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"Reimbursement for Security Costs Update"



Tuesday, December 18, 2001 

Reimbursement for Security Costs Update
AAAE/ACI-NA


We have encouraging news regarding our efforts to secure funding in the
supplemental spending portion of the FY02 DOD spending bill.  You will
recall that the Senate version of the legislation contained $200 million
for airports to pay for a portion of our direct costs associated with
the increased security measures required after 9/11.  The bill also
contained an additional $57 million for the Essential Air Service (EAS)
program.

Negotiations have been on-going since late Friday evening and over the
weekend, culminating in a staff-level agreement in the early hours of
today that we believe will lead to a conference meeting as early as
today on the bill.

Over the weekend, we learned that an initial decision had been made to
fund the airport security reimbursement at not less than $120 million.
We have been pressing for them to get as close to the $200 million as
possible and it now appears that we will get somewhere between $150-175
million (closer to the $175 million we think).  We don't have any
information on the EAS number yet, although you can expect that it will
be less than the $57 million in the Senate bill.

We know that $150-175 million is inadequate to meet the needs in the
system and we will keep fighting for more in the FY03 DOT bill and the
next supplemental appropriations bill in the Spring, but this represents
a significant down payment.  It is probably frustrating for many of you
to watch this process, knowing that airports need a lot more financial
help, but the fact that we appear to have made it into the final
agreement is not an insignificant accomplishment.  In this $20 billion
package, we were competing against additional defense spending, funds
for New York and other homeland security initiatives such as public
health and bio-terrorism, et al.  

This tentative agreement will not be locked down until the conferees
meet today (or tomorrow) so hold tight on this. 


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