[Congressional Record Volume 143, Number 21 (Tuesday, February 25, 1997)]
[House]
[Pages H598-H605]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AIRPORT AND AIRWAY TRUST FUND TAX REINSTATEMENT ACT OF 1997
Mr. ARCHER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 668) to amend the Internal Revenue Code of 1986 to reinstate
the Airport and Airway Trust Fund excise taxes, and for other purposes.
The Clerk read as follows:
H.R. 668
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Airport
and Airway Trust Fund Tax Reinstatement Act of 1997''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
SEC. 2. REINSTATEMENT OF AIRPORT AND AIRWAY TRUST FUND EXCISE
TAXES.
(a) Fuel Taxes.--
(1) Aviation fuel.--Subparagraph (A) of section 4091(b)(3)
is amended to read as follows:
``(A) The rate of tax specified in paragraph (1) shall be
4.3 cents per gallon--
[[Page H599]]
``(i) after December 31, 1996, and before the date which is
7 days after the date of the enactment of the Airport and
Airway Trust Fund Tax Reinstatement Act of 1997, and
``(ii) after September 30, 1997.''
(2) Aviation gasoline.--Subsection (d) of section 4081 is
amended by striking the paragraph (3) added by section
1609(a) of the Small Business Job Protection Act of 1996 and
by striking paragraphs (1) and (2) and inserting the
following new paragraphs:
``(1) In general.--The rates of tax specified in clauses
(i) and (iii) of subsection (a)(2)(A) shall be 4.3 cents per
gallon after September 30, 1999.
``(2) Aviation gasoline.--The rate of tax specified in
subsection (a)(2)(A)(ii) shall be 4.3 cents per gallon--
``(A) after December 31, 1996, and before the date which is
7 days after the date of the enactment of the Airport and
Airway Trust Fund Tax Reinstatement Act of 1997, and
``(B) after September 30, 1997.''
(3) Noncommercial aviation.--Paragraph (3) of section
4041(c) is amended to read as follows:
``(3) Termination.--The rate of the taxes imposed by
paragraph (1) shall be 4.3 cents per gallon--
``(A) after December 31, 1996, and before the date which is
7 days after the date of the enactment of the Airport and
Airway Trust Fund Tax Reinstatement Act of 1997, and
``(B) after September 30, 1997.''
(b) Ticket Taxes.--
(1) Persons.--Subsection (g) of section 4261 is amended to
read as follows:
``(g) Application of Taxes.--
``(1) In general.--The taxes imposed by this section shall
apply to--
``(A) transportation beginning during the period--
``(i) beginning on the 7th day after the date of the
enactment of the Airport and Airway Trust Fund Tax
Reinstatement Act of 1997, and
``(ii) ending on September 30, 1997, and
``(B) amounts paid during such period for transportation
beginning after such period.
``(2) Refunds.--If, as of the date any transportation
begins, the taxes imposed by this section would not have
applied to such transportation if paid for on such date, any
tax paid under paragraph (1)(B) with respect to such
transportation shall be treated as an overpayment.''
(2) Property.--Subsection (d) of section 4271 is amended to
read as follows:
``(d) Application of Tax.--
``(1) In general.--The tax imposed by subsection (a) shall
apply to--
``(A) transportation beginning during the period--
``(i) beginning on the 7th day after the date of the
enactment of the Airport and Airway Trust Fund Tax
Reinstatement Act of 1997, and
``(ii) ending on September 30, 1997, and
``(B) amounts paid during such period for transportation
beginning after such period.
``(2) Refunds.--If, as of the date any transportation
begins, the taxes imposed by this section would not have
applied to such transportation if paid for on such date, any
tax paid under paragraph (1)(B) with respect to such
transportation shall be treated as an overpayment.''
(c) Transfers to Airport and Airway Trust Fund.--
(1) In general.--Subsection (b) of section 9502 is amended
to read as follows:
``(b) Transfers to Airport and Airway Trust Fund.--There
are hereby appropriated to the Airport and Airway Trust Fund
amounts equivalent to--
``(1) the taxes received in the Treasury under--
``(A) subsections (c) and (e) of section 4041 (relating to
aviation fuels),
``(B) sections 4261 and 4271 (relating to transportation by
air),
``(C) section 4081 (relating to gasoline) with respect to
aviation gasoline (to the extent that the rate of the tax on
such gasoline exceeds 4.3 cents per gallon), and
``(D) section 4091 (relating to aviation fuel) to the
extent attributable to the Airport and Airway Trust Fund
financing rate, and
``(2) the amounts determined by the Secretary of the
Treasury to be equivalent to the amounts of civil penalties
collected under section 47107(n) of title 49, United States
Code.''
(2) Termination of financing rate.--Paragraph (3) of
section 9502(f) is amended to read as follows:
``(3) Termination.--Notwithstanding the preceding
provisions of this subsection, the Airport and Airway Trust
Fund financing rate shall be zero with respect to taxes
imposed during any period that the rate of the tax imposed by
section 4091(b)(1) is 4.3 cents per gallon.''
(d) Floor Stocks Taxes on Aviation Gasoline and Aviation
Fuel.--
(1) Imposition of tax.--In the case of any aviation liquid
on which tax was imposed under section 4081 or 4091 of the
Internal Revenue Code of 1986 before the tax effective date
and which is held on such date by any person, there is
hereby imposed a floor stocks tax of--
(A) 15 cents per gallon in the case of aviation gasoline,
and
(B) 17.5 cents per gallon in the case of aviation fuel.
(2) Liability for tax and method of payment.--
(A) Liability for tax.--A person holding, on the tax
effective date, any aviation liquid to which the tax imposed
by paragraph (1) applies shall be liable for such tax.
