The bill includes $12,000,000 for applied scientific research and

development, test and evaluation projects necessary to maintain and

expand the technology required for the Coast Guard's operational and

regulatory missions. Of this amount, $3,150,000 is to be derived from

the oil spill liability trust fund. This is $6,300,000 below the budget

request and $7,000,000 less than the amount provided last year. The

reduction is due to budget constraints and the Committee's view that

additional funding must be provided to fight the war on drugs. The

Committee believes that much of the work in this appropriation,

especially those activities oriented toward management analysis or

operational effectiveness analysis, could easily and properly be

performed using operating funds.

BOAT SAFETY

(Aquatic Resources Trust Fund)

Appropriation, fiscal year 1998 $35,000,000

Budget estimate, fiscal year 1999\1\

Recommended in the bill

xlBill compared with:

Appropriation, fiscal year 1998 -35,000,000

Budget estimate, fiscal year 1999

\1\President's budget requests $50,000,000 in mandatory appropriations in fiscal year 1999.

The Internal Revenue Code of 1954, as amended, and the Federal Boat

Safety Act of 1971, as amended, provide for the transfer of highway

trust fund revenue derived from the motor boat fuel tax, excise taxes on

sport fishing equipment, and import duties on fishing tackle and yachts

to the aquatic resources trust fund. The Secretary of the Treasury

estimates the amounts to be so transferred and appropriations are

authorized from the fund for recreational boating safety assistance and

other programs by the Federal Boat Safety Act of 1971 and Public Law

98-369 (the Deficit Reduction Act of 1984). These funds are used

primarily to provide grants to states to help enforce boating safety

laws and to expand boating education programs.

The bill includes no appropriation for the boat safety program. The

recently-enacted Transportation Efficiency Act for the 21st Century

(TEA21) made changes to the authorizing legislation which essentially

make this a mandatory program. The Committee believes that sufficient

funding will be made available through the highway Act that additional

discretionary funds are unnecessary. The Committee continues to believe

that boating fatalities and injuries are a serious problem, and that the

Coast Guard should play a greater leadership role than is currently the

case. Since this is now essentially a mandatory program, the Committee

strongly encourages the appropriate legislative committees to provide

the leadership in this area and develop programs which reduce the number

of fatalities and injuries nationwide.

FEDERAL AVIATION ADMINISTRATION

SUMMARY OF FISCAL YEAR 1999 PROGRAM

The Federal Aviation Administration (FAA) is responsible for the

safety and development of civil aviation and the evolution of a national

system of airports. Most of the activities of the FAA will be funded

with direct appropriations in fiscal year 1999. The grants-in-aid for

airports program, however, will be financed under contract authority

with the program level established by a limitation on obligations

contained in the accompanying bill. The bill assumes continuation of the

aviation ticket tax and other related aviation excise taxes throughout

fiscal year 1999 and assumes no new user fees.

The recommended program level for the FAA for fiscal year 1999 totals

$9,477,558,000, including a $1,800,000,000 limitation on the use of

contract authority. This is $375,964,000 (4.1 percent) above the fiscal

year 1998 enacted level and $273,572,000 (3 percent) below the

President's request. When user fees are included, the total FAA budget

is $9,524,400,000, an increase of $422,806,000 (4.6 percent) over fiscal

year 1998. The following table summarizes the fiscal year 1998 program

levels, the fiscal year 1999 program requests, and the Committee's

recommendations:

Program Fiscal Year--

1998 enacted 1999 estimate 1999 recommended

Operations $5,301,934,000 $5,634,972,000 $5,579,400,000

Facilities and equipment 1,900,477,000 2,130,000,000 2,000,000,000

Research, engineering and development 199,183,000 290,000,000 145,000,000

Grants-in-aid for airports (AIP) 1,700,000,000 1,700,000,000 1,800,000,000

----------------- ----------------- ------------------

Total 9,101,594,000 9,754,972,000 9,524,400,000

OPERATIONS

(including airport and airway trust fund)

Appropriation, fiscal year 1998\1\ $5,301,934,000

Budget estimate, fiscal year 1999 5,588,130,000

Recommended in the bill 5,532,558,000

xlBill compared with:

Appropriation, fiscal year 1998 +230,624,000

Budget estimate, fiscal year 1999 -55,572,000

\1\Excludes reductions of $939,000 for TASC.

This appropriation provides funds for the operation, maintenance,

communications, and logistical support of the air traffic control and

air navigation systems. It also covers administrative and managerial

costs for the FAA's regulatory, airports, medical, engineering and

development programs.

The operations appropriation includes the following major activities:

(1) operation on a 24-hour daily basis of a national air traffic system;

(2) establishment and maintenance of a national system of aids to

navigation; (3) establishment and surveillance of civil air regulations

to assure safety in aviation; (4) development of standards, rules and

regulations governing the physical fitness of airmen as well as the

administration of an aviation medical research program; (5)

administration of the acquisition, research and development programs;

(6) administration of the civil aviation security program; (7)

headquarters, administration and other staff offices; and (8)

administration of the federal grants-in-aid program for airport

construction.

COMMITTE RECOMMENDATION

The Committee recommends $5,532,558,000 for FAA operations, an

increase of $230,624,000 (4.4 percent) above the level provided for

fiscal year 1998. This compares to a level of $5,588,130,000 in the

President's budget request. In addition, the FAA is expected to receive

a $43,000,000 permanent user fee appropriation from overflight fees and

$3,842,000 in other user fees, bringing the total operating increase to

5 percent during fiscal year 1999.

