The 1987 Act provided for an automatic 50-percent reduction in air passenger ticket, cargo and fuel taxes for 1990, if Trust Fund appropriations for airport improvements, airway facilities and equipment, and research, engineering, and development for the prior 2 fiscal years totaled less than 85 percent of authorized levels. The Act also provided that emergency medical helicopters owned or leased by health care facilities which do not use the Federally-assisted airport and airway facilities funded by these taxes are exempt from all applicable airport and airway excise taxes. 1989 Amendment The Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) suspended the aviation tax reduction until January 1, 1991, with the automatic 50-percent tax reduction scheduled to take effect if the applicable Trust Fund program appropriations (as set forth in the 1987 Act) were less than 85 percent of the Trust Fund authorizations for fiscal years 1989 and 1990. Also, the 1989 Act increased the international departure tax from $3 to $6 per person on January 1, 1990. 1990 Amendment The Omnibus Budget Reconciliation Act of 1990 (Title XI of P.L. 101-508) repealed the automatic 50-percent aviation excise tax reduction trigger, The 1990 Act also increased the aviation taxes (except the international departure tax) by 25 percent, effective December 1, 1990, and extended all the taxes through 1995. Under the conference agreement on the 1990 Act, the revenue from the tax increases is to be retained in the General Fund through 1992 and thereafter deposited in the Trust Fund.1 The 1990 Act also amended the Trust Fund statute to permit expenditures from the Trust Fund for purposes included in the 1990 Trust Fund authorization provisions (provided in Title IX of the 1990 Act). Title IX of the 1990 Act provided an extension of Trust Fund program authorizations at increased levels for fiscal years 1991 and 1992, eliminated the penalty provision which reduced FAA operations and maintenance expenditures from the Trust Fund if Trust Fund capital programs were not full funded, and added contract authority from the Trust Fund for fiscal years 1992-1998 for payments under the Small Community Air Service Program ("essential air services"). 1992 Amendment The Airport and Airway Safety, Capacity, Noise Improvement, and Intermodal Transportation Act of 1992 (P.L. 102-581) included a separate revenue title permitting expenditures from the Trust Fund for fiscal years 1993, 1994 and 1995 for the purposes set forth in the nonrevenue titles of that Act. New (or newly specified) expenditure purposes provided in the nonrevenue titles of the Act include: (1) terminal development of revenue-producing areas and construction of non-revenue-producing parking lots for nonhub air The statutory language of the 1990 Act inadvertently omitted the General Fund retention of the increases in the air passenger and air cargo taxes. A technical correction to reflect the congressional intent was included in the Airport and Airway Safety, Capacity, Noise Improvement, and Intermodal Transportation Act of 1992 (P.L. 102–581). ports; (2) use of Airport Improvement Program funds for relocation of air traffic control towers in certain cases, for acquiring land for pads suitable for aircraft deicing, and for construction or purchase of capital equipment necessary for the airport's compliance with the Americans with Disabilities Act, the Clean Air Act, and the Federal Water Pollution Control Act (other than capital equipment which would primarily benefit a revenue-producing area of the airport used by a nonaeronautical business); and (3) grants to up to four vocational technical institutions for the acquisition or construction of facilities for the advanced training of maintenance technicians for air carrier aircraft. The revenue title of the 1992 Act also included a technical correction to provide that the 1990 Act increases in the air passenger and air cargo tax revenues be retained in the General Fund through December 31, 1992, as intended in the 1990 Act conference agreement. (The statutory language of the 1990 Act had inadvertently omitted the language regarding the temporary retention in the General Fund of the increase in these tax revenues.) FINANCING MECHANISM The Airport and Airway Trust Fund is financed by several aviation excise taxes. The following table sets forth the taxes and rates under present law. TABLE 1. SCHEDULE OF AIRPORT AND AIRWAY TRUST FUND EXCISE TAXES Tax (and code section) Present law rate1 Air passenger ticket tax (sec. 4261 (a), (b) and 10 percent. (d)) 23 Domestic air cargo tax (sec. 4271) International departure tax (sec. 4261 (c)) 6.25 percent. $6 per person. Fuels tax for noncommercial (general) aviation (sec. 15 cents per gallon on gaso4041(c))3. line; 17.5 cents per gallon on other fuels. These taxes are scheduled to expire after December 31, 1995. 