(B) Method of payment.--The tax imposed by paragraph (1)
shall be paid in such manner as the Secretary shall
prescribe.
(C) Time for payment.--The tax imposed by paragraph (1)
shall be paid on or before the first day of the 5th month
beginning after the tax effective date.
(3) Definitions.--For purposes of this subsection--
(A) Tax effective date.--The term ``tax effective date''
means the date which is 7 days after the date of the
enactment of this Act.
(B) Aviation liquid.--The term ``aviation liquid'' means
aviation gasoline and aviation fuel.
(C) Aviation gasoline.--The term ``aviation gasoline'' has
the meaning given such term in section 4081 of such Code.
(D) Aviation fuel.--The term ``aviation fuel'' has the
meaning given such term by section 4093 of such Code.
(E) Held by a person.--Aviation liquid shall be considered
as ``held by a person'' if title thereto has passed to such
person (whether or not delivery to the person has been made).
(F) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(4) Exception for exempt uses.--The tax imposed by
paragraph (1) shall not apply to--
(A) aviation liquid held by any person on the tax effective
date exclusively for any use for which a credit or refund of
the entire tax imposed by section 4081 or 4091 of such Code
(as the case may be) is allowable for such liquid purchased
on or after such tax effective date for such use, or
(B) aviation fuel held by any person on the tax effective
date exclusively for any use described in section 4092(b) of
such Code.
(5) Exception for certain amounts of fuel.--
(A) In general.--No tax shall be imposed by paragraph (1)
on any aviation liquid held on the tax effective date by any
person if the aggregate amount of such liquid (determined
separately for aviation gasoline and aviation fuel) held by
such person on such date does not exceed 2,000 gallons. The
preceding sentence shall apply only if such person submits to
the Secretary (at the time and in the manner required by the
Secretary) such information as the Secretary shall require
for purposes of this paragraph.
(B) Exempt fuel.--Any liquid to which the tax imposed by
paragraph (1) does not apply by reason of paragraph (4) shall
not be taken into account under subparagraph (A).
(C) Controlled groups.--For purposes of this paragraph--
(i) Corporations.--
(I) In general.--All persons treated as a controlled group
shall be treated as 1 person.
(II) Controlled group.--The term ``controlled group'' has
the meaning given such term by subsection (a) of section 1563
of such Code; except that for such purposes, the phrase
``more than 50 percent'' shall be substituted for the phrase
``at least 80 percent'' each place it appears in such
subsection.
(ii) Nonincorporated persons under common control.--Under
regulations prescribed by the Secretary, principles similar
to the principles of clause (i) shall apply to a group of
persons under common control where 1 or more of such persons
is not a corporation.
(6) Other laws applicable.--All provisions of law,
including penalties, applicable with respect to the taxes
imposed by section 4081 or 4091 of such Code shall, insofar
as applicable and not inconsistent with the provisions of
this subsection, apply with respect to the floor stocks taxes
imposed by paragraph (1) to the same extent as if such taxes
were imposed by such section 4081 or 4091, as the case may
be.
(e) Effective Dates.--
(1) Fuel taxes.--The amendments made by subsection (a)
shall apply to periods beginning on or after the 7th day
after the date of the enactment of this Act.
(2) Ticket taxes.--
(A) In general.--The amendments made by subsection (b)
shall apply to transportation beginning on or after such 7th
day.
(B) Exception for certain payments.--Except as provided in
subparagraph (C), the amendments made by subsection (b) shall
not apply to any amount paid before such 7th day.
(C) Payments of property transportation tax within
controlled group.--In the case of the tax imposed by section
4271 of the Internal Revenue Code of 1986, subparagraph (B)
shall not apply to any amount paid by 1 member of a
controlled group for transportation furnished by another
member of such group. For purposes of the preceding sentence,
all persons treated as a single employer under subsection (a)
or (b) of section 52 of the Internal Revenue Code of 1986
shall be treated as members of a controlled group.
(f) Application of Look-Back Safe Harbor for Deposits.--
Nothing in the look-back safe harbor prescribed in Treasury
Regulation section 40.6302(c)-1(c)(2) shall be construed to
permit such safe harbor to be used with respect to any tax
unless such tax was imposed throughout the look-back period.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas [Mr. Archer] and the gentleman from New York [Mr. Rangel] each
will control 20 minutes.
The Chair recognizes the gentleman from Texas [Mr. Archer].
[[Page H600]]
Mr. HILLEARY. Mr. Speaker, I have a parliamentary inquiry. Is either
the gentleman from Texas or the gentleman from New York opposed to the
bill? If not, I would like to request the time in opposition.
The SPEAKER pro tempore. Is the gentleman from New York opposed to
the motion?
Mr. RANGEL. No, Mr. Speaker.
The SPEAKER pro tempore. Is the gentleman from Tennessee opposed?
Mr. HILLEARY. Yes, I am, Mr. Speaker, in its present form.
The SPEAKER pro tempore. The gentleman from New York [Mr. Rangel]
does not qualify as opposed. The Chair will recognize the gentleman
from Tennessee [Mr. Hilleary] to manage the 20 minutes in opposition.
Parliamentary Inquiry
Mr. RANGEL. Mr. Speaker, I have a parliamentary inquiry.
The SPEAKER pro tempore. The gentleman will state it.
Mr. RANGEL. Mr. Speaker, may the chairman of the full committee
advance time to the minority?
The SPEAKER pro tempore. The gentleman from Texas may yield time by
the minute or he may yield the gentleman such time as he may consume.
Mr. ARCHER. Mr. Speaker, I was prepared for the inquiry by the
gentleman from Tennessee and I ask unanimous consent to yield 10
minutes of my time to the gentleman from New York [Mr. Rangel] to
assign as he may see fit.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
The SPEAKER pro tempore. The Chair recognizes the gentleman from
Texas [Mr. Archer].
