U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

99–010

" ! SENATE 107th Congress

2d Session

REPORT

2002

107–161

Calendar No. 414

NATIONAL AVIATION CAPACITY

EXPANSION ACT OF 2002

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND

TRANSPORTATION

on

S. 2039

JUNE 11, 2002.—Ordered to be printed

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ERNEST F. HOLLINGS, South Carolina, Chairman

DANIEL K. INOUYE, Hawaii

JOHN D. ROCKEFELLER IV, West Virginia

JOHN F. KERRY, Massachusetts

JOHN B. BREAUX, Louisiana

BYRON L. DORGAN, North Dakota

RON WYDEN, Oregon

MAX CLELAND, Georgia

BARBARA BOXER, California

JOHN EDWARDS, North Carolina

JEAN CARNAHAN, Missouri

BILL NELSON, Florida

JOHN MCCAIN, Arizona

TED STEVENS, Alaska

CONRAD BURNS, Montana

TRENT LOTT, Mississippi

KAY BAILEY HUTCHISON, Texas

OLYMPIA SNOWE, Maine

SAM BROWNBACK, Kansas

GORDON SMITH, Oregon

PETER G. FITZGERALD, Illinois

JOHN ENSIGN, Nevada

GEORGE ALLEN, Virginia

KEVIN D. KAYES, Staff Director

MOSES BOYD, Chief Counsel

GREGG ELIAS, General Counsel

JEANNE BUMPUS, Republican Staff Director and General Counsel

ANN BEGEMAN, Republican Deputy Staff Director

Calendar No. 414

107TH CONGRESS REPORT

2d Session " ! SENATE 107–161

NATIONAL AVIATION CAPACITY EXPANSION ACT OF 2002

JUNE 11, 2002.—Ordered to be printed

Mr. HOLLINGS, from the Committee on Commerce, Science, and

Transportation, submitted the following

REPORT

[To accompany S. 2039]

The Committee on Commerce, Science, and Transportation, to

which was referred the bill (S. 2039), to expand aviation capacity

in the Chicago area, having considered the same, reports favorably

thereon with an amendment in the nature of a substitute and recommends that the bill (as amended) do pass.

PURPOSE OF THE BILL

The purpose of the bill is to end an impass over airport expansion efforts in the Chicago area. The bill legislates a process to provide that O’Hare International Airport expansion plans and the efforts to move forward with the planning of a new airport south of

the City of Chicago proceed. The bill ensures that all environmental processes, safety and efficiency reviews, and all other relevant Federal analyses are conducted. The bill further leaves untouched the Federal Aviation Administration’s (FAA) ability to exercise its authority in determining the future of the projects. Finally, the bill seeks to ensure that once Federal funds are expended

to begin the O’Hare redesign project, the State will not exercise its

authority to stop the project. The plan has the support of the Governor of Illinois and the Mayor of Chicago.

BACKGROUND AND NEEDS

The dispute over airport expansion in Illinois has been stalled for

many years as various governors and mayors could not come to a

consensus regarding the prospects for a new airport in the Chicago

area. Many proposals were put forward over the past 30 years, but

no progress was made. Under Illinois law, no airport construction

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in the State can proceed without the approval of the governor. Recent efforts by Chicago Mayor Richard Daley to expand O’Hare

International Airport (O’Hare) and efforts by Illinois Governor

George Ryan to move forward with plans for a new airport south

of Chicago were continually at an impasse.

The bill seeks to end that stalemate by ensuring that the O’Hare

reconfiguration plans and the plans to build a new south suburban

airport are fully reviewed by the FAA. In addition, the bill provides

that once Federal funds are provided, the State will not exercise its

rights to block the proposed O’Hare expansion plan. It also requires

that all environmental processes be complied with, but does not

guarantee or provide any funding to either Chicago-area project or

to a project for the airport in Gary, Indiana.

With airport expansion in the Chicago region seemingly deadlocked, Senators Harkin and Grassley, as well as Senator Durbin,

began to push for a Federal solution. Flight delays and the lack of

capacity at O’Hare were beginning to limit access to Chicago for

many small towns, and were affecting interstate commerce in many

parts of the country. This led the Commerce Committee to hold a

field hearing in Chicago on June 15, 2001, to urge local factions to

develop a solution that would expand airport capacity in the Chicago region. At the time, nationwide delays, including at O’Hare,

were inhibiting interstate air transportation. Witnesses at the June

hearing included representatives from the City of Chicago, the

State of Illinois, the Suburban O’Hare Commission, Chicago business leaders, and the Chair of the Illinois House of Representatives

Aviation Subcommittee.