A breakdown of the fiscal year 1998 enacted level, the fiscal year

1999 budget estimate, and the Committee recommendation by budget

activity is as follows:

Budget activity Fiscal year--

1998 enacted 1999 estimate 1999 recommended

Air traffic services $4,171,416,000 $4,380,866,000 $4,352,175,000

Aviation regulation and certification 614,168,000 636,027,000 635,418,000

Civil aviation security 98,154,000 128,821,000 128,821,000

Administration of airports 48,052,000 49,854,000 49,554,000

Research and acquisition 92,340,000 94,202,000 92,340,000

Commercial space transportation 6,182,000 6,275,000 6,275,000

Administration 258,491,000 259,014,000 258,365,000

Staff offices 71,750,000 76,071,000 77,071,000

Account-wide adjustments -9,137,000 --- -24,461,000

----------------- ------------------- ------------------

Total budget 5,301,934,000 \1\5,631,130,000 \1\5,575,558,000

Overflight user fee collections --- 43,000,000 43,000,000

Appropriated in this bill 5,351,934,000 5,588,130,000 5,532,558,000

\1\Excludes $3,842,000 in other user fee collections.

FAA Funding Situation

Over the past three years, the Department of Transportation and the

FAA have suggested that the Congressional budget process will be unable

to provide funding for the FAA's true needs over the 1998 2002 time

frame. In response to this and other concerns, Congress established the

National Civil Aviation Review Commission and called for an independent

assessment of FAA's long-term finances last year.

The independent assessment of FAA's financial situation concluded that:

(1) With little or no change in FAA's operations, the agency's

estimate of their long-term funding requirement is reasonable; and

(2) Significant opportunities for cost savings and efficiencies

exist in the FAA today, and should be taken advantage of to reduce

future budgetary requirements.

After reviewing this report and other information submitted by the

FAA, the Committee does not believe the federal budget process is

inherently or structurally incapable of providing adequate resources for

the FAA. The resources in this bill confirm that the Congress can

provide significantly increasing resources for the FAA, even above the

rates of increase of aviation activity. In this bill, appropriations for

FAA's air traffic operations increase by approximately $180 million (4.3

percent)--far beyond the estimated rate of increase in aviation

activity. Grants for improvements at our nation's airports are increased

by 6 percent. Funding for FAA air traffic control capital programs are

above the fiscal year 1998 level as well, by 5.3 percent.

In recommending these increases in the agency's budget, the Committee

hopes the FAA will leverage this increase by making structural and

process changes in the agency to improve productivity and reduce waste,

as suggested in the independent assessment. The independent assessment

noted that even a 10 percent improvement in air traffic productivity

would save the agency $21,000,000 a year in operating costs, and

recommended the FAA Administrator mandate that FAA's Productivity

Working Group establish specific goals and expectations in this area.

They noted ``air traffic control operations costs continue to increase

faster than the demand for FAA air traffic control services''. The IG

testified before the Committee last year that ``there are a lot of

opportunities for them [the FAA] to reduce their operating costs''. Yet

currently the FAA's budget assumes little air traffic control

productivity improvement in the 1998 2000 time period.

USER FEES

The bill assumes the collection of no additional user fees in fiscal

year 1999 that were not Congressionally authorized for collection during

fiscal year 1998 and includes a provision prohibiting funds in this Act

from being used to plan or promulgate any regulation to institute any

new user fee not specifically authorized by law after the date of

enactment of this Act. The bill assumes the FAA will collect

approximately $43,000,000 during fiscal year 1999 from overflight user

fees and $3,842,000 from other authorized user fees.

The Committee's specific recommendations by budget activity are

discussed below.

AIR TRAFFIC SERVICES

The Committee recommends $4,352,175,000 for air traffic services, an

increase of $180,759,000 (4.3 percent) above the fiscal year 1998

enacted level. The Committee believes these increases are needed as air

traffic activity continues to increase, and as FAA struggles to maintain

both old and modernized air traffic control systems simultaneously. As

the following chart indicates, this 4 percent increase is far above the

anticipated workload indicators for fiscal year 1999. This is similar to

past years.

Insert Folio 001 here

AIR TRAFFIC CONTROLLER PAY AND STAFFING LEVELS

The FAA recently announced a new, five-year agreement with the

largest of its labor unions which will affect the agency's budget

significantly for the next several years. The agreement with the

National Air Traffic Controllers Association is estimated to result in

an average 13.5 percent increase in base salary for covered employees,

which will add up to $940,000,000 in new budgetary requirements over the

fiscal year 1999 to 2003 time period. If similar increases are afforded

to other, non-bargaining unit members of the air traffic service, the

additional cost is estimated at over $1 billion. The Committee is aware

that the agreement also includes productivity improvements and caps on

staffing which should reduce the impact of the salary increases;

however, it does not appear at this time that such improvements will

offset more than 15 percent of the total cost increase. To honor this

agreement, FAA estimates that between $70,000,000 and $80,000,000 will

be required in fiscal year 1999. None of these funds have been budgeted

by the FAA, however, and no funds are specifically set aside in this

bill for that purpose. The Committee directs the FAA administrator to

submit a report to the House and Senate Committees on Appropriations no

later than December 31, 1998 which explains in detail the pay scales

established under this new agreement, the dollar impact in fiscal year

1999, and the programs and activities being reduced or deferred in

fiscal year 1999 to finance the new agreement.

