Legislation to reauthorize the Federal Aviation Administration saw significant action last week in both chambers of Congress, but it faces several tests before it can be enacted.
The Senate Finance Committee approved a draft measure Sept. 21 that would raise some jet fuel taxes and fees for international flights to help pay for modernizing the nation's air traffic control system. The draft will eventually be merged with a larger measure (S 1300) to reauthorize the FAA.
There is broad agreement that the air traffic control system needs new revenues to pay for needed modernizations, but there are simmering disagreements about who should pay for those upgrades.
The House passed its own version of the FAA bill -- including an aviation tax package -- on Sept. 20. The White House has threatened to veto the measure (HR 2881), saying it would not do enough to tie funding to actual costs of operating the system.
It is unclear when the full Senate will take up its companion measure, which the Commerce, Science and Transportation Committee approved May 16.
In the meantime, the clock is ticking: The FAA's current authorization (PL 108-176) expires Sept. 30.
Given the complexity of the FAA legislation, Congress almost certainly will have to extend current law to buy time for negotiations on a final bill.
"I would prefer to extend it 90 days as part of a continuing resolution, but we'll see what happens with that," said Sen. John D. Rockefeller IV, D-W.Va., who sits on both the Finance and Commerce committees.
Senate Finance PackageThe Finance panel approved the tax draft, 13-0, on Sept. 21. It would reauthorize through fiscal 2011 the FAA's revenue system, which relies primarily on fuel and ticket taxes.
Lawmakers have been struggling this year with who should pay for much-needed improvements to the air traffic control system, which is under increasing strain from rising numbers of flights.
The commercial airlines and the general aviation industry of private planes have been locked in a pitched battle over who pays less and imposes the greater burden on the system.
Like the reauthorization bill the House passed Sept. 20 by a vote of 267-151, the Senate Finance draft would raise the tax on general aviation fuel to 36 cents per gallon, from 21.8 cents.
But the Senate bill also would classify aircraft owned by multiple parties (called "fractionals") as general aviation for the purposes of jet fuel taxation, repeal the ticket tax these types of planes are subject to, and impose a $58-per-flight departure tax on them.
Additionally, it would increase the international departure and arrival tax from $15.10 per flight to $16.65, and index it for inflation.
Rockefeller, who helped write the larger reauthorization bill, criticized the tax draft for not raising taxes enough on general aviation, a section of the industry he believes uses more air traffic control resources than it pays for. He argued that taxpayers foot most of the burden of the system, in part through taxes on the price of a ticket.
"For too long, the high-end corporate general aviation industry has gotten a free ride," Rockefeller said. He introduced an amendment that would have raised the fuel tax on general aviation to 56 cents per gallon, as well as expanding a tax exemption for rural airports. It was defeated by voice vote.
The committee adopted by voice vote a manager's amendment that included language preventing airlines from presenting fuel surcharges as government-imposed taxes in some advertising, requiring that new accruals in air carrier pension plans be funded, and creating a new tax credit for transportation infrastructure projects around Ground Zero in New York City.
The Senate measure also would add about $3.4 billion from the general treasury to shore up the depleted Highway Trust Fund.
It would offset that loss of general revenues by temporarily prohibiting trust fund money from being used for non-highway purposes; suspending tax credits for certain kinds of fuels; cracking down on fuel fraud; raising the penalty tax on oil spills; and moving back by one year, to March 20, 2002, the effective date of a law (PL 108-357) that bars "corporate inversions," a restructuring whereby a group of companies avoid paying U.S. income taxes by setting up their parent corporation in tax-haven countries.
Rail AmendmentThe Finance markup had been delayed because of a tiff over railroad funding.
Soon after the panel met Sept. 20, an unnamed senator invoked a Senate rule preventing committees from meeting after the chamber has been in session for two hours. The rule is typically waived each day by unanimous consent.
The rule was invoked when it became clear that Sen. Trent Lott, R-Miss., planned to offer an amendment that would authorize some $2.7 billion in bonding authority through 2010 for intercity passenger rail.
The rail bonding amendment was adopted Sept. 21 by voice vote. John Kerry, D-Mass., offered it because Lott was out of town giving a speech with former Senate Democratic leader Tom Daschle of South Dakota (1987-2005).
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