6. Many airports have restaurant and other concession contracts so written that the rental consideration is based on the operator's gross sales. Airport officials, and the operators, as well generally agree that this type of agreement has proven highly satisfactory to both parties, especially when the percentage is applied against a fixed minimum. This type of agreement would prevent the airport from making improvements with Federal assistance if the proposed amendment were enacted. It 7. This bill was apparently initiated by the Air Carriers Association. should be pointed out that this very point was discussed when the original law was enacted, and was also thoroughly debated when the CAA regulations were formulated. The Air Carriers were heard on both occasions and we see no reason for again reopening the case. In fact, this Board feels that the regulations adopted by CAA already go entirely too far in promulgating Federal control over a municipal operation. 8. If the Federal Airport Act is going to be continually subject to use by individual groups to further their own interests, then its basic purposes will surely be defeated. 9. If this bill were to become law the Federal Government would in effect be saying: Here are Federal funds to help you build and/or develop an airport, but you must take along with it these regulations, which make it impossibie for you to successfully operate that airport after it is constructed. 10. The intention of the Federal Airport Act was to assist public airports and not to subsidize air carriers. H. R. 6180 puts restrictions and limitations on airport management that is prohibitive. 11. Should H. R. 6180 become law it is possible that there would be half a dozen full crews handling gasoline on the ramp and several restaurant or food concessionaires. This would cause considerable conflicts. We would not be able to place responsibility, there would be many more men and trucks working on the ramp and the over-all service would be costly and inefficient. We do not have facilities or supervision for controlling this type of operation. We were not aware that H. R. 6180 was being considered until May 13, 1948, and have not had an opportunity to analyze fully the implications of the bill as it would affect the airport. We are convinced, however, that it would be deterimental to not only our airport but to others as well. We respectfully urge your support in opposing this bill and suggest that more publicity be given on the bill so that cities affected may have an opportunity to study its effect before any action is taken. It is difficult to present our objections through correspondence. BOARD OF PARK COMMISSIONERS, By EMORY L. Cox, Acting Director. Hon. CHARLES WOLVERTON, COMMISSION GOVERNMENT, Chairman, House Committee of Interstate and Foreign Commerce, House Office Building, Washington, D. C. DEAR MR. WOLVERTON. House of Representative's bill No. 6180 to amend the Federal Airport Act, by Representative Leonard W. Hall, has been brought to my attention. Its provisions seem to us to be inimical to the interests of municipal airports coming within the provisions of the Federal Airport Act, to such an extent that we feel justified in vigorously protesting its passage, and in requesting that you assist in the defeat of this amendment. Municipalities must look forward to the time when airports can be made at least self-sustaining. We attempt to do this by the rental or sale of various premises on the airport, services and privileges, and base the charges, in some cases, on percentages of business done or services sold. There is a disposition in some quarters to claim that any percentage charge made by a municipality on its airport is a tax, when in fact it is a rental. Although the bill seems in a way, fair on its face, because it permits "such charges, fees, or rentals as represent fair and reasonable compensation for the cost of any service rendered", and permits "any tax which is imposed by the airport owner or operator upon business organizations generally in the taxing jurisdiction", the passage of such an act would serve to hamper and handicap all municipalities in their struggle to make ends meet on their airports, and would subject them to the constant harassment of dealing with complaints from the air lines, which of course are strong backers of this legislation. Municipalities are not generally engaged in gouging the air lines. They provide terminals for the use of a great transportation business, and this transportation business must eventually stand on its own feet and meet the cost of its terminals. If Federal legislation continues to increase supervision of and restrictions upon the means of raising funds for the operation of municipal airports, as a condition to participation in the benefits accorded to municipalities under the Federal Airport Act, municipalities will be forced to consider whether it is profitable to accept the Federal benefits under the act; and should they elect not to accept such benefits, the national program of airports envisioned under this act will fail. It is our hope that you will do everything within your power to defeat this legislation. Very truly yours, LOUIS E. GRASHOT, Commissioner, Finances and Institutions. Mr. DOLLIVER. The committee is in recess. (Whereupon, at 12:20 p. m. the committee recessed until 3 p. m.) AFTER RECESS (The hearing resumed at 3 p. m.) Mr. DOLLIVER. The hearing will come to order. By congressional courtesy, we first call upon Congressman Eberharter, of