On December 5, 2001, Mayor Daley and Governor Ryan reached

a compromise to reconfigure O’Hare while proceeding with planning for a new airport (termed ‘‘South Suburban’’ or ‘‘Peotone’’),

south of Chicago. The agreement to modernize and expand O’Hare

International Airport and to allow construction of a third airport

provides for:

(1) Expanding and reconfiguring O’Hare to eight runways,

with six parallel runways (see Appendix A);

(2) Planning a south suburban airport near Peotone;

(3) Improving ground infrastructure to address traffic congestion, including western access to O’Hare; and

(4) Continuing the operation of Chicago’s Meigs Field (a general aviation airport in Chicago).

The legislation will recognize the agreement between the City

and the State, facilitate interstate commerce, and provide some certainty to the people of Illinois, the traveling public, the passenger

and cargo airlines using O’Hare, and general aviation pilots that

use Meigs Field. Testimony by Mayor Daley at the Commerce Committee’s second hearing on this matter held March 21, 2002, noted

that the City did not want to commit funds to the project only to

have a subsequent governor overturn the agreement. The Committee does not want to see Federal dollars similarly misused. By

supporting Federal legislation, Governor Ryan, Mayor Daley and

the Committee are seeking to avert wasting local and Federal dollars.

O’Hare expansion will provide a significant boost for business interests across the country, and the agreement has earned the

strong endorsement of many national organizations such as the

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AFL–CIO and the U.S. Chamber of Commerce. The aviation industry is also in agreement. Air traffic controllers, the airlines represented by the Air Transport Association, airports represented by

Airports Council International-North America and the American

Association of Airport Executives, the Aircraft Owners and Pilots

Association, and business leaders throughout the State of Illinois,

all have expressed their support for legislation to expedite modernizing O’Hare. Congressmen Hyde and Jackson, both from Illinois,

testified against the plan and the legislation.

O’Hare is one the world’s largest airports. As noted elsewhere, it

also, prior to September 11, was one of the most delayed airports.

These delays, costing consumers millions of dollars in terms of

time, also limited the ability to add additional flights sought by

small communities throughout the country. With the advent of regional jets, access to O’Hare has become possible for many more

communities. Without a reconfiguration of the facility, in the long

term, such access would be effectively cut off. O’Hare is one of the

few major hubs in the U.S. with two air carriers each operating in

excess of 35 percent of the flights. These hubs provide gateways to

hundreds of other communities and international cities.

In providing a degree of certainty that the agreement reached by

the Governor and Mayor will proceed, albeit with all applicable

legal, environmental and safety reviews, the Committee is seeking

to ensure that once Federal dollars are committed, a future decision will not result in a waste of those resources. Thus, to facilitate

interstate commerce, and to avoid wasteful spending, the bill effectively enables the agreement to be thoroughly reviewed, and if approved, move forward in the normal course of FAA practices.

O’HARE INTERNATIONAL AIRPORT—ITS ROLE IN THE NATIONAL

AVIATION SYSTEM

During World War II, Douglas Aircraft manufactured C–54

transport planes for the United States Air Corps on the site that

is now O’Hare. The City purchased the Douglas facility in 1945,

and built the Orchard Place Airport on the site the following year.

In 1949, the airport was renamed for Edward ‘‘Butch’’ O’Hare, a

Navy fighter ace and Congressional Medal of Honor recipient. By

1959, the City began a massive expansion of O’Hare, and the airport was redesigned to accommodate 20 million passengers annually. However, rapid and dramatic changes in aviation have again

stressed capacity, rendering the once-modern enhancements obsolete.

O’Hare International Airport is a major transportation hub, and

is a crucial by-way for much of the nation’s business and travel demands. Despite the shut down of the air traffic control system in

response to the September 11 attacks, and subsequent flight reductions by the air carriers, O’Hare handled more flights in 2001 than

at any other time in its history and is currently the world’s busiest

airport. Last year, more than 67 million passengers passed through

O’Hare on 911,917 flights. O’Hare averages more than 2,500 commercial flights each day to 174 non-stop markets, provided by 45

passenger airlines, as well as cargo flights provided by 19 cargo

carriers. With non-stop flights to 47 of the 50 states O’Hare serves

more destinations than any other airport in the nation, and more

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than half of those passengers depend on O’Hare to connect between

flights.

With so many travelers depending on O’Hare, a steady flow of air

traffic at the facility is important to locations across the country.

In a report issued last year, however, the FAA determined that

scheduled traffic at O’Hare met or exceeded the airport’s good

weather capacity for 31⁄2 hours per day and its bad weather capacity for 8 hours per day. This stress on capacity at O’Hare is a major

factor leading to flight delays at the airport.