General Leave
Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
and include extraneous matter on H.R. 668.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today I bring before the House a bill, H.R. 668, the
Airport and Airway Trust Fund Tax Reinstatement Act of 1997. This
bipartisan legislation was requested by the administration and is urged
by airport authorities and operators across the country to restore
funding to the Airport and Airway Trust Fund.
It is critical that the House pass H.R. 668 without delay or change.
Absent the additional trust fund revenues this bill provides, essential
aviation capital programs, including safety enhancements, will not
proceed beyond the end of February.
H.R. 668 corrects a $1.2 billion shortfall in the trust fund and
reinforces the trust fund finances by restoring temporarily, through
September 30, 1997, the 10-percent passenger ticket tax and other
Airport and Airway Trust Fund excise taxes which lapse after 1996. In
addition, the bill renews expired authority for the transfer of
aviation taxes from general revenues into the trust fund.
I cannot overstate the importance of moving this bill swiftly. Within
5 days the FAA will start sending out notices canceling or suspending
contracts which involve safety expenditures and airport improvements.
We do not have the luxury of time to deliberate alternatives which
carry no guarantee of speedy consideration in this Chamber or in the
Senate. Rather, an informal Committee Transportation Task Force is
examining in depth the issue of long-term financing for our Federal
aviation system so that this kind of crisis does not occur again.
So that my colleagues have a clear understanding of the consequences
of delay or inaction, the Federal Aviation Administration has informed
me that some 850 airports located in every State, Guam, and Puerto Rico
will be impacted. Furthermore, of the $1.3 billion total at risk, more
than half is attributable to small- and medium-sized airports.
In summary, this bill addresses the safety concerns of the airports,
pilots, and air travelers in every State. The House should also be
aware that the Senate Finance Committee has already acted upon
identical legislation to expedite Senate floor consideration of this
measure and expected White House approval.
Again, I urge my colleagues to allow this bill to move forward
immediately. A delay will only jeopardize important air safety
improvements and, worse, cast doubt on Congress's ability to act
responsibly and effectively where essential Government safety programs
face sudden financial disruptions.
Mr. Speaker, for the benefit of all of our Members, this is not a tax
increase. This is a reinstitution of an expired provision. These funds
are used for only one purpose, and that is our airports and airways.
Passengers deserve to know that when they fly, they will fly safely,
and this bill is essential in that regard.
Mr. Speaker, I reserve the balance of my time.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume,
and I rise to support our chairman in this bill.
Mr. Speaker, this bill expired because of an attempt at budgetary
gimmickry that has almost jeopardized the safety of our airports and
our passengers and our pilots, but that is behind us, and I think we
have learned a lesson, and in order to ensure the safe operation of the
Nation's air transportation system, I join with the chairman in sharing
the urgency with which we act, and that is why this matter is on the
suspension calendar.
This bill will extend a ticket tax through the end of September,
1997, which will give the Congress and our committee an opportunity to
come up with a long-term funding plan because, as pointed out by the
chairman of the committee, this is merely the reinstitution of an
existing tax that nobody challenges is necessary if we are going to
safeguard our airways.
The bill also extends the Treasury Department authority to transfer
tax revenue to the Airport and Airway Trust Fund, which is a critical
issue for the Federal Aviation Administration. Without the necessary
transfer of tax revenue, the FAA will be unable to commit to capital
projects as early as March, and March is, of course, just a couple of
days away.
We have to make certain that there is confidence felt by Americans,
and we have the responsibility to provide that for Americans who fly
for work or for pleasure. As a matter of fact, it impedes the
efficiency of our commerce, as we have to transfer our goods and
services to all parts of our country and to the world.
I think it is very important that this tax be extended to give the
committee an opportunity to assure this Congress and the Nation that
this will not happen again and that we are going to work it out in such
a way that it cannot happen again. I certainly know that Members on our
side are prepared to work with the majority party and with the
President in making certain that we come up with a proper solution of
this very serious problem.
If it has not been said, I think the Congress should know that this
bill passed out of the Committee on Ways and Means on a voice vote
without objection.
Mr. Speaker, I reserve the balance of my time.
Mr. HILLEARY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to H.R. 668, the Airport and Airway
Trust Fund Tax Reinstatement Act. I oppose the bill in its present form
precisely because, as its title indicates, it is a tax increase, a $2.7
billion tax increase.
We will probably hear debate from supporters about how reasonable and
sensible this tax increase is. We have already heard it is a user fee,
and that it is. We may hear about how this is simply putting a tax back
that has been in existence for many years. We may hear about how this
is only a temporary extension of an old tax. We may hear about how
there is a plan to make this an even better tax or user fee in the next
fall. But one fact remains, Mr. Speaker. To quote a letter I received
Monday from the National Taxpayers Union, quote, ``This bill standing
alone indisputably raises taxes.''
{time} 1430
To quote a letter I received Monday from Americans for Tax Reform,
quote, ``ATR does not support renewing this tax,'' unquote.
To quote a letter I received this morning from Citizens Against
Government Waste, quote, ``We are greatly
[[Page H601]]
concerned that one of the first substantive pieces of legislation
considered by the 105th Congress is one that will raise taxes. That is
exactly what H.R. 668, the Airport and Airway Trust Fund Tax
Reinstatement Act, will do, raise taxes on American travelers,''
unquote.
To quote another letter I received this morning, quote, ``Citizens
for a Sound Economy strongly oppose H.R. 668, the Airport and Airway
Trust Fund Tax Reinstatement Act of 1997. This tax will cost U.S.
taxpayers $2.7 billion,'' unquote.