Pennsylvania. STATEMENT OF HON. HERMAN P. EBERHARTER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. EBERHARTER. I am Representative Herman Eberharter, of Pennsylvania. I appear here, Mr. Chairman, at the request and perhaps to some extent on behalf of the county of Allegheny, whose board of county commissioners have operated in western Pennsylvania, there in the county, an airport which was when it was built perhaps one of the topnotch airports of the country. It cost a total of about $5,500,000. They are now constructing a most modern airport in another section of the county, which will cost approximately $25,000,000 of the county's money, so that they have quite a stake in whatever decision this committee and the Congress makes with respect to the subject before you for consideration today. They say, Mr. Chairman, this proposed legislation, if enacted into law, will seriously and adversely affect the orderly and efficient operation of Allegheny County airports in that it will impose unfair restrictions upon the county in the control of essential airport activities and facilities. It is our considered opinion that the effect of such legislation would discriminate against the public interest, for the benefit of a few air-line operators. While the county is most anxious, they say, that the air lines prosper, nevertheless this proposed legislation is an unwarranted attempt by the air lines to interfere with those airport activities which are properly within the control and jurisdiction of the public authorities operating the airports. This proposed legislation will, if enacted into law, deprive the public authorities of their control over the delivery, storage, and dispensing facilities for petroleum products used by the air lines on airport property and interfere with control of the dispensing of food and beverages at the airports. Mr. Chairman, I feel that this is a very serious subject. It seems to have been proposed in some haze, and I think it is a matter which requires a great deal of study and consideration, and perhaps a real survey, before anything is done or any definite decision made. I hope that the committee will, as I am sure it will, give every consideration to postponing this to a later date. Thank you very much, Mr. Chairman. Mr. DOLLIVER. Are there any questions? We will now call on another of our colleagues, the Honorable J. Caleb Boggs, of Delaware. STATEMENT OF HON. J. CALEB BOGGS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF DELAWARE Mr. BOGGS. Mr. Chairman and members of the committee, it is my desire to appear briefly in opposition to H. R. 6180, a bill to amend the Federal Airport Act. This bill, if enacted, would work a great hardship on and be a deterrent to the full development of an airport program. As far as I am concerned, I want to do anything possible to be of help in the development of a well balanced, over-all air program; but, in the development of such a program, we must be fully conscious of the components of such a program and not do anything that would tend to retard by limiting one phase in order to help another phase of such a program. Airports I am familiar with are in a struggling stage, and this bill would certainly be crippling to the efforts and progress thus far made toward the development of efficient and adequate airports. I should like to quote from a letter which I have received from Mr. Don W. Martin, airport manager of the New Castle County Airport, Wilmington, Del. Mr. Martin is also vice president of the American Association of Airport Executives. He states that he personally believes this bill to be vicious and unfair because airports must receive taxes and charges in order to survive and be maintained for civilian and military use. I shall not go further into the details concerning the facts and various provisions of the bill because I know that the committee will develop them fairly. I am of the opinion, however, that this proposal, in view of all the facts and circumstances, does not justify favorable consideration at this time. Mr. DOLLIVER. Are there any questions? Mr. DOLLIVER. The next witness is Col. Raymond J. Kelly, corporation counsel of Detroit, Mich., and chairman of the committee on airports of the National Institute of Municipal Law Officers, 730 Jackson Place, Washington, D. C. STATEMENT OF COL. RAYMOND J. KELLY, CORPORATION COUNSEL OF DETROIT, MICH., AND CHAIRMAN OF THE COMMITTEE ON AIRPORTS OF THE NATIONAL INSTITUTE OF MUNICIPAL LAW OFFICERS, WASHINGTON, D. C. Colonel KELLY. The National Institute of Municipal Law Officers is an organization of more than 500 cities acting through their chief legal officer. It is supported entirely by tax funds of cities to compile information of a legal character for its city members and to express the joint ideas of cities on matters which affect them all. I appear here in opposition to H. R. 6180. În H. R. 6180 the scheduled air lines, already heavily subsidized and aided by cities and the Federal Government, seek to bankrupt forever the city-owned airports of the Nation. This is worse than biting the hand that has fed them-here the air lines seek to cut the jugular vein and keep airports that receive Federal aid forever impotent financially. Why such a brazen attempt to guarantee perpetually that air lines will receive bounties from city taxpayers? Why seek by legislative edict from the Congress of the United States the forced expansion and continuance of city largesse in this field? I think I know. This committee is well aware that from