Delays at O’Hare can have a crippling effect on the entire U.S.

aviation system, and the number of users in the system is rapidly

growing while O’Hare’s current configuration has remained unchanged. The FAA’s recently announced aerospace forecast projections indicate commercial air carrier enplanements are expected to

increase from 649.9 million in 2001 to 954.1 million in 2013, which

represents a system-wide growth rate of 4 percent annually over

the next 12 years. Demand at O’Hare alone is anticipated to grow

by 18 percent over the coming decade according to the recent airport capacity report, and the imbalance between capacity and demand growth is expected to significantly increase delays at O’Hare

over this time period.

These delays cost travelers time and money. Moreover, the carriers also suffer financial losses due to the costs attributed to such

delays, including fuel burn and other expenses. Delays cost $166.5

million per year to the airlines at O’Hare alone, and billions to airlines and travelers across the nation (based on an average operation cost of $25.17 per minute of delay for the nationwide fleet).

Last year, prior to September 11, the FAA identified O’Hare as one

of the major choke points in the national aviation system in its

Aviation Capacity Benchmark Report when it identified O’Hare as

the third most delayed airport in the country (after LaGuardia and

Newark) in 2000.

Unlike New York’s LaGuardia Airport and some of the nation’s

other delay-plagued airports, O’Hare has an opportunity to expand

primarily using the existing airport area and provide needed aviation apacity for many years. According to testimony by proponents,

O’Hare’s antiquated runway layout is the primary cause of these

delays. Although it is at the center of the national aviation system,

O’Hare struggles with an old-fashioned, inefficient airfield design.

Modern runway design employs parallel approaches in instrument flight rule conditions. Proponents of the redesign plan assert

that by modernizing O’Hare’s airfield by constructing one new runway and relocating three existing runways, delays and congestion

are projected to be reduced dramatically. An up-to-date configuration, according to testimony by the City of Chicago, will reduce bad

weather delays by 95 percent, and overall delays by 79 percent.

With a broader layout, O’Hare could be far more efficient, and the

whole national air transportation system would benefit. Under the

legislation, the FAA will review the benefits of the redesign pursuant to existing guidelines.

While the need to increase aviation capacity in the Chicago region is clear, taking the necessary action to address this need has

been difficult. In the early 1970s, the City took action to plan for

regional aviation development, and began to prepare a Master Plan

Study for O’Hare which represented the first attempt to formulate

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a systematic plan of growth in the area. While the Master Plan

Study was in the preparation stage, opponents of continued growth

at O’Hare filed suit against the FAA in 1974. Since this time, no

expansion has occurred and no consensus has been achieved on

how to increase capacity for the Chicago region until the agreement

between Governor Ryan and Mayor Daley was reached.

SUMMARY OF MAJOR PROVISIONS

The bill does the following:

Lays out in precise detail the Chicago-area aviation agreement reached by Governor Ryan and Mayor Daley on December 5, 2001, providing for the reconstruction and expansion of

O’Hare and allowing for the construction of a third Chicagoarea airport at Peotone, Illinois. Nothing in the bill guarantees

any funding for the O’Hare or Peotone project, or mandates

that a specific set of runway configurations be approved, as the

FAA retains all its existing discretion to analyze, review, and,

if all relevant tests are met, approve the O’Hare project. For

example, the bill requires that any new runway redesign increase capacity in both instrument and visual flight conditions

and that the percentage of runway incursions not increase.

Seeks to ensure that the deal to expand O’Hare made by the

Governor and the Mayor is not broken, but is thoroughly reviewed and is consistent with the safety and efficiency of the

air traffic control system. Under Illinois law, the City of Chicago cannot build new runways or reconfigure existing runways without the approval of the governor. The bill seeks to

prohibit a future governor from disapproving the decision to

move forward once Federal funds are expended.

Directs the FAA, while retaining FAA’s existing authority, to

implement the agreement reached between the Governor and

the Mayor by facilitating the runway redesign plan submitted

by O’Hare. This action would be contingent upon the FAA’s determination that the plan meets all existing requirements for

the project. The FAA has discretion to modify the plan, if necessary, for efficiency, safety, or other concerns. The bill also

gives priority consideration for an application for a letter of intent (LOI) for a new south suburban airport and also for an

LOI for Gary, Indiana.

Requires any redesign plan to conform with the Clean Air

Act and to conform to all other environmental mandates to the

maximum extent possible,while requiring that the State use its

customary practices to analyze any Clean Air Act requirements.

