ple, shows that in 1979 in Atlanta, air transportation created a $2 billion impact on the local economy. This economic benefit is repeated over and over at airports throughout the Nation (approximated to be $30 billion nationwide). Such benefits underlie the rationale for charging some of the costs of the air system to the general public.

Under the bill, users would contribute several billions more than they would have under S. 508 as introduced and O&M will receive a higher level of funding than any other expenditure program under the bill. This means users would pay more than double their current share of FAA's operations and maintenance costs, in addition to paying 100 percent of capital costs under the program. It is important to note, however, that these figures would require a continuing contribution to the air system from the general taxpayer who also reaps benefits from the safe and efficient operation of the system.

4. APPORTIONMENT

Section 8 provides for the apportionment of funds authorized for airport development and airport planning in a manner more appropriate to the post airline deregulation era and for enhanced discretion on the part of the Secretary to move the available funds to the highest priority projects.

The present Act required the administration of separate Federal aid programs for airport development at air carrier, air commuter service, reliever and general aviation airports as well as a separate program for airport planning. This proposal would combine the grant and planning programs for all such airports into a single grant program for airport development and planning.

This combination of programs should improve investment decisions. Many of the present separate programs are funded at relatively low levels approximately $15 million annually. After such amounts are divided to meet needs throughout the States and territories, individual airports typically do not receive amounts sufficient to accomplish significant development projects. This is particularly true at about 300 of the smaller airports currently categorized as "non-hubs", all of which currently receive annual apportionments of either $50,000 or $150,000. Such amounts are usually inadequate to fund desirable projects. This leads airport sponsors either to seek supplemental grants from the Secretary's discretionary funds or to use their apportioned funds on smaller projects, even when the accomplishment of a single project would be preferable. By combining the separate programs, the bill would give sponsors access to larger funding pools and would allow funds to be used to meet a wide range of priority needs.

This section also establishes apportionment categories which are consistent with the aviation regulatory environment created by passage of the Airline Deregulation Act of 1978. Under the deregulation act, the current Civil Aeronautics Board and most of its functions are phased out between now and January 1, 1985. An airport development program for the post-CAB era must provide for investment decisions to be made without reference to criteria

which had meaning only in the pre-deregulation environment, that is, "airports served by air carriers certified by the CAB."

This section calls for the determination of apportionments based primarily on the number of revenue passenger emplanements at an airport. However, the proposed system of apportionments also provides recognition to an airport's status as a reliever airport and provides some apportionments on the basis of a State's size and population. Regardless of the advent of deregulation, this realinement of apportionment categories reflects a belief that the classification of airports as "air carrier", "commuter", or "general aviation" do not represent distinctions which correspond sufficiently to actual airport development needs, and that the real needs can be better met with greater flexibility to move funds among the categories.

Single-year guarantees for certain types of airports in the current act are replaced with 6-year guarantees so that the flexibility desired is achieved while also giving the airports some assurance that no category will be funded in total below a minimum level.

The proposal would also modify but continue the discretionary funds program concept of the present act. There would be a single discretionary fund for airport development and planning.

This section also establishes that a portion of the section 6 funds for each fiscal year are to be apportioned by the Secretary to pri mary airports. The apportionment formula set forth in this section is the one used in the present Act in making apportionments for air carrier airports for 1982 and 1983. For 1984 through 1987 the funds available to an airport under the formula increase by 30 percent. Those air carrier airports which qualify as primary airports will continue in all cases to receive funds directly from the Federal Government as under the present Act.

The present Act contains a provision in section 15(a)(3)(A), which limits apportionments to air carrier airports to two-thirds of the total airport development funds authorized under the present Act. This bill reduces the apportionment category limit to 50 percent of the total program authorization, reflecting the fact that, under this proposal, some of the present air carrier airports will receive airport development and planning funds under other sections and some may eventually be eliminated from the program.

5. DISCRETIONARY FUND

Section 8 establishes a discretionary fund for airport development and planning projects.

All airport development and planning funds not apportioned under sections 8(b) (1) and (2) are available as discretionary funds. The discretionary fund concept is taken from the present act, under which separate discretionary funds are maintained for "air carrier" and "general aviation" airports. Under this proposal, consistent with the overall apportionment scheme proposed, a single discretionary fund is established for all eligible airport development and planning. Further, in the administration of the discre tionary fund, it is intended that appropriate resources within the fund will be identified in advance to support major and costly proj

ects.

The discretionary fund provides minimum, 6-year guarantees for reliever, general aviation and smaller air carrier airports. The committee wishes to emphasize that these minimums are just that, a minimum guarantee, not a maximum, not an average, and we expect more to be spent in meeting the needs of these airports. By setting a minimum and having a large discretionary fund with the flexibility to move moneys around, we seek to insure that the needs will be met and we avoid the needless uncertainty of an absolute dollar forecast.

6. STATE PARTICIPATION

Under section 12 qualifying States would be given a block grant to administer for small commercial service airports and general aviation airports within their boundaries. $428.1 million over six years, would be allocated to the States for this purpose. All airports located in nonparticipating States would continue to apply to the Secretary of Transportation to obtain their project grants. The Committee believes this is an important provision in light of the increasing recognition of the necessity of turning over the management of Federal programs to States and local communities. Opposition to such a provision, which was evidenced in a prior hearing, was not reflected in this year's hearing. It has become apparent that many airport owners and operators are willing, indeed might prefer, to deal with the State rather than the Federal Government regarding airport aid financing. The States are already partners with the localities and the Federal Government in airport development in 46 States.