the beginning of civil aviation cities have been in the forefront sponsoring, aiding, and encouraging the scheduled air lines of the United States. The records of this committee are full of statements by city officials down through the years, in which statements benefit after benefit has been. urged for the scheduled air lines. These air lines were repeatedly called an infant industry, and cities wanted and still want the benefits of scheduled air transportation. So our representatives came here to urge legislation, appropriations, and other action to help the scheduled air lines. This is the first time, to my knowledge, when cities have appeared before this committee to oppose legislation obviously fostered by and designed to benefit scheduled air lines-but this is the first time in the history of civil aviation that the scheduled air lines have come before this committee to request a special and entirely unjustified subsidy from those who pay taxes in the cities and counties of the Nation. Why? I think I know. City taxpayers have contributed millions upon millions to scheduled air lines in a manner just as effective as if these amounts were paid directly into air-line coffers. Without a single exception, every city in the Nation which receives scheduled air-line service has spent untold amounts on the construction, development, improvement, maintenance, and operation of an airport in order that this scheduled air line could operate. Without such airports, scheduled air lines could not exist. Cities which have expended these large sums have never received, nor do they ever expect to receive, reimbursement from the scheduled air lines. Since cities receive most of their income from real estate taxes, it is city real estate taxpayers who have paid this money into air-line treasuries. While it is true that Federal funds have been used in the construction of many of these airports, and this is quite proper because of the essential nature of airports in our national defense scheme, such payments have never relieved cities. from bearing full operational and maintenance costs or from providing valuable space "free" at the airport to the Federal Government without compensation, for the weather bureau, the post office department, the Air Corps, and the Civil Aeronautics Administration, which to some degree has offset the Federal funds received. With such a record of sponsorship and aid to scheduled air lines, why is it that these air lines now seek through this special legislation a guaranty that city taxpayers will continue to support them in the manner in which they have "become accustomed," and effectively expand this support? I think I know. City expenses have greatly increased along with the upward trend of costs throughout the Nation. Every city is greatly pressed to make ends meet. Every one of the hundreds of services and functions of cities has been and is being examined most carefully by city officials and city taxpayers in order that every unnecessary or nonbeneficial function or service may be eliminated or made to operate in a more efficient or economical manner. City officials and city taxpayers have begun to look at operation deficits at airports with a most critical eye. They are wondering how scheduled air lines can spend millions of dollars for advertising, the most expensive ticketing procedure in the world, and other luxuries, yet spend less than 1 percent of their total revenues on their most essential facility-the airport. Regardless of the merits of the current financial problems of scheduled air lines, problems which to city officials seem to stem chiefly from management and planning, city officials feel that something can be done, and something must be done, about the way the scheduled air lines have treated the cities of the Nation on landing fee payments for use of city airports. When city airport operating deficits were exposed to the spotlight of local taxpayer reaction, there arose a general demand that something be done about the rotten situation which was revealed. Since city attorneys have had much to do with the leases which exist for the use of city airports, this problem has generally resolved itself into a question to the city attorney something like this: "Why can't you do something about the air-line lease for the use of our city airport?" There were so many city attorneys who had this question presented to them that at our national meetings this subject came up time and time again, and our committee on airports decided that a national survey and study was essential. As our study progressed, it became quite clear to all of us that our chief difficulty with scheduled air lines grew out of the so-called model lease which the air lines had written up and which they "pressurized" onto city after city. When I say "pressurized," I mean exactly that. Let me explain. The scheduled air lines have experts who do nothing else but go from city to city to negotiate agreements for the use of city airports. These experts always go in a body. That is, every scheduled air line using a particular airport sees to it that its representative goes at one and the same time to a particular city to negotiate an agreement for the use of the airport. There they meet with the airport manager, the city attorney, and other city officials designated for that purpose, and begin a discussion of the airport lease. The air line representatives always take a united position. If any question comes up during the discussion, they insist upon retiring to 76782-484 |