Maximum age rule. --Under discretionary powers authorized by

Congress, the FAA has promulgated a maximum age rule for air traffic

controllers which specifies that no air traffic controller may be

initially hired by the FAA over 31 years of age. The Committee has been

made aware of an instance this year where the FAA hired an air traffic

controller with full knowledge that the controller exceeded that age

slightly. After the individual relocated, the agency noticed its error

and advised the individual that he would be compelled to take a

``voluntary'' change in employment status in order to keep his job. At

the same time, the agency has been rehiring many former controllers who

have not worked for the FAA for at least fifteen years and who are well

over the age limit. The Committee is unclear whether the maximum age

rule continues to serve a valid purpose at the agency, given the FAA's

desire to have maximum flexibility in personnel practices. In addition,

since a large percentage of new hires are over the age limit anyway,

there is the appearance of unfairness between different classes of

potential air traffic controllers. Therefore, the Committee directs FAA

to review the maximum age rule, and strongly consider waiving the rule

for any employees mistakenly hired by the agency which meet all hiring

criteria except the age limitation.

Air traffic controller training.-- The FAA uses a controller

training contract and training at the FAA Academy in Oklahoma (referred

to as ``technical training'') to supplement training done by local staff

at each air traffic facility. The controller training contract provides

site specific training at all en route and five major terminal

facilities. The funding for technical training supports course

development and instruction at the FAA Academy using FAA and contract

employees. The fiscal year 1999 budget request included $15,500,000 for

the controller training contract and $24,938,000 for technical training,

for a total of $40,438,000. This is $4,000,000 (11 percent) above the

estimated level for fiscal year 1998. The Committee bill includes the

requested amount, and the FAA is encouraged to maintain those funds for

training throughout the year if at all possible.

Contract weather services, Hickory Regional Airport. --The Committee

directs the FAA to continue providing contract weather observation

services at the Hickory Regional Airport in North Carolina during fiscal

year 1999.

Contract weather services, Northwest Alabama Regional Airport. --The

Committee directs the FAA to continue providing contract weather

observation services at the Northwest Alabama Regional Airport in Muscle

Shoals, Alabama.

Adjustments to the budget estimate are as follows:

NAS handoff. --The recommended bill includes an increase of 10

percent for overtime related to the implementation of new equipment at

air traffic control facilities, compared to the 32 percent increase

requested.

Aeronautical charting. --The bill includes $27,311,190 for

aeronautical charting, a reduction of $5,000,000 from the budget

estimate of $32,311,190. The reduction would eliminate the proposed

increase to subsidize rental costs at the National Oceanic and

Atmospheric Administration.

Annualization of fiscal year 1998 new hires. --The fiscal year 1999

budget estimates that $10,428,000 would be required to annualize in

fiscal year 1999 the 500 net new hires from fiscal year 1998. However,

due to shortfalls in fiscal year 1998, it does not appear likely that

FAA will meet this hiring target. Therefore, a lower level of

annualization funding will suffice. The Committee recommendation reduces

this amount by approximately one half.

MARC. --The recommendation includes $1,700,000 to continue operating

support for the Mid-America Aviation Resource Consortium (MARC) in

Minnesota. This is the same as enacted for fiscal year 1998. These funds

are to be used in Minnesota to support the air traffic controller

training program, to continue research and curriculum development for

the FAA, to follow-up on MARC graduates and to develop other materials

as needed for FAA-related projects. MARC has a successful record in

placing its graduates directly in the field. The Committee supports and

encourages this cost-effective manner of training, and directs the FAA

to continue the current contractual relationship with MARC, as

prescribed by law.

Systems maintenance. --FAA budget documents indicate that the

national airspace system is deteriorating at an increasing rate, as new

systems compete against old for maintenance priorities and the agency

holds down or reprograms resources for maintenance staffing and spare

parts. The Committee received evidence from FAA and other sources this

year which highlight this problem:

(a) Although FAA agrees that the agency should budget for maintenance

personnel at least to 80 percent of that called for in their staffing

standard, the fiscal year 1999 budget would accommodate only 71 percent.

This compares to approximately 103 percent of the staffing standard for

air traffic controllers. The comparable figure five years ago was 82

percent.

(b) The agency is not meeting its employment goals for the

maintenance workforce. For example, in fiscal year 1997, the FAA

expected an employment level of 8,410 for the maintenance workforce, but

at the end of the year, had only achieved 8,281. This is because

attrition was higher than expected.

(c) Maintenance overtime has increased dramatically--over 102

percent--between fiscal years 1996 and 1999. The FAA now budgets for

over 420,000 hours of maintenance overtime.

(d) The request for spare parts in fiscal year 1999 is the lowest of

any year since 1993, and fiscal year 1998 obligations for spare parts

are also lower than any year since 1993. This comes despite a growing

inventory of deployed systems and facilities.

(e) Unscheduled outages and mean time to restore for some systems are

increasing significantly. For example, unscheduled outages for VOR

systems during 1996 were at their highest level since 1990. In

explaining the increases in mean time to restore NAS equipment, FAA

officials state that this is because the equipment is old, replacement

parts may not be readily available, the workforce is small, and newer

technicians may not have the expertise to repair the old equipment.

The Committee is concerned about this situation, and consequently

recommends an additional $12,584,000 for maintenance. The FAA may decide

the distribution of these funds between spare parts and staffing.

Mather Airport instrument landing system.-- Once again this year,

the bill includes a general provision (sec. 313) which allows airports

to transfer, without consideration, instrument landing systems and

associated lighting equipment to the FAA, if the purchase of such

systems had been assisted by an FAA airport grant. The Committee

believes that the GRN 29 instrument landing system at Sacramento Mather

Airport in California meets these requirements, and the FAA is directed

to take over the operation and maintenance of that system in accord with

section 313 of this Act.

Leased telecommunications. --The recommended level provides an

increase of 2.5 percent instead of the 7 percent increase requested.