7. DEFEDERALIZATION

The bill creates incentives for larger airports to voluntarily withdraw from the airport development program. First by eliminating certain statutory and regulatory obligations associated with these grants and second by allowing airports which choose defederalization to continue to receive grants for land acquisition and noise abatement.

As stated in Report No. 97-97, May 15, 1981, the Commerce Committee believes that defederalization of the nation's largest airports will ultimately benefit airport operators and users by creating more efficient airports at lower cost to the public. However, the Commerce Committee also believes that a variety of questions remain about how this program would operate. Because of these questions, the major user groups and many of the larger airports that would be defederalized under S. 508, as previously reported, objected to defederalization if a passenger facility charge was authorized.

This bill requires the Secretary of Transportation to submit to Congress within one year of enactment a report on whether any airports should be excluded from the federal program. The report must also consider whether airports should be permitted to impose any form of passenger facility charge and how such a charge should be collected. On the basis of this report, the Aviation Subcommittee will consider whether further modifications to the airport development program are desirable.

CBO COST ESTIMATE

The cost estimate of the Congressional Budget Office is not available at the time this report is filed, but will be submitted subsequently.

REGULATORY IMPACT

In accordance with paragraph 11(b) of rule XXVI of the standing Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported.

One of the primary goals of the reported bill is to reduce the large amounts of redtape and paperwork that are associated with the current program. Under the new block grant program in section 12 of the bill, participating States will be able to receive moneys apportioned for certain airports within those States with a minimum amount of paperwork and delay. Moreover the States may then obligate these funds for airport development or airport planning without the need to comply with many of the regulations of the current program. These States are even free to establish their own State standards for airport development in lieu of many of the remaining Federal standards if such State standards are approved by the Secretary of Transportation.

The project grant program in sections 10 and 11 of the bill has also been amended to drop certain unnecessary requirements. This program has been further simplified by allowing airports to apply for a number of projects in a single application. Finally the administrative expense and paperwork associated with both the block grant and project grant programs should be greatly reduced by a new legislative provision requiring the Secretary of Transportation to rely on conclusionary certifications of compliance with program requirements whenever possible.

A final feature of the bill that will reduce Federal regulation is section 26 which permits airports to withdraw from the airport improvement program. As airports withdraw from the program it will improve the ability of the Federal Aviation Administration to service those airports that remain in the program. Moreover any airport that is "defederalized" may elect to terminate a large number of obligations and restrictions which currently apply to such airports under the terms of section 27 of the bill.

None of the provisions of the bill is expected to have an impact on the small effect of the current program on personal privacy. To the extent, however, that the Secretary relies on conclusionary certifications of compliance from project sponsors rather than lengthy and detailed submissions, personal privacy should be enhanced.

SECTION-BY-SECTION ANALYSIS

SHORT TITLE

Section 1

This section provides that the act may be cited as the "Airport and Airway System Development Act of 1982."

DECLARATION OF POLICY

Section 2

This section sets forth a declaration of policy. Specifically, section 2 would set forth as policies and findings: that the safe operation of the airport and airway system will continue to be the highest aviation priority; that the continuation of airport and airway improvement programs, including both development and planning activities, and more effective management and utilization of the Nation's airport and airway system are required to meet current and projected growth in aviation; that this Act should be administered so as to provide adequate navigation aids and airport facilities, including reliever airports, for points where scheduled commercial air service is provided; that aviation facilities should be built and operated with due regard to providing substantial relief from current and projected noise impacts on nearby communities; that airports which have the ability to finance their capital and operating needs without Federal assistance should be encouraged to voluntarily withdraw from eligibility for such assistance; and that the Federal administrative requirements placed upon airport sponsors can be reduced and simplified through the use of single project applications to cover all airport improvement projects.

Section 3

DEFINITIONS

This section lists the definitions applicable to the bill. Some of these definitions are identical to those in the present Act, some are entirely new and some contain modifications to existing definitions. Finally, some definitions in the present Act have been deleted.

Definitions Unchanged

The definitions of "airport," 3(1), "government aircraft," 3(13), "landing area," 3(14), "project costs," 3(19), "public airport," 3(22), and "Secretary," 3(25) are self-explanatory and identical to definitions in the present act.

Deletions

As a result of the enactment of the Airline Deregulation Act of 1978, which terminates the Civil Aeronautics Board effective January 1, 1985, and which terminates many of its functions at earlier dates, whether an airport is or is not served by an "air carrier certificated by the Civil Aeronautics Board" will soon cease to be an appropriate basis for making determinations regarding the distribution of Federal funds for airport and airway development and planning. Accordingly, this bill does not include the definitions of "air carrier airport," "commuter service airport," and "general aviation airport" found in the present act.

This bill would also delete the definitions in the present act of "planning agency," "airport master planning," and "terminal area," as either unnecessary or inappropriate in the context of the proposed legislation.