[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
          USER FEES IN THE AVIATION INDUSTRY: TURBULENCE AHEAD 

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                           SEPTEMBER 12, 2012


                               __________



                 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 112-085
              Available via the GPO Website: www.fdsys.gov

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                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Sam Graves..................................................     1
Hon. Nydia Velazquez,............................................     2

                               WITNESSES

Marian Epps, CFO, Epps Aviation, DeKalb-Peachtree Airport, 
  Atlanta, GA....................................................     3
Martha King, Co-Owner, Co-Chairman, King Schools, Inc., San 
  Diego, CA......................................................     5
Kenneth J. Button, George Mason University, University Professor, 
  Director, Center for Transportation, Policy, Operations and 
  Logistics; and, Director, Aerospace Policy Research Center, 
  Arlington, VA..................................................     7
Brad Pierce, President, Restaurant Equipment World, Orlando, FL..     9

                                APPENDIX

Prepared Statements:
    Marian Epps, CFO, Epps Aviation, DeKalb-Peachtree Airport, 
      Atlanta, GA................................................    22
    Martha King, Co-Owner, Co-Chairman, King Schools, Inc., San 
      Diego, CA..................................................    26
    Kenneth J. Button, George Mason University, University 
      Professor, Director, Center for Transportation, Policy, 
      Operations and Logistics; and, Director, Aerospace Policy 
      Research Center, Arlington, VA.............................    30
    Brad Pierce, President, Restaurant Equipment World, Orlando, 
      FL.........................................................    39
Questions for the Record:
    None
Answers for the Record:
    None
Additional Materials for the Record:
    Ed Oberholtzer Letter for the Record.........................    45
    Letter to President Obama Opposing Aviation User Fees........    46


          USER FEES IN THE AVIATION INDUSTRY: TURBULENCE AHEAD

                              ----------                              


                     WEDNESDAY, SEPTEMBER 12, 2012

                          House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:00 p.m., in room 
2360, Rayburn House Office Building, Hon. Sam Graves (Chairman 
of the Committee) presiding.
    Present: Representatives Graves, Mulvaney, West, Hanna, 
Schilling, Velazquez, and Schrader.
    Chairman Graves. Good afternoon, everyone. I want to call 
the hearing to order and welcome everybody for joining us.
    We have an excellent panel here today to examine President 
Obama's proposal to impose per flight user fees on aviation 
operators. Unfortunately, this isn't a new proposal. Previous 
Presidents have suggested a user fee system for aviation in 
addition to the current taxes and fees that are already levied 
as a way to bolster the Airport and Airways Trust Fund.
    Fortunately, these proposals have never been enacted. And 
today we are going to discuss how important it is that they are 
never enacted.
    In the fiscal year 2013 budget, President Obama proposed a 
$100 per flight user fee on general aviation operators. 
Imposing such a plan has the very real potential to stifle the 
general aviation industry as a whole and harm job creation. The 
general aviation industry is predominantly made up of small 
businesses. Annually, it accounts for 27 million flight hours, 
carries 166 million passengers to around 5,000 communities. And 
according to the National Air Transportation Association, more 
than two-thirds of general aviation flights are for business 
purposes.
    Overall, general aviation both operations and manufacturing 
employs about 1.2 million people and contributes approximately 
$150 billion to our gross domestic product. The bottom line is, 
general aviation is a very significant part of our national 
economy.
    The general aviation community has always contributed 
financially to the national air transportation infrastructure. 
And since the inception of the Airport and Airways Trust Fund, 
the general aviation community has paid its share through a 
21.9 cent per gallon tax on jet fuel and a 19.4 cent per gallon 
tax on aviation gasoline, all without the need for a large 
bureaucracy to collect these taxes from hundreds of thousands 
of individual pilots and aircraft owners. This is a far more 
equitable and efficient way to address our aviation and 
infrastructure needs.
    Imposing a $100 per flight user fee on operators is simply 
the wrong approach, and the President offered very few details 
as to how such a system would be established and even less 
analysis on how it would impact the aviation industry. I 
believe this is very bad policy, and there is little doubt it 
would stifle job creation and economic growth in the United 
States. I would also like to remind my colleagues on the 
Committee of the broad and bipartisan opposition from Congress 
to the President's proposal. And I would ask unanimous consent 
that a letter that was sent and signed by 195 Members of 
Congress expressing concerns be submitted into the record.
    Without objection, we will do that. It is so ordered. And 
again I want to thank our witnesses for taking the time to be 
with us today, and I look forward to hearing all of the 
testimony that we are going to hear today.
    I would now yield to Ranking Member Velazquez for her 
opening statement.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Good afternoon.
    The U.S. economy is as complex as it is vibrant, requiring 
frequent travel throughout the Nation. For small businesswomen 
and men, this may mean traveling at the last minute or to 
remote areas that are not served regularly by commercial 
airlines. As a result, general aviation and the flexibility it 
provides plays a key role in our Nation's growth. In fact, 
general aviation directly generated $22.1 billion in 2009 and 
has an overall impact of $76.5 billion, employing nearly half a 
million workers. This contribution will no doubt grow as the 
economy continues to recover.
    With this important role in mind, it is critical that we 
carefully examine any potential policy that could impact this 
industry and the workers it employs. One such policy is the 
administration's proposal to levy a $100 fee on takeoffs and 
landings for commercial airplanes and corporate jets. While all 
piston and emergency aircraft will be exempt, this new fee 
structure could create new burdens for the aviation community 
while requiring a new bureaucracy to monitor compliance. It is 
important to carefully consider whether the benefits of the new 
user fee system outweighs the cost of its implementation.
    While it is sensible to talk about this user fee proposal, 
doing so really misses the elephant in the room today. And that 
elephant is sequestration and the across-the-board cuts on all 
Federal spending that will take effect in January. Estimates 
show that the FAA stands to lose $1 billion through funding as 
a result. According to a study by the Aerospace Industry 
Association, this could force the layoff of almost 1,500 air 
traffic controllers, nearly 10 percent of the total, and the 
closing of more than 240 airport control towers around the 
country. Many of these closings will likely occur at smaller 
airports that handle less traffic, those that are most used by 
the general aviation community.
    Additionally, passenger traffic could drop by 10 percent, 
causing aircraft manufacturing to fall, costing the economy 
another 11,000 to 22,000 jobs. So while it is important to 
discuss the imposition of user fees, it is equally if not more 
important to talk about the effects of fiscal belt tightening 
on the general aviation industry. This issue is not unique to 
the FAA or aviation, but it will have to be addressed jointly 
by the government and the private citizens that rely on those 
specific services.
    Whether it is crop insurance for farmers, loans for small 
businesses, entrance fees at national parks, or traffic control 
services for pilots and their passengers, reduced Federal 
funding creates difficult choices. Tough decisions will have to 
be made, and hearings like the one that we are having today can 
help us determine what the best solution is.
    Ensuring that the general aviation industry remains strong 
in light of these current fiscal challenges is a priority for 
this Committee. It plays an important role in the U.S. economy 
particularly for areas that lack other transportation 
infrastructure, and it is poised to grow stronger over the next 
20 years. Through its presence, it not only creates jobs but 
also serves as an economic anchor for many rural communities.
    I would like to thank the distinguished panel of witnesses 
for traveling here today. And I look forward to their 
testimony.
    Thank you, Mr. Chairman. I yield back.
    Chairman Graves. Thanks, Nydia.
    Our witnesses today.

