Senate approves $5.75 billion for airport construction grants.

WASHINGTON -- After days of delay, the Senate finally approved legislation Thursday night authorizing $5.75 billion over three years for airport construction grants.

Action on the bill had ground to a halt in the face of a Republican filibuster by Sen. Alfonse D'Amato of New York, who was demanding hearings on President Clinton's involvement in Whitewater, an Arkansas land deal.

The Senate failed to approve the airport measure last year amid a controversy over airport fees and charges, but the current version appears to have eliminated those sticking points.

The measure establishes a specific procedure for dealing with future disputes. Along with setting out general ground rules, Transportation Secretary Federico Pena is charged with determining whether a proposed fee is reasonable.

Should a fee dispute arise, the airline would still be required pay the fee but it would be held in escrow until the dispute was resolved.

Several lawmakers have complained that cities are taking airport revenues and diverting them to nonairport uses. The bill aims to stop the practice by allowing Pena to seek an injunction against any city determined to be diverting its funds. The secretary could then begin withholding grant funds.

The House passed its version of the airport grant program last October, authorizing $6.48 billion in airport construction grants over three years. House and Senate negotiators are expected to hammer out a compromise before June 30, when the current grant program expires.

A stop-gap measure was approved by Congress last month that provided $800 million in grants through the end of June. All grants had been on hold since last October because of the Senate's failure to act.

The temporary measure contained a controversial provision that allowed Pena to block any proposed airport fee increase if he received a complaint from an airline that the increase was unreasonable.

Municipal market participants said that the provision could put some airport bond ratings in jeopardy and frighten investors.

Both airports and airlines support the bill as written, said Sam Whitehorn, chief counsel for the Senate Environment and Public Works Committee.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER