The House Transportation and Infrastructure Committee approved a bill--H.R. 2881, the FAA Reauthorization Act of 2007-- on June 28, to reauthorize federal aviation programs through fiscal year 2011. The bill was introduced late on June 27 and bypassed Subcommittee consideration in an effort to get the bill approved before Congress adjourns for the July 4th recess.
The bill provides $15.8 billion for the Airport Improvement Program (AIP) over four years as follows: $3.8 billion in fiscal year 2008, $3.9 billion in fiscal year 2009, $4.0 billion in fiscal year 2010 and $4.1 billion in fiscal year 2011 (the program is funded at $3.5 billion in fiscal year 2007).
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 $7.00. According to the Federal Aviation Administration (FAA), if every airport raised its PFC to $7.00, 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.
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.
The Committee rejected the Administration's sweeping aviation financing reform proposal. While the Transportation and Infrastructure Committee does not have jurisdiction over taxes, the committee opted to include in the bill recommendations to the House Ways and Means Committee to increase the general aviation jet fuel tax rate for inflation from 21.8 cents per gallon to 30.7 cents per gallon and to increase the aviation gasoline tax rate from 19.3 cents per gallon to 24.1 cents per gallon.
The Senate Commerce, Science and Transportation Committee approved its version of an FAA reauthorization bill--S. 1300--in May. The Senate bill funds the AIP program at the same levels as the House bill but does not allow for an increase in the Passenger Facility Charge. The Senate bill recommends an increase in the fuel taxes used by business aviation from 21.8 cents per gallon to 49.1 cents per gallon. The Senate bill would also establish a $25 per flight surcharge that would be used to capitalize a new Air Traffic Modernization Fund.