Requires that before a plan is approved for O’Hare, soundproofing of residential property and schools is included in the

plan.

Requires the continued operation of Meigs Field under the

control of the City of Chicago.

Provides no priority for federal funding of any O’Hare

projects, including the runway redesign plan.

Recognizes the importance of utilizing Gary/Chicago Airport,

Rockford, IL Airport, and other existing infrastructure to promote capacity and reduce congestion in the region.

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Does not make a determination whether if the proposal is

safe, as that is a matter for the FAA to review. The legislation

specifically notes that the FAA’s safety authority and ability to

disapprove the plan is not affected. For example, under the

plan, the distance between runway centerlines, whether configured as independent or dependent parallel runways, and how

each is used, will be carefully reviewed by the FAA. If the layout of the runways is deemed unsafe, inefficient, or needs adjustments, that decision under the bill, and under existing law,

is left to the FAA.

Ensures, with respect to access to O’Hare, that all carriers

benefit from the expansion plans, not just the two major carriers, United and American. Access is facilitated by requiring,

as part of any grant provided, that the FAA receive appropriate assurances that ‘‘have-not’’ or new entrant carriers be

provided reasonable access to gates and facilities. Also, the bill

does not adversely affect the property rights of those incumbent carriers.

LEGISLATIVE HISTORY

On March 20, 2002, Senator Durbin introduced S. 2039, the National Aviation Capacity Act of 2002.

On March 21, 2002, the Committee held a hearing to consider

the agreement reached between Governor Ryan and Mayor Daley

to expand airport capacity in the Chicago area. The hearing focused

on the agreement and also on the legislation that was introduced

by Senator Durbin to help implement the agreement. The Mayor

and Governor both testified in support of the bill.

On April 18, 2002, the Commerce Committee ordered S. 2039 to

be reported with an amendment in the nature of a substitute. The

Committee adopted: a manager’s amendment; an amendment by

Senator Dorgan to protect existing property holders at O’Hare;

compromise language offered by Senator McCain on behalf of Senator Fitzgerald that notes that the FAA Administrator is not required to approve the O’Hare runway redesign plan; an amendment offered by Senator Fitzgerald on runway incursions; and an

amendment offered by Senator Fitzgerald clarifying noise mitigation requirements. The Committee rejected amendments offered by

Senator Fitzgerald that sought to limit the area of O’Hare expansion and to have the Federal government regulate contracting at

O’Hare, which would have required all contract services to be reviewed.

The agreement reached by Governor Ryan and Mayor Daley was

spurred by the June 15, 2001, Commerce Committee field hearing

in Chicago which looked at proposals to improve air service to the

region. At the field hearing, the State and Mayor’s representatives

were told to try to work out a plan by September 1, 2001. While

this deadline was not met, a plan was offered on December 5, 2001,

when the Mayor and Governor agreed to reconfigure O’Hare and

proceed with planning for a new airport (Peotone), south of Chicago.

The agreement between Mayor Daley and Governor Ryan is a

compromise that has taken years to reach. In an effort to make certain that the State of Illinois moves forward on expanding air service in the Chicago region, the agreement by the State and City was

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encompassed in legislation that was introduced in both the House

and Senate. In the Senate, Senator Durbin first introduced S. 1786,

and later introduced S. 2039, to ensure that O’Hare expansion

plans continue. In the House, H.R. 3479 was introduced by Rep. Lipinski, and has more than 100 cosponsors.

On December 7, 2001, Senator Durbin attempted to add S. 1786

to the Department of Defense Appropriations Act of 2002. Senator

Fitzgerald objected and debated the issue for several hours. He argued that only Peotone should be built and that O’Hare expansion

will not add any new capacity, will create unsafe conditions, and

will contribute to noise and other environmental degradations. Senator Durbin subsequently withdrew the amendment.

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing

Rules of the Senate and section 403 of the Congressional Budget

Act of 1974, the Committee provides the following cost estimate,

prepared by the Congressional Budget Office:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, May 7, 2002.

Hon. ERNEST F. HOLLINGS,

Chairman, Committee on Commerce, Science, and Transportation,

U.S. Senate, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 2039, the National Aviation

Capacity Expansion Act of 2002.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contacts are Mark Hadley (for federal costs) and Susan Sieg Tompkins (for the state and local impact).

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

S. 2039—National Aviation Capacity Expansion Act of 2002

S. 2039 would direct the Administrator of the Federal Aviation

Administration (FAA) to assist in redesigning and reconstructing

Chicago O’Hare International Airport in Cook and Dupage Counties, Illinois, in accordance with a specified runway design plan.

