Significantly, we do not expect 1981 production levels to exceed 12,000 units nor do we expect production volume to surpass previous levels until interest rates return to previous levels and the economy improves.

We support the administration's goals as we understand them. That is to increase productivity, increase employment, reduce taxes and reduce Government regulation. We feel the administration proposal, which has been much discussed today, to increase fuel taxes to as high as 20 percent per gallon, is not a solution and is not consistent with the goals of the administration, as we understand them.

Fuel prices have already reached and exceeded the $2 level in some localities now. A 20 percent or 40 cents per gallon charge would be a great burden for our industry to carry at this time. We support the user charges, but maintain there is a strong public benefit, as has been mentioned before. We're glad to see in your statement your support of the concept of an 81⁄2-cent-pergallon tax; our major concern is to maintain access for every community. This becomes significantly important under airline deregulation as both private and other nonscheduled airline transportation become even more vital for providing rapid, reliable movement of material and personnel, so all industry, however dispersed, can enjoy the benefits of air transportation which is vital to supporting increased national productivity.

As we stated in our testimony last year, the single most important need of the U.S. air transportation system today is to expand air-support capacity in and near densely populated areas. I would like to add a personal comment on this one.

In my own State of New Jersey, the most populated State, we were in severe danger of losing an airport. The airport was known as Caldwell Right Airport at that time. Land values had reached the level that these 260 acres, at that time, were appraised in the $6-$8 million level, perhaps appraised at $12-$14 million today. No way that that could operate as a private facility.

The owners of the property placed a blind airport sale without the knowledge of the aviation community. But fortunately we did see it and we did respond. After several years of hard work, we were able to obtain a public sponsor and local county improvement authority, and through the use of ADAP funds, saved this airport. I would like to cite it as a really outstanding example of how an airport can be saved by the use of ADAP funds. Today, it's the second or third busiest airport in New Jersey.

We're concerned that the restricted definition given to reliever airport in the bill, which is an airport designated by the Secretary as having the function of relieving congestion at primary airports, will tend to involve even less study and debate on whether a specific airport in a given metropolitan area relieves traffic for specific primary airports in that area.

As a matter of fact, any useful airport which provides day and night facilities and reasonable access to communities in a major metropolitan area serves to relieve the primary airports. Therefore, we would recommend that the definition of reliever airport be enlarged to include any public-use airport and/or any private air

port, as designated by the Secretary, in a metropolitan area served by a primary airport.

We further believe that retention and upgrading of metropolitan airports is essential to preserving airport capacity as well as providing for some increases. It is highly unlikely many new airports will be constructed in or around major metropolitan areas, even though there are well documented and identified needs for new airports.

Madam Chairwoman, at this time I would like to have Mr. Stimpson, our president, discuss other aspects of our statement. Mr. STIMPSON. Thank you, Mr. Moore. I certainly know of your commitment to defederalization, Madam Chairwoman. I'm not intending to get into a debate with you on it this morning, but I would like to raise two concerns that we have about the bill as expressed in S. 508.

First, I think your committee has come a long way on the access question, in trying to put language into the bill which will guarantee access for all users into airports if they should become defederalized.

I think there are two types of access we have to look at. One is the physical access. At some of the big airports, additional traffic due to airline deregulation, increased commuter and business flying, and the physical capacity determies the ability to use these airports.

The second type of access is an economic access. We have already seen high landing fees being imposed at a number of big airports. We can expect further ones with a really defederalized environ

ment.

We think there should be some rationale, some reason, not unjust discrimination. We have some alternative language which we have suggested in our testimony. We would like to explore further with your staff what would help guarantee this type of access to airports if they should become defederalized. We think you've taken a big step in trying to correct this problem in the language you currently have.

The second major concern we have with defederalization is the ability to put new facilities in for the general region at some larger airports. As we understand in a truly defederalized environment, it will be primarily up to the airport operators and airlines to negotiate the new types of facilities that would go into airports.

For example, if you have a new 5,000-foot runway for general aviation proposed at an airport, will this be built subject to the negotiations between the airlines and operators?

Generally, aviation is not just, as you know, five or six airlines landing at one airport where you have a relatively small environment wherein these negotiations can take place. In our instance, we are talking about hundreds of thousands of users at any single airport.