And just as I came to the floor someone handed me yet another letter
from the American Conservative Union, and I will quote part of it:
``As it stands now, this legislation will have the effect of raising
taxes on American consumers by another $2.7 billion between now and the
end of September 1997. We find it unconscionable that such legislation
should be allowed to come to the floor of the House without an
offsetting tax cut provision.''
I know we can call this tax by many different names. We can call it
an excise tax, we can call it a user fee, we can call it an assessment
on air travelers, we can call it revenue enhancement. But you know,
back home in Tennessee that old story about if it looks like a duck,
walks like a duck, talks like a duck, it is probably a duck. That is
what we say back home, and that is what a lot of people say.
You can call this tax whatever you want. You can dress the tax up
however you want. But it still quacks like a duck. It is not just me
and the people of Tennessee calling this a tax, but the National
Taxpayers Union, American Conservative Union, the Counsel for Citizens
Against Government Waste, Citizens for a Sound Economy, and the
Americans for Tax Reform also call it a tax.
Mr. Speaker, this year the Federal Government is expected to spend $1
trillion 631 billion. The problem here is that we are not taxing
Americans too little, but the Federal Government continues to spend too
much.
Mr. Speaker, I do not understand what all the rush is about to raise
this tax. The report filed by the Committee on Ways and Means clearly
states the current balance in the trust fund is sufficient to fund the
FAA's operating expenses to the end of the 1997 fiscal year. As I
understand that, planes will continue to fly, flight controllers will
continue to remain in their towers, and they will continue to provide
safe and efficient air travel for Americans.
If the problem is that we will run out of funding for capital
improvement projects at airports, that can be solved very quickly
without any tax increase. I have been advised that if we pass simple
transfer authority to the Treasury, capital projects will be able to
continue for several months while we figure out how to get an agreement
on a revenue-neutral bill to pass.
More than $1 billion in excise taxes have been collected by the
airlines last fall, but they do not send the check to the Treasury
until the end of this week. The problem we have is that the Treasury
has no legal authority to transfer the money to the airport trust fund.
We could pass a simple bill giving the Treasury the authority it needs
to transfer the money to the airport trust fund. Then we can figure out
how to give the American taxpayers a break, or at least not give them
another black eye.
There is no reason why we need to be steamrolling taxpayers just to
continue paving runways. Instead we should try to give them a break.
Mr. Speaker, I urge my colleagues to oppose this tax increase.
Mr. Speaker, I reserve the balance of my time.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Minnesota [Mr. Ramstad], a member of the committee.
Mr. RAMSTAD. Mr. Speaker, I am happy to report that this legislation
before us today represents a bipartisan and unanimous effort on the
part of the Committee on Ways and Means to find an immediate solution
to the very real crisis threatening the solvency of the airport and
airway trust fund.
In my home State of Minnesota, the Metropolitan Airports Commission
was seriously concerned when the trust fund was expected to run out of
money in June or July of this year. Now that we know the expected date
of insolvency is March, there is absolutely no time for delay. And I
just want to say, Mr. Speaker, as the No. 1 ranked Member of Congress
last session by the National Taxpayers Union, I take a back seat to
nobody when it comes to protecting American taxpayers. And as this
letter I have, which I will submit for the Record, from Grover Norquist
of Americans for Tax Reform clearly states, this is not a tax increase,
as the chairman also stated. It is the reinstatement of an existing and
necessary tax.
Mr. Speaker, it is also worth noting that this is a temporary
measure. A transportation task force, in fact, of the Committee on Ways
and Means is working hard right now in developing fair alternatives to
the present excise tax, and I hope a fair funding mechanism will be
developed later this year in the context of FAA funding and our larger
budget negotiations.
But while we consider the equities of reforming the system, it is
absolutely crucial for national air safety that we temporarily and
immediately restore the aviation excise taxes. Our Nation's safety
depends on this action, and it is too important, Mr. Speaker, to fall
victim to political posturing or political grandstanding.
I urge my colleagues to do the right thing for Americans who travel
by air, and support this bill.
The letter referred to is as follows:
Americans for Tax Reform,
Washington, DC, February 24, 1997.
Congressman John Boehner,
House Republican Conference.
Dear John: I sincerely appreciate your commitment to the
Pledge and all of the work that you have done to uphold and
strengthen it. You have been one of the leaders in the House
of Representatives concerning the Pledge, and I wanted you to
know that your efforts are recognized.
I would also like to thank you for your question regarding
the pledge and the air ticket tax. Although ATR does not
support renewing this tax, voting for it will not violate the
Federal Taxpayer Protection Pledge, because it does not
``increase the marginal income tax rates for individuals and/
or businesses,'' and it does not ``reduc[e] or eliminat[e]
deductions and credits.'' In addition, ATR will not include
this vote in our next rating of Congress.
If you have any further questions or concerns, please do
not hesitate to contact me.
Thanks again for all of your help!
Sincerely,
Grover G. Norquist,
President.
Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts [Mr. Neal] a member of the Committee on Ways and Means.
Mr. NEAL of Massachusetts. Mr. Speaker, today we are debating a very
serious piece of legislation. This legislation reinstates Federal
aviation taxes which expired at the end of the year. Due to our failure
to reach a budget agreement and only the willingness to enact short-
term extensions, we are now faced with this serious situation.
The House Committee on Ways and Means and the Senate Finance
Committee, acting in a bipartisan manner, moved quickly on this
legislation, and we have indeed offered what I think is a correction.
But unfortunately there are those who will have people believe that
this is a tax increase. This is an extension of a tax that expired
because of the Congress' inability to promptly renew the tax.
I do not think any of us here are in favor of raising taxes, and what
we must remember is that this is not a new tax. One of the criticisms
frequently leveled in this institution of tax increases as they are
proposed is that they contribute to unnecessary spending and that there
is no accounting of how indeed those dollars are spent.
