The funding authorization for the Federal Aviation Administration (FAA), included in the FAA Modernization and Reform Act of 2012 ( P.L. 112-95 ), expires on September 30, 2015. In addition to setting spending levels, FAA authorization acts typically set policy on a wide range of issues related to civil aviation. This report considers topics that are likely to arise as the 114 th Congress debates reauthorization. It does not attempt to be comprehensive. Many issues debated prior to passage of the FAA Modernization and Reform Act of 2012 are not discussed unless further congressional consideration appears probable. Additional issues, not discussed in this report, may arise as Congress moves forward. Most FAA programs are financed through the Airport and Airway Trust Fund (AATF), sometimes referred to as the Aviation Trust Fund. The AATF was established in 1970 under the Airport and Airway Development Act of 1970 (P.L. 91-258) to provide for expansion of the nation's airports and air traffic system. Since FY2009, the AATF has provided between 66.6% and 71.4% of FAA's total annual funding, with the remainder coming from general fund appropriations. Revenue sources for the trust fund include passenger ticket taxes, segment fees, air cargo fees, and fuel taxes paid by both commercial and general aviation aircraft (see Table 1 ). In addition to excise taxes deposited into the trust fund, FAA imposes air traffic service fees on flights that transit U.S.-controlled airspace but do not take off from or land in the United States. These overflight fees partially fund the Essential Air Service (EAS) program. In 2013, the AATF had revenues of almost $12.9 billion and maintained a cash balance of more than $13 billion. However, the uncommitted balance has declined considerably since 2001, when it exceeded $7 billion. Following the onset of the global economic crisis in 2008, the AATF uncommitted balanced dropped to $299 million at the end of FY2009, but has since rebounded; it was estimated to be $1.3 billion at the end of FY2014. The trust fund balance is projected to grow in the near term, as AATF revenue continues to rise and airport capital needs are projected to decline over the next five years. In the longer term, however, the vitality of the AATF remains a concern, as reductions in general fund appropriations to FAA have increased the proportion of FAA funding that is derived from the trust fund. Changes in airline business practices pose a risk to the AATF revenue structure. Trust fund revenue is largely dependent on airlines' ticket sales, and the spread of low-cost air carrier models has held down ticket prices and therefore AATF receipts. In addition, airlines increasingly impose fees for a variety of options and amenities, such as checked bags and onboard meals, rather than including them in the base ticket price. Generally, fees not included in the base ticket price are not subject to federal excise taxes. The U.S. Government Accountability Office (GAO) estimated that the trust fund could have received $186 million in FY2009 from untaxed baggage fees alone, had these fees been subject to the 7.5% excise tax. Airlines have long contended that general aviation operators, particularly corporate jets, should provide a larger share of the revenues supporting the trust fund. General aviation interests dispute this, arguing that the air traffic system mainly supports the airlines, and that nonairline users pay a reasonable share given the relatively small incremental costs arising from their flights. Proposals in 2012 to increase the general aviation jet fuel tax were not adopted. The Clinton, George W. Bush, and Obama Administrations all proposed per-flight user charges; President Barack Obama has proposed a $100-per-flight charge on commercial and general aviation jets and turboprops that fly in controlled airspace each year since 2011. In the 110 th Congress, the Senate voted to impose a $25-per-flight fee on all commercial and general aviation flights (see S. 1300 , 110 th Congress) as an additional revenue source for the AATF. None of those proposals has been enacted into law. In recent years, FAA funding has totaled between $15 billion and $16 billion annually. FAA funding is divided among four main accounts. Operations and Maintenance (O&M) makes up the largest portion of the FAA budget, receiving slightly more than 60% of total FAA appropriations. It is the only FAA account that is funded, in part, by general fund contributions. The O&M account principally funds air traffic operations and aviation safety programs. The Airport Improvement Program (AIP) provides federal grants-in-aid for projects such as new runways and taxiways; runway lengthening, rehabilitation, and repair; and noise mitigation near airports. The Facilities and Equipment (F&E) account provides funding for the acquisition and maintenance of air traffic facilities and equipment, and for engineering, development, testing, and evaluation of technologies related to the federal air traffic system. The Research, Engineering, and