Presented to:

By:

Date:

Federal Aviation Administration

Airport Funding – FAA Airport Improvement Program (AIP)

Texas Aviation Conference

Mike Nicely, Manager Texas ADO

May 15, 2013

Federal Aviation Administration

Discussion Topics

• Enabling Legislation • Authorization & Appropriation • AIP Funding Breakdown • AIP Apportionment • AIP Apportionment/Discretionary • AIP Discretionary • AIP Distribution – National • AIP Distribution - Texas

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Federal Aviation Administration

Legislation • Airport and Airway Revenue Act of 1970

– Established Airport and Airway Trust Fund

• Taxpayer Relief Act of 1997 – Established current tax structure for Trust Fund revenue

• Domestic Passenger Ticket Tax (7.5% of ticket price) • Domestic Passenger Flight Segment ($3 per segment for 2002 then indexed to

CPI) • Special Rule for Flights Between the continental US and Alaska or Hawaii ($6

departure tax, indexed to CPI from 1999 plus portion of passenger ticket tax) • Passenger Ticket Tax at Rural Airports (7.5% of ticket price) • International Departure and Arrival Taxes ($12 per person departure plus $12

per person arrival tax indexed to CPI from 1999) • Frequent Flyer Tax (7.5% of frequent flyer award value) • Domestic Freight and Mail (6.25% of shipment cost) • Fuel Tax (Commercial Fuel (4.3 cents/gal), GA Fuel (19.3 cents/gal – AVGAS,

21.8 cents/gal – Jet Fuel)

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Federal Aviation Administration

Legislation

• Trust Fund Annual Revenue - $10-12 B. • Trust Fund Funds:

– FAA Operation (funded by General Fund & Trust Fund) – FAA Facilities and Equipment – FAA Research, Engineering and Development – Grants-in-Aid for Airports – Airport Improvement

Program (AIP) – DOT – Essential Air Services

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Federal Aviation Administration

Authorization & Appropriation for AIP

• Authorization – FAA Modernization and Reform Act of 2012

• Four Years 2012 – 2015 • AIP - $3.35 B

• Appropriation by Congress Annually – Full Year Continuing Resolution – Sept. 30, 2013 – AIP at FY 2012 level - $3.35 B.

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Federal Aviation Administration

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AIP Funding Breakdown

• Three types of funding: 1. Apportionments (formula driven to AIP)

2. Discretionary (set-asides & minimums)

3. Apportionment/Discretionary Hybrid

•60% of AIP

•40% of AIP

Federal Aviation Administration

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AIP Apportionments

• Passenger Entitlements – Formula based on # of annual passenger boardings

• $1M min and $22M max

• Cargo Entitlements – 3.5% of AIP (100 million lbs. landed cargo rate)

• 8% max/airport

• State Funding – State Apportionment (20% of AIP)

• Based on state population and land mass – Non-Primary Entitlement (lesser of 1/5 of 5-year NPIAS

development or $150K)

• Alaskan Supplemental

Federal Aviation Administration

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AIP Apportionment/Discretionary Hybrid

• Small Airport Fund – Made up of 87.5% of returned passenger

entitlements from large and medium hub airports • $3 PFC = 50% turn back • $4/$4.5 PFC = 75% turn back

– Small Hub airports get 1/7 – Non Hub airports get 4/7 – General Aviation get 2/7

Federal Aviation Administration

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AIP Discretionary

• Set-Asides – Noise (35% of amount remaining after apportionments) – Reliever (0.66% of amount remaining after apportionments) – MAP (4% of amount remaining after apportionments)

• Minimums – Capacity/Safety/Security/Noise (C/S/S/N)

• 75% of remaining after set-asides (+) 2/3 of 12.5% returned entitlements

– Pure Discretionary • 25% of remaining after set-asides (+) 1/3 of 12.5% returned

entitlements

Federal Aviation Administration

AIP Distribution - National

• Allotments to FAA Airports Division Regional Offices based on THREE Factors – # of airports in region (80% weighting factor) – Region activity levels (10% weighting factor) – Airports Capital Improvement Plan (10% weighting

factor) • Regions award grants to airports based on

priority development needs contained in 3-year Airports Capital Improvement Plan.

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Federal Aviation Administration

AIP Distribution – Texas (FY 2012)

• Passenger Entitlements – $63 million – 26 airports

• Cargo Entitlements – $6.5 million – 9 airports

• State Funding – $17.2 million – State Apportionment – $26.6 million – Non-Primary Entitlement

• Discretionary – $104 million

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Challenges of a Growing Aviation System

Presentation to: Name: Date:

Federal Aviation Administration Federal Aviation Administration

Federal Aviation Administration Thank you!

Questions?

Mike Nicely Manager, Texas Airports Development Office (817) 222-5650 mike.nicely@faa.gov