STATEMENTS OF MARIAN EPPS, CFO, EPPS AVIATION, DEKALB-PEACHTREE 
AIRPORT, ATLANTA, GEORGIA, TESTIFYING ON BEHALF OF THE NATIONAL 
   AIR TRANSPORTATION ASSOCIATION; MARTHA KING, CO-OWNER, CO-
CHAIRMAN, KING SCHOOLS, INC., SAN DIEGO, CALIFORNIA, TESTIFYING 
   ON BEHALF OF THE NATIONAL BUSINESS AVIATION ASSOCIATION; 
    KENNETH J. BUTTON, GEORGE MASON UNIVERSITY, UNIVERSITY 
    PROFESSOR, DIRECTOR, CENTER FOR TRANSPORTATION, POLICY, 
   OPERATIONS AND LOGISTICS; AND DIRECTOR, AEROSPACE POLICY 
    RESEARCH CENTER, ARLINGTON, VIRGINIA; AND BRAD PIERCE, 
   PRESIDENT, RESTAURANT EQUIPMENT WORLD, ORLANDO, FLORIDA, 
    TESTIFYING ON BEHALF OF THE AIRCRAFT OWNERS AND PILOTS 
                          ASSOCIATION

    Chairman Graves. Our first witness is Marian Epps, CFO of 
Epps Aviation, which is a fixed base operator based in DeKalb-
Peachtree Airport in Atlanta, Georgia. Marian joined the family 
business in 1993 in a marketing role. And in 1995, she was 
promoted to the position of CFO and elected to the board of 
directors in 2007. She manages accounting operations, 
information technology. She oversees charter and aircraft 
management, and Pilatus aircraft sales.
    Ms. Epps is testifying on behalf of the National Air 
Transportation Association.
    Thank you for taking the time to be here, Marian. We 
appreciate it.

                    STATEMENT OF MARIAN EPPS

    Ms. Epps. Chairman Graves, Ranking Member Velazquez, and 
members of the Committee, the National Air Transportation 
Association appreciates the opportunity to appear before the 
Committee to discuss the detrimental impact user fees would 
have on the general aviation industry.
    My name is Marian Epps. I am the CFO of Epps Aviation in 
Atlanta, Georgia. Epps is one of NATA's member companies and is 
located at the second busiest airport in Georgia. Our owner and 
founder, Pat Epps, my father, has come a long way since his 
father, Ben Epps, built and flew Georgia's first aircraft at 
the age of 19 in 1907.
    Pat was the youngest boy of 10 children, eight of whom 
became pilots. Let's fast forward to 1965, when my father 
bought a small fixed base operation at the DeKalb-Peachtree 
Airport. For 47 years now, Epps Aviation has served the 
business and public aviation communities. We started with 19 
employees, two hangars, on 21 acres of leased land. Today we 
have 145 employees, down from our pre-recession high of over 
200. Our workforce includes line technicians, A&P mechanics, 
avionic technicians, client service representatives, and 
pilots. They serve U.S. and international customers 24/7, 365 
days a year.
    We have made improvements on our 21 acres of leased space, 
not with government funds but with company profits. We built a 
terminal lobby, maintenance facilities, five 10,000 square foot 
corporate hangars, 40 T-hangars, and a fuel farm. Today these 
facilities are home base to over 100 aircraft owners. Many of 
these aircraft owners are small businesses themselves that use 
aviation to grow their business, such as a seafood wholesaler, 
a lighting manufacturer, an industrial packaging company, and a 
chicken farmer.
    These small businesses rely on aviation, just like ours, 
and they have felt the effects of a slower economy. They are 
struggling to build back to prerecession levels.
    So why am I here? The administration has included a tax 
proposal in the deficit reduction plan that would require all 
air transportation providers to pay a $100 per flight departure 
fee. This departure fee would kill small businesses like ours 
and hurt organizations around the country that depend on 
general aviation. Imposing a user fee would also be detrimental 
to the many States with little or no commercial airline 
service. They need general aviation for economic job growth.
    Let me give you some more data on why aviation is so 
critically important to our economy. The industry employs 1.2 
million workers and generates $150 billion annually in economic 
activity. And let me tell you why user fees would negatively 
impact general aviation in the U.S. No doubt many operators 
would fly less due to the increased cost of using the National 
Airspace System. Less activity will have a ripple effect 
throughout the industry with many businesses such as ours 
suffering due to the lower fuel sales, maintenance, and other 
services. And it would be an enormous administrative burden for 
both the government and the aircraft operators. Just look at 
the countries that have a user fee system. None of these 
countries have the level of aviation activity of the United 
States. Most bill after flights are conducted for the air 
traffic services, and their delayed billing systems are error-
prone, and they cost more to administer than what they collect.
    Why build a new system when we have one that works? The 
current fuel tax ensures that the aviation trust fund will 
receive the appropriate contribution the minute fuel is 
purchased, without having to wait weeks or even months for 
payments.
    Let me wrap up by saying that Congress and the aviation 
industry have been in opposition to any user fee proposals on 
aviation. Over the past 5 years, numerous letters from the 
House and Senate Members of Congress, industry coalitions, and 
aviation associations have reiterated that per flight user fees 
will cripple the aviation industry and the small businesses it 
represents. We have seen this happen in other countries. The 
government's first priority should be to create an environment 
in which businesses can grow and make more important 
contributions to the national economy. A user fee is little 
more than a punitive tax that would have a lasting negative 
effect on aviation.
    We all agree that fuel taxes represent the best way for the 
aviation industry to contribute revenue to the Federal 
Government and support efforts to enhance the National Air 
Transportation System. We look forward to working with the 
Committee in resolving this issue, and we are eager to serve as 
a valuable resource for aviation businesses during this debate.
    Thank you for your time, and I really appreciate being 
here.
    Chairman Graves. Thank you Ms. Epps.
    Our next witness is Martha King, who is the co-owner and 
cochairman of King Schools, which is a flight training school 
based in San Diego, California. In business for over 36 years, 
King Schools focuses on innovative technologies to help train 
pilots over a wide range of certifications. Martha is the first 
and only woman to hold every category and class of FAA rating 
on her pilot and instructor certificates.
    Ms. King is testifying on behalf of the National Business 
Aviation Association.
    Welcome to the Committee, Martha.

