House passes FAA reauthorization bill

Bill provides $15.8 billion for the Airport Improvement Program over four years

News Associated General Contractors of America September 24, 2007
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By a 267-151 margin on Sept. 20, the House approved H.R. 2881, the Reauthorization Act of 2007, to reauthorize federal aviation programs through fiscal year 2011. The bill provides $15.8 billion for the Airport Improvement Program (AIP) over four years as follows: $3.8 billion in FY '08, $3.9 billion in FY '09, $4 billion in FY '10 and $4.1 billion in FY '11 (the program is funded at $3.5 billion in FY '07). The bill allows airports to meet their unique capital needs by increasing the passenger facility charge cap (PFC) from $4.50 to as much as $7. According to the FAA, if every airport raised its PFC to $7, it would generate about $1.1 billion in additional revenue for airport development each year. A survey conducted by the Airports Council International-North America estimates total airport capital needs to be about $17.5 billion per year from 2007 to 2011.

The measure also includes a four-year extension of the current tax system that funds the Airport and Airway Trust Fund, as well as an increase in the tax on jet fuel and aviation gasoline used by noncommercial aviation (general aviation). Specifically, the tax on noncommercial jet fuel would be increased by 14.1 cents per gallon from 21.8 to 25.9, a 65% increase. The tax on noncommercial aviation gasoline would be increased by 4.8 cents per gallon from 19.3 to 24.1, a 25% increase.

In addition, the bill provides $13 billion to accelerate the implementation of the Next Generation Air Transportation System (NextGen) and enable the FAA to replace or repair existing facilities and equipment to modernize the air traffic control system. Revenues generated by the increases in the fuel taxes can only be used for air traffic control system modernization.

The Administration issued a veto threat against the House 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 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.

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