1. National Association of State Aviation Officials
2018 Annual Conference
Wednesday, April 4 – Friday, April 6, 2018
Jackson, MS
Mark Kimberling
President and CEO
(703)
Intro Slide:
Thank you to hosts
NASAO mission – nationally recognized voice
NASAO represents the public interest in aviation
Credibility on technical issues to leaders on Capitol Hill
MOU with FAA
“Airports are natural constituency”
“Recently there have some major developments in Washington that are going to have significant impacts on the aviation community”
“The main conversations taking place on Capitol Hill with respect to Aviation are far different then they were even one month ago” – Briefly hit ATC fight
“Today I am going to talk about the key details in the FY18 Omnibus, The Trump Infrastructure Plan, Long-Term FAA Reauthorization, and several hot topic issues like UAS regulation”
Transition: We’ll start today’s discussion with an overview of the $1.3 trillion spending bill that was just signed into law at the end of March

2. Fiscal 2018 Omnibus: DOT Highlights
Department of Transportation (DOT)
The bill provides $86.2 billion, in total budgetary resources, including offsetting collections. This is a $10 billion increase from the FY 2017 enacted level.
The bill provides $27.3 billion in discretionary appropriations for the DOT. This is $8.7 billion increase from the fiscal year 2017 enacted level.
Congress’ 12 appropriations bills were lumped into one massive spending bill, referred to as an omnibus
The $1.3 billion bill gave many agencies significant increases, while some saw their budgets decrease like the State Department
The Department of Transportation, along with DOD and DHS saw some of the most significant percentage increases.
This is in-line with the Trump Administration’s focus on infrastructure investment – which we now know is expected to come increments that are included in several smaller bills rather than one large infrastructure bill. I will elaborate more on this later in the presentation.
Some of the key take-aways of the DOT funding included in the Omnibus are:
The Department saw an increase of $10 billion from the FY17 level
$8.7 of which is in discretionary appropriations
20% of the overall increase in THUD Appropriations went to Highways
13% of the overall increase went to Aviation
Rail, Maritime, Mass Transit, and TIGER combined account for 30% of the increase with the remainder going to HUD for a wide array of programs.
Transition: “We will now take a closer look at FAA funding in the omnibus”

3. Fiscal 2018 Omnibus: FAA Highlights
*$18 billion in total budgetary resources for the FAA
*FAA Authorization is extended through Sept. 30, 2018
Airport Grants
$1 billion increase in AIP
$15 million for Airport Cooperative Research Program
$10 million for SCASDP
Operations
$133 million increase for the Air Traffic Organization
$165 million for the Contract Tower program
Facilities and Equipment
$1.3 billion for NextGen investments (+$239 million)
Research and Development
$24 million for UAS research ($17 million above the budget request).
In addition to an overall 10% increase in FAA funding, the omnibus also included a 6-month FAA extension.
The inclusion of this extension was crucial because it prevented then need for congress to pass a separate bill
The most significant increase was in the Airport Grants category, where AIP received a $1billion increase in discretionary funds, which I will elaborate on in detail
Noteworthy increases were also made to NextGen, ATO, Contract Towers and UAS research
Transition: The $1billion increase to AIP is discretionary and does not go through the standard formula. On this next slide I will explain what info is currently available on how the funds will be apportioned.

4. Fiscal 2018 Omnibus: Airport Grants
Airport Improvement Program – $3.35 billion
Additional Airport Improvement Program Funds -- $1 billion to remain available through September 30, 2020 under these specific requirements:
Funding comes from the General Fund, not the Airport and Airways Trust Fund;
Funding is NOT subject to apportionment formulas, special apportionment categories, or minimum percentages;
USDOT/FAA will distribute funds as discretionary grants to airports and must give priority consideration to projects at:
(a) Non-primary airports that are classified as Regional, Local, or Basic airports and are not located within a Metropolitan or Micropolitan Statistical Area as defined by the Office of Management and Budget; or
(b) primary airports that are classified as Small or Non-hub airports;
The federal share for these grants to Non-primary airports is 100 percent;
Grant amounts are not subject to any limitation on obligations in the AIP.
Note: bullets on this are self-explanatory
Additional points:
NASAO has been in direct communication with the Appropriations Committee and the FAA
Priority consideration is to be given to rural and small airports
A funding guideline document is expected to be provided from the Appropriations Committee to the FAA