                    STATEMENT OF MARTHA KING

    Ms. King. Thank you very much.
    My name is Martha King, and I am honored to be here today 
to represent the National Business Aviation Association, NBAA. 
NBAA has over 9,000 members, and all have one thing in common: 
they rely on business aviation to meet some of their companies' 
travel challenges.
    Mr. Chairman, as you say, I am co-owner and co-chairman of 
King Schools, a flight training company that my husband and I 
started in 1975. King Schools is a member of NBAA, and I serve 
on the association's Associate Member Advisory Council. King 
Schools grew from its original two employees, my husband and 
myself, in 1975 to a high of 90 employees in 2007.
    Like thousands of startup companies all over the U.S., we 
found that using a general aviation airplane made our company 
more efficient and more productive. It allowed us to do more in 
less time. It helped us survive, compete, and grow; 37 years 
later, we still depend on our general aviation airplane.
    Mr. Chairman, as you know, general aviation is one of our 
Nation's most significant industries. It is one of the few U.S. 
industries that contributes positively to our Nation's balance 
of trade. It is fundamental to our Nation's manufacturing base. 
It employs 1.2 million Americans at a time when our country 
urgently needs jobs. It is an economic lifeline to thousands of 
small- and mid-sized American communities with little or no 
scheduled airline service. It helps companies of all sizes be 
more efficient, more productive, and more competitive. And it 
is vital to our Nation's humanitarian efforts.
    The great recession has been devastating to the general 
aviation industry. By virtually any measure, our industry 
shrank by 30 to 60 percent. My company is down from 90 
employees to 50. It is difficult to imagine how at a time when 
the critical American industry is struggling the way that 
general aviation is, people in Washington could be 
contemplating an onerous, regressive, and administratively 
burdensome new per flight tax, euphemistically called a ``user 
fee.''
    A $100 per flight tax on all turbine-powered aircraft would 
be devastating for thousands of small businesses like mine. And 
I hope that this important Committee will put an end to this 
nonsensical proposal once and for all.
    Here are some valuable facts: Most of the business 
airplanes and component parts flying in the world today were 
built in the U.S.; 85 percent of companies that use business 
aviation are small- and mid-sized businesses. Most business 
aviation flights fly to or from airports with no scheduled 
airline service. And the average age of the U.S. general 
aviation turbine airplane fleet is over 25 years old.
    Mr. Chairman, I know that there are those who try to 
promote a caricature of business aviation that is at odds with 
these facts. But the reality is that my small business is very 
representative of business aviation in the U.S. Our employees 
are instructors, technicians, sales people, and customer 
service representatives. And these are the people that fly on 
our airplanes. We do not have an army of accountants standing 
by to process a bunch of $100 per flight invoices from some new 
Federal bureaucracy. And quite frankly, our country does not 
need some new ``Sky-R-S,'' complete with auditors, billing 
agents, and collectors. Today business aviation pays at the 
pump through a per gallon fuel tax. It is simple. It is fair. 
It is efficient, progressive, and environmentally friendly. And 
it is adjustable. Congress can raise or lower the fuel tax. We 
do not need to establish a foreign-style system of user fees in 
the U.S. We have a better way. We have fuel taxes.
    Make no mistake: A new $100 per flight fee on all turbine 
airplane flights is a bad idea. It will hurt our economy, our 
transportation system, and small towns. And it will hurt small 
businesses like mine. We are counting on this Committee to make 
sure that does not happen. We are counting on you to spread the 
word that aviation fuel taxes work, and per flight fees 
destroy.
    Thank you for the opportunity to be here today. And I will 
be happy to answer your questions.
    Ms. Velazquez. Mr. Chairman, it is my pleasure to introduce 
our witness, Kenneth Button.
    Welcome, sir.
    Let me properly introduce you to the Committee. He is a 
university professor of public policy at George Mason 
University, where he is the director of the Center For 
Transportation Policy, Operations, and Logistics as well as the 
director of the Aerospace Policy Research Center. He has 
published or has in press some 80 books and over 400 academic 
papers in the field of transportation economics aviation policy 
and related subjects.
    Professor Button is the editor of numerous academic 
journals in the fields of aviation and aerospace policy, 
tourism and transportation. Prior to coming to George Mason 
University in 1997, he served as a transportation expert for 
the OECD and taught at several universities around the world.
    Welcome, sir.

                 STATEMENT OF KENNETH J. BUTTON

    Mr. Button. Thank you very much.
    I am very grateful for you inviting me to talk. Let me give 
my conclusions first. There seems to be two separate issues 
here. First of all, whether user charges are a good thing. I 
actually disagree with the chairman on this. I think there 
should be a move towards user charges in aviation. I believe 
they should be genuine user charges, which I would call a 
price. Basically user charges are a price for doing something.
    Secondly, on the issue of whether one wants to simply add 
an extra charge to the existing fuel charges, on whether this 
particular charge is an ideal way of doing it, I must confess, 
I do have some reservations.
    The first point: Pricing is very effective for three 
reasons. It allocates out the facilities you have got to the 
people who make the best use of them. It allocates out these 
facilities to the people who are willing to pay and thus 
presumably make the largest financial return from using them. 
In other words, the business people are the most efficient.
    Secondly, you collect revenue from this which is directly 
related to use. Fuel charges are not directly related to the 
use of the system. And this direct relationship allows the FAA 
and other bodies to decide where new investments are required 
or where certain types of facilities may be truncated.
    And thirdly, it provides a stream of revenue which is 
independent of any form of taxation which allows the body--the 
FAA in this case--to actually provide additional capacity and 
to finance it. That is why a lot of countries have moved toward 
user charges.
    The user charges have had some problems where they have 
been introduced. The reasons for this are partly the nature of 
the charges. They have not been imposed particularly well. 
There has been a certain experimentation involved. And of 
course, the United States has an advantage here. It can learn 
the lessons from elsewhere.
    So I am very much in favor of user charges. I don't think 
they pose the problems which we sometimes hear.
    These particular charges which are being proposed here I 
think one has to look at them fairly carefully. I think there 
is a need to remember that general aviation does use the 
infrastructure in the same way as commercial aviation. It does 
not pay as much for using that infrastructure. But on the other 
hand, it doesn't necessarily use all of that infrastructure. It 
doesn't need everything large commercial aircraft do. There are 
some issues about a flat charge across everything because users 
of the system use different amounts of it.
    This particular charge I think has got some issues that 
need to be looked at. I do agree we do have to raise some 
additional revenue. The air transport system does need 
additional money. I do believe this small debt which has been 
accumulated in the United States getting on for $17 trillion 
has to somehow be paid down. It has to be paid down I think so 
it is not a burden on future generations, but also so we don't 
have the burden, as the economy recovers, of higher interest 
payments on it. Inevitably, interest rates will go up as the 
economy recovers. Somehow that has to be paid for.
    My concern about this particular charge is, it has been 
floated as a form of trying to help pay off some of the 
national deficit. According to my calculations, if this is the 
sole source of money, it would take something over 13,000 years 
to actually pay off the national deficit, assuming there is no 
interest on that deficit. So I think putting it forward as a 
method of paying off the deficit is inappropriate.
    Secondly, it has been put forward as a method of getting to 
greater equality. My view is, we should have equality as much 
between generations as between groups at the moment. Therefore, 
I think we need user charges which ensure the aviation industry 
in this country--be it large commercial undertakings, general 
aviation, business aviation, flying schools, or whatever--are 
efficient at what they do, that they have the appropriate 
facilities provided to them. They pay the appropriate--I will 
use the word again, the ``appropriate'' price for that 
infrastructure and that infrastructure has a viable method of 
funding.
    I have some reservations therefore about this particular 
proposal. Although I do have considerable sympathy with the 
underlying idea; we have much more efficient user charges on 
aviation, or pricing aviation, as I like to say. I have 
provided some written testimony, and clearly, I have provided a 
very short summary of it. Thank you.
    Chairman Graves. Rounding out our panel today is Brad 
Pierce, who is the president of Restaurant Equipment World, 
REW, in Orlando, Florida. Started by Brad's father Jerry in 
1976, REW remains a family owned and operated company that 
sells professional grade kitchen equipment from both their 
showroom in Orlando and across the world online. The company 
currently employs approximately 50 individuals.
    He is testifying on behalf of the Aircraft Owners and 
Pilots Association.
    I want to thank you for being here today, Mr. Pierce. We 
appreciate it.

