House Passes Three-Month FAA Extension

The House on Monday passed legislation that would keep the Federal Aviation Administration operating for three months, while lawmakers finish work on a four-year reauthorization bill.

The FAA's authority to collect the excise and ticket taxes that fuel much of its budget will expire on Sept. 30, when its current authorization ends (PL 108-176). The House passed the extension (HR 3540) by voice vote.

The Senate could either take up the House-passed bill and clear it by week's end, or include an extension in the continuing appropriations resolution Congress must clear to keep the entire government running after the Oct. 1 start of the 2008 fiscal year. Sen. John D. Rockefeller IV, D-W.Va. chairman of the Senate Commerce, Science and Transportation Aviation Subcommittee, said he would prefer to roll the FAA extension into the continuing resolution, but he was not sure that would be the case.

Last week, the House passed its long-term FAA bill (HR 2881) and the Senate Finance Committee completed the revenue section of that chamber's bill (S 1300), which had been approved earlier by the Commerce Committee. The revenue provisions will be added to the basic Senate bill on the floor.

But it will take time to pass the FAA bill in the Senate; no date has been set for floor action. And reconciling the House and Senate bills in conference will not be easy as there are significant differences between the two versions, particularly regarding new fees for various sectors of the aviation industry intended to help pay for improvements to the country's aging air traffic control system.

Complicating matters further is a White House veto threat. The administration wants Congress to substantially alter the financing system for the FAA to link fees and taxes more directly to usage of the air traffic control system, so that those who place the heaviest burden on the system pay the most.

The Senate bill tends to favor the airline industry by requiring 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 raises some taxes on general aviation but does not alter the basic fee structure.

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.

The revenue measure approved last week by the Finance Committee also would raise the tax on general aviation fuel to 36 cents per gallon, from 21.8 cents. 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 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.

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.