[Congressional Record Volume 151, Number 6 (Wednesday, January 26, 2005)]
[Senate]
[Pages S579-S580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MURKOWSKI (for herself, Mr. Stevens, and Mrs. Murray):
  S. 171. A bill to exempt seaplanes from certain transportation taxes; 
to the Committee on Finance.
  Ms. MURKOWSKI. Mr. President, I rise today to introduce two related 
pieces of legislation addressing inequities that affect seaplane 
operators and passengers in rural areas. Both of these were included in 
S. 1072 when it passed the Senate last year, but because that business 
remains unfinished, it is necessary to reintroduce them.

[[Page S580]]

  The first of these--on which Senator Stevens is joining me as a 
cosponsor, is a modification to the definition of a ``rural airport.'' 
The law adopted in 1997 provides for a per-passenger fee--now $3.20--on 
each domestic flight segment. Rural airports were exempted from the tax 
on the grounds it was intended to cover increased security costs for 
airports handling large aircraft and international flights. The law 
defines a rural airport as one which--for a given calendar year--has 
fewer than 100,000 departures in the second preceding calendar year, 
and which either received essential air service subsidies as of August 
5, 1997, or is more than 75 miles from a larger airport.
  The latter provision is a significant problem in my State. It was 
intended to reflect the fact that 75 miles is not really a long way to 
drive to and from an airport. Unfortunately, that assumes there is a 
road to drive on. That's not always the case. My State has a number of 
small community airports that are within 75 miles of a larger airport, 
but where there are no roads connecting the two. Thus, passengers 
cannot choose to drive to the larger airport. In order to fly to their 
ultimate destination, they are forced to fly from their village to the 
larger airport, where the passenger tax is legitimately collected. The 
bottom line is that these rural residents are unfairly taxed at least 
twice as much as all the other passengers leaving from the larger 
airport.
  My bill simply adds this one additional unique criterion to the 
definition of a rural airport--that it may include a small airport that 
is within 75 miles from a larger one, but where there is no road 
connection between the two.
  The second bill I am introducing today--along with Senator Stevens 
and Senator Murray--is also intended to correct an inequity. Air 
passenger transportation is subject to a 7.5 percent excise tax in 
addition to the $3.20 per-segment fee. This generates revenue that goes 
toward the maintenance and improvements of airports receiving Airport 
Improvement Program (AIP) funding. However, in several cases in Alaska, 
and in at least one case in the State of Washington, the taxes are 
imposed on seaplane operators who land on and take off from open 
waters, not from facilities using AIP funds, and which rarely if ever 
make use of FAA communication and navigation systems. It should be a 
fundamental tenet that those who do not receive a service should not be 
required to pay for it. That is exactly the basis for my second bill.
  Both these proposals have been in circulation for several years. Each 
of them has been estimated by the Joint Committee on Taxation to have 
negligible impacts on revenue--less than $2 million per year for the 
rural airport definition and less than $1 million for the excise tax. 
In that connection, it should also be noted that even if the excise tax 
for seaplane operators is eliminated, they will still be paying their 
fair share because they will automatically begin paying higher fuel 
taxes. The latter will go up from 4.4 cents per gallon to 19.4 cents 
per gallon for aviation gasoline and to 21.9 cents per gallon for jet 
fuel.
  I encourage my colleagues' support of these two important measures.
  I ask unanimous consent that the text of both measures be printed in 
the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 170

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. RURAL AIRPORTS.

       (a) In General.--Clause (ii) of section 4261(e)(1)(B) of 
     the Internal Revenue Code of 1986 (defining rural airport) is 
     amended--
       (1) by striking ``or'' at the end of subclause (I),
       (2) by striking the period at the end of subclause (II) and 
     inserting ``, or'', and
       (3) by adding at the end the following:
       ``(III) is not connected by paved roads to another 
     airport.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after December 31, 
     2004.
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