FAA also would be directed to assist in developing a south suburban airport in the Chicago metropolitan region. The bill would require an implementation plan to be prepared by the state of Illinois

under the Clean Air Act for regulating emissions associated with

activities at commercial service airports.

CBO estimates that S. 2039 would have no significant impact on

federal spending. The bill could affect which projects the FAA

chooses to support, but based on information from the agency, CBO

estimates that S. 2039 would have no net effect on total spending

for such projects. Because S. 2039 would not affect direct spending

or receipts, pay-as-you-go-procedures would not apply.

The bill would preempt the state of Illinois’ authority to regulate

certain activities of the owners of O’Hare airport. Specifically, the

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bill would preempt the state’s authority to control or regulate the

owner of O’Hare airport as it applies for federal grant funds to pay

for the airport expansion. In addition, the bill would limit the

state’s authority to impose regulations on aviation safety with respect to the development of a runway redesign plan for O’Hare.

These preemptions would be intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA).

In implementing the runway redesign plan at O’Hare, the city of

Chicago would have to take steps to mitigate noise in residential

units and schools around the airport. The city also would be prohibited from using the Clean Air Act to interfere with runway construction at O’Hare or development of another airport south of Chicago. These requirements also would be intergovernmental mandates as defined in UMRA.

Based on information from FAA and the city of Chicago, CBO estimates that the preemptions of state authority and the requirements placed on the city would not impose significant costs. Thus,

the costs of the bill’s mandates would not exceed the threshold established by UMRA ($58 million in 2002, adjusted annually for inflation). The bill contains no new private-sector mandates as defined in UMRA.

The CBO staff contacts for this estimate are Mark Hadley (for

federal costs) and Susan Sieg Tompkins (for the state and local impact). This estimate was approved by Peter H. Fontaine, Deputy

Assistant Director for Budget Analysis.

REGULATORY IMPACT STATEMENT

In accordance with paragraph 11(b) of rule XXVI of the Standing

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported:

Because S. 2039 does not create any new programs, the legislation will have no additional regulatory impact, and will result in

no additional reporting requirements. The legislation will have no

further effect on the number or types of individuals and businesses

regulated, the economic impact of such regulation, the personal privacy of affected individuals, or the paperwork required from such

individuals and businesses. A number of provisions in the bill require the FAA and other agencies to participate in reviewing the

redesign plan, which includes a western access road system, to ensure that an existing airport remain open, and to consider expeditiously applications for letters of intent for airport infrastructure

projects. All of these types of requirements are actions that the

Federal government routinely participates in and the burden on

the government is not increased by the legislation. In addition,

while the bill effectively directs the City of Chicago and State of Illinois to submit their plans and proposals, each has agreed voluntarily to do so, and there are no additional requirements imposed

upon them.

NUMBER OF PERSONS COVERED

The bill affects entities already subject to FAA rules and regulations, and the number of persons covered is unchanged by the legislation. The process to review the application by the City of Chicago to expand O’Hare will be subject to all regulatory and environVerDate 11-MAY-2000 04:54 Jun 12, 2002 Jkt 099010 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\SR161.XXX pfrm04 PsN: SR161
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mental reviews in the normal course of business, and persons affected by any such expansion, should it ultimately be approved,

under existing regulatory procedures will have ample opportunity

to raise issues and concerns with the FAA. The same is true if, and

when, plans to expand the airport at Gary, Indiana, are put forward and if plans to build the new south suburban airport proceed.

ECONOMIC IMPACT

As noted above, O’Hare International Airport is one of the nation’s largest airports, channeling more than 67 million passengers

per year to destinations around the globe. O’Hare generated employment creates jobs for more than 365,000 individuals, and according to reports, the airport is the impetus for more than $30 billion in economic activity annually. The proposed plan to expand capacity from some 900,000 operations to approximately 1.6 million

operations a year is expected to generate 195,000 more jobs and is

projected to reduce delays at the airport by 79 percent overall, cutting costs in terms of travel time, fuel burn and other factors by

a significant amount.

The priority designation for letters of intent, an instrument delineating the FAA’s long term funding commitment to an airport

construction project, if ultimately granted, will provide benefits to

Gary and the new South Suburban Airport, as each of those

projects move forward. At this point, those benefits—delay reductions, jobs, and other factors—have not been clearly identified, but

it is anticipated that each will have positive economic impacts for

their respective areas and the region.

PRIVACY

Nothing in the bill affects the privacy rights of any individuals.