GPS-related telecommunications costs. --The Committee does not

believe that operations costs for the wide- and local-area augmentation

systems (WAAS and LAAS, respectively) utilizing the GPS satellite system

are yet appropriate for FAA's operating budget. The Committee believes

these costs should be borne by the F&E budget, given the developmental

nature of these systems. Therefore, the bill transfers $22,700,000 for

the WAAS project and $675,000 for the LAAS project to the F&E

appropriation.

Aviation Regulation And Certification

The Committee recommends $635,418,000 for aviation regulation and

certification, $609,000 below the budget request and $21,250,000 (3.5

percent) above the fiscal year 1998 enacted level.

Flight standards, new staffing. --The Committee recommendation does

not include $425,000 for the requested six new headquarters aviation

safety inspector positions. According to budget justification documents,

these positions appear to be related to FAA's modernization program, not

for ongoing operational responsibilities. The Committee is cautious

about raising the operating budget to address temporary needs caused by

the implementation of new technologies, and encourages the FAA to

finance these activities through the F&E budget, or minimize their

requirement through the implementation of labor-saving automation

technology.

Aviation safety program. --FAA's flight standards service conducts a

program known as the aviation safety program (ASP), which produces and

distributes safety educational programs and materials for general

aviation pilots. Since the large majority of aviation accidents in this

country are general aviation accidents, the Committee believes that a

small increase in this area could result in a large payoff. The bill

includes $700,000 for the ASP program, an increase of $500,000 above the

budget estimate.

Safety-related training activities.-- The Committee is aware of a

training plan being developed by the Aviation Institute at the George

Washington University/Virginia campus and the Institute for Public

Policy and the Department of Psychology at George Mason University,

through the Aviation Policy Program, to address important air travel

safety issues. The program is intended to improve aviation safety

through human factors research and through research into the legal,

economic, policy, and technical dimensions of domestic and international

aviation. The Committee urges the FAA to work with the university to

determine how this training plan can be structured to support and

complement the agency's other ongoing safety programs.

Rulemaking. --Given the ``Challenge 2000'' study and National Civil

Aviation Review Commission recommendations that the FAA's rulemaking

process should be streamlined, as well as the view in Congress that

regulations should be held at the minimum level necessary, the Committee

does not find it justified to increase the rulemaking budget by 24.5

percent over the past two fiscal years, as the fiscal year 1999 budget

assumes. The recommendation would freeze these costs at the same dollar

level as enacted for fiscal year 1998, a reduction of $684,000 from the

budget estimate.

Automatic dependent surveillance-broadcast system. --The Committee

understands that the automatic dependent surveillance-broadcast (ADS B)

system is pending the approval of the FAA. The Committee is supportive

of aircraft being equipped with the best collision avoidance system

available. However, understanding the concern for the lack of collision

avoidance systems in cargo aircraft, the Committee directs the FAA to

approve ADS B by January 1, 2001, or mandate traffic alert and collision

avoidance system (TCAS II) in all cargo aircraft at that time.

Civil Aviation Security

The Committee recommends $128,821,000 for civil aviation security,

the same as the budget estimate and an increase of $30,667,000 (31.2

percent) above the fiscal year 1998 enacted level. The bill includes

funds for 15 additional staff years for aviation security personnel, as

requested. The majority of the increase is required to annualize

salaries of new personnel hired with funding from the Supplemental

Appropriations Act, 1997.

Administration of Airports

The Committee recommends $49,554,000 for the administration of

airports program, a reduction of $300,000 from the budget estimate and

$1,502,000 (3.1 percent) above the fiscal year 1998 enacted level. The

reduction would eliminate funds for a new department-wide grants

management system. The Committee is not convinced that such an

initiative is of sufficiently high priority, given current budget

constraints.

Research And Acquisition

The Committee recommends $92,340,000 for research and acquisition,

$1,862,000 (2 percent) less than the budget request and approximately

the same as the fiscal year 1998 enacted level. This activity finances

the planning, management, and coordination of FAA's research and

acquisition programs. A separate recommendation is discussed under

``accountwide adjustments'' transferring the funding for certain

acquisition personnel to the ``Facilities and equipment'' appropriation.

Commercial Space Transportation

The Committee recommends $6,275,000 for the Office of Commercial

Space Transportation (OCST), the same as the budget request and $93,000

(1.5 percent) above the fiscal year 1998 enacted level.

Administration

The Committee recommends $258,365,000 for administration, a reduction

of $649,000 from the budget estimate.

Washington flight program (hangar six) .--Data provided by the FAA

shows that a large percentage of the use of FAA aircraft is by other

agencies such as NASA, the FBI, and the Department of Justice. The

aircraft is also used significantly by NTSB for non-emergency situations

(e.g., meetings) where it appears that commercial travel could be used.

It appears that some of these trips could be performed either on

commercial aircraft or on a reimbursable basis, with these other

agencies paying their fair share of operating costs. The recommended

reduction of $649,000 allows approximately half of the requested funds

for these operations. The recommended level assumes that additional

funds will be collected on a reimbursable basis. However, the Committee

assumes that emergency ``go team'' operations of NTSB or the secretary's

office will be exempt from the reimbursable requirement.

Staff Offices

The Committee recommends $77,071,000 for certain headquarters staff

offices funded in this budget activity, an increase of $1,000,000 above

the budget estimate. The increase is to fund a new initiative, the

Office of Safety Assessment, which is explained more fully below.