                    STATEMENT OF BRAD PIERCE

    Mr. Pierce. Thank you. Well, it is certainly an honor to be 
speaking with you here today. I am here today representing the 
Aircraft Owners and Pilots Association, also known as the AOPA. 
We have been an AOPA member since 1997 and are also proud to be 
a member of the National Business Aviation Association.
    Restaurant Equipment World was founded more than 35 years 
ago by my father, Jerry Pierce. We provide restaurant and food 
service equipment throughout the Southeast and beyond from our 
headquarters in Orlando, Florida. We are proud to have 
approximately 48 employees. And through our efficiencies, we 
have sold products to more than 100,000 customers in all 50 
States and more than 110 countries internationally.
    My testimony today will make three points: Number one, 
general aviation has been a critical factor for the growth of 
our business and has given us important competitive advantages. 
Number two, general aviation users pay to fund the aviation 
system through excise taxes on fuels. This system is effective. 
It is proven and should continue to be the means by which users 
pay into the system. Number three, user fees would be 
devastating to businesses like myself that depend on general 
aviation.
    General aviation grows businesses. Restaurant Equipment 
World depends on it each and every day to conduct business. We 
currently fly a Turbo Cirrus SR 22 aircraft, and we have a 
deposit placed on a Cirrus Vision Jet, which will be the fourth 
business aircraft for our company. I consider my airplane to be 
one of my best employees. It has consistently allowed me to 
expand our boundaries and our service area because it allows me 
to reach our potential clients fast, even when they are located 
hundreds of miles away. I have personally flown our business 
aircraft to 49 States in an effort to maintain existing 
relationships, attend industry events and pursue new business 
for our company.
    Our airplanes allows us to control our own travel schedule 
so we are able to stay onsite with our customers to make sure 
that our interactions are complete and that they are satisfied 
with the services that we have provided, all the while not 
needing to worry about cutting things short, catching a 
commercial flight.
    As recently as 2 weeks ago, our aircraft allowed me to 
shift my travel schedule in order to meet a new client as well 
as being able to make an impromptu visit to a manufacturing 
partner on a way to an industry event. On more than one 
occasion, our planes provided us a competitive advantage of 
allowing us to move very, very quickly. We had a call from a 
potential client up in North Carolina. I was able to arrange a 
meeting in a matter of hours, something that would have taken 
me 2 full days back and forth on a commercial airliner. We 
arrived faster than even their local competition, and we got 
the contract.
    Our airplane allows us to meet multiple customers in 
multiple cities and multiple States in a matter of a single 
day. We can respond quickly to our customer needs. We can build 
relationships with them. And we can help our customers grow 
their businesses. And many of our customers are small 
businesses themselves.
    Both senior management and my rank-and-file staff members 
utilize our aircraft as an important tool to serving our 
customers' needs. And I am not alone. In my home State of 
Florida, for example, general aviation is associated with more 
than 7 million jobs and has an estimated economic impact of 
$7.5 billion. That is because thousands of other business 
owners just like myself use general aviation to grow their 
companies.
    The current recession has been a challenge for Restaurant 
Equipment World. In order to survive and thrive, we have had to 
be laser-focused with efficiency. We can't just throw money 
wildly at problems and opportunities. We need to be there for 
our customers now more than ever. At a time when we have seen 
multiple competitors failing, we have been able to grow our 
business and have been able to continue hiring employees.
    General aviation pays at the pump. Every general aviation 
operator pays to support the aviation infrastructure every time 
we fly through an excise tax on fuel. This tax has been an 
effective way of paying into the system since the earliest days 
of powered flight. It directly reflects how much we fly because 
we are taxed on the amount of fuel that we use.
    The current system requires no additional bureaucracy or 
administrative costs for either the system users or the Federal 
Government, and Congress sets the tax rate. It is within your 
ability to adjust the rate as needed. The $100 per flight fee 
would require a new system just to administer and collect this 
tax. And once the bureaucracy was in place, that fee could be 
changed at any time without congressional input or oversight. 
For business owners like myself, there would be an additional 
cost just to reconcile and pay these results and invoices.
    Today's system of excise taxes works. Creating a new type 
of tax would increase costs and decrease efficiency for 
everyone involved. The proposed $100 per flight fee would be 
devastating to small businesses like my own. Adding an 
additional $100 to cover every flight would impact how many 
clients we could go and see, especially in rural areas where it 
just simply would not be worth stopping for that extra $100 fee 
that is imposed.
    Our business depends on being responsive to our clients' 
needs and building relationships in person. This fee would 
absolutely devastate that, and our value proposition would 
change dramatically.
    In conclusion, I would like to thank you for the 
opportunity to testify here before you today. And I urge you to 
reject new taxes in the form of user fees for general aviation. 
General aviation has made it possible for us to grow Restaurant 
Equipment World from a five-person company to one with 
approximately 48 employees today. We want to continue to create 
jobs but we need general aviation to be able to do it. Allow us 
to continue to pay at the pump so we can focus our energy on 
making our business stronger instead of paying new fees. Thank 
you for your time.
    Chairman Graves. Thanks, Mr. Pierce.
    I will now go with questions. And I am going to turn to Mr. 
West to start us off.
    Mr. West. Thank you, Mr. Chairman and ranking member.
    And in full disclosure, I want to say that the wings on my 
lapel are representative of the fact that I failed the Army 
aviation test. So I got into the line to be a paratrooper. That 
was a lot simpler.
    Now, with that being said, Dr. Button, you said something 
in your oral testimony. You said that fuel charges are not 
directly related to use. So, I mean, to me, you have got to 
have fuel for an aircraft to take off. So fuel charges have to 
be directly related to use. So, in a way, we are already 
talking about a user fee that is being paid by these users of 
the aviation assets. Why do we need to go to a $100 user fee?
    And you just debunked the whole thing about the debt and 
deficit. So can you explain to us, is there something wrong 
with the Airport and Airway Trust Fund where we need to change 
the system by which we are supposed to be replenishing it?
    Mr. Button. Yes. Thank you for the question. I think there 
is an issue here about what pricing does. And I think the 
American economy is built upon market principles and pricing. 
The importance of direct pricing is that it basically, as I 
said, it allocates what you have got. It indicates where you 
need more or less. And it provides resources for doing so. The 
fuel tax is a tax. There is no direct link between the fuel 
charge and the actual use of the system. In a sense, depending 
on how far you fly, where you fly and so on, that is not 
directly linked to the actual cost of providing air traffic 
control services at airports. There is a linkage. I agree with 
you. But the linkage is a little bit akin to the fuel tax on 
roads. The fuel tax on roads is the same per gallon 
irrespective of whether you are driving in the sense of 
congested Washington or out in the middle of West Virginia. The 
charge is the same. It does not reflect the cost of the system 
you are using. And by affecting the cost of what you are using, 