5. Trump Infrastructure Plan
“Legislative Outline for Rebuilding Infrastructure in America”
$1.5 trillion infrastructure package to include $200 billion direct federal funding
Incentive Grants Program – $100 billion
20% federal match to 80% state/local funding
Provided through discretionary grants by federal agencies.
Rural Infrastructure Program – $50 billion
80% disbursed to states
20% provided in “performance grants” by federal agencies
Transformative Projects Program – $20 billion
Disbursed by Dept. of Commerce
For innovative projects that are high-risk but commercially viable
Federal Credit Programs – $14 billion
Expands TIFIA program and includes airports
Other – $10 billion
Federal Capital Financing Fund to finance federal real estate deals
Aviation components of the infrastructure plan:
Shortening the project approval process to two-years or less
Expanding the use of Private Activity Bonds (PABs), including the number of eligible uses for airport projects. The Plan would get rid of the PAB state and transportation volume caps, and exempt PABs from the Alternative Minimum Tax (AMT).
Allowing small hub airports the same expedited PFC application process as non-hub airports.
Providing airports the ability to offer incentive payments for early completion of AIP projects.
Federal Credit Programs – providing $14 billion in expanded federal credit programs, including the Transportation Infrastructure Finance and Innovation Act (TIFIA), which has expanded eligibility to include airport and other infrastructure projects
Expanding the existing airport privatization pilot program by removing the cap on participating airports, and changing the current 65 percent supermajority requirement for airline approval to a simple majority.
Limiting FAA’s approval and oversight of non-aviation development activities at airports, to focus more oversight on critical airfield infrastructure.
Moving the oversight of AIP grants from advance application approval to post-expenditure audits

6. FAA Reauthorization Legislation
Timeline
Sep. 30, 2018 – FAA Authorization Expires
Mar. 23, 2018 – Congress passes 6-month extension
Feb. 27, 2018 – ATC privatization dropped from H.R.2977
Sept. 28, 2017 – Congress passes 6-month extension
Jul. 12, – H.R Rules Print including Tax Title is released
Jun. 29, 2017 – S approved in Senate Committee
Jun. 27, 2017 – H.R approved in House Committee
Jul. 13, 2016 – Congress passes 14-month FAA extension bill
Air Traffic Control
Privatization
Pilot Training/Shortage
Overview:
Explain how ATC privatization held up House Bill
Explain how 1500 Hour rule has held up the Senate Bill
Explain how recent developments in both chambers now present a path forward for long-term FAA
Transition:
The ATC privatization debate may be over for now, but during the heat of the discussion, NASAO put forward a unique position of opposition that gained a lot of traction and was very influential at critical point

7. House FAA Reauthorization – ATC Tax Title
- Explain tax title opposition
- Also mention subsequent CBO rescore that said the tax title added 100 billion to deficit

8. House FAA Reauthorization – ATC Concerns
Key concerns to cover:
Board composition
Access / Air service
User fees being altered down the road
No other foreign models privatized during NextGen process

9. Senate FAA Reauthorization – 1,500 Hour Rule
The 2013 Pilot Certification and Qualification Requirements for Air Carrier Operations Rule increase the minimum number of flight-training hours for commercial pilots from 250 hours to 1,500 hours, severely constricting and massively elongating the pilot training pipeline.
Projected Pilot Shortage
Senate Commerce Committee Chairman John Thune (R-SD) included language in the Senate FAA Reauthorization that would create additional structured training pathways for credit toward the airline transport pilot certificate (ATP) flight hour requirements.
Air Service Reductions