Well, that is certainly untrue of Federal aviation taxes. Revenue
from these taxes are placed in the airport and airway trust fund, and I
underscore the term trust fund. The fund provides 100 percent of the
Federal funding for airport improvements, facilities, equipment,
research, engineering, planning, and development projects and about 75
percent of the Federal Aviation Administration's operating funds. This
fund is solely based upon aviation excise tax revenue. We ought to act
promptly.
Last week the FAA stopped all fiscal 1997 airport improvement grants,
and in my State of Massachusetts this affects 14 projects.
The extension of this Federal aviation tax is an issue which impacts
all
[[Page H602]]
of our constituents, as we know, from time to time based upon a
headline that grips all of us. We all benefit from safe and effective
air transport.
I have a letter from Chairman Saltmarsh of the Massachusetts
Aeronautics Commission and I think a line from this letter succinctly
summarizes this debate.
If the aviation excise taxes are not reinstated quickly,
the FAA fiscal crisis could result in a degradation of air
transportation safety.
We should heed this message and enact the reinstatement of the
aviation ticket taxes. The extension through the end of this fiscal
year serves all of our constituents well, and I currently serve on a
task force which is reviewing all of these excise tax proposals.
I urge my colleagues today to let common sense prevail. It is our
responsibility to reinstate these aviation taxes. These taxes are of
necessary purpose and provide a purpose and service which benefits all
of us.
I also think it is interesting that a year ago we were in the midst
of a stalemate in this institution over how much authority the
Secretary of the Treasury ought to have. Today the suggestion is being
made in one quarter that we ought to refrain from action on this
aviation tax proposal, and instead turn the authority for this issue
over to the Treasury Secretary so that he might assemble a solution.
That is not the role of the executive branch in this instance.
Mr. HILLEARY. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas [Mr. Paul].
(Mr. PAUL asked and was given permission to revise and extend his
remarks.)
Mr. PAUL. Mr. Speaker, if I could be convinced that this piece of
legislation was truly the honoring of a user fee, I believe I could
give it some support. I believe user fees and trust funds may be a way
to go in many of the areas of our system that overtaxes and overspends.
But I have come to the conclusion that this so-called reinstatement is
a tax increase. Not only would I not be satisfied with even maintaining
a tax, I would like to see taxes go down. The fact that there will be
$2.7 billion more extracted from the American taxpayers, I feel
compelled to oppose this piece of legislation.
But at the same time, I would like to put in a good word for the
trust funds. Truly, if we would follow our commitment to the trust
funds and not use these trust funds for spending in the general
revenues, I think we would all be better off. Whether it is the Social
Security trust fund or whether it is the highway trust fund or the
airport trust fund or the port trust fund, I think it would be much
better if they were true user fees, and since I conclude that this is
not a true user fee and it is an actual increase of taxes going into
the general revenues, I feel compelled to oppose this piece of
legislation.
I urge my colleagues to vote no on H.R. 668.
Mr. ARCHER. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Tennessee [Mr. Duncan].
Mr. DUNCAN. Mr. Speaker, I rise in support of the reinstatement of
the 10 percent ticket tax. I want to commend the gentleman from Texas
[Mr. Archer] for his leadership on this issue. Chairman Archer is
chairman of the Committee on Ways and Means, has never supported an
increase in taxes, and neither have I.
We have the safest and most efficient aviation system in the world,
but it is growing by leaps and bounds due to great increases in both
air passenger and air cargo traffic. We simply cannot operate a safe,
efficient, rapidly growing system for free. We have to spend money on
it, and this means either some type of tax or some type of user fee or
some combination of both.
Speaker Gingrich has asked the Subcommittee on Aviation, which I
chair, to look into a user fee system. We have already held 2 days of
hearings on this and have heard from many outstanding witnesses, but we
are still a long way from reaching any type of consensus on this. In
the meantime while we consider user fees or other types of taxes, we
need to reinstate the 10 percent ticket tax.
Aviation is one of the few major fields in which the United States
still leads the world, but we need to support Chairman Archer and take
this very necessary step today to make sure that we maintain a safe and
efficient aviation system.
I urge my colleagues to support the gentleman from Texas [Mr. Archer]
and the Committee on Ways and Means and reinstate this tax. This is not
a tax increase and we need to take this step at this time.
Mr. HILLEARY. Mr. Speaker, how much time is remaining on my side?
The SPEAKER pro tempore (Mr. Solomon). The gentleman from Tennessee
has 12 minutes remaining, the gentleman from Texas has 3 minutes
remaining, and the gentleman from New York has 4 minutes remaining. So
the gentleman from Tennessee has substantial time ahead of them.
Mr. HILLEARY. Mr. Speaker, would the gentleman from New York wish to
speak again on this before we wind up?
The SPEAKER pro tempore. Does the gentleman from Tennessee have no
further speakers at this point?
Mr. HILLEARY. I have no further speakers other than myself.
Mr. RANGEL. Mr. Speaker, I will leave it up to you how we handle
this. I have one more speaker and I assume we want to end it all
together, so if the gentleman intends to use all of his time, I think
it is important to know that.
The SPEAKER pro tempore. The gentleman from Texas has the right to
close, and the gentleman from Tennessee has the right to speak just
before the gentleman from Texas.
Mr. RANGEL. I only have one more speaker.
Mr. HILLEARY. I will be speaking and I will be consuming the rest of
my time and then yielding back.
The SPEAKER pro tempore. Does the gentleman from Texas have no
further speakers except himself to close?
Mr. Archer. Mr. Speaker, I have no further requests for time other
than my closing speech.
The SPEAKER pro tempore. In that case, the Chair will recognize the
gentleman from New York to close for his side.