PAPERWORK

Nothing in the bill increases the paperwork burden on the private sector or the Federal government as the existing means for

processing grant applications for airport expansion projects, and

conducting the environmental review process are unchanged. In

one respect, paperwork requirements may be reduced as the State

of Illinois, having already agreed to the O’Hare project and the

Peotone concept, will not have to go through the review in the out

years of the need for the project and the analysis of the funding

requests from the airport, both of which exist under current law.

The bill requires that the FAA submit a report to Congress if necessary criteria to begin construction on the O’Hare redesign plan

have not been met December 31, 2004.

SECTION-BY-SECTION ANALYSIS

Section 1. Short title

Section 1 designates the short title of the bill as the ‘‘National

Aviation Capacity Expansion Act of 2002.’’

Section 2. Findings

Section 2 presents a dozen findings of Congress to explain the

purpose of the bill.

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It also explains the background for the legislation, which includes noting how important airport expansion nationwide is to addressing longer term capacity needs. The Committee last year favorably reported legislation S. 633, the Aviation Delay Prevention

Act, designed to streamline the entire airport construction review

process for all airports. This bill focuses on the particular details

of the Chicago metropolitan area and the need to expand capacity.

Section 3. Airport construction and redesign

Section 3 reiterates the importance of the Chicago region to the

national air transportation system, and directs the FAA Administrator to pursue both an expansion of O’Hare International Airport

and a review of plans for a south suburban airport. Any action

taken by the FAA regarding these efforts are required to be consistent with existing environmental and safety requirements. The

approved runway redesign plan must be able to demonstrate improved capacity regardless of weather conditions, and the existing

property rights of airport users must not be affected by these provisions. Approval of the runway redesign plan is conditioned on

meeting the requirements of the Clean Air Act, the use of best

management practices, and maintaining existing levels of airport

safety.

Section 3 also prohibits the State of Illinois from interfering with

the O’Hare runway redesign plan. Furthermore, the State is required to develop an implementation plan according to the normal

process to account for emissions at the State’s commercial service

airports without intentionally interfering with airport capacity efforts.

The legislation before the Committee presented a unique set of

circumstances because of an unusual set of provisions under Illinois State law to which airports in other States, are not subject.

Under Illinois law, the Governor, through his Transportation Department, must issue a certificate approving authorization for runway construction (Section 47), and no local government can apply

for Federal airport grants without State approval (Section 38.01—

Also referred to as a ‘‘Channeling Act’’). Thus, without Federal legislation, it is possible that a future governor may put a halt to

O’Hare’s expansion after it has already begun, which would waste

federal dollars and adversely affect interstate commerce.

As noted above, Illinois is one of only a few states that provides

airport approval power to State Executive authority. Even if

O’Hare does not receive any State money, the Governor maintains

the power to deny new or relocated runways at O’Hare. Of those

states that have executive approval, according to testimony by

Mayor Daley, only O’Hare has been prevented from implementing

a runway plan because of State opposition.

O’Hare serves as a gateway to hundreds of domestic and international markets for small- and medium-sized communities. Increased capacity at O’Hare would allow communities throughout

the U.S. additional access to many cities, both here and abroad.

Given local agreement, and unique Illinois laws, the bill seeks to

ensure that, consistent with all applicable laws, the review process

moves forward, funding for planning and analysis is made available through the normal FAA grant process, without any priority

for O’Hare, and that once begun and once approved, the Federal,

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State, and local resources are not wasted, merely due to a future

change in political position.

Section 3 also requires that any approved airport plan is phased

to ensure that the construction of an east-west runway which conforms to certain stated conditions does not begin prior to January

1, 2011. Any plan must include public roadway access through the

existing western boundary of O’Hare, and is required to provide

noise mitigation for local communities. The FAA Administrator is

prohibited from moving forward with O’Hare redesign until a satisfactory noise mitigation plan is offered by the City of Chicago

which provides a continual lessening of noise impact for surrounding communities in each successive calendar year. With respect to environmental concerns, the bill specifically requires that

as part of any plan approval for the runway redesign, the City

must include acoustical treatment of residences and schools within

the 65 DNL noise contour. The Committee understands that the

agreement between the Mayor and Governor includes about $450

million for soundproofing. The Committee notes that as the U.S.

commercial fleet has phased out noisier, older aircraft, the number

of people nationwide inside of the 65 DNL area has been substantially reduced, and that for the Chicago area, the reduction represents more than 20,000 homes since 1997. The Federal government will have no financial responsibility for the O’Hare project if

these conditions are not met.

