[Congressional Record Volume 157, Number 23 (Monday, February 14, 2011)]
[Senate]
[Pages S687-S688]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS:
  S. 340. An original bill to amend the Internal Revenue Code of 1986 
to extend the funding and expenditure authority of the Airport and 
Airway Trust Fund, and for other purposes; from the Committee on 
Finance; placed on the calendar.
  Mr. HATCH. Mr. President, today Chairman Baucus filed an original 
bill and an amendment to the Federal Aviation Administration, FAA, bill 
currently being considered by the Senate. Both of these items are 
identical. They reflect the revenue title to the FAA bill that was 
reported by the Finance Committee last Tuesday. I am hopeful that this 
heralds the passage of long-term FAA reauthorization and represents a 
break with our ongoing pattern of funding the FAA with short-term 
extensions of current law.
  In most respects the Finance Committee product reflects the FAA bill 
that was passed unanimously last year with 93 votes. However, there is 
a very important difference. Thanks to an amendment filed by Senator 
Coburn, who is a new member of the Finance Committee, only 90 percent 
of forecasted revenues to the Airport and Airway Trust Fund for a given 
year will be spent. Over the past several years the uncommitted cash 
balance remaining in the trust fund has steadily decreased because 
actual revenues have fallen short of forecast revenues. Since 
recipients of trust fund revenues expect to be paid in real dollars and 
not forecasted dollars, it makes sense to make sure the trust fund 
contains actual dollars. By allowing only 90 percent of forecast trust 
fund revenues to be spent, we are putting in place a 10 percent cushion 
to guard against the frequent occurrence that actual trust fund 
revenues will fall short of projected revenues.
  The Finance Committee product also increases the amount general 
aviation and fractional aircraft will pay for each gallon of jet fuel 
they use. These increases will impact neither commercial airlines nor 
passengers of commercial airlines. The cost of fuel for commercial 
aviation is not changed at all by the Finance Committee product. What 
makes the increases of the costs borne by the general aviation and 
fractional communities unique is that both groups are active supporters 
of these increases. As these letters explain, the increases in the cost 
of jet fuel are supported because the proceeds will help our airport 
and airway system transition to the Next Generation Air Transportation 
System, or NextGen. NextGen is the satellite-based air traffic control 
system that is slated to replace our current radar-based system. The 
transition to NextGen is expected to reduce inefficiencies within and 
enhance the benefits of our airport and airway system.
  In closing, I want to thank Chairman Baucus and the other Members of 
the Finance Committee for their work on the revenue title to the FAA 
bill, and I hope for the rapid completion of FAA reauthorization.
  Mr. President, I ask unanimous consent that letters of support be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  General Aviation


                                    Manufacturers Association,

                                 Washington, DC, January 31, 2011.
     Hon. Max Baucus,
     Chairman, Senate Finance Committee, Dirksen Senate Office 
         Building, Washington, DC.
     Hon. Orrin Hatch,
     Ranking Member, Senate Finance Committee, Dirksen Senate 
         Office Building, Washington, DC.
       Dear Chairman Baucus and Senator Hatch: On behalf of the 
     seventy members of the General Aviation Manufacturers 
     Association (GAMA), I am writing in strong support of the tax 
     title to the ``FAA Air Transportation Modernization and 
     Safety Improvement Act'' which will be considered by the 
     Senate this week.
       As you know, this legislation is identical to the FAA 
     reauthorization bill that passed in the Senate last year. The 
     tax title of the bill, which was drafted by the Finance 
     Committee, includes an increase in the excise tax on jet-fuel 
     used in general aviation operations. The funding raised by 
     this fuel tax increase will be placed in an account within 
     the Airport and Airway Trust Fund to help fund air traffic 
     control modernization programs.
       In previous Congresses, our members have supported the fuel 
     tax increase included in the bill because we strongly support 
     modernization and are willing to pay more to help complete 
     it. We believe that the Finance Committee has examined this 
     issue thoroughly and that its actions will help move the bill 
     quickly through Congress and put us on the right path towards 
     modernization.
       In conclusion, we support the tax title to the FAA 
     reauthorization bill and thank the committee for being 
     receptive to our views during this process. We look forward 
     to working with you as the bill proceeds through Congress.
           Sincerely,
                                                   Peter J. Bunce,
     President & CEO.
                                  ____