Mr. RANGEL. Mr. Speaker, I have one speaker. I did want to make some
closing comments.
Mr. Speaker, I yield 3 minutes to the gentleman from Minnesota [Mr.
Oberstar], who is the ranking senior member on the Committee on
Transportation and Infrastructure.
{time} 1445
Mr. OBERSTAR. Mr. Speaker, I thank our Democratic leader on the
committee for yielding.
Mr. Speaker, to characterize this bill as a tax increase is a
disservice to truth, to history, and to aviation. The truth simply is
that this bill represents the reinstatement of a fee. It is called a
tax, but it has been treated as a fee, a fee that was the unintended
victim of the budgetary train wreck that we engaged in at the end of
1995 and the beginning of 1996. Nobody intended that this fee, that
these funds should lapse. It is only fair, it is only fair to air
travelers that we reinstate this fee and these funds into the Aviation
Trust Fund.
The history that we would be disserving is that in 1970 air travelers
of this country, through the Congress, agreed to impose a fee to be
deposited in a trust fund like the Highway Trust Fund for the purposes
of aviation, to serve the needs of a growing sector of our economy,
which sector today represents $600 billion, 10 percent of our gross
domestic product in the United States.
To allow this fee to lapse and the funding that goes into the
Aviation Trust Fund to lapse would be a disservice to aviation. It
would mean that there would be no money for airport construction unless
we are prepared to appropriate funds out of the general revenues,
which, in effect, would be a real tax increase on the rest of the
American economy. There would be no funds for airport improvement
projects, runways, taxiways, overlays, parking aprons on the side of
airports.
There would be no funds to continue the modernization of the air
traffic control system, the $32 billion modernization program which we
get a monthly report on the status; 87 to 90 percent of a $32 billion
program is already in place and we are making progress toward finishing
the job by the end of this decade; and air traffic controllers would
not be paid.
All of us in this body who travel on weekends would find our travel
schedules grinding to a halt unless we are
[[Page H603]]
prepared to appropriate funds from some other source. Again, air
travelers agreed to impose this fee on themselves in 1970. For 27 years
this revenue stream has funded the needs of aviation.
As the former chairman of the Subcommittee on Aviation, I say those
funds are wisely invested in stimulating the most dynamic sector of the
Nation's economy, which in international affairs generates for the
United States a huge surplus balance of payments in aviation trade, in
cargo and passengers with the Pacific Rim and the European Community,
and we ought not to do such a disservice to aviation, to that important
economic sector, by allowing this fee to expire.
So I commend the chairman of the committee for undertaking this
initiative, and our Democratic leader for moving it forward. We look
forward to working with the committee on developing an alternative
means of financing air traffic control in the coming months.
Mr. Speaker, I am in strong support of this measure, and I appreciate
it being scheduled in an expeditious manner. With this bill, the
aviation trust fund will not go broke a month from now. If the bill is
not passed, there will be a forced curtailment of about three-fourths
of our planned and already appropriated aviation capital development
spending for the balance of this fiscal year.
We are responding to a crisis created when the taxes expired at the
end of last December and the airline industry, legally, did not remit
the taxes collected last fall until this week. But traveling public
needs to understand that this is a created crises, not one that just
happened.
Rather than provide a steady stream of revenues to fund most of the
Federal Government's aviation safety and security programs and the
operation of the air traffic control system, the Congress allowed the
aviation taxes to expire twice in the past 14 months, and with this
bill, there is the distinct possibility that the taxes will expire
again 7 months from now.
We have fallen into the mode of funding long-term capital
improvements and the day-in-and-day-out operations of the Federal
Aviation Administration in a hand-to-mouth fashion. This is no way to
proceed.
We should be establishing a long-term source of funding for the
Nation's aviation programs, so that we are not in what has grown to
become a perpetual funding crisis. The reason we are not doing so is
clear: Our budget scorekeeping rules will permit these expired taxes to
be counted as new revenue when they are reinstated, and hence, under
our budget scorekeeping rules, the Congress can forgo, much more
easily, tough budget and tax choices later. This is a neat trick; a
cute gimmick; but it plays games with our Nation's aviation system.
There is no choice but to support this bill, but we should be doing
something for a much longer term. And if we need to change our system
of funding our aviation programs when we get recommendations from the
National Civil Aviation Review Commission later this year, let us do
so. But we should not have to do so in the artificially created crisis
atmosphere that we will find ourselves at the end of this fiscal year.
Mr. HILLEARY. Mr. Speaker, I yield 2 minutes to the gentleman from
Florida [Mr. Scarborough].
Mr. Scarborough. Mr. Speaker, I would like to thank the gentleman
from Tennessee for yielding me this time.
Let me say first of all that as a father of two children, ages 9 and
6, as somebody that goes up in the air two times a week, three times a
week, every time I step onto an airplane I obviously am concerned,
because I do not want my boys growing up without a father. The more I
travel, the more I realize I am taking my life into my own hands.
Despite that fact, I think that we have come to a point as a country
where we are taxing our citizens 50.2 percent of every dollar they
earn. This is another $3 billion tax increase, any way you want to put
it, that is not being offset right now.
Let me say that on any tax policy, I trust the chairman of the Ways
and Means Committee more than anybody else, and if the gentleman from
Texas [Mr. Archer] had his way over the past 2 years, America would be
on its way to tax reform in such a way that would save the United
States of America and make us the strongest Nation in the world.
I would vote for the gentleman from Texas [Mr. Archer] for President
2000, but he is not the man who is going to be making the final
decisions on whether we can offset the $3 billion that we need to
offset. That man is on the other side of Pennsylvania Avenue. He has
demagogued the tax issue for 2 years, and we cannot trust the
administration to play straight.