Office of Safety Assessment. --The bill includes $1,000,000 for the

FAA to establish a new Office of Safety Assessment. The primary

responsibility of this office is to coordinate activities which will

result in more effective and useful measurement of aviation safety

nationwide. The Committee is concerned that, today, aviation safety

statistics are produced, all too often, in a haphazard way which

responds to a particular incident or media exposure. This is not the

most effective way to ensure the public safety in aviation. The

Committee is heartened that both the FAA and the commercial airline

industry are moving in the direction of providing a more thoughtful,

comprehensive approach to safety measurement which is critical if safety

is to be improved. In this year's hearing, the FAA administrator said

``we would, Mr. Chairman, embrace that enthusiastically . . . I think

formalizing that is a very good idea, and I think it would be very

helpful to us''.

The Committee envisions that a task force would be created with

representatives from, at a minimum, the Federal Aviation Administration,

the National Transportation Safety Board, the DOT Office of Inspector

General, the General Accounting Office, the Air Transport Association,

the Aircraft Owners and Pilots Association, and the Flight Safety

Foundation. The task force would be assisted by detailees, as

appropriate, and a permanent staff of five. The recommendation includes

funds for five staffyears and administrative support.

English language proficiency. --The Committee appreciates the work

of the Office of International Aviation over the past year at designing

an English language proficiency program which more closely meets

Congressional intent. The Committee remains concerned that not enough is

being done around the world to promote and standardize proficiency in

the English language by pilots and air traffic controllers around the

world. The Committee understands that FAA will allocate approximately

$350,000 to continue this effort in fiscal year 1999.

Accountwide Adjustments

The Committee recommends accountwide adjustments resulting in a net

decrease of $24,461,000 below the budget estimate. These adjustments are

discussed below.

Advisory and assistance services. --The recommendation allows the

same level as last year instead of the requested increase of 56.2

percent. This results in a savings of $179,000.

TASC. --The Committee recommendation reduces the amount of FAA

activities to be performed by OST's Transportation Administrative

Service Center (TASC) due to lack of justification. In fiscal year 1998,

the FAA budget included $28,400,000 for TASC activities. The fiscal year

1999 budget includes $30,600,000, and there are indications the TASC

will submit billings for $37,000,000. Given the rising cost and the

Committee's uncertainty about the cost-effectiveness of these services,

the bill includes language capping FAA's costs at $28,600,000, which is

the fiscal year 1997 level. This results in a reduction from the budget

estimate of $2,000,000.

Contractual studies. --The recommendation holds contractual studies

to slightly lower than the fiscal year 1998 level, instead of the 8.1

percent increase requested. The recommendation provides $9,428,000,

compared to the budget estimate of $10,428,000 and the fiscal year 1998

enacted level of $9,640,000. The reduction is due to budget constraints.

Acquisition staffing. --The Committee recommends transferring

funding responsibility for several acquisition-related offices from the

operations appropriation to ``Facilities and equipment'' (F&E), which is

more closely associated with the work being performed. Although

executive, planning, and general support offices would remain in the

operations appropriation, those offices which support individual

programs more directly should be financed out of the capital budget,

because their product is to assist in modernizing the system, not

perform day-to-day operations of today's system. The bill assumes the

following offices and staffyears will be transferred, and the

$17,440,000 in associated costs have been added in F&E under ``personnel

and related expenses''.

Office

FTE

ATS Development:

17

En route IPT

14

Terminal IPT

9

Tower/FSS IPT

7

TFM IPT

6

Oceanic IPT

5

CNS Systems Development:

18

Infrastructure IPT

12

Communications IPT

9

Surveillance and weather IPT

21

Aircraft and avionics IPT

14

Systems Architecture and Investment Analysis Office:

20

5 subordinate offices

60

Year 2000 Program Office:

6

Total

218

Offset for miscellaneous user fees. --The recommendation deletes

$3,842,000 of the request in anticipation that a similar amount in

miscellaneous (non-overflight) user fees will be collected in fiscal

year 1999 to offset the reduction and credited to this appropriation.

These user fee collections are the same as the FAA's estimate, and break

down as follows:

Foreign repair station fees $3,200,000

Civil aviation registry fees 500,000

Security fingerprinting fees 140,000

Air taxi registration fees 2,000

------------

Total 3,842,000

Bill Language

Manned auxiliary flight service stations. --The Committee bill

includes the limitation requested in the President's budget prohibiting

funds from being used to operate a manned auxiliary flight service

station in the contiguous United States. The FAA budget includes no

funding to operate such stations during fiscal year 1999.

Second career training program. --Once again this year, the

Committee bill includes a prohibition on the use of funds for the second

career training program. This prohibition has been in annual

appropriations Acts for many years, and is included in the President's

budget

Sunday premium pay. --The bill retains a provision begun in fiscal

year 1995 which prohibits the FAA from paying Sunday premium pay except

in those cases where the individual actually worked on a Sunday. The

statute governing Sunday premium pay (5 U.S.C. 5546(a)) is very clear:

``An employee who performs work during a regularly scheduled 8-hour

period of service which is not overtime work as defined by section

5542(a) of this title a part of which is performed on Sunday is entitled

to * * * premium pay at a rate equal to 25 percent of his rate of basic

pay.'' Disregarding the plain meaning of the statute and previous

Comptroller General decisions, however, in Armitage v. United States,

the Federal Circuit Court held in 1993 that employees need not actually

perform work on a Sunday to receive premium pay. The FAA was required

immediately to provide back pay totaling $37,000,000 for time scheduled

but not actually worked between November 1986 and July 1993. Without

this provision, the FAA would be liable for significant unfunded

liabilities, to be financed by the agency's annual operating budget.