you are making sure resources are properly deployed.
    My view on the charging is the whole thing needs to be 
looked at, so we move forward to a system where you have direct 
charging for what you use. This is gradually taking place in 
the road services where we have tolls and so on which are 
beginning to actually reflect the use made of the system and 
the quality of the system. You are going to pay more to go on 
the Beltway at 70 miles an hour and possibly even in Texas, you 
can drive at 85 miles an hour if you pay enough. That may be a 
little extreme. But the fact is, you have got the people using 
it----
    Mr. West. Well, that is State, like the Florida Turnpike, 
the New Jersey Turnpike, Pennsylvania. You are talking about 
something that is Federal now.
    Mr. Button. May I ask you a question then, sir, what is the 
difference economically between a federally supplied facility 
and a State supplied facility?
    Mr. West. Well, what I am trying to ascertain is, what is 
broken with this trust fund system that we need to go from what 
we have with a fuel based system, where we can initiate 
legislation. I am sure that we can raise the taxes on the fuel 
in to this $100. And I would also like to know, who came up 
with $100?
    Mr. Button. The answer to your second question is actually 
also posed in my written evidence. I mean, it is a number. It 
could be $95, $250. There doesn't seem to be any rhyme or 
reason to go with that particular number.
    Mr. West. That is my problem. There is no rhyme or reason. 
Someone in the Federal bureaucracy just came up with a dollar 
amount. I don't--did they consult with any of the users out 
there? I think that is what we are talking about. We are 
talking about a problem going around looking for a solution.
    Mr. Button. But what you do have I think is a need for 
additional revenue for the FAA. And perhaps you do need some 
form of an additional charge. I would personally remove the 
fuel charge and in some way have a direct user charge, which 
may amount to a combination of the two sums of money. It may 
not. But different types of aviation use the system in 
different ways. And that should be reflected. It should be 
reflected in the price they pay. I take the point that general 
aviation and business aviation is important. I have done work 
on the small airports in Virginia and it is quite clear they 
contribute significantly to the local economy. So I don't 
disagree at all with any of my colleagues here. It is very, 
very important. But it is also important to use it wisely and 
sensibly.
    You have got to remember small businesses use general 
aviation and business aviation, but they also use commercial 
aviation. I imagine the bulk of small businesses in this 
country actually use commercial aviation. And you have to have 
the appropriate balance between the two to benefit small 
business in its entirety in this country and not simply look at 
the suppliers of aviation services.
    Mr. West. Real quickly, what would this do to your profit 
margins if we went to this $100----
    Ms. Epps. Our profit margins would just diminish. It really 
would kill the general aviation community. Pilots already shop 
around for the cheapest fuel price they can get because it is a 
commodity. And when you whop a $100 departure tax--it is just 
going to add incrementally to your cost and drive people away 
from using aviation. And once people are driven away from using 
aviation, jobs are lost and revenues for example, at our county 
airport--are going to just fall off a cliff.
    Mr. West. Thank you, Mr. Chairman.
    I yield back because I am over time.
    Chairman Graves. Ms. Velazquez.
    Ms. Velazquez. Thank you.
    Mr. Button, clearly, there is a large difference in prices 
that commercial airlines and corporate jets pay for using the 
same level of air traffic services. Do you believe that this 
is--that this difference is too great and should be reduced 
whether through fuel taxes, user fees, or some other mechanism?
    Mr. Button. I believe it should be reduced. I don't think 
they necessarily should pay the same because I think that 
commercial aircraft demand additional facilities not required 
by general aviation or business planes. So I don't think they 
necessarily pay the same, but I think the differential is 
extremely large. I think one reason for this is the commercial 
air business in a sense generates more revenue and, therefore, 
is seen as a mechanism for raising more money, which is not 
necessarily the most efficient way of allocating resources. So 
I certainly think they should be closed. By how much I think 
requires a serious study. But there should be some closing of 
that gap in some way or the other.
    Ms. Velazquez. Thank you. It appears that both the current 
system of fuel taxes and the proposed user fees do not result 
in accurate prices. If you were to design a pricing system from 
the beginning and did not have any constraint in doing so, 
would you build off the current fuel tax system or start fresh 
based on a user fee approach?
    Mr. Button. I would go to a user fee approach. I think 
there may be reasons for taxation on aviation to do with the 
environmental implications, which we are not talking about 
here, I don't think. But for using the system, I think people 
should pay for what they use. That is quite common in virtually 
every other part of the economy.
    Ms. Velazquez. Given the concerns that were raised by the 
witnesses here regarding a user fee that is too onerous, that 
it creates another bureaucracy, that compliance will create a 
problem for them, what is your reaction to that?
    Mr. Button. Well, the reaction to the latter one on the 
administration is, I would get rid of the fuel surcharge and 
the takeoff fee and have one simple charging mechanism, which 
could be meted on the aircraft and you get a bill like your 
telephone bill. I think that is not beyond the wisdom of man, 
and we do it on the tollways anyway. This mechanism is there. 
So the actual administrative charge is once and for all and a 
not very large change in the mechanism in my view.
    Ms. Velazquez. Let's talk about sequestration for a moment. 
You know, it is slated to begin in January, and the FAA stands 
to lose $1 billion from its budget. It has been estimated that 
air traffic services will have to be curtailed significantly. 
If this does occur, how would you recommend the FAA go about 
determining where it should reduce air traffic control 
services?
    Mr. Button. Well, my problem is with the current system of 
charging; we have got no indicator of where the best parts of 
the system are. The charging system doesn't actually tell you 
where the largest demands are. So you have got no mechanism. I 
could sit down and do some econometric work. I am by training 
an econometrician. But I imagine my results would be far off 
the mark. These analyses are. They have a major problem finding 
$1 billion. And I think how you actually cut it back, I think 
that probably the best way would simply be to ask the guys at 
the FAA who have every day contact with the industry, and you 
get a rough and ready answer.
    Ms. Velazquez. Thank you.
    Ms. Epps, I gathered from your testimony that you support 
raising fuel taxes instead of user fees, given the fact that it 
hasn't been raised for quite a while.
    Ms. Epps. Ranking Member Velazquez, they have not been 
raised in over 20 years. And the current system of collecting 
the tax in the fuel is the most efficient system. It would 
eliminate any additional administrative costs.
    Ms. Velazquez. Okay. If we have a shortfall and 
sequestration takes effect, would you support raising fuel 
taxes?
    Ms. Epps. That would be the preference over a new user fee.
    Ms. Velazquez. Thank you.
    Ms. King. Yes, absolutely that would be the preference.
    And I disagree with Dr. Button that fuel charges are not 
related directly to the use of the system because the more an 
aircraft flies and the more sophisticated it is, and the more 
it needs the airline type airports, the more fuel it is going 
to use and the more tax it will pay.
    Ms. Velazquez. Dr. Button, would you like to respond?
    Mr. Button. I don't disagree with that. But I would like to 
