New FAA funding bill passes House, but taxes and fees face opposition

21 September 2007

A Bill to fund a long-awaited upgrade of the US air-traffic control system easily passed the House of Representatives on Thursday 20 September. But its taxation proposals look doomed. The White House has said it will veto the legislation if the bill''s tax structure is not amended when it is reconciled with the Senate''s version.

The House vote to authorise funding for the Federal Aviation Administration (FAA) till 2011 passed 267-151, with voting mostly on party lines. It will provide $68 billion for the agency that oversees US air traffic and regulates the country''s airlines.

Apart from providing the FAA''s operating budget, the legislation also finances a major upgrade to the nation''s present 1950s-era radar-based air traffic control system to one based on satellite-powered global positioning systems (GPS), which will cost $15 billion to $22 billion.

The House has proposed that the increased spending required would be partly financed by increasing the tax rate on aviation gasoline by 25 per cent, from 19.3 cents per gallon to 24.1 cents per gallon, and by 64 per cent, from 21.8 cents per gallon to almost 36 cents a gallon, for aviation-grade kerosene used in non-commercial aviation.

The bill also raises the fee that airports can charge passengers to a maximum of $7 a ticket from a $4.50, an increase that would go to expanding or improving airports, including projects to reduce noise.

It would require airlines and airports to have contingency plans to take care of passengers stuck in planes waiting at an airport for several hours. Excessive tarmac delays are part of a passenger''s bill of rights pushed by some legislators and consumer activists. The bill also includes a number of other changes, including raising the mandatory retirement age for commercial pilots from 60 to 65.