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Senate Commerce Proposal
Concerns About S.1300 – The Aviation Investment and Modernization Act
The members of the Alliance for Aviation Across America strongly support modernization of America’s aviation system, so that it can continue to be the world’s safest, best and most efficient well into the future.
However, the Aviation Investment and Modernization Act (S.1300), introduced in the Senate on May 13, includes a new user fee proposal that has the potential to negatively impact small and mid-size businesses across the country. Specifically, the proposal:
Introduces User Fee Funding
S.1300 establishes a new $25 per-flight user fee for all turbine operations. The per-flight user fee is very regressive, applying equally to a jumbo jetliner flying out of JFK with 300 people aboard and a turboprop aircraft flying in controlled airspace from a small town with 5 people aboard. In addition, payment of the fee is likely to be a significant administrative burden for many general aviation operators. The International Air Transport Association has said that it costs international airlines $85 to $125 just to process a foreign user fee. That processing cost is likely to be even higher for non-airline companies, since they are primarily small and mid-size companies not set up to handle charges like these. Thus, the $25 per-flight fee represents a huge hidden cost to operators that dramatically exceeds the amount of the fee itself.
Necessitates a Collection Bureaucracy
The proposal would require a large and expensive bureaucracy of billing agents, collection agents, auditors, dispute arbitrators, and others.
Creates a Powerful “Special Interest” Board
S.1300 establishes a 7-person board, including industry representatives, with significant authority over the FAA’s budget, hiring decisions, and spending programs.
Is Expected to Give Huge Tax Break to the Big Airlines
It has been widely reported that, in establishing the $25 per-flight user fee, the Senate Commerce Committee will recommend that the big airlines be relieved of the 4.3 cents per-gallon fuel tax. The exchange of a $25 per flight user fee in lieu of their 4.3 cents per-gallon fuel tax represents a golden swap for the big airlines that will allow them to pad their profits by millions of dollars every year.
Singles Out Part 91-Turbine Operators
While the big airlines are allowed to pad their profits by swapping their 4.3 cents per-gallon fuel tax for a $25 per flight fee. Part 91 turbine operators are being singled out for payment of the fees and increased fuel taxes. While not specifically stated in the bill, the Senate Commerce Committee is reported to be recommending that the federal fuel tax paid by Part 91 turbine operators be raised 125 percent, from 21.8 cents per-gallon to 49 cents per-gallon.
The Alliance respectfully asks Senators to reconsider approaches to FAA funding that are based upon user fees.
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