This provision is identical to that in effect for fiscal years 1995

through 1998, and as requested by the administration in the fiscal year

1999 President's budget.

GENERAL PROVISIONS

O'Hare Airport slot management. --The bill continues the general

provision (sec. 329) enacted beginning in fiscal year 1995 which

prohibits funding to implement or enforce regulations that would result

in slot allocations for international operations to any carrier at

O'Hare Airport in excess of the number of slots allocated to and

scheduled by that carrier as of the first day of the 1993 1994 winter

season, if that international slot is withdrawn from an air carrier

under existing regulations for slot withdrawals.

Centennial of Flight Commission.-- The bill includes a provision

(sec. 336) which stipulates that, of the funds provided for FAA

``Operations'', $250,000 shall be for support of the Centennial of

Flight Commission, as reported by the House Committee on Transportation

and Infrastructure in section 711 of H.R. 4057, the ``Airport

Improvement Program Reauthorization Act of 1998''.

FACILITIES AND EQUIPMENT

(Airport and Airway Trust Fund)

Appropriation, fiscal year 1998 $1,900,477,000

Budget estimate, fiscal year 1999 2,130,000,000

Recommended in the bill 2,000,000,000

xlBill compared with:

Appropriation, fiscal year 1998 +99,523,000

Budget estimate, fiscal year 1999 -130,000,000

This account is the principal means for modernizing and improving air

traffic control and airway facilities, This account also finances major

capital investments required by other agency programs, experimental

research and development facilities, and other improvements to enhance

the safety and capacity of the airspace system.

Committee Recommendation

The Committee recommends an appropriation of $2,000,000,000 for this

program, an increase of $99,523,000 (6.8 percent) above the level

provided for fiscal year 1998 and $130,000,000 below the budget

estimate. The bill provides that of the total amount recommended,

$1,749,350,000 is available for obligation until September 30, 2001, and

$250,650,000 (the amount for personnel and related expenses) is

available until September 30, 1999. These obligation availabilities are

consistent with past appropriations Acts and the same as the budget

request.

The following chart shows the fiscal year 1998 enacted level, the

fiscal year 1999 budget estimate and the Committee recommendation for

each of the projects funded by this appropriation:

Offset Folios 56 to 59 insert here

ATC CAPITAL NEEDS AND THE CONGRESSIONAL BUDGET PROCESS

The Committee does not agree with those who suggest that the federal

budget process will be unable to provide for the high-priority air

traffic control modernization needs of the FAA. To the contrary, the

current budget process does not impose fixed or immutable budget limits.

As the GAO and the DOT Inspector General have repeatedly stated, FAA's

modernization problems have not been the result of inadequate funding,

but instead by weak and unfocused management at the FAA. When additional

needs are justified, they are provided in the current process--with a

prime example being the increase provided in this bill. This increase is

greater than the government-wide spending increases for next year under

the discretionary caps, and greater than what will be approved for

capital programs in many other federal agencies.

FUNDING RESPONSIBILITY FOR NAVIGATION AND LANDING SYSTEMS

Last year, the Committee directed FAA not to shift funding

responsibility for air traffic control equipment items which have

historically been acquired and maintained by the Federal Government. The

Committee reiterates that the procedure and maintenance of navigational

aids, landing aids, and approach lighting systems are generally the

responsibility of the government, as part of the ``contract'' that

aviation passengers and general aviation pilots enter into through the

payment of aviation excise taxes. The FAA has the responsibility to

provide a national system of air traffic control equipment and services.

The Committee believes that proposals to shift a subset of these

responsibilities to airports is inappropriate and could result in the

diminution of aviation safety, since airports are neither staffed nor

funded to assume ownership, operation, or maintenance of such equipment.

The procurement and maintenance of such equipment should remain a

financial responsibility of the FAA, and the agency should not move

forward on any proposal to transfer this responsibility without specific

Congressional authorization. The Committee has seen at least one

instance this year where FAA suggested that landing aids and ATC

equipment for a control tower should be financed by the local airport.

The Committee reiterates that this is inconsistent with direction

provided last year.

Engineering, Development, Test and Evaluation

The Committee recommends $462,722,000 for engineering, development,

test and evaluation, an increase of $69,892,000 (16.2 percent) above the

fiscal year 1998 enacted level. Adjustments from the budget request are

explained below.

Advanced technology development and prototyping. --The Committee

recommends $45,857,000 for a new activity, ``Advanced technology

development and prototyping''. Previously these activities were budgeted

in the Research, Engineering and Development (RE&D) appropriation under

activities titled ``Capacity and air traffic management technology'' and

``Communications, navigation and surveillance''. The Committee believes

that, because these activities fit closely with follow-on activities

funded in F&E, management could be improved if they were funded together

in F&E. These activities are funded at the budget request levels, except

for the ``Flight 2000'' project, for which no funds are provided. The

Committee does not intend for this budget adjustment to change the

authorizing committee of jurisdiction in the House, which has

historically been the Committee on Science. For that reason, these

activities are recommended in a single new program, rather than

dispersed throughout the F&E appropriation.

Flight 2000. --Once again this year, the Committee recommends no

funds for this project, a reduction of $90,000,000 from the budget

estimate. In last year's report, the Committee observed that the FAA was

not yet ready to begin such an ambitious and expensive undertaking, had

not decided on the sites for the project, and had not achieved industry

consensus. Regrettably, the Committee reaches the same conclusion this

year as well. Although the FAA has made significant progress in the

planning for this program, it is apparent that many of the major

decisions which would help justify such a large initial investment are

not scheduled until after this year's appropriations process is

complete. Only two months ago, the Aircraft Owners and Pilots

Association--a major participant in this project--requested that FAA

redesign Flight 2000, saying the program ``has been viewed within FAA as

a Christmas tree, with program offices clambering to hang their

ornaments so they can share in anticipated Flight 2000 funding''. While

not opposed per se to the concept of this project, the Committee

requires more detailed information before approving such an expensive

undertaking. The Committee also notes that the program is not

authorized. The Committee will reconsider the program for funding again

next year, once the pertinent justification documents are completed and

reviewed.

