Performance And Accountability Report - Fiscal Year 2013 - Federal Aviation Administration - U.s. Department Of Transportation Page 113
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150 NOTE 16. Commitments, Contingencies, and Other Disclosures
Subsequent Event.
Due to a lapse in annual appropriations
30, 2012, the FAA had obligated $5.8 billion of this total amount,
from October 1, 2013, through October 16, 2013, the FAA ceased
leaving $1.6 billion unobligated.
all non-excepted activities pursuant to the Antideficiency Act,
Aviation Insurance Program.
Under the Aviation Insurance
U.S.C. Section 1341 et seq, and all non-exempt activities.
Program, the FAA is authorized to issue hull and liability
This partial shutdown included issuing stop work orders for
insurance for air carrier operations for which commercial
approximately 1,000 contracts. The financial impact of these stop
insurance is not available on reasonable terms and when
work orders is undetermined at this time.
continuation of U.S. flag commercial air service is necessary in
Reauthorization.
Effective October 17, 2013, the FAA is
the interest of air commerce, national security, and the foreign
operating under a continuing resolution (CR), Public Law 113-46
policy of the United States. The FAA may issue non-premium
for its FY 2014 appropriation and many of its programmatic
insurance and premium insurance for which a risk-based
and financing authorities. The CR will be in effect through
premium is charged to the air carrier, to the extent practical.
January 15, 2014, and includes a provision that allows the FAA
During FY 2013, the FAA provided premium war-risk insurance
to collect aviation-related excise taxes and to continue spending
to 49 airlines. For these airlines, combined hull and liability per
at FY 2013 rates. It also provides sufficient contract authority to
occurrence coverage limits range from $100 million to $4 billion.
the Airport Improvement Program.
The FAA also provided non-premium war-risk insurance to 37
In addition, the passage of the FAA Modernization and
carriers with 2,068 aircraft for U.S. Department of Defense
Reform Act of 2012, Public Law 112-95, authorizes the FAA’s
charter operations for Central Command.
programmatic and financing authorities, the Airport Improvement
As of September 30, 2013, there are pending aviation insurance
Program contract authority and the authority to collect and
claims in the amount of $7.0 million. There is approximately $2.0
deposit excise taxes into and make expenditures from the AATF.
billion available in the Aviation Insurance Revolving Fund to pay
The new authority expires on September 30, 2015.
claims to carriers covered by premium insurance. If premium
Airport Improvement Program.
The Airport Improvement
insurance claims should exceed that amount, additional funding
Program provides grants for the planning and development of
could be appropriated from the General Fund. The Department of
public-use airports that are included in the National Plan of
Defense and the State Department have agreed to pay claims to
Integrated Airport Systems. Eligible projects generally include
the carriers covered by non-premium insurance.
improvements that address airport safety, capacity, security,
Legal Claims.
As of September 30, 2013 and 2012, the FAA’s
and environmental concerns. The FAA’s share of eligible costs
contingent liabilities for asserted and pending legal claims
for large and medium primary hub airports is 75 percent with
probable and reasonably possible of loss were estimated at $76
the exception of noise program implementation, for which the
million and $93 million, respectively. There are other claims that
FAA’s share is 80 percent. For remaining airports (small primary,
could result in significant pay-outs; however, it is not possible at
reliever, and general aviation), the FAA’s share of eligible costs is
this time to determine the probability of an unfavorable outcome,
95 percent.
or to estimate the amount of potential loss in the event of such
The FAA has authority under 49 U.S.C. 47110(e) to issue letters
an outcome.
of intent to enter into a series of annual Airport Improvement
Environmental Liabilities.
As of September 30, 2013, the
Program grant agreements. The FAA records an obligation when
FAA estimated contingent liabilities, categorized as reasonably
a grant is awarded. As of September 30, 2013, the FAA had
possible at $165.2 million related to environmental remediation.
letters of intent extending through FY 2028 totaling $7.4 billion.
Contingency costs are defined for environmental liabilities as
As of September 30, 2013, the FAA had obligated $6.0 billion of
those costs that may result from incomplete design, unforeseen
this total amount, leaving $1.4 billion unobligated.
and unpredictable conditions or uncertainties within a defined
As of September 30, 2012, the FAA had letters of intent
project scope. Note 7 discloses the environmental liability
extending through FY 2028 totaling $7.4 billion. As of September
accrual.
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Federal Aviation Administration
Fiscal Year 2013
Performance and Accountability Report
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