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Tue, Sep 18, 2007

HAI Expects Major Progress With House FAA Reauthorization Bill This Week

HAI tells ANN that 'events are unfolding rapidly in Washington this week,' with the soon-to-expire FAA Reauthorization Bill moving quickly through the U.S. House of Representatives. The HAI has learned the House Ways and Means Committee will release the tax portions of the legislation later today, September 18, while the House Rules Committee will act on Wednesday, September 19, so that the bill could be on the House floor by Thursday, September 20.

HAI thinks that the House Ways and Means Committee will mark up the legislation on Tuesday, September 18 with a proposal that would create a separate category for aviation-grade kerosene used in noncommercial flights, and would set that tax at 35.9 cents per gallon. This would increase the tax by 14.1 cents per gallon, or 65 percent, from the current general aviation jet fuel tax. General aviation would also see a 25 percent increase in its gas tax, from 19.3 cents per gallon to 24.1 cents per gallon. The current 4.3 cents per gallon jet fuel and gasoline taxes for airlines would not change. The bill would reauthorize aviation taxes through September 30, 2011.

Noting that the Bush Administration and the airlines have argued the airlines contribute more than 90 percent of the revenue going into the aviation trust fund, while accounting for about 70 percent of the use of the air traffic control system, HAI and other general aviation groups reject those percentages. They argue that the airlines use the bulk of the expensive air traffic control costs at major airports and should be paying more.

The Ways and Means proposal will require that all revenue going into the aviation trust fund, attributable to the tax increases for general aviation, be used exclusively for modernizing the air traffic control system. There is no special set-aside for modernization in current law. HAI believes that any fuel taxes collected from helicopter operations should be set aside to fund a national heliport system and to provide financial assistance in the development of helicopter approaches.

HAI also beleives that the bill would eliminate transfer from the highway trust fund to the aviation trust fund and states that taxes imposed on aviation-grade kerosene would go only to the aviation trust fund. The Joint Tax Committee has estimated that the committee’s proposal would result in $687 million more going into the aviation trust fund in five years.

The current aviation excise taxes expire September 30, and at least one short-term extension of those taxes is expected before lawmakers can reauthorize them. Events and information are unfolding quickly, and HAI assures us that they are in contact with Congressional staff. What IS known is that the Ways and Means Committee will act Tuesday, September 18, the Rules Committee will act Wednesday, September 19, and the FAA Reauthorization Bill could be on the floor with a vote Thursday, September 20.

The leadership of the House Transportation and Infrastructure Committee is preparing a Manager’s Amendment for the bill, but it is unknown at this time whether additional amendments will be allowed when the measure reaches the House floor. HAI has urged their members to contact their elected representatives in the House TODAY and let them know their position on this legislation and how increases in the fuel tax will affect their operations while the airlines are not being subjected to any additional costs. HAI reminds the aviation community that the House bill also includes a significant number of cost increases for operators to include, pilot licenses, certification of aircraft, and pilot medicals. Ouch...

FMI: www.rotor.com, www.house.gov

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