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port or to deal within the airport in commodities used by scheduled air carriers as distinguished from the unquestionable right to impose privilege fees upon those who furnish similar commodities to other airport occupants.
For example, the right of airport management to impose a charge upon a fixed base operator, so-called, or airport aircraft repair man and garagekeeper, for sales of service, aviation and other gasoline, oil, parts, equipment, and accessories to airport users of such supplies is universally conceded. In effect, H. R. 6180 would deny this right as to dealers and distributors of such supplies who import them into an airport, but have no regular place of business at the airport, only when they are imported for scheduled air carriers, but not as to any other airport consumer.
Charges or fees upon a gallonage basis to distributors of petroleum products who import their products into an airport for scheduled air line use are opposed, not because such a charge would violate any recognized principle or policy, but only because it is alleged that under the terms of petroleum distributors' area contracts the air line and not the petroleum distributor would bear the ultimate burden. There is no law that would prevent modification of such terms and the absorption or sharing of this burden by petroleum companies.
Nevertheless, in the case of meals aloft furnished to scheduled air lines by a producer who has no place of business on the airport and whose product competes with the airport restaurant concession, it is agreed that a privilege charge on such a supplier is proper whether or not the supplier would pass the charge on to the scheduled air-line user. By H. R. 6180 such a charge would be impossible as to meals aloft served to scheduled carriers.
Obviously, then, the rationale of H. R. 6180 is solely to insulate scheduled air lines from any possibility of having legitimate privilege charges to airport distributors, whether they do or do not have a place of business at the airport, being passed on to them to pay. This, it is submitted, is a matter properly left for negotiation between the local distributor and the local consumer in any instance.
Two: It would invalidate section 11 (1) of the Federal Airport Act, which in effect directs the CAA to prevent unjust discrimination against airport commodity consumers who are not scheduled air passenger carriers.
Section 11 (1) reads as follows:
As a condition precedent to his approval of a project under this act, the administrator shall receive assurances in writing, satisfactory to him that:
One: The airport to which the project relates will be available for public use on fair and reasonable terms and without unjust discrimination;
Enactment of the proposed legislation would at once place scheduled air carriers in a preferred class by exempting them from the risk of being required by their suppliers to bear the burden of legitimate business privilege assessments upon the suppliers. But all other consumers of identical commodities at an airport would not enjoy such exemption from the normal business risk that a dispenser of a commodity may pass to his consumer in the price of his product any privilege charge or fee that may initially be imposed upon him.
Thus, the fixed-base operator required to pay a charge per gallon on aviation fuels dispensed at the airport could transmit his burden to private, itinerant or nonscheduled aircraft operators. But scheduled
air lines could avoid risk of this burden by purchasing such fuels from large distributors off the airport in competition with the fixed-base operator and the airport whose revenue from fixed-base operator's business is proportionate to his gross sales. .
To exempt the scheduled air line but not the private or itinerant airoperator from such a normal business risk is, if it is submitted, clearly discriminatory unless the public interest in aviation development is to be deemed to be confined solely to the development of privately controlled scheduled air lines.
Three: It would accomplish by indirection that which if attempted by direct. legislation would constitute a patently unconstitutional invasion of the sovereign right of a State or of a municipality to tax.
Agreement by an airport to accept Federal aid under the conditions sought to be imposed by passage of H. R. 6180 would entail a surrender by airport management of the right to do by flexible administrative action that which, notwithstanding any such agreement, could thereafter be accomplished by local legislative action, namely, the enactment of a law imposing a tax upon the privilege of dealing in or selling any commodity within a publicly owned or other airport. It is doubted that the Congress would ever attempt by direct legislation to deny the right of the States to tax in this field.
The constitutional power of the State to tax the manufacturer of gasoline or importation into the State of gasoline, and to impose a general sales tax upon various commodities, notwithstanding indirect impact upon persons engaged in interstate commerce, has been firmly established by decisions of the Supreme Court of the United States.
Four: It would establish unwarranted interference with the police power of States and municipalities to prescribe laws, ordinances, and regulations governing the storage, use, and control of inflammable petroleum products in the interest of security of the lives, safety, and property of the public.
This point requires no argument. The police power of the several States to regulate matters pertaining to the risk of injury or death to persons and damage to property by fire has too long been established. Certainly, the safe storage and distribution of aviation gasoline involves. no peculiarly aeronautical problem.