                                                      National Air


                                   Transportation Association,

                                 Alexandria, VA, February 3, 2011.
     Hon. Max Baucus,
     Chairman, Senate Committee on Finance, U.S. Senate, Dirksen 
         Senate Office Building, Washington, DC.
     Hon. Orrin Hatch,
     Ranking Member, Senate Committee on Finance, U.S. Senate, 
         Dirksen Senate Office Building, Washington, DC.
       Dear Chairman Baucus and Ranking Member Hatch: The National 
     Air Transportation Association (NATA), the voice of aviation 
     business, is the public policy group representing the 
     interests of aviation businesses before the Congress, federal 
     agencies and state governments. NATA's 2,000 member companies 
     own, operate and service aircraft. These companies provide 
     for the needs of the traveling public by offering services 
     and products to aircraft operators and others such as fuel 
     sales, aircraft maintenance, parts sales, storage, rental, 
     airline servicing, flight training, Part 135 on-demand air 
     charter, fractional aircraft program management and scheduled 
     commuter operations in smaller aircraft. NATA members are a 
     vital link in the aviation industry providing services to the 
     general public, airlines, general aviation and the military.
       On behalf of NATA, I write in support of the tax title to 
     S. 223, the FAA Air Transportation Modernization and Safety 
     Improvement Act, which would increase the tax on general 
     aviation jet fuel. A reasonable tax increase allows general 
     aviation operators to provide more revenue to the Airport and 
     Airways Trust Fund (trust fund). General aviation fuels have 
     not had a substantial tax increase in over 15 years and, 
     despite the recent downturn in the economy, we believe the 
     current system of aviation excise taxes has proven to be a 
     stable and efficient source of revenue for the trust fund as 
     opposed to another funding mechanism that has been proposed 
     in the past few years.
       As you know, passage of Federal Aviation Administration 
     reauthorization legislation will provide much needed funding 
     for the trust funds while ensuring that our national airspace 
     system remains safe and efficient and creating and 
     maintaining valuable jobs in the United States. Investments 
     to our aviation infrastructure will allow the modernization 
     of the Next Generation Air Transportation System to expand as 
     efficiently as possible.
       We support a tax increase on general aviation fuels to 
     finance the trust fund in a manner that has proven successful 
     since its creation. Thank you for your attention to this 
     important matter.
           Sincerely,
                                                   James K. Coyne,
     President.
                                  ____

                                                   aircraft Owners


                                       and Pilots Association,

                                 Washington, DC, February 4, 2011.
     Hon. Max Baucus,
     Chairman, Senate Finance Committee, U.S. Senate, Washington, 
         DC.
     Hon. Orrin Hatch,
     Ranking Member, Senate Finance Committee, U.S. Senate, 
         Washington, DC.
       Dear Chairman Baucus and Ranking Member Hatch: In 
     anticipation of Senate action on S. 223, legislation to 
     reauthorize the Federal Aviation Administration (FAA), I am 
     writing to reiterate our support for the previously agreed to 
     tax increases in general aviation fuel taxes.
       The stability and certainty that an FAA reauthorization 
     bill provides is vital for federal investments in safety, 
     modernizing the air traffic control system, FAA operations, 
     airport improvements and aviation research efforts.

[[Page S688]]

       AOPA has consistently supported using the time-tested 
     system of passenger transportation and aviation fuel taxes in 
     combination with general fund tax revenues to support the FAA 
     and the aviation system. We have consistently supported a 25 
     percent increase in aviation gasoline and a 65 percent tax 
     increase on non-commercial jet fuel in lieu of user fees to 
     generate additional revenue to the Aviation Trust Fund for 
     air traffic control modernization.
       Even though economic times are extremely difficult, AOPA 
     members continue to support the agreed-to increases in 
     general aviation fuel taxes and we support the inclusion of 
     this funding mechanism in the Senate FAA Reauthorization 
     Bill.
       Thank you for your consideration of our views. We look 
     forward to working with you to complete the FAA 
     Reauthorization Bill.
           Sincerely,
                                                  Craig L. Fuller,
     President and CEO.
                                  ____