have a much closer correlation between the two. It is 
absolutely true, as I said, that there is some correlation. The 
correlation I think is not particularly clear. And I think that 
needs clarifying. And I think the charges should be closer to 
the costs.
    Ms. Velazquez. Thank you.
    Mr. Pierce, what is your position regarding, if we face a 
shortfall, how would we be able to make it up?
    Mr. Pierce. If there is a shortfall and Congress votes to 
raise these fees and the fees are coming in some form or 
another, then I would prefer it to be in a fuel tax. In our 
case, we pay quite a bit of taxes into the system. I fly, as I 
mentioned, into 49 States. I fly extensively. Therefore, I am 
paying a lot more than the people who would fly locally.
    Ms. Velazquez. What you are stating is that you would 
support raising the fuel tax?
    Mr. Pierce. I would support the--if a tax is voted on and 
is approved by Congress, that then, at that point, I would 
prefer the tax----
    Ms. Velazquez. So that is a ``yes'' to my question?
    Mr. Pierce. I do not specifically advocate that we--without 
knowing the facts and knowing what this amount is, I can't 
blanket say that we should or should not raise a specific tax.
    Ms. Velazquez. My question was a simple one. If we are out 
of money, how are we going to make up for the shortfall? Either 
we impose a user fee, or we raise fuel taxes.
    Mr. Pierce. I think that it is more complex in looking at 
how people use the system. When the system is built for the 
airline industry, we may need to raise their taxes at a 
different rate than we raise general aviation taxes is my 
personal opinion. But I think that it is more complex.
    Ms. Velazquez. Mr. Chairman, thank you.
    Chairman Graves. For the record, I think all of the 
organizations here were in full agreement with an increase in 
aviation fuel taxes when we went through the last round of 
taking a look at that in the Transportation Committee.
    Mr. Hanna.
    Mr. Hanna. Thank you, Mr. Chairman.
    In the interest of disclosure I am an AOP member, a pilot. 
I have watched your videos. Ms. King, you are actually good on 
videos but great here today. Thank you for being here, 
everyone.
    If the assumption is--and that doesn't bias me. I think it 
gives me certain input and insights. Although it may bias me, I 
am also an airport owner. It is kind of the law of the bigger 
fool theory. I bought one, lost a lot of money, and sold it to 
another guy who had more money than me. And I am happy about 
it.
    But what possible reason, Dr. Button, do you have to think 
that money collected nationally, $100 at one airport or 
another, will make it distributed more fairly or more properly, 
as you put it? There is not a lot of evidence----I mean, if you 
take, for example, the transportation bill, which is very much 
underfunded, we have a formula. The formula doesn't necessarily 
go. So I question your major premise that that would be an 
outcome.
    Mr. Button. First of all, I agree with you entirely about 
the allocation of the transportation bill. It is not an ideal 
mechanism. In this case, I am very much in favor of assuming--
and this is a strong assumption--the FAA acts sensibly and 
rationally. And the FAA is a public agency, which is to serve 
the public. It is getting revenue in. It knows where the 
revenue is coming from. Therefore, it should direct its 
investments to areas where there is a large amount of revenue. 
And there is clearly a demand for the services in that area. 
That is a rather strong assumption I would agree with.
    But if I am treating it as a private business, a private 
business--many air traffic control systems in the world in 
airports now are corporatized or, in the British case, are 
semi-privatized, they have signals from the fees they get where 
the investment is needed, required----
    Mr. Hanna. Professor, I appreciate that. But let's be 
honest--it is subjective. And there is very little evidence 
about--throughout this country that every dollar we collect 
from the States we send back, if they are lucky, some much 
smaller percentage of it. This won't change this. We have a 
mechanism that works perfectly well that is, as Ms. King said, 
bigger planes that require more runway, more everything, they 
burn a hell of a lot more fuel. There is not necessarily a 
relationship between the number of times you take off and land 
and the amount you actually use. But there is a much more 
direct correlation with the fuel in that regard.
    Mr. Button. Well, it is true. But you may expend more fuel 
taking off and landing, but are you incurring the same 
proportional change in infrastructure which is needed? That is 
the question.
    Mr. Hanna. But that is a question that that doesn't 
necessarily answer. I mean, you can still--the fuel tax can 
still take that, can still account for that. And we know where 
fuel is collected. So we also have a system to do exactly what 
you want to do, which is recognize how much money was collected 
at what airport, and they can allocate it already without this 
additional bureaucracy. I can tell you within--give me a day, 
and I can tell you how much fuel is burned at every airport in 
America.
    Mr. Button. Yes. I can do that as well.
    Mr. Hanna. But the point is that you have the ability to 
allocate it now.
    Mr. Button. We do have. But you have also got to link this 
to cost. At the moment, the allocations are not done that way. 
If you take a large jet into an airport, you sure as heck burn 
a lot more fuel and collect more revenue. But the costs of that 
jet landing are not the same as a smaller jet coming in which 
burns less fuel. You collect less money from the smaller jet, 
it takes up the same length of runway. It takes up basically 
the same amount of air traffic control time.
    Mr. Hanna. You are actually wrong about that. It doesn't 
take up the same length of runway.
    Mr. Button. You are right. It is a shorter amount. But that 
is my point, by the way, in response to the earlier question. 
You would have a differential rate for different types of 
aircraft. They would not be bought together. There would be a 
gap.
    Mr. Hanna. I am listening carefully to you. And I believe 
you believe this. Having flown a lot in my life, I frankly find 
no benefit to adding this additional bureaucracy and no added 
ability to allocate differently or more thoughtfully. And just 
the opportunity, though, to eat up a bigger piece of revenue 
through bureaucracy that we don't have yet.
    Mr. Button. Well, I would simply substitute--I would simply 
get rid of the existing charges and have a direct user charge 
with one bureaucracy----
    Mr. Hanna. So you want to eliminate the gas tax?
    Mr. Button. Eliminate it, I think you should pay for what 
you use in a society. And in that sense, you tend not to get 
overspending too often. You don't run up large deficits too 
often.
    Mr. Hanna. I yield back.
    Thank you, sir.
    Chairman Graves. Mr. Schrader.
    Mr. Schrader. Thank you, Mr. Chairman.
    It seems like we are off into academic exercises and 
thoughtfulness, and that is excellent. I guess one thing I 
would take from this is that at some point--hopefully sooner 
rather than later--it will be interesting to have general 
aviation and the FAA and others participate in some sort of 
thoughtful discussion and/or study of, is there a better way to 
allocate the costs of general aviation? And I think that would 
be fine. I don't know enough about--I am a pilot, but I am a 
four- to six-seater plane, so I am not even going to pay any of 
these things at the end of the day. So maybe I should be favor 
of the new fee.
    But general aviation, obviously, has come out in favor of 
not doing this. And based on the ranking member's questions, 
they are inclined--if there has to be a fee, that they prefer 
to do the fuel tax. And so I guess I am just a country doctor 
from western Oregon, and if that is what the industry wants and 
they are willing to pay for it, regardless of perceived 
inequities, in order to balance our budget and help things go 
forward--we have a problem right now. A sequester would be 
horrible. But we have a debt and deficit problem right now.
    And while I think Dr. Button has good points, we are not 
