Publication Date: January 2010
Publisher: Library of Congress. Congressional Research Service
Author(s): Robert S. Kirk
Research Area: Transportation
Coverage: United States
The Airport Improvement Program (AIP) has been providing federal grants for airport development and planning since the passage of the Airport and Airway Improvement Act of 1982 (P.L. 97-248). AIP funding is usually spent on projects that support aircraft operations such as runways, taxiways, aprons, noise abatement, land purchase, and safety or emergency equipment. The funds obligated for the AIP are drawn from the Airport and Airway Trust Fund (hereafter referred to as the trust fund), which is supported by a variety of user fees and fuel taxes. The AIP is one of five major sources of airport capital development funding. The other sources are tax- exempt bonds, passenger facility charges (PFCs: a local tax levied on each boarding passenger), state and local grants, and airport operating revenue. Different airports use different combinations of these sources depending on the individual airport's financial situation and the type of project being considered. Small airports are more dependent on AIP grants than large or medium-sized airports. The larger airports, whose projects tend to be much more costly, are more likely to participate in the tax-exempt bond market or finance capital development projects with a PFC. The multi-year authorization of the AIP under Vision 100--Century of Aviation Reauthorization Act (P.L. 108-176) ended on September 30, 2007. Since then, a series of short-term extensions has authorized and provided funding for AIP. The AIP and PFC issues that have been considered during the ongoing debate regarding the reauthorization of the Federal Aviation Administration (FAA) include the national level of need for airport development and the appropriate AIP funding level; the appropriate federal role in airport development; the criteria for the distribution of funding across airports of different types and sizes; the sufficiency of AIP discretionary funding, especially for major capacity enhancing projects; airport privatization; defederalization of large airports; raising or eliminating the $4.50 ceiling now imposed on PFCs; the use and tax treatment of airport bonds; and noise mitigation funding and eligibility. During the FAA reauthorization debate, virtually all of the policy issues and options concerning AIP will be influenced by the broader budget issues of the adequacy of trust fund revenues and the availability of money for the FAA from the Treasury general fund. Should ample revenues be available, the reauthorization of AIP could maintain the program's structure and perhaps even increase AIP spending. A constrained-budget scenario would probably increase interest in such issues as defederalization or a tightening of program formula funding and eligibility criteria, which could provide cost savings. It could also increase interest in raising or eliminating the PFC ceiling, which could help airports fund more projects. This report is focused solely on AIP issues in the ongoing FAA reauthorization debate. To track the full FAA reauthorization debate, including legislative action on AIP and other FAA programs and activities, see CRS Report R40410, Federal Aviation Administration (FAA) Reauthorization: An Overview of Legislative Action in the 111th Congress, coordinated by Bart Elias.