A report prepared under the requirements of Section 520 of the Federal Aviation Administration Authorization Act of 1994

https://doi.org/10.21949/14037651996PDFTech ReportAirportsFinancingImprovementsDevelopmentLoansGovernment fundingGrant aidCapital costsCapital investmentsImpactsAirport Improvement ProgramFederal Aviation AdministrationFederal fiscal restraintUnited States. Federal Aviation AdministrationUnited States. Federal Aviation AdministrationNTL-AVIATION-Aviation Economics and FinanceBTS Data DirectorySection 520 of the Federal Aviation Administration (FAA) Authorization Act of 1994 (Public Law 103-305) directs the Secretary of Transportation to conduct a study of innovative approaches for using Federal funds to finance airport development as a means of supplementing financing available under the Airport Improvement Program (AIP). The Secretary is mandated to consider (at a minimum): Mechanisms that will produce greater investment in airport development per dollar of Federal expenditure; Approaches that would permit entering into agreements with non-Federal entities, such as airport sponsors, for the loan of Federal funds, guarantee of loan repayment, or purchase of insurance or other forms of enhancement for borrower debt, including the use of unobligated AIP contract authority and unobligated balances in the Airport and Airways Trust Fund; Means to lower the cost of financing airport development.Accordingly, this study examines the following matters of Congressional interest: 1) Several feasible options for innovative Federal approaches to airport finance; 2) The change in airports' cost of borrowing funds for capital investment projects ("the cost of capital") as a result of innovative financing mechanisms (potentially reducing costs to airport users); 3) The extent to which reductions in the cost of capital would increase or accelerate airport borrowing for the purpose of capital investment; 4) The extent to which increased or accelerated airport borrowing would precipitate the addition of more infrastructure to the airport system versus a substitution for other forms of available airport finance (such as state and local grants); and 5) The possibility that options for innovative finance could help diminish airline near term financial constraints that inhibit timely construction of needed airport improvements.84