going to balance the budget on the aviation industry. If 
everyone pays a teeny little bit, which I think Americans are 
willing to do their fair share, I think we would come a long 
way to fixing our country's problems.
    So that is just a comment more than a question, Mr. 
Chairman. I think the industry itself has come up with a 
reasonable solution. It seems like most of the panel is 
moderately interested in that solution. I think most of us are 
interested in that solution. Maybe that is a suggestion we can 
make to the administration to not cause a problem, but let's 
help the industry do what it does best, which is fly people 
around, create jobs, and be market and job builders for our 
great country and just have it where we do some adjustment of a 
gas fee and the jet fuel fee for right now. And then let's 
study the problem and figure out if we have a better long-term 
solution.
    So just a comment, Mr. Chairman.
    I yield back.
    Chairman Graves. Mr. Schilling.
    Mr. Schilling. Thank you, Chairman.
    A couple of things. I don't fly at all. I have a few 
friends that fly. I do make a pretty mean pizza--at least that 
is what they tell me. But one of my concerns is the fact that 
this will create another government agency when we already have 
a system in place.
    And I guess this question is to Dr. Button. The analogy of 
the bigger plane--or just the statement on the bigger plane 
landing on the runway versus the smaller plane. The bigger is 
going to use a lot more fuel; therefore, it will pay more in 
taxes. I don't believe that they do make the same impact on the 
airports when they are landing or taking off--specifically, I 
guess, it would be taking off. It would be like saying the Ford 
Escort versus the semitruck using the road. It is kind of that 
idea.
    But the one thing that I look at is, you know, we have got 
pretty much everybody here agreeing that they are willing to 
pay more in the fuel tax, just like Mr. Schrader said. So one 
of my concerns, again, also is the fact that you were going to 
start out with a number out of the hat, $100. Where does it go? 
And I do have a young man that--and I guess, what do I tell the 
18-year-old kid that is trying to get his, as he is starting to 
fly, and that every time he is going to take off or land, it is 
going to cost him a couple hundred bucks? I think we are 
discouraging new pilots for long term down the road. That gets 
pretty expensive, especially for some young folks that are out 
there. But when I go back home this weekend, what do I tell 
this 18-year-old pilot with the $100 fee? How do I sell that to 
him?
    Mr. Button. Me? Well, first of all, we would need him to 
tell him to enroll in a new degree we are going to have at 
George Mason, where you can get credits for acquiring a pilot's 
license, so you can get a plus from that. I think the point is 
very much--I am the academic here. Therefore, I am putting 
forward the academic perspective because I think we have sort 
of a consensus without me here. But I also do believe, though, 
in user charges. From a pragmatic short-term point of view, you 
may want to raise fuel taxes. The administration is saying that 
is easy. That does not avoid the arbitrariness of the system, 
though. You are talking about $100 being arbitrary. How much 
are you going to raise the fuel tax by? What amount? That is 
equally arbitrary.
    Mr. Schilling. No, it is not.
    Mr. Button. But why isn't it? If you want to raise a 
certain sum of money, then you can----
    It is arbitrary in the sense, if you push up the fuel tax, 
you are going to raise a sum of money. You have a target sum of 
money you want to raise, you raise the fuel tax to get that 
target sum of money. So you have got to have the target sum of 
money. Ditto when you have $100, you have got a target sum of 
money, $1.2 billion, I believe. That is a target. So the target 
is there whichever way you go. Both are arbitrary.
    As for your son, I think you ought to say he has a great 
future in aviation, that the aviation industry is growing. And 
in the longer term, if the economy picks up, there will be a 
lot of opportunities for flying, and he will be earning a large 
salary, perhaps producing pizzas and flying them around. I 
don't know.
    Mr. Schilling. Next question.
    Mr. Pierce, the small business you are in, being a small 
business, the one thing that is very frustrating is we work on 
fractions. You are running this business, you are paying 
utilities, rent, what have you. The government continues to 
come in and wants to take another piece of that fraction. 
Between the regulations and everything going on, I mean, do you 
find that that is a big problem within your business?
    Mr. Pierce. Absolutely. The social cost of doing business 
is perhaps one of our largest challenges. The economy has 
obviously hurt our industry and a lot of my competitors, as I 
have mentioned. And you are so focused on trying to just to 
work to serve your customers and to do what you need to do to 
take care of your employees and allow them to have good places 
to come to work and grow as individuals and care for their 
families. And more and more regulations just tend to keep kind 
of poking their nose in where more and more time is spent, not 
only looking at the regulations but also determining what costs 
to allocate in terms of budgetary items for accountants and 
lawyers and everybody else to make it so that a small 
businessperson, like myself, can understand all of these new 
charges and regulations and how to properly comply with them. 
And I think that when we look at things like the administrative 
cost of this new proposal, this would add to that burden in 
addition to the other social costs we are already incurring.
    Mr. Schilling. Does your food service company absorb that 
cost? Or do you pass it on to your customers?
    Mr. Pierce. We have absorbed to some degree as much as we 
can. You take part of the pain, and eventually you figure out 
that if you take all the pain, you are going to go out of 
business yourself. So that has been passed along to our end 
user customers and has increased, obviously, their costs for 
equipment and their cost for services, which is then revenue 
that they can't use to pay to grow their own companies.
    Mr. Schilling. That they pass on to their customers also.
    Mr. Pierce. Absolutely.
    Mr. Schilling. So the bottom line is, all of these fees go 
down to the hardworking people of the United States of America.
    With that, I yield back.
    Mr. Pierce. Thank you, sir.
    Chairman Graves. A couple points of clarification.
    In the hearings about the proposed user fee, the $100 user 
fee that the administration is putting forth, what it is is 
revenue mining, plain and simple. There is no indication 
whatsoever that this money is going to go to the airport trust 
fund. There is none. It goes into general revenue. An increase 
in fuel taxes however or fuel taxes going into the general 
aviation trust fund to pay for infrastructure that we use on 
our airports. What this is is revenue mining on the 
administration's part. And it would cripple aviation.
    But I do have a question for Dr. Button. In terms of paying 
for what you use or making it equitable, how you are going to 
do it. And you would have a different fee structure for 
different aircraft. But if you take two different daily 
operations and you take a crop duster out there that is flying 
an air tractor, which is a turbine, and he makes 50 takeoffs 
and 50 landings in one day but never exceeds 200 feet above 
ground level, and you have got a King Air that takes off from 
point A to point B, and he pays that $100 fee, whatever it is, 
and that crop-duster pays that $100 fee for all 50 of those 
operations, how is that equitable when that crop duster never 
accesses the system nor does he use the air traffic control 
system? And how can you argue that that is an equitable system 
but a fuel charge is not?
    Mr. Button. I entirely agree with you. I don't think that 
is equitable. I think the issue is that there should be a 
charging system to reflect the fact one chap is doing 50-odd 
trips. The charge would probably not be that large because he 
is not using air traffic control facilities in that sense. 
Those that fly higher do; therefore, their fees would be 