En route automation. --The budget request of $118,000,000 included

$46,000,000 for full-scale development of conflict probe and $72,000,000

for replacement of the host computer system. The Committee

recommendation for these items provides funding under Free Flight phase

one, as requested by the FAA. Funding for conflict probe has been

reduced to $31,500,000 due to budget constraints and host replacement is

funded at $13,200,000. The Committee bill assumes that additional

funding for host replacement, up to the requested level, will be made

available for Year 2000 date change programs from a supplemental

appropriation to be addressed later in the year.

Oceanic automation. --The Committee recommends no funding to

continue this project due to escalating cost overruns and serious

schedule slippage. Two years after FAA awarded a contract for

development of the advanced oceanic automation system, the program

appears to be in a state of chaos. Both the prime contractor and FAA

acknowledge that there are schedule slippages and large cost overruns in

this program. Given FAA's proposal in fiscal year 1998 to reprogram

existing funds from this program, and the agency's decision this year to

terminate phase two, it is far from clear whether the program is still

cost-beneficial, or whether it can be sustained to its completion, given

the increased cost. The recommendation to terminate this program results

in a savings of $13,700,000.

Next generation VHF air/ground communication system. --The Committee

deletes the $500,000 requested for this item due to lack of

justification. The budget documents indicate that these funds are for

activities such as ``system transition planning'' and ``acquisition

documentation development''. Those documents also state that future

requirements are ``under review''. Given this tremulous justification,

the Committee defers funding at this time.

Free flight phase one. --The Committee recommends total funding of

$168,200,000 for several programs which have been collectively described

by the FAA as ``free flight phase one''. The Committee also recommends

transferring those activities into a consolidated budget line, so that

the program and its constituent elements may be more effectively

monitored over time. The Committee recommendation for each of these

projects and a comparison to both the original budget estimate and a

budget amendment submitted (by letter) for these items, is as follows:

[In thousands of dollars]

Line item Project Original budget Amendment Total request Committee recommended

1A04 Air Traffic Management $47,800 $16,500 $64,300 $64,300

(Passive FAST) (24,100) (16,500) (40,600) (40,600)

(URET ADM) (5,800) (0) (5,800) (5,800)

(CDM) (10,600) (0) (10,600) (10,600)

(Other) (7,300) (0) (7,300) (7,300)

1A05 En Route Automation 118,000 0 118,000 44,700

(Conflict Probe) (46,000) (0) (46,000) (31,500)

(Host Replacement) (72,000) (0) (72,000) (13,200)

1A06 Aeronautical Datalink 16,500 6,500 23,000 23,000

(CPDLC) (9,200) (6,500) (15,700) (15,700)

(Other) (7,300) (0) (7,300) (7,300)

TBD Initial SMA 0 6,000 6,000 6,000

TBD FFPI Integration 0 8,000 8,000 8,000

2A05 WARP 20,000 2,200 22,200 22,200

----------------- ----------- --------------- -----------------------

Total 202,300 39,200 241,500 168,200

The Committee supports the purpose of this program, which is designed

to develop simultaneously a number of technologies which would provide

safety and capacity benefits for both general aviation and commercial

airline passengers. This program is the recommendation of the NAS

Modernization Task Force convened by the Administrator last year, and

later an RTCA Free Flight Select Committee. The Committee believes the

FAA should be congratulated for the consensus it reached in developing

free flight phase one. The Committee agrees that accelerating a subset

of FAA's overall modernization program is the best way to speed new

technologies to the field.

Local area augmentation system (LAAS). --The recommendation reflects

a transfer of $675,000 from the operations appropriation to more

appropriately reflect the nature of telecommunications costs being

incurred. These funds are now included under ``Next generation

navigation and landing system'', as explained below.

Next generation navigation and landing systems. --The Committee

recommends total funding of $129,875,000 for a new budget line titled

``Next generation navigation and landing systems'', which includes

funding for the wide area augmentation system (WAAS). A comparison of

the Committee recommendation to the budget estimate is as follows:

Project FY99 budget Committee recommended

WAAS research and development $101,500,000 $80,000,000

WAAS procurement (#2D09) 16,000,000 ---

WAAS telecommunications (transfer from ops) 22,700,000 22,700,000

LAAS research and development 6,500,000 6,500,000

LAAS telecommunications (transfer from ops) 675,000 675,000

Instrument landing system (ILS) --- 10,000,000

Tactical landing system (TLS) --- 5,000,000

LORAN navigation system --- 5,000,000

--------------- -----------------------

Total 147,375,000 129,875,000

(a) Wide area augmentation system. --The Committee recommends total

funding of $102,700,000 for continued development of the GPS wide area

augmentation system (WAAS). This is 73 percent of the $140,200,000

requested, and compares to $152,830,000 provided last year. Since

Congressional action on the budget last year, the FAA announced that

sole means navigation using WAAS may not be possible due to technical

uncertainties regarding solar disturbances, the possibility of signal

jamming, and issues surrounding continuity of the signal. Although the

FAA is still researching this issue, the IG testified this year that

``in our opinion, some type of backup system for WAAS will be needed for

the foreseeable future . . . because of significant unresolved issues

and the relatively fluid state of program definition, we plan to

continue monitoring the WAAS program''. The General Accounting Office

reported earlier this year that a large portion of the WAAS benefits are

calculated amounts of very small passenger time savings--averaging

thirty seconds per passenger. In past years, both the Volpe

Transportation Systems Center and the GAO concluded that the use of such

savings in cost-benefit studies was highly questionable.