Development account finances research on improving aviation safety and operational efficiency and on reducing environmental impacts of aviation operations. Authorizations and appropriations for these accounts are shown in Table 2 . The federal government supports the development of airport infrastructure in three different ways. First, the AIP provides federal grants to airports for planning and development, mainly of capital projects related to aircraft operations such as runways and taxiways. Second, Congress has authorized airports to assess a local passenger facility charge (PFC) on each boarding passenger, subject to specific federal approval. PFC revenues can be used for a broader range of projects than AIP funds, including "landside" projects such as passenger terminals and ground access improvements. Third, federal law grants investors preferential income tax treatment on interest income from bonds issued by state and local governments for airport improvements (subject to compliance with federal rules). Airports may also draw on state and local funds and on operating revenues such as lease payments and landing fees. Different airports use different combinations of AIP funding, PFCs, tax-exempt bonds, state and local grants, and airport revenues to finance particular projects. Small airports are more likely to be dependent on AIP grants than large or medium-sized airports. Larger airports are much more likely to issue tax-exempt bonds or finance capital projects with the proceeds of PFCs. Each of these funding sources places various legislative, regulatory, or contractual constraints on airports that use it. The availability and conditions of one source of funding may also influence the availability and terms of other funding sources. In a 2007 study, GAO found that bonds financed 50% of airports' capital spending, AIP 29%, PFCs 17%, state and local contributions 4%, and airport revenue 4%. The assessment of airport capital needs is fundamental to determining the appropriate federal support needed to foster a safe and efficient national airport system. The federal government's interest goes beyond capacity issues to include implementation of federal safety and noise policies. The U.S. passenger airline industry has seen a wave of bankruptcies and several major airline mergers since 2000, including the merger of American Airlines and U.S. Airways in 2013. Consolidation led to a reduction in the number of commercial flights between 2005 and 2009. Since that year, the number of commercial flights has been fairly steady, but at a level 15% to 18% lower than in 2005, as carriers have consolidated operations and eliminated some duplicative hubs and routes. Government data indicate that domestic airlines have shown considerable capacity discipline; instead of adding flights, they have been flying fuller planes, with an average load factor over 83% in the first 10 months of 2014. The reduced number of flights may ease the pressure on airport and air traffic control facilities. On the other hand, airlines' on-time performance does not appear to have improved with industry consolidation, suggesting that capacity issues continue to affect carrier performance in some geographic areas. Both FAA and the Airports Council International-North America (ACI-NA) have issued projections of airports' long-term financial needs. FAA estimated in its report that the national system's capital needs for FY2013-FY2017 will total $42.5 billion (an annual average of $8.5 billion). The ACI-NA capital needs survey resulted in an estimate of $71.3 billion over the same years (an annual average of $14.3 billion). The main reason for the widely differing estimates was disparate views on what kinds of airport projects to include. The FAA estimate was based on information taken from airport master plans and state system plans, but FAA planners screened out planned projects not justified by aviation activity forecasts or not eligible for AIP grants. Only designated airports were included in the FAA study. Implicit in this methodology is that the planning has been carried through to the point where financing is identified. The ACI-NA study casts a substantially wider net. It includes projects funded by PFCs, bonds, or state or local funding; airport-funded air traffic control facilities; airport or Transportation Security Administration (TSA)-funded security projects; "necessary" AIP-ineligible projects such as parking facilities, hangars, revenue portions of terminals, and off-airport roads/transit facilities; and AIP-eligible projects for which AIP funding was not requested. These additions cause the ACI-NA estimate of capital needs to be far higher than the FAA estimate. FAA has devoted particular attention to evaluating capital needs at the largest airports, which handle the vast majority of commercial passenger boardings. The agency has undertaken three studies to determine which improvements at major airports are most critical to increasing system capacity. The most recent such study, called FACT3, was released in January 2015.