Congress passes short-term extension for federal airport programs

As the September 30 deadline for reauthorization of federal airport programs and the taxes that support them approached, Congress passed several different measures to extend the programs to avoid a shutdown in the program. Although lawmakers have been working on reauthorization for months, controversy over the financing of the federal programs has delayed agreement on the measures. Federal aviation programs are funded through a combination of taxes on airport users and general funds

A four-year reauthorization passed by the House and a bill approved by the Senate Commerce Committee would maintain the current financing structure for federal airport programs, rejecting a controversial overhaul of the programs and financing structure proposed by the Department of Transportation earlier this year. The House bill allows municipal airports to increase the cap on passenger facility charges (PFC) from the current $4.50 ceiling to $7.00, a key provision sought bylocal airports. The Senate bill does not address the PFC cap, which airports use to fund capital improvement.

H.R. 2881, the House-passed bill, would authorize almost $16 billion for Airport Improved grants to airports and increase airport improvement program (ALP) funding for smaller airports which are particularly reliant on AIP for capital financing.

The bill increases funding for two programs targeted to smaller communities--the Essential Air Services program and the Small CommunityAir Service Development program. Both were targeted for cuts or elimination under the Administration's proposal.

The Continuing Resolution (CR) adopted by the House to fund government operations through November includes a three-month extension of federal aviation programs and airport taxes and fees while lawmakers continue efforts to gain support for the long term reauthorization bill. The measure would provide funding and taxes at fiscal 2007 levels, which expired on September 30. The House also passed a separate three-month extension of FAA programs, H.R. 3540, on September 24, and the Senate is expected to consider that this week. If the Senate does not adopt H.R. 3540, the three-month extension, then the CR would keep the programs operating at current levels through November 16.

The House passed a four-year reauthorization measure, H.R. 2881, on September 20 that included funding for Airport Improvement Program funding and an increase in the cap on passenger facility charges fromthe current $4.50 to a proposed $7.00. The Senate has not passed itsversion of the Federal Aviation Administration (FAA) reauthorization, S. 1300, but the Senate Finance Committee adopted the revenue portion of the legislation on September 21.

No date has been set for Senate action on S. 1300, the four-year reauthorization measure and there are many differences between the House and Senate bills.

The Senate bill would require general aviation, particularly high-end business jets, to pay more than current law requires for use of the air traffic control system. General aviation groups prefer the House bill, which would raise some taxes on general aviation but would not alter the basic fee structure. The administration has threatened to veto the House bill, saying it would not adequately tie FAA revenueto the costs that users impose on the air traffic control system.

The Senate bill would impose a new $25 per-flight surcharge, revenues from which would be placed into a new trust fund that could be used only to pay for modernizing the air traffic control system and raise the tax on general aviation fuel to 36 cents per gallon, from 21.8cents. The House bill would raise the general aviation fuel tax to 35.9 cents per gallon, from 21.8 cents per gallon, and the commercial aviation fuel tax to 24.1 cents per gallon, from 19.3 cents per gallon. The extra revenue would be dedicated to air traffic control modernization.