The apparent softness in program benefits combined with

newly-announced uncertainty over the total cost to achieve these

capabilities makes the Committee wary of proceeding at the current pace

in this program. The technical uncertainties make clear that WAAS is

still very much a developmental program--and one in which future costs

could rise significantly to address technical issues. The Committee is

supportive of continued WAAS research, but at a slower pace. The

Committee recommends $80,000,000 to continue this work, with a special

focus not on hardware procurement and installation, or on phase II and

III activity, but on resolving the research issues which continue to

surround the program. The bill also includes the transfer of $22,700,000

from the operations budget for telecommunications costs related to WAAS.

It is clear that, after the agency decides whether or not a backup

system is required, a new benefit-cost analysis will be required to

revalidate the WAAS investment, and that such analysis should consider

the costs and benefits to users of all systems affected. For example,

the decision on a backup system has ramifications not only for the FAA,

but also for the Coast Guard, which currently operates (and would pay to

decommission) the Loran navigation system, which is used primarily by

maritime users. In addition, concerns over the adequacy of WAAS as a

sole means of navigation stem in part from the findings of the

President's Commission on Critical Infrastructure Protection and on

jamming issues which have national security implications far beyond the

FAA. For these reasons, the Committee directs that the decision on a

WAAS backup system be made by the Secretary of Transportation, in

consultation with the FAA and other affected organizations.

The bill also includes language prohibiting the FAA from signing a

lease for WAAS satellite services until the FAA administrator certifies

to the House and Senate Committees on Appropriations that the FAA has

completed a lease versus buy analysis which indicates that such lease

will result in the lowest overall cost to the agency. For many years,

DOT appropriations Acts have included a provision which limits the

agency's ability to obligate funds under general multiyear procurement

authority in advance of appropriations. This type of control is in place

to ensure that the agency does not commit the government too far in

advance of Congressional review and appropriations. The Committee is

especially sensitive on this point with the FAA, which has a history of

proceeding too quickly into procurement. For fiscal year 1999, the FAA

has suggested a new twist on this old theme. The agency has proposed

that, for WAAS satellite communication services, the agency would sign a

contract for the development, installation, and checkout of satellite

payloads, the pro rata share of launch costs, and routine operating

costs, but allow all these costs to be rolled into a single annual

service charge, to be funded from the operating budget. The Committee

believes this would set a dangerous precedent of using operating funds

for items which are, upon detailed analysis, little more than

traditional acquisition activities. In addition, FAA's analysis

indicates such a lease may be as much as $200,000,000 more expensive

than other alternatives, partly to compensate a prime contractor for the

risks in this approach. The Committee is highly doubtful that the

operating budget would be able to sustain such a program in the

outyears, especially if the agency continues to pay operating and

maintenance costs for today's systems as well.

For these reasons, the Committee insists that the distinction be kept

between the operating and capital budgets, and that the agency not

commit the government in advance of appropriations through leases which

include significant elements traditionally defined as acquisition or

procurement.

(b) Instrument landing systems (ILS). --The Committee recommends

$10,000,000 for continued procurement of instrument landing systems. The

Committee believes that, given the uncertainties in the WAAS program,

the FAA should continue procuring ILS systems and install them at those

locations with the highest cost-benefit. It is important to add such

funds this year, because the existing contract expires in December 1998.

(c) Tactical landing systems. --The recommendation includes

$5,000,000 for procurement of tactical landing systems.

(d) Loran navigation system. --The recommendation includes $5,000,000

for continued upgrade of the Loran navigation system.

Procurement of Air Traffic Control Facilities and Equipment

The bill includes $839,784,800 for the procurement of air traffic

control facilities and equipment, a reduction of $49,943,200 (5.6

percent) below the fiscal year 1998 enacted level.

En route automation. --The recommended bill includes $166,700,000

for this program. Reductions are due to budget constraints and the need

to fund higher priority projects. A comparison of the budget estimate to

the Committee recommendation for activities in this project follows:

Activity name FY99 budget Committee recommended Change to request

DSR deployment $173,600,000 $153,600,000 -$20,000,000

En route SW dev and support 7,000,000 4,000,000 -3,000,000

Flight data input/output 2,100,000 2,100,000 ---

Host/DARC/Pamri sustainment 9,000,000 5,000,000 -4,000,000

HID/CD LAN 4,700,000 2,000,000 -2,700,000

General reduction -1,100,000 --- ---

--------------- ----------------------- -------------------

Total 195,300,000 166,700,000 -28,600,000

ARTCC building improvements. --The recommended bill includes

$49,800,000 for this program. Reductions are due to budget constraints

and the need to fund higher priority projects. A comparison of the

budget estimate to the Committee recommendation for activities in this

project follows:

Activity name FY99 budget Committee recommendation

ARTCC improvements $45,000,000 $40,000,000

Honolulu CERAP relocation 17,100,000 8,000,000

Security 1,500,000 1,500,000

Regionally originated projects 331,600 300,000

-------------- --------------------------

Total 63,931,500 49,800,000

Voice switching and control system (VSCS). --The Committee

recommends $7,500,000 for VSCS, a reduction of $7,000,000 to the budget

estimate. The Committee believes that upgrades to this

already-commissioned system can proceed at a slower pace in order to

fund other requirements.

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