The debate over the costs of the O’Hare expansion project is not

settled by the legislation and the plan includes a number of items

that are not eligible for FAA airport grant monies or Passenger Facility Charges (PFC) funding. According to the Illinois Department

of Transportation, the cost of the proposed O’Hare expansion is estimated at between $5.65 billion and $6.75 billion for the airfield

changes, terminal development, road improvements, land acquisition and noise mitigation. However, as with all airport projects, the

figures are only estimates. As the project is vetted, firmer estimates will be developed. Under existing FAA procedures, the costs

of the project will be reviewed to confirm that, for example, construction estimates are reasonable. In addition, if substantial Airport Improvement Program (AIP) dollars are provided, the FAA

will conduct a benefit cost analysis of the project. With respect to

sources of funding, airport projects are funded from a multitude of

sources—one source is the FAA’s AIP program, under which the

City of Chicago receives approximately $6.5 million in entitlement

funds for O’Hare each year. Another source is passenger facility

charges—a $4.50 per segment fee imposed on passengers to expand

capacity. Other sources include bonds (e.g., general aviation revenue bonds) that may be backed by airport rates and charges imposed on incumbent carriers or that are backed by other sources of

revenue. Generally, such bond financing is provided through the

private sector based upon the viability of the project and the ability

to repay. Thus, the issue of costs is not one that is addressed in

the bill and the matter will be considered by the FAA, the City, the

State, the affected carriers, and the financial community. The Committee, knowing that this issue was not a matter for the Committee

to determine, specifically included language that nothing in the bill

provided any monies or a priority for such Federal funds. As a genVerDate 11-MAY-2000 04:54 Jun 12, 2002 Jkt 099010 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\SR161.XXX pfrm04 PsN: SR161
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eral matter, the FAA where it does provide funds for a major

project, only pays for a small portion of a project’s total costs.

Section 3 requires the FAA Administrator to give priority consideration to applications for letters of intent (LOI) submitted by the

State of Illinois, the State of Indiana, or political subdivisions

thereof for a south suburban airport or an extension of the main

runway at Gary/Chicago Airport. The only priorities accorded to

airports are those for Gary, Indiana, and the new south suburban

airport, both of which will be provided a priority consideration for

their LOI, the FAA’s long-term funding commitment letters. The

Committee understands, in adding Gary to receive such consideration, that the airport has plans to expand its airport and that the

plans include a de minimus amount of funds for environmental

cleanup. Nothing in the Act mandates any specific set of criteria

for approval under the LOI requests, but only that each will be

considered expeditiously. A report to Congress is mandated if necessary criteria to begin construction on O’Hare runway redesign

plan have not been met by December 31, 2004.

Section 3 requires Merrill C. Meigs Field to remain open, owned

and operated by the City of Chicago until January 1, 2026. The

provision enables the City to use revenues from the two largest carriers at O’Hare, American and United, to pay for the operating and

maintenance costs of Meigs. The Committee understands that

these two carriers have agreed to the arrangement and that other

carriers are not party to the agreement. If circumstances at O’Hare

change, the Committee anticipates that agreements would need to

be reached with other carriers. Additionally, Section 3 sets the definition for the terms ‘‘runway redesign plan,’’ ‘‘south suburban airport,’’ ‘‘Administrator,’’ ‘‘State,’’ and ‘‘implementation plan.’’

Section 4. Application with existing law

Section 4 requires that no priority is given to Federal funding of

O’Hare noise mitigation projects or the O’Hare runway redesign

plan.

Section 5. Competitive access requirements

Section 5 requires that, in providing funds to expand O’Hare, the

FAA is required to receive adequate assurances (generally referred

to as grant assurances) that gates and facilities are available, or

will be made available on fair and reasonable terms to all carriers

serving or seeking to serve O’Hare. As expansion of runways and

redesign occurs, and as new terminals are built, the provision ensures that access by carriers other than the two dominant carriers,

United and American, is provided.

Section 5 seeks grant assurances that existing exclusive use gate

arrangements are phased out as contracts expire and as, and if,

new facilities are provided. The City is urged to do so as soon as

practicable so that other carriers can obtain access to the airport.

The phase out of exclusive use contracts for gates and associated

facilities extends to such assets that are either relinquished by existing tenants or those assets added to the airport. Finally, the section requires the airport to conduct a comprehensive study of the

existing facilities and types of contracts in existence.

Under Section 5, in providing relief under the bill, the Committee is cognizant that access to O’Hare must be provided to the

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‘‘have not’’ carriers as mentioned earlier. O’Hare today is dominated by two major U.S. carriers-Chicago-based United Airlines

and Dallas-Ft. Worth-based American Airlines. Other carriers are

concerned that as construction ensues, and new terminals are constructed, that they be provided reasonable access to gates and facilities. Senator Dorgan offered an amendment that was accepted

that protects existing property rights. Senator Dorgan was concerned that the ‘‘have not’’ carriers might have their terminal space

condemned by the City.