higher.
    And that would be, you know, based on the actual cost of 
using the system. The problem with any fixed charge is that it 
is largely arbitrary, and this is true of the $100. It is an 
arbitrary number. The cut-off point for what aviation types pay 
and don't pay is also arbitrary. So there is a certain 
arbitrariness about that.
    I am very much in favor of a general user charge. How much 
does it cost for that plane in terms of the costs imposed on 
the FAA and the other providers in the air transport 
infrastructure? The airports, it may be zilch in the case of a 
crop-duster taking off from a field, or it may be large in the 
case of a large commercial aircraft. They should pay for the 
appropriate cost of using the airport and the air traffic 
control system. Just like if we go and purchase anything else, 
we pay the cost of producing it and if we--a lot of us want it, 
the price goes up, and the supplier supplies more. There are 
signals in the pricing mechanism. That is the way the American 
system works. Apple uses it pretty well, and they are the most 
successful company in the world.
    Chairman Graves. Then how do you account for the rest of 
the general aviation out there, the non-turbine aircraft, the 
piston-tire aircraft, the weekend flyers.
    Mr. Button. I think it is like anything else, there should 
be an appropriate charge for them if they use any publicly 
provided facilities. If they use a private air field, that is 
their own cost. If they don't use any form of an air traffic 
control facility, that is not a cost to the Nation. But if they 
do, they should pay.
    Chairman Graves. Well, my question, you mentioned, you 
know, that you just meter this by that takeoff and you get a 
bill in the mail for that takeoff. How on earth are you ever 
going to police something like this, and put a bureaucracy in 
place to try to account for that and decide who is taking off 
from the private field, who is not taking off from a private 
field, when you have aviation fuel taxes that pretty much 
account for that?
    Mr. Button. Well, the aviation fuel taxes. If you take--why 
are you paying an aviation fuel tax if you are taking off from 
your own field? You are not using up any controlled air space. 
I mean, why should you pay the government for that facility 
which you are not using. I have got some sympathy, I think you 
know, in the case of general aviation taking off from a private 
field, landing and flying through uncontrolled air space. You 
are not using any national resources. I would sympathize there 
should be no payment for that.
    Chairman Graves. Okay, let's take out private air fields 
and just talk about smaller air fields.
    Mr. Button. Small air fields if they are privately owned, 
the private company owning them presumably would pay an 
appropriate take-off landing fee.
    Chairman Graves. Very, very, very few--I am talking about 
municipal airports. The vast majority of airports in this 
country, municipal county-owned.
    Mr. Button. Well, presumably the airport, which someone has 
to pay for that airport somewhere along the line. Why not pay 
directly for the facilities used? We do this in virtually every 
other thing we do in society. Certainly, we don't do it 
perfectly. Let's. You know I am not----
    Chairman Graves. It is effective. But isn't that exactly 
what fuel charges do is pay directly for the use of that----
    Mr. Button. It is paid directly for the fuel you use, but 
you may have a runway of a certain length, which two aircraft 
of slightly different sizes use, one burning more fuel than the 
other; therefore, one pays more tax than the other one, but 
they are using exactly the same facility.
    Chairman Graves. Well, see, then you get right back into 
the situation in which you are going to have to put a 
bureaucracy in place which is going to cost money just to be 
able to determine if, you know, how much a Stinson 108 uses as 
opposed to a Gulfstream, how much runway they are going to use.
    Mr. Button. I accept there is a bureaucratic cost. I think 
I would get rid of the existing charges, which would reduce the 
burden of that. But the other charges do not involve actually 
the Federal systems, the point and factor over here, because a 
lot of the airports are owned by States or municipal 
authorities, and the airport themselves, presumably, should act 
commercially in the way they set their fees. The air traffic 
control, which is, as far as I can see, is the primary issue, 
which is the FAA----
    Chairman Graves. Before we have a vote--we have a series of 
votes coming up and I would like to ask you if you would like 
to weigh in at all, anyone else on what I have asked?
    Ms. King.
    Ms. King. Yes, I would like to address the fact, Dr. 
Button's position was taken by the head of the FAA equivalent 
in Australia, and what they did is pursue exactly that 
philosophy that if you are out in the outback and you are not 
coming into town, why should you be paying fuel taxes? We will 
get rid of the fuel taxes, and we will put in user fees at all 
of the towered airports. They did that. It has been 
devastating. The airports--the philosophy was that with the 
user fees, the pilots using the airport will have an incentive 
to control the costs that are being charged to them. But the 
power is so unequal between the government and an individual 
pilot, that that is not an effective mechanism. It did not 
work. And I don't believe that it will work. And it has been 
devastating to flight training organizations in areas like 
Sydney and many other places up and down the east coast where 
they did flight training. What is left in Australia has moved 
inland, away from the air traffic system.
    The point is that air traffic is a national transportation 
resource and even the air tractor that is flying out of a crop-
duster field and not taking off and landing from an airport 
with a tower, that pilot trained somewhere. The aircraft was 
built and certified by the FAA. There is a whole lot of FAA 
cost and national cost involved in it. And I think that the 
national fuel system is the best way to pay for it. The issue 
of the runway and, a big airplane versus a small airplane 
landing on it, the runway is the length that it is, the longer 
length in smaller towns, because they want the bigger business 
aircraft there. And so they pay more to essentially compensate 
the municipality for being willing to finance that big of a 
runway.
    Chairman Graves. I apologize to Mr. Mulvaney for not 
getting to your questions. I want to apologize for the vote 
series that we have. It is going to probably take, because we 
have got a motion to recommit in there. It is probably going to 
take about an hour, so unfortunately, I am probably going to go 
ahead and adjourn the hearing so you all don't have to sit 
around and wait on us to do our job.
    But I want to thank all of our witnesses for being here 
today.
    It is very evident to me, and 195 of my colleagues which 
signed the letter opposing the per flight user fee on 
operations in the aviation industry, is a very bad policy. It 
is going to add to an already massive federal bureaucracy, and 
it is going to create a lot of unnecessary financial and 
regulatory burdens on small businesses. My job and the job of 
this Committee is going to be watched very carefully what 
happens when we do an omnibus spending bill at the end of the 
year, to make sure that user fees are not in that particular 
piece of legislation, and to watch when it comes to 
sequestration, which we will have a hearing in this Committee 
on sequestration this week, in fact tomorrow, and we will have 
another hearing next week, and another hearing on the financial 
cliff that is coming.
    But we are going to do everything we can to make sure that 
user fees are not included in any end-of-the-year spending 
measures.
    And with that, I would ask unanimous consent that members 
have 5 legislative days to submit statements and supportive 
materials for the record.
    Without objection, that is so ordered. And with that, the 
hearing is adjourned. I appreciate very much all of the 
witnesses for coming today.
    [Whereupon, at 2:09 p.m., the committee was adjourned.]

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