The real purpose of the proviso of H. R. 6180 is to permit the scheduled air carrier by boycotting the costly airport fuel storage and distribution system, just as by boycotting the airport fixed base operator, to avoid the risk of possible contributory participation in the cost of maintenance and operation of such systems and thus again, to roll back further subsidization to the private or itinerant aircraft operator and other nonairline consumer or to the already overburdened taxpayer.
Five. It would result in defeat of the purpose of the Federal Airport Act to provide Federal assistance in costly airport development by distortion of the act into a device to compel further subsidization of scheduled air carriers by the taxpayers of local communities.
Scheduled domestic air carriers have available certain avenues of relief and subsidy under the economic regulations of the Civil Aeronatucs Board, and the provisions of the Civil Aeronautics Act of 1938, as amended.
The Federal Airport Act, on the other hand, is by its provisionsclearly intended to provide financial assistance to local communities.
in the development of adequate and costly airports. The language of the latter act appears generally to be concerned only with assurances that airports receiving Federal aid be aeronautically and structurally sound in design and permanently available to use by all classes of aircraft and operators of aircraft. Nowhere in the Airport Act does Congress expressly concern itself with the economic or management policies of local airports, nor does Congress appear to have expressly directed or authorized the Civil Aeronautics Administration to concern itself with such matters, of which more later.
In the entire general field of rates, charges, and fees directly or indirectly affecting all classes of users of various airports disagreement may reasonably be anticipated from time to time between the user and airport manager. Resolution of these differences can, however, in sound judgment, be accomplished in any case only by adjustment and negotiation at the local airport level, but not by preferential legislation or by administrative regulation. With local airport cost accounting systems as yet inadequately developed or nonexistent, it is clearly not time for Congress to consider even the practicability of entry by legislation into the subject of regulation of publicly owned airport rates, charges, and fees, let alone possible constitutional obstacles to such a course.
Nor is the Civil Aeronautics Administration or any other Federal administrative agency as yet sufficiently informed of all the intricacies of the problems of each airport in the United States or endowed with the divine wisdom necessary to undertake successfully the task of devising uniform regulation of rates, charges, and fees for local airport each of whose problems are unique unto itself and individually and collectively so complex and ramified as to defy any effort toward uniform regulation or legislation.
Six: It would require, in the case of the Commonwealth of Massachusetts, a violation by the Massachusetts Department of Public Works of an express mandate of the Massachusetts General Court that:
The department shall establish a schedule of aircraft landing fees, parking or tie-down fees, services and other charges including the sale of gasoline or other aviation fuels, oils and other articles and supplies on the lands it has acquired or holds for airport purposes.
The Massachusetts General Court has in effect delegated its general power to tax in the field of commodities and supplies dealt in at the airport to the Massachusetts Department of Public Works with the mandate to exercise its function by flexible administrative action. Obviously, upon the passage of H. R. 6180 Massachusetts would be ineligible to receive Federal airport aid without violation of the mandate of its own legislature.
In short, it would set the commercial air lines apart as privileged users of tax-supported facilities—users who would be above the laws, rules, regulations, and practices governing other individuals and businesses.
Such legislation would do worse than condone monopoly; it would set up a corporate dynasty or heirarchy, untouchable and secure, all at the taxpayers' expense.
Upon the grounds already advanced in opposition to the passage of H. R. 6187, the Commonwealth also opposes current efforts by the Civil Aeronautics Administration to accomplish by unauthorized administrative regulation an objective comparable in kind, but at the moment seemingly lesser in degree, to the objectives of H. R. 6180.
From the current appropriation under the Federal Airport Act the Civil Aeronautics Administration has allocated $600,000 for project developments at Logan Airport. Of this amount more than $400,000 consists of discretionary funds which, unless Massachusetts can accede to conditions sought to be imposed by the Civil Aeronautics Administration, may be lost to Massachusetts, notwithstanding her urgent need for them and notwithstanding that they are derived in substantial part from tax funds paid into the Federal Treasury by the people of Massachusetts.
