House, Senate Part Ways on Financing in FAA Reauthorization Measures

Both chambers of Congress will be working Thursday on legislation to reauthorize the Federal Aviation Administration.

The full House will vote on a $68 billion measure (HR 2881) to reauthorize the agency, while a Senate committee will mark up portions of its own FAA bill. The Senate measure also includes provisions intended to ensure the solvency of the Highway Trust Fund.

In the House, lawmakers are expected to adopt a hefty manager's amendment that includes language to tighten oversight of foreign aircraft repair stations, clamp down on excessive airline scheduling, establish health and safety standards for flight attendants and create new protections for people stranded on delayed aircraft.

The House will vote on an amendment by Ted Poe, R-Texas, that would require foreign aircraft repair stations to subject their employees to drug and alcohol testing, as is the case for domestic aircraft mechanics.

Additionally, the House will consider an amendment by Florida Democrat Ron Klein that would require the Transportation Department to investigate more consumer complaints, including flight cancellations, overbooking, baggage concerns and other issues.

As expected, the rule for floor consideration would automatically add to the underlying bill a financing measure (HR 3539) that would raise the general aviation fuel tax from 21.8 cents per gallon to 35.9 cents per gallon, and the commercial aviation fuel tax from 19.3 cents per gallon to 24.1 cents per gallon. The extra revenue would be dedicated to air traffic control modernization.

However, the rule will not contain language that would automatically pass a three-month extension of the FAA's authorization (HR 3540). The current extension (PL 108-176) expires Sept. 30, and it is unclear how the House will proceed on extending its programs.

The White House issued a veto threat Wednesday against the House's FAA bill, saying it would not do enough to tie the agency's revenues more directly to the costs imposed on the air traffic control system by its various users.

The statement of administration policy said the bill "falls far short of providing critical reforms proposed by the administration. Indeed, it would make the status quo worse by undoing progress achieved in prior Congresses."

The administration wants to replace the current system of fuel and ticket taxes with new usage fees, such as per-flight charges based on distance traveled. The administration said such a shift is necessary to fund system upgrades to handle the increasing volume of air traffic.

On Thursday, the Senate Finance Committee will mark up tax legislation that eventually will be added to the chamber's FAA bill (S 1300).

The Senate panel's version would raise the tax on general aviation fuel to 36 cents per gallon, but the measure's similarities with the House bill end there.

It would not change commercial aviation fuel taxes. But it 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 currently subject to, and impose a $58-per-flight departure tax on them.

Additionally, it would change the international departure and arrival tax from $15.10 per flight to $16.50, and index it for inflation.

The committee's draft bill includes provisions intended to ensure the solvency of the Highway Trust Fund, which fuels federal infrastructure investment.

In July, the Office of Management and Budget estimated that the Highway Trust Fund could have a shortfall of $3.8 billion to $4.3 billion by fiscal 2009 unless lawmakers find new revenue streams or significantly cut highway spending.

The Congressional Budget Office has echoed those estimates, saying further shortfalls can be expected in fiscal 2010 and beyond.

Appropriators made it clear that lawmakers should not expect the trust fund to be bailed out by spending from the general Treasury, and that it would be up to the Finance Committee to remedy the problem.

The measure the committee will consider would add about $3.4 billion to the trust fund by temporarily prohibiting money from being transferred from it to the general Treasury for non-highway uses, including some transit purposes, and suspending tax credits for certain kinds of fuels, among other initiatives.

The draft also contains some provisions designed to combat fuel fraud, including changing the location where gasoline taxes are collected and imposing an excise tax on removing certain fuels from foreign trade zones.

Losses to the general Treasury caused by these changes would be offset by increasing the penalty tax on oil spills from 5 cents per barrel to 10 cents per barrel through the end of 2017, and moving up by one year the effective date of a law (PL 108-357) that prohibits "corporate inversions," whereby companies avoid paying U.S. income taxes by setting up post office boxes in tax haven countries.

The Senate Finance Committee markup is scheduled for 4 p.m. Thursday in 215 Dirksen.

Source: CQ Today Round-the-clock coverage of news from Capitol Hill. ©2007 Congressional Quarterly Inc. All Rights Reserved.