So I refuse to take part in voting for any bill that will make
Americans pay more than the 50.2 percent of every dollar that they earn
in the future. I hope that we can vote down this bill and that Chairman
Archer can be given the leeway he needs to go ahead and find the $3
billion to offset the tax increase, because I will tell my colleagues
this: Neither Chairman Archer, neither the gentleman from Tennessee
[Mr. Hilleary] nor myself came up to Washington to raise taxes any more
than what the other side of the aisle has been doing for the past 30
years. So I respectfully will vote against this bill and would ask
other conservatives to do the same.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I want to compliment the gentleman from Tennessee [Mr.
Hilleary] for proving that any issue coming before this House can be
debated and that there are two sides to every story. However, the
gentleman should know that as a result of this tax expiring, it has not
been of any lesser cost to the traveler, and so the airports are
collecting this money and it is not being transferred for the purposes
that the Congress intended.
So my colleague may get caught in a Catch-22 that in your effort to
reduce the cost to passengers, that is not happening, and at the same
time you are not providing the service which this Congress has an
obligation to provide. So I would hope that the Members take that into
consideration in supporting this bill.
Mr. HILLEARY. Mr. Speaker, I yield myself the remainder of my time.
Let me just finish up this debate on my side by commending the
chairman of the Committee on Ways and Means, the gentleman from Texas
[Mr. Archer]. I would echo what the gentleman from Florida said. I know
that he is not for tax increases; everybody knows that, and I know he
has worked hard on this. I am going to support an increase in funding
for the FAA and airline safety. That is not really at issue.
I just want to say, though, that this has been a tax that we have
reinstated before. This is reinstating it this time, it has been
reinstated before. The last time we reinstated it, we did so with a
corresponding tax cut so that it was not really a net tax increase.
That is all we are asking for this time, is a corresponding tax cut.
I do not really care what we call it. We can call it a tax increase,
we can call it a user fee increase, we can call it whatever we want. I
do not think that is a big issue; it is really a mute issue. I think a
lot has been said about airline safety. That is a mute issue. Everybody
is for that, and they are not in danger of losing funding that would
bring their operations below any kind of safety standards. But this is
a big issue to me, and it kind of goes to the essence of what I think
we are as conservatives.
Mr. Speaker, when we left this town last fall, we were asked to vote
for billions of dollars of new spending that was going to eventually go
on the backs of our grandchildren, and we had to do that because we
were being beaten up back home politically and we had to get back to
defend ourselves. Sometimes you have to do those things. Sometimes you
have to take a step backward so you can live to fight again another
day, and we did live in the elections and we are here to fight another
day. This is that other day. We took that step backwards last fall so
we could take two steps forward in the 105th Congress.
Well, this is the first substantive bill that we are going to be
voting on, and it is a $2.7 billion increase in revenue, however you
characterize it. Is this what the conservative 105th Congress is going
to stand for, if the first substantive bill we vote on is a tax
increase?
It goes to the very essence of what we are as conservatives. We are
for balancing the budget and shrinking the Federal Government so that
those folks back in Tennessee or Florida, or wherever, that are working
two jobs just trying to make ends meet, both spouses working two jobs,
do not have yet another program that they have to pay for.
[[Page H604]]
Mr. Speaker, this is a tax on people who buy jet fuel and it is a tax
on people who buy tickets from airlines, but these are real people,
ordinary people; these are not high income people, all of them. I had a
lady a couple of years ago, about a year-and-a-half ago call me, and
her son was being sent off to Bosnia and he had been in the Army and he
had been in Korea, and he had just come back, was in California, and
then he got orders to go to Bosnia. She could not afford to go out to
California to see him and she was distraught. She could not afford that
ticket, at whatever cost it was. I managed to find her a way to get out
there to see him, but there are other folks. The grandmother who wants
to go out and see that grandchild that has just been born, she has
never seen that grandchild.
These are not all high income people. These are regular folks. This
is another increase on their backs, call it a user fee, call it a tax,
call it whatever we want. This is not really something that I oppose,
the increase of this user fee/tax. But we must have an offsetting tax
cut so it is not yet another tax increase, so that this very bond, this
very cord that bonds all conservatives.
Mr. Speaker, we disagree on abortion and this and that and the other,
but one thing that we all agree on is that we do not want to feed the
Federal Government, that monster, any more money in any form. That is
the one thing we can all agree on, and the first thing that we are
being asked to vote on of substance in the 105th Congress is an
enhancement or increase of that fee or that tax or whatever you want to
call it.
That is why I rise in opposition to this bill as it is presently
formed. I would move to support it if it had an offsetting tax
decrease.
Mr. Speaker, I yield back the balance of my time.
Mr. ARCHER. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I understand the position of the gentleman from
Tennessee [Mr. Hilleary], but I must say that the funds that will be
raised from this tax go for a very special purpose, and they are
limited to go for that very special purpose, and that is to provide
safety for the air travelers.
I wish that we could have tickets sold all over this country without
a tax in it so that we could have lower air fares for every passenger,
but it takes money to build a safety infrastructure, and if we do not
pass this bill, many improvements in safety infrastructure will not
occur.
Antiquated radar systems that have already had repairs will not be
replaced with modern radar systems. I would not want to be on that
plane that does not get that infrastructure as a result of failing to
pass this tax. Deicing capabilities in airports across this country
that need to be available will not be done, and on and on and on.
Yes, the air traffic controllers will be there, but what kind of
computer backup, what kind of technology are they going to have? Will
we continue to depend upon computers that still use the old vacuum
tube, which none are made in the U.S. today? We have to go to Poland to
buy the replacement, repair parts, because we have not updated those
computers, and that now will be put on the sidelines if we do not pass
this bill.