Massachusetts has been informed by the Civil Aeronautics Administration that in order to qualify to receive this grant she must, on or before May 31, 1948, agree in writing, to be effective for a period of 20 years, to certain provisions, among others, now embodied in the Civil Aeronautics Administration's third draft project application, Form ACA 1624, revised as of March 12, 1948, part III, sponsors assurances, which reads:
Four, the sponsor agrees that it will operate the airport for the use and benefit of the public, on fair and reasonable terms and without unjust discrimination. In furtherance of this covenant (but without limiting its general applicability and effect), the sponsor specifically covenants and agrees:
(b) That it will not exercise or grant any right or privilege which would operate to prevent any person, firm, or corporation operating aircraft on the airport from:
(2) Purchasing off the airport and having delivered on the airport without entrance fee, delivery fee, or other surcharge for delivery any parts, materials, or supplies necessary for the servicing, repair, or operation of its aircraft: Provided, That the sponsor may make reasonable charges for the cost of any service, including charges for maintenance, operation, and depreciation of facilities and rights-of-way, furnished by the sponsor in connection with the delivery of any parts, materials, or supplies.
Massachusetts submits that neither section 11 nor any other provision of the Federal Airport Act, or of the Civil Aeronautics Act of 1938
directs or even authorizes, expressly or implicitly, the entry by the Civil Aeronautics Administration by regulation or otherwise into the vast and complex field of airport rates, charges, and fees.
Such entry into local airport economic and management policy by CAA can result only in endless confusion, ultimate defeat of the clear purpose of the Federal Airport Act, and discrimination far greater than that sought by the act to be avoided.
Once established in this field CAA could go on year after year requiring assurances tending to establish cost formula ceilings on landing fees, rental charges, and any other rate that an airport might undertaké to establish within the limits of its own cost requirements and its desire to compete with other airports and to encourage the development of aviation, notwithstanding that very few, if any, airports have yet been able to recover annual operating costs, let alone donation of the construction costs in the interest of development of scheduled air transportation.
Unless CAA is at once withdrawn from this field continued action in this direction must eventually wreck the Federal airport program or commit the taxpayers of the communities whose officials, because of immediate financial exigencies, have submitted to such restrictions, to double subsidization of scheduled air carriers.
Better that the Congress limit subsidy of scheduled air carriers by the Civil Aeronautics Administration to the means afforded by the
Civil Aeronautics Act than to permit the Civil Aeronautics Administration, by confusion between the purposes of the two acts or its functions under them to convert the Federal Airport Act from one to aid local communities to one that indirectly saddles them with further subsidization of scheduled air carriers contrary to the plain intent of the Congress.
Referring in part to the present financial predicaments of public airport operators and in part to the current effort of the Civil Aeronautics Administration to enter the field of regulation of airport rates, charges, and fees, and equally applicable to the attempt implicit in H. R. 6180 to enlarge and to perpetuate that effort, His Excellency Robert F. Bradford, Governor of Massachusetts, in an address at the first annual meeting of the newly organized Airport Operators Council at Boston, exactly 7 days before H. Ř. 6180 was filed in Congress, said:
If we are to accept the comfortable assumption that government in business is always to be played for a sucker, perhaps such a situation could continue indefinitely. I will not accept such an assumption, and I think I speak for every reasonable person, whether he be interested as a taxpayer or as a private investor in a commercial enterprise.
That statement of Governor Bradford had to do with the present regulations of the Civil Aeronautics Administration insofar as they affected the particular situation in Massachusetts.
It is equally applicable, more applicable, to this proposed bill.
I think one thing ought to be made clear to the committee, that it gets overlooked as these discussions become involved. When we talk about self-supporting airports, I believe we find that there is no airport at the present time operating in black figures. What do we mean by that? We mean this: In the case of Boston, we have a $53,000,000 plant which has already been furnished to the air lines without charge. Not a nickel is sought to be recovered on that in the matter of business before us now. But it costs something each year to keep the doors of that plant swinging. It costs Massachusetts some $350,000 this year and it is anticipated that it will be about $500,000 next year.
We bave already heard the allegation of inefficient management. That is the next one. It costs too much to operate your plant, that is what they say. It so happens that until this past year Maskachusetts practically had no management, which is much of the cause of the difficulty.
We have a few leases which we have to overcome. We have to insist on renegotiation of a certain lease of American Airlines before we will give them a lease on another hangar that they want to have back again, which does expire this year.
It is not a pleasant thing to have to do, but it is the only way we can undo and fix up an old lease that has a long time yet to go.
We have a situation where one of the major air lines built a hangar in 1946 in Boston, and it has not paid a cent of rent yet, because we cannot come to any agreement. Each time we try to propose an agreement they come back with a counter proposition that is ridiculous and it would cost to meet their demands in the instance I have in mind, $95,000 for paving and fencing to get about $3,500 per year for ground rent where the hangar stands. That is the sort of thing we have had to contend with.