                                                 National Business


                                        Aviation Associations,

                                                 February 4, 2011.
     Hon. Max Baucus,
     Chairman, Committee on Finance, Hart Senate Office Building, 
         Washington, DC.
       Dear Chairman Baucus: The National Business Aviation 
     Association (NBAA) strongly supports passage of legislation 
     to reauthorize the Federal Aviation Administration, and urges 
     the U.S. Senate to expeditiously approve this critical 
     legislation.
       Aviation, including business aviation, is a vital link in 
     our transportation system and powerful engine for job 
     creation and economic growth. Ensuring that the United States 
     has the largest, safest, and most efficient air 
     transportation system is clearly in our country's interest 
     and should be a national imperative.
       NBAA represents approximately 8,000 companies that rely on 
     general aviation aircraft to help them survive and compete in 
     the marketplace. Eighty-five percent of our members are small 
     and mid-size businesses, many of whom operate to and from 
     small towns and rural communities with little or no 
     commercial airline service.
       This legislation will greatly facilitate and accelerate the 
     transformation of our air traffic control system to the Next 
     Generation Air Traffic Control System--NextGen. As you know, 
     NextGen will increase the capacity and enhance the safety of 
     our air traffic control system. It will also reduce 
     aviation's environmental impact.
       The legislation will provide much needed long-term 
     direction and stability to the Federal Aviation 
     Administration. The bill will enable the agency to do the 
     critical long-range planning, and make the long-range 
     investments in airport infrastructure and technology that are 
     needed to modernize and expand the system. The time to enact 
     a strong multi-year reauthorization bill is now.
       The reauthorization bill helps fund the transformation to 
     NextGen in part through an increase in the general aviation 
     fuel tax. While no industry wants to pay additional taxes, 
     particularly during these very challenging times, NBAA 
     supports the fuel tax increase contained in this bill because 
     we believe that the rapid transformation to NextGen is 
     critically important to the vitality of the U.S. aviation 
     system.
       We urge the Senate to expedite consideration of the FAA 
     reauthorization bill. It is important that we finalize this 
     legislation that will undoubtedly enhance safety, reduce 
     emissions, expand the system and ensure that the U.S. will 
     continue to lead the world in aviation technology.
           Sincerely,
     Ed Bolen.
                                  ____



                                                       NETJETS

                                   Columbus, OH, February 7, 2011.
     Hon. Max Baucus,
     Chairman, Senate Committee on Finance, U.S. Senate, Dirksen 
         Senate Office Building, Washington, DC.
     Hon. Charles Grassley,
     Ranking Member, Senate Committee on Finance, U.S. Senate, 
         Dirksen Senate Office Building, Washington, DC.
       Dear Chairman Baucus and Ranking Member Grassley: As a 
     leading fractional ownership program management company here 
     in the United States, I write today in support of language 
     included within S. 223, the Federal Aviation Administration 
     (FAA) Air Transportation Modernization and Safety Improvement 
     Act, that provides for a minor change in the tax code to 
     ensure that operations of aircraft in fractional ownership 
     programs are taxed as general aviation.
       The FAA has determined that fractionally-owned aircraft 
     operations are in fact private. However, the Internal Revenue 
     Service continues to tax the operations of such aircraft as 
     if they are commercial. The IRS made this tax determination 
     when the concept of fractional ownership was very new, and 
     before the FAA had completed its analysis and issued 
     regulations that classify fractionally-owned aircraft as non-
     commercial general aviation.
       To remedy this situation, we request your support for 
     language contained within S. 223 to also be included within 
     the House FAA reauthorization bill. Specifically, Section 805 
     of S. 223, entitled, ``Treatment of Fractional Ownership 
     Operations,'' would ensure that all fractionally-owned 
     aircraft operations are taxed as non-commercial general 
     aviation.
       We strongly support Section 805 of S. 223 and request your 
     assistance to secure this language within the House FAA 
     Reauthorization bill. Thank you for your attention to this 
     important issue.
           Sincerely,
                                                 Jordan B. Hansell
                                                        President.
                                 ______