Through Section 5, the Committee recognizes that while expansion is critical for all carriers and travelers, access for ‘‘have not’’ carriers must be provided on fair and reasonable terms. The Committee maintains a strong interest in promoting a competitive environment among air carriers and does not favor arrangements that

can have the counter-effect. In building its new facilities and new

terminals, the Committee expects that the City will use funds to

build new gates that are available for ‘‘have not’’ and new entrant

carriers. The assurances the FAA can seek as part of the funding

could include the construction of additional gates. The Committee

believes that the Federal government’s oversight should be focused

and sufficient to help foster the pertinent policy objective. Any alterations of existing arrangements between air carriers and an airport operator, pursuant to this section, should be handled in a balanced manner that recognizes the rights that accrue to each party

in such previously-negotiated business arrangements. The Committee anticipates that, if such arrangements are renegotiated,

they be conducted in good faith between the parties. However, as

contracts expire and new leases are entered into, the Committee

expects that lease arrangements, particularly for the dominant carriers, will use non-exclusive types of arrangements. The Committee

in reviewing this issue understands and expects that existing preferential use gates and facilities contracts for United and American

will all become either preferential or common-use, and that as

other contracts expire or are renegotiated, the City, to the extent

practicable, will utilize non-exclusive arrangements for the ‘‘have

not’’ carriers as well. However, flexibility is provided in the bill so

that the non-dominant carriers are not disadvantaged by such actions, and it is not intended by any of the provisions of Section 5

that any existing contract with ‘‘have not’’ carriers be impaired.

ROLLCALL VOTES IN COMMITTEE

In accordance with paragraph 7(c) of rule XXVI of the Standing

Rules of the Senate, the Committee provides the following description of the record votes during its consideration of S. 2039:

Senator Fitzgerald offered an amendment, to the amendment (in

the nature of a substitute) offered by Senator Hollings, to encourage the FAA to consider alternative proposals for the modernization of O’Hare. By rollcall vote of 4 yeas and 19 nays as follows,

the amendment was defeated:

YEAS—4 NAYS—19

Mr. Lott Mr. Hollings

Mr. Fitzgerald Mr. Inouye1

Mr. Ensign1 Mr. Rockefeller1

Mr. Allen Mr. Kerry1

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Mr. Breaux

Mr. Dorgan

Mr. Wyden

Mr. Cleland1

Mrs. Boxer1

Mr. Edwards1

Mrs. Carnahan1

Mr. Nelson

Mr. McCain

Mr. Stevens1

Mr. Burns

Mrs. Hutchison

Ms. Snowe

Mr. Brownback

Mr. Smith 1By proxy

Senator Fitzgerald offered an amendment, to the amendment (in

the nature of a substitute) offered by Senator Hollings, to require

competition in contracting for services and sale of goods at O’Hare.

By rollcall vote of 8 yeas and 15 nays as follows, the amendment

was defeated:

YEAS—8 NAYS—15

Mr. McCain Mr. Hollings

Mr. Lott Mr. Inouye1

Ms. Snowe Mr. Rockefeller1

Mr. Brownback Mr. Kerry1

Mr. Smith Mr. Breaux

Mr. Fitzgerald Mr. Dorgan

Mr. Ensign1 Mr. Wyden

Mr. Allen1 Mr. Cleland1

Mrs. Boxer1

Mr. Edwards1

Mrs. Carnahan1

Mr. Nelson

Mr. Stevens1

Mr. Burns

Mrs. Hutchison 1By proxy

By rollcall vote of 19 yeas and 4 nays as follows, the bill was

ordered reported with an amendment in the nature of a substitute:

YEAS—19 NAYS—4

Mr. Hollings Mr. Lott

Mr. Inouye1 Mr. Fitzgerald

Mr. Rockefeller1 Mr. Ensign1

Mr. Kerry1 Mr. Allen1

Mr. Breaux

Mr. Dorgan

Mr. Wyden

Mr. Cleland1

Mrs. Boxer1

Mr. Edwards1

Mrs. Carnahan1

Mr. Nelson

15

Mr. McCain

Mr. Stevens1

Mr. Burns

Mrs. Hutchison

Ms. Snowe

Mr. Brownback

Mr. Smith

1By proxy

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing

Rules of the Senate, the Committee states that the bill as reported

would make no change to existing law.

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