So we do have a concern about getting some of these additional facilities and increasing both capacity and safety. Maybe there is a way it can be worked out whereby, if defederalization does become a fact of life, you could have special funds which, on some of these urgent safety and capacity items, could be used at some of these

airports. I'm not necessarily sure how that would work at this point, but I throw it out as something to explore.

The second major area I would like to cover this morning is the issue of States. We have historically opposed the State role. On further evaluation we have changed our position on this. We recommend the participation as stated in your bill for general aviation program, block-grant program for States for general aviation airports only, not reliever airports or airline or air carrier airports, but for the general aviation airport program. Many States do an excellent job.

On joint use, we would again say this is a high priority. We're limiting Federal resources, cutting down the ADAP program to $450 million or whatever we're talking about. Every time I fly over Davison out here or Andrews and see these little used airports, my God, why can't we use them for civil aviation.

I urge a major thrust and joint use of nonstrategic airports. This is an area from which we could get increased airport capacity immediately.

Finally, on the user tax issue, we were shocked when the administration proposal came out last week. We're heartened by your comments in your statement that the 20 percent maybe really isn't a true fact. From what Mr. Trent said this morning, a 40-percent tax on us at this point in time would be devastating, catastrophic. We support user charges.

I would like to leave two followup thoughts with you. We like a fuel tax. We like it at an established rate, whether it's 8.5 cents a gallon or whatever. The price of fuel is going up dramatically, much faster than the inflation rate; $2 per gallon fuel in this country is not uncommon at this point. So a 40 cent tax imposed all at one time or over a period of years is much more than our industry can take.

So if we take where we were, 7 cents a gallon last October, to where we are today, the administration proposal is about a 450percent increase over what we had last October. If you think of where we are now, 4 cents a gallon for avgas since the bill expired, it's much more than a 1,000-percent increase.

So we would urge you to take a careful look, as you are, at the user tax, saying I would think things really need to be sorted out. After the whole program level is determined, and the public benefit portion is determined, we can make a rational judgment as to what makes most sense.

In closing, we think this bill is extremely important. We're sorry it wasn't passed last year and we would do anything to work with you and your committee and the House in getting this passed.

Senator KASSEBAUM. Thank you very much. I would like to start with a question that has puzzled me to a certain extent, although you've indicated some support. But one of the major purposes of defederalization for ADAP was to provide and target more money to the smaller, general aviation airports that service the general aviation, smaller aircraft carrier industry.

It's been a puzzlement to me why there hasn't been stronger support from your membership for the concept of defederalization, because it would seem to me this is the very audience to which it's most directly beneficial.

Mr. STIMPSON. You're right. We do serve 14,000 airports in the country, many smaller airports. But we serve all the larger ones,

too.

The big problem exists in the capacity of some of the larger airports. I think that is the basic reason we've been concerned about defederalization is the access and development at the top 69 or 72 airports, wherever the line is drawn.

Maybe with the bigger airports, harder to get additional runways or facilities. But with the medium airports, particularly, which are increasing in activity, there is a lot of general aviation activity. We would like some assurances of our ability to continue to use these airports. I think that is at the heart of our concern about defederalization.

Mr. MOORE. When we say access, we mean economic access as well. Landing fees that would be prohibitive would also constitute no access as far as we're concerned. So those are some of our concerns.

Senator KASSEBAUM. Well, I share your concerns about access, and I think you make a persuasive point with the comment that air carriers would not perhaps be willing to help finance airport improvements designed to enhance the general aviation usage at these centralized airports.

But I think it's very true that both air carriers and airports benefit from general aviation use. And having adequate facilities for them, they relieve the congestion that saves fuel for air carriers and reduce noise by improving the approach and departure patterns. They feed passengers to the airlines. This is becoming an increasingly important service, and benefits the business community.

With these obvious benefits, I think you would have some very persuasive arguments and leverage which you could use in negotiations with those airports.

Mr. STIMPSON. You may be right. I would hope you are.

Senator KASSEBAUM. If we continue to raise taxes, we may not need to worry about how much the usage is going to expand. So I suppose that there are two ways we have to look at this and be very cautious that we don't tax ourselves out of the market.

I have some questions Senator Cannon has submitted. I will just make them a matter of record and appreciate very much your testimony and look forward to working with you.