The Americans for Tax Reform, and I have a letter here signed by
Grover Farquist, the president, says that they support this bill, that
this is not an increase in the personal or corporate income tax.
Members should know that.
I am sure the gentleman from Tennessee did not intentionally
misrepresent their position. But this is a good bill, it is a needed
bill. It is a bill that will pass sometime this year if it does not
pass now, and in the meantime, if we do not pass it now, we are
potentially jeopardizing improvements in the safety infrastructure that
is essential to all of us as air travelers.
Mr. Speaker, I urge the passage of the bill.
Mr. FORD. Mr. Speaker, I rise in support of H.R. 668. This measure is
critical to ensure that funds will continue to flow to the aviation
trust fund. The Memphis and Shelby County airport authority, which is
located in my congressional district is due to receive approximately
$11,000,000 in airport improvement grants this fiscal year to construct
a new third parallel runway at Memphis International Airport. The
airport authority is also expecting an additional $4,000,000 for the
Noise Compatibility Program.
Mr. Speaker, my congressional district is one of the Nation's top
distribution centers in part because the largest cargo airline in the
world operates from our international airport. H.R. 668 is essential to
commerce not only in the Ninth Congressional District but throughout
the Nation and the world. I urge my colleagues to vote for H.R. 668.
Mr. GINGRICH. Mr. Speaker, I rise in support of a short-term
reimposition of the aviation excise taxes through the end of the
current fiscal year. I want to take this opportunity to reiterate my
strong support of the work underway by Chairman Bill Archer's Ways and
Means Committee Transportation Tax Task Force, led by Congressman Mac
Collins, to examine alternative means of assessing aviation costs. The
short-term renewal which we are considering today in no way diminishes
the efforts of the task force to identify a long-term solution to FAA
financing. This extension will provide the task force with the time
needed to study the issues and make recommendations to Chairman Archer.
I commend Chairman Archer and Representative Collins for the fair,
thorough and deliberative manner in which the task force is conducting
its review, and I look forward to reviewing the task force's report.
Aviation is a vital sector of our national economy. If we are to
maintain our preeminent aviation status in the world, we must ensure
that the FAA has the resources to procure state-of-the-art equipment
and employ the most efficient processes. At the same time, we must
determine an equitable and efficient way possible to charge users for
aviation services and cover the costs of the FAA.
This short-term extension will give FAA the necessary resources to
perform its important duties as we examine and develop possible
alternative methods of financing the FAA. I urge my colleagues to
support the short-term extension and the long-term effort to reform FAA
operations and financing.
Mr. LEVIN. Mr. Speaker, I join Chairman Archer and the ranking member
in strong support of H.R. 668. It is vital that the House take action
today to reinforce funding for the airport and airway trust fund.
H.R. 668 temporarily restores the 10 percent passenger ticket tax and
other airport and airway trust fund excise taxes which lapsed last
December 31. This legislation extends these excise taxes through
September 30, 1997. Prompt enactment of this legislation is essential
to our Nation's air transportation system. Failure to do so would
result in the airport trust fund having inadequate revenues to support
airport capital improvements and safety enhancements beyond March 1997.
While H.R. 668 addresses the short-term solvency of the airport and
airway trust fund, Congress must do a better job of ensuring a
dependable revenue stream to support our Nation's air transportation
system.
The excise taxes supporting the airport trust fund first expired at
midnight on December 31, 1995. Despite pleas from some of us for
immediate action, Congress sat on its hands for nearly 9 months before
reinstating the excise taxes on August 27, 1996. Then, 5 months later,
Congress let the excise taxes lapse again. Now, once again, we're
temporarily extending the taxes until September 30.
Certainly, there's a lot of interest in restructuring the ticket
taxes that support the airport trust fund. I personally believe the
current excise tax is inequitable and should be restructured so that
the financial cost of maintaining our Nation's air transportation
system is more fairly spread among those who use the system. Congress
should explore all the options to make the ticket tax as fair as
possible. I hope my colleagues will agree that we should resolve this
matter promptly so this debate will never again disrupt the air
transportation system.
Mr. GANSKE. Mr. Speaker, I rise today in support of extending the
user fees that fund the our airports and airways. Extending this
program renews our commitment to providing our constituents with safe
and modern air travel without breaking our commitment against new
taxes.
The surcharge on airline tickets has been in place for more than a
quarter of a century and is a critical step in ensuring that those who
use the airway infrastructure contribute to its maintenance and
improvement.
The ticket tax expired at the end of last year. At the time, Congress
chose to delay action on extension of the tax. Congress and the
administration agreed that there was sufficient money in the trust
funds to cover expenses between then and the start of fiscal year 1998.
It was thought that during the intervening months, Congress could
consider changes to the ways in which money is collected for the trust
funds and include those reforms in a broader budget bill.
Unfortunately, however, the need for immediate action has become
apparent. If the surcharge on airline tickets is not immediately
extended, there could be significant shortfalls in
[[Page H605]]
these critical accounts, delaying needed airport improvement programs
such as those going on in Des Moines today.
More importantly, a depletion of the trust fund poses a very real and
very serious safety threat to our already strained air traffic
infrastructure. I believe that we will be gambling with public safety
if we fail to act promptly to extend the ticket tax.
The ticket tax has been a regular feature of airline travel since
1970. Although it lapsed at the end of last year, passage of this bill
is not a new tax. It is an extension of an existing one which has
expired.
Mr. Speaker, I urge my colleagues to vote in favor of this important
legislation.
{time} 1500
The SPEAKER pro tempore (Mr. Solomon). The question is on the motion
offered by the gentleman from Texas [Mr. Archer] that the House suspend
the rules and pass the bill, H.R. 668.
The question was taken.
Mr. HILLEARY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________