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"House Panel Approves FY03 DOT Spending Bill"

Tuesday, October 1, 2002

House Panel Approves FY03 DOT Spending Bill

The House Appropriations Committee approved its version of the fiscal year
2003 DOT spending bill, theoretically sending it to the House floor for
consideration. While there is a lot of good news to report in terms of the
House bill, we want to caution early on that the appropriations process for
fiscal year 2003 is confused and far from over. In the Senate, the
Appropriations Committee has similarly approved its version of the 2003
bill, although the full Senate has yet to consider the measure.

The House bill includes:

Installation of Explosive Detection Equipment in Airports House Bill: TSA
Operations funded at $5.146 billion, including $275 million for EDS/ETD
installation. The committee report notes that "Additional funds are needed
given the Committee recommendation to install a higher percentage of CT-scan
systems and the assumption that airports will be allowed waivers of the
current deadline. These funds will increase the number of airports which are
able to place their bomb detection systems in-line. TSA's funding level
assumed large numbers of trace detection systems as interim measure, and
very few in-line CT-scan systems."

The bill provides $452 million for EDS procurement and includes a provision
that requires DOT to acquire and pay for all EDS equipment. The report says
that "the committee does not believe that individual airports of the FAA's
AIP program should be responsible for these new federal requirements."

Senate Bill: TSA Operations was funded at $4.95 billion, including $200
million for installation of EDS and EDT machines at airports and $124
million for procurement for additional EDS machines.

Full Funding of $3.4 billion for the Airport Improvement Program
House Bill: Fully funded at $3.4 billion. While the bill allows $62.8
million for administration of the program to come from AIP, the committee
rejected the Administration's requests to fund EAS ($83 million) and airport
technology research ($16.5 million) from AIP. The bill also funds the Small
Community Air Service Development Pilot Program at $20 million from general
funds rather than AIP as the Senate proposes.

Senate Bill: The committee-passed bill includes $3.4 billion for AIP. Of
those funds, $64.6 million is made available for administration of the
program, $16.5 million is made available for aviation technology research
and $20 million is made available to fund the Small Community Air Service
Development Pilot Program.

FAA and TSA Use of Space in Airport-Owned Facilities
House Bill: Includes general provision requiring FAA and TSA to pay for
space at airports except for the baggage and screening areas. (Congress
approved a similar provision for FAA as part of the FY02 DOT Appropriations
bill and for both FAA and TSA in the just completed FY02 supplemental bill.)
Senate Bill: Includes same provision, which was also included in the FY 2002
supplemental spending bill.

Use of Local/State Law Enforcement at Screening Checkpoints
House Bill: $250 million to reimburse authorities for the use of local and
state law enforcement at screening checkpoints. In addition, the bill
includes legislative and report language making clear that the TSA has the
authority to continue using state and local law enforcement at screening
checkpoints on a reimbursable basis.
Senate Bill: Funded at requested level of $226 million. No legislative
changes in this area.

Full Funding of $27.5 million for the Air Service Development Pilot Program
House Bill: $20 million in general funds.
Senate Bill: $20 million from AIP.

Funding for the Essential Air Service Program

House Bill: $100 million for EAS. Rejection of Administration's proposal to
use $83 million in AIP funding for EAS.
Senate Bill: The Committee approved a total of $128 million for the
Essential Air Service Program ($65 million from AIP, $50 million from over
flight fees and $13 million in carryover funds).

Full Funding for the Contract Tower Program
House Bill: The bill includes $78 million for the Contract Tower Program and
$6 million for the Cost-Sharing Program.

Senate Bill: The bill includes $78 million for the Contract Tower Program
and $6 million for the Cost-Sharing Program.

Airport Funding of Project-Specific FAA Staff or Consultants
House Bill: No provision.

Senate Bill: The bill includes a General Provision allowing airports to fund
project-specific FAA staff or consultants for key capacity projects.
(Congress approved a similar provision as part of the FY02 DOT
Appropriations bill.)

Funding for Aviation-Related Research and Development

House Bill: $138 million overall. The Energy and Environment account which
funds important noise research is funded at $22.1 million ($14.4 million
above the budget request).

Senate Bill: $124 million overall, with $ 2.698 million slotted for the
Energy and Environment account.

TSA Staffing Levels:

House Bill: The House bill is highly critical of TSA staffing plans and caps
the number of TSA employees at 45,000 - the same cap included in the fiscal
year 2002 supplemental spending bill.

Senate Bill: No cap on TSA employees.

With the beginning of the fiscal year today, none of the 13 appropriations
bills funding much of the federal government have been completed due to a
great deal of disagreement between the House, the Senate and the White House
on overall funding levels and numerous other competing priorities. Congress
last week passed a "continuing resolution" (CR) funding the government
through the end of this week, and they are expected to pass a second CR this
week to run through Oct. 11 -- the target date for getting out of town for
the November election.

It remains to been seen what Congress will do beyond that point to ensure
funding for DOT, TSA and other agencies wiht programs such as AIP for the
remainder of the fiscal year. Some have speculated that Congress will
temporarily fund the government until sometime after the November elections
and then come back to wrap up work on the appropriations bills in a lame
duck session. Others contend that Congress will fund the government with a
longer-term continuing resolution through the beginning of next year into
January, February or March, a scenario that would allow them to wait for the
new Congress to be seated and avoid a post-election lame duck session.

Whatever the scenario, chances are that DOT and TSA funding for 2003 will be
be folded into a broader bill sometime in the next several months that will
fund much of the federal government.

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