I certainly give support to your statement we should take a good look at the joint use of nonstrategic airports.

[The statement follows:]

STATEMENT OF EDWARD B. MOORE, CHAIRMAN, GENERAL AVIATION
MANUFACTURERS ASSOCIATION

We appreciate the opportunity to testify on your proposed legislation which is intended to provide for the improvement of the nation's airport and airway system. With me this morning is Edward W. Stimpson, President of the General Aviation Manufacturers Association.

The General Aviation Manufacturers Association, like the rest of the nation, is dedicated to those programs and policies which will increase the productivity of this nation, reduce government participation and involvement in regulatory matters, improve aviation safety, and maintain a strong air transportation system. We are pleased that the Senate is taking the initiative in reestablishing a basic foundation of a strong aviation industry and air transportation network by continuing to provide for the funding of capital expenditures for airports and air navigation

systems from funds already provided by the users of the system and dedicated to that purpose.

Today, we would like to make suggestions for further improvement of the bill. Our major concern, of course, is to maintain access for general aviation to every community. This becomes significantly important under airline deregulation as both private and other non-scheduled air transportation become even more vital for providing rapid, reliable movement of material and personnel so that all industry, however dispersed, can enjoy the benefits of air transportation which is vital to supporting increased national productivity.

RELIEVER AIRPORT PROGRAM

As we stated in our testimony last year, the single most important need of the U.S. air transportation system today is to expand airport capacity in and near densely populated areas. It is in those areas that there is the most demand for air services, both air carrier and general aviation, and airport capacities are most limited. It is also in those areas that competition for land and other uses is most acute and airport growth has been virtually stopped. The incredible fact that only five new reliever airports have been constructed since 1970 is a strong indictment of our past reliever programs. In simple terms, these programs have been most disappointing.

We are concerned that the restrictive definition given to reliever airport in the bill, which is "an airport designated by the Secretary as having the function of relieving congestion at a primary airport," will end to involve endless study and debate on whether a specific airport in a given metropolitan area relieves traffic for specific primary airports in that area. As a matter of fact, any useful airport which provides day and night facilities and reasonable access to communities in a major metropolitan area, serves to relieve the primary airports. Its relief function becomes all the more valuable if it is equipped with sufficient navigation facilities which can provide for the conduct of operations during instrument weather conditions. The better the runway and taxiway, as well as parking and other facilities, the more effective is its reliever role. Therefore, we would recommend that the definition of reliever airport be enlarged to include "any public use airport and/or any private airport as designated by the secretary in a metropolitan area served by a primary airport." This definition would automatically make all publicly-owned airports eligible for improvements as relievers and would give the Secretary the same flexibility of designating private airports as relievers as he would have under the definition of the bill.

We further believe that the retention and upgrading of present airports in the metropolitan area served by primary airports is essential to preserving our present airport capacity as well as providing for some increases. It is highly unlikely that many new airports will be constructed in or around major metropolitan areas even though there are well documented and identified needs for new airports. A survey now two years old conducted by the aviation community of 30 top metropolitan areas identified a need for $142 million for airport improvements, $22 million for facitities and equipment, and $84 million for acquiring existing private airports and building a few new airports. It is obvious that the needs will go far beyond the $225 million authorized in the Bill for the five year period, which leads to the conviction that we would best serve community needs by considering metropolitan areas as a whole and providing for additional capacity wherever we can at any airport that is open for public use and serves to divert general aviation traffic from the primary airports.

DEFEDERALIZATION OF PRIMARY AIRPORTS

The General Aviation Manufacturers Association has little direct knowledge of which airports can and which airports cannot provide needed airport development without access to user funds which were collected by the federal government for the development of a system of airports. There is no question but that the largest airports can, and now largely do, provide airport facilities with the federal contribution being a minor fraction of the total cost of developments. On the other hand, it is apparent that even the authors of this Bill had some question about the ability of those airports on the lower end of the scale being able to continue development without use of Trust Funds, as evidenced by the requirement that the Secretary of Transportation and the Comptroller General conduct separate studies of the ability of these airports to replace the money which they would otherwise receive from the Trust Fund under the act. We do not pretend to know where the line should be drawn between eligible and ineligible airports.

The aviation industry and the Congress took a major step when they enacted the Airport and Airway Act of 1970. Conceptually, this Act provided that the direct