10. FAA Reauthorization Bills – AIP Program

11. FAA Reauthorization Bills – NPE Reform
Non-Primary Entitlement (NPE) Program Background:
Before AIR-21, State Apportionment received the total general aviation entitlement. AIR-21 increased the general aviation entitlement to 20%
AIP gives each non-primary airport $150,000 in NPE grants annually. NPE grants can carry over for up to 4 years
Unused money is redirected to the FAA for immediate re-allocation
NPE Reform included in S.1405:
Increases carry over from 4 to 5 years
Creates NPE discretionary fund for carry over
Authorizes the FAA to reduce the local match for certain non-primary airport projects to 5%
Allows up to 4% of total NPE funds to be used for certain airport development at Disaster Relief Airports
Key Findings in 2015 NPIAS Report:
“The NPE has come at the expense of the state apportionment, which had been used to fund high priority projects within a state. Since the NPE is calculated first out of the General Aviation apportionment, the state apportionment has dropped each year.”

12. FAA Reauthorization Bills – PFC Fees
House Bill - H.R. 2997
Allows all airports to charge the $4.50 maximum PFC without as many restrictions.
Expands the pilot program for PFCs at non-hub airports.
Senate Bill - S.1405
Expands the pilot program for PFCs at non-hub airports.
Related: The Senate's FY2018 THUD Appropriations bill increased PFC by $4.00 to $8.50 per passenger - but only for originating flights. The FY2018 omnibus did not include this provision.

13. FAA Reauthorization Bills – EAS Program
Number of airports in the Essential Air Service program, by state
Senate Bill – S. 1405
FY18: $175 million
FY19: $175 million
FY20: $175 million
FY21: $175 million
*House EAS levels likely to change due to removal of ATC Privatization
*Related: FY 18 Omnibus funded EAS at $155 million

14. FAA Reauthorization Bills – SCASDP
Small Community Air Service Development Program
Funding and Gants Awarded 2002 – 2016
Senate Bill – S. 1405
FY : $10 million
Related: FY 18 Omnibus authorized SCASDP AT $10 million

15. FAA Reauthorization Bills – Contract Tower Program
-Until FY2013 the Contract Tower Program was automatically funded by the FAA’s Air Traffic Organization.
-When the budget sequester went into effect in 2013, the FAA opted to find some of its required sequester savings by slashing the nation’s Contract Tower Program.
-Congress passed legislation to prohibit this and in every year since has included a line item in the transportation funding bill requiring the FAA to fully fund the Contract Tower Program.

16. FAA Reauthorization Bills – UAS Key Drone Policy Developments
UAS Integration Pilot Program (IPP)
UAS Remote ID and Tracking Aviation Rulemaking Committee (ARC)
Model Aircraft Exemption (Sec. 336)
House Bill – H.R. 2997
Gives the FAA more flexibility to permit operations not permitted under current rules
Authorizes package delivery within one year
Extends test sites for another six years
Starts rulemaking for Unmanned Traffic Management (UTM), or “ATC for drones”
Drones privacy review
Study on how to recover FAA costs on drones rules and oversight
Senate Bill – S. 1405
Same as House bill
Requires the development of risk-based standards for small drones.
Requires a rulemaking for micro-drones (less than 4.4 lbs.)
Study on what type of spectrum drones may use
Requires the development of a safety exam for everyone age 13 or older wanting to operate a drone weighing over 0.55 lbs.
Establishes fines and prison sentences for people using drones to interfere with aircraft and airports.
Tanya’s user fee

17. Forecast & NASAO Updates
Midterm Elections
FAA leadership and Congressional Committee Chairs
Long-term FAA Reauthorization
Infrastructure investment
NASAO Updates
Comprehensive training program
NASAO Aviation Data Report Website
NASAO Annual Conference
State Aviation Journal, Drone Talk, e-Newsletters

18. National Association of State Aviation Officials
Mark Kimberling
President and CEO
(703) |