The House Moves, Senate Is Next ...

Sept. 19, 2007
... in the reauthorization drama on Capitol Hill. This week the U.S. House Ways & Means Committee approved its version of FAA and aviation system reauthorization – HR. 2881. If anyone doubts the clout of general aviation groups, particularly the Aircraft Owners & Pilots Association, this bill serves as evidence that they have the ear of key Congressional leaders. It is almost as though the U.S. House ignored arguments by FAA and the major airlines, via ATA, who had lobbied hard for a total rethinking of how the U.S. aviation system is funded.  The clout of airport lobbying groups remains in question. At the top of their wish list is an increase in the cap on passenger facility charges (PFCs), currently set at $4.50. Even FAA supported an increase, albeit to $6 – the airports want $7.50, and indexing for inflation. The Senate has proposed a jump to $7, but without House support that remains in question. Earlier this week, Airports Council International-North America was alerting members that Congress was considering abandoning the increase. The fate of a PFC increase now rests with the Senate Finance Committee, which still has to mark up its reauthorization bill proposed in May. The good news for airports is that the House wants to continue strong funding for the Airport Improvement Program.  H.R. 2881, expected to undergo a full floor vote by week’s end, calls for increasing the tax on non-commercial jet fuel from 21.9 cents per gallon to 36 cents. It would raise the tax on avgas from 19.4 cents per gallon to 24.1 cents. Notably, the bill would repeal the “fuel fraud provision enacted as part of the 2005 surface transportation reauthorization bill that required aviation fuel retailers to purchase jet fuel from their distributors at the same rate as highway diesel fuel (24.4 cents per gallon), sell it at the aviation jet fuel tax rate (21.9 cents per gallon), and obtain a refund from the Internal Revenue Service (IRS) for the 2.5 cents per gallon difference,†according to the National Air Transportation Association. NATA had lobbied hard to have this unnecessary administrative burden taken off the shoulders of its FBO members.    The increase in fuel taxes is to be targeted at air traffic control modernization. The Senate has proposed a $25 per flight fee on IFR flights that would be used to upgrade ATC. The Ways & Means Committee also hedged its bet, concurrently passing a continuing resolution to maintain the current taxing structure, should the full Congress fail to pass a final bill before September 30. On that day, all current funding authorization expires.  Thanks for reading. jfi             Â