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Managing America: Transportation

TheWeekInCongress.com (TM)

Week Ending September 28, 2007

H.R.3540 To amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund.

The funding that the bill extends are taxes on commercial carriers, aviation fuel and passengers. The tax revenues are then returned through the Airport and Airways Trust Fund for capital improvement of the US airport and airways system and operations and programs of the FAA. The bill does not increase taxes but rather extends current tax amounts until the completion of the forthcoming reauthorization bill.

Trust Fund monies are expended on a variety of projects including noise abatement, infrastructure improvement and expansion, safety, intermodal transportation, transportation security and the Leaking Underground Storage tank Trust Fund, a fund that spends to investigate and clean up underground fuel storage tanks that are leaking.

The air passenger tax is 7.5% ad valorem tax plus $2.40 for domestic flights in 2007 and a $15.10 departure or arrival fee for international travel. Air cargo is taxed at a 6.25% ad velorem.

Jet fuel for commercial aviation is taxed at 4.3 cents per gallon (cpg), non-commercial aviation at 21.8 cpg, Aviation gasoline for commercial use is taxed at 4.3 cpg and 18.3 cpg for non-commercial use. 0.1% is spent on the Leaking Underground Storage Tank Trust. Tax exempt entities such as state or local governments are still taxed at 0.1% for the Storage Tank Fund.

Tax revenues as described above produce and average of $11 billion yearly. The bill appears to be authorizing spending of tax revenues beyond the September 30 fiscal year end and to do so against expected tax revenues.

Sponsor:  Rep. Charles Rangel (D-NY-15^th)

Vote: Passed House by voice vote September 24, 2007

Cost to the taxpayers: “CBO estimates that implementing the bill would increase discretionary spending by $3.1 billion over the 2008-2012 period by authorizing

appropriation of revenues expected to be collected during the first three months of fiscal year 2008. Enacting the bill would not affect direct spending.”

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Earmark Certification:   Pursuant to clause 9 of rule XXI of the Rules of the House of Representatives, the Ways and Means Committee has determined that the bill as reported contains no congressional earmarks, limited tax benefits, or limited tariff benefits within the meaning of that Rule.

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