2 Air transportation between the United States and a foreign station which is not more than 225 miles from the nearest point in the continental United States, as well as between two such foreign stations, generally is subject to this tax where payment for the travel is made in the United States. The 1982 amendments permit the Secretary to waive the 225-mile zone rule if Canada or Mexico enter into a "qualified agreement". This tax does not apply to transportation between the United States and other foreign stations where payment is made outside the United States, nor does it apply to the U.S. portions of certain uninterrupted international air transportation (where the layover does not exceed 12 hours). Also, the air passenger ticket tax does not apply to the portion of flights to or from Alaska and Hawaii which are not made over the United States (Code sec. 4262). 3 The tax does not apply to aircraft owned by a tax-exempt museum operated exclusively for the procurement, care, and exhibition of World War II aircraft (defined in sec. 4041(h)). Certain helicopters are exempt under the 1982, 1984, and 1987 amendments. Source: Joint Committee on Taxation, "Schedule of Present Federal Excise Taxes (as of January 1, 1993)" (JCS5-93), April 15, 1993. The passenger ticket tax applies to air passenger transportation within the continental United States, while the $6 per passenger international departure tax applies to flights abroad beginning in the United States and to flights to and from Alaska and Hawaii and between Alaska and Hawaii. The domestic air cargo tax ap plies to the transportation of property by air which begins and ends in the United States. Aircraft not subject to these passenger or freight taxes are subject to the fuel taxes noted above; exemptions are provided for aviation fuels used on farms or used for farming purposes or by a State or local government or a nonprofit educational organization. Also, under the 1982, 1984, and 1987 Acts, certain helicopters are exempt from the fuels and air transportation taxes if used in timber or hard mineral operations or oil and gas exploration or development or in providing emergency medical services where the Federal aviation system and Federally-aided airports are not used. EXPENDITURE PURPOSES The present Trust Fund statute authorizes obligations incurred under Title I of the 1970 Act, under the 1976 Act Amendments, the 1979 Act Amendments, the Fiscal Year 1981 Authorization Act, the Airport and Airway Improvement Act of 1982, the Airport and Airway Safety and Capacity Expansion Act of 1987, the Airport Noise and Capacity Act of 1990, the Aviation Safety and Capacity Expansion Act of 1990, the Federal Aviation Administration Research, Engineering, and Development Authorization Act of 1990, and the Airport and Airway Safety, Capacity, Noise Improvement, and Intermodal Transportation Act of 1992, as in effect on October 31, 1992. The Airport and Airway Trust Fund expenditure programs authorized under present law include the following: 1. Airport Improvement Program (AIP).— (a) Airport planning Planning for airport systems for airport master plans; also, airport noise compatibility planning for air carrier airports eligible for terminal development costs. (b) Airport construction Construction, improvement or repair of a public airport (includes removal of airport hazards and construction of physical barriers and landscaping to diminish noise). (c) Airport terminal facilities—Non-revenue-producing publicuse areas which are directly related to movement of passengers and baggage at certified air carrier airports having required safety and security equipment (including baggage facilities and passenger-moving equipment); also, development of revenueproducing areas and construction of non-revenue-producing parking lots for nonhub airports (subject to certification that the grant will not defer needed development with respect to safety, security, or capacity). (d) Land acquisition-Includes land or property interests for airport noise control purposes; also includes acquisition of land for, or work necessary to construct, pads suitable for aircraft deicing (subject to certain limitations). (e) Airport-related equipment-Airport security equipment required by DOT regulations, snow removal equipment, noise suppressing equipment, navigation aids, and safety equipment required for airport certification; also includes construction or purchase of capital equipment necessary for compliance by an airport with the Americans with Disabilities Act, the Clean Air Act, or the Federal Water Pollution Control Act, other than capital equipment which would primarily benefit a revenueproducing area of the airport used by a nonaeronautical busi ness. (f) Airport noise compatibility programs-Includes soundproofing of public buildings; local governmental units are eligible for project grants as well as airports. (g) Training Includes interactive training systems and grants for up to four vocational technical institutions to acquire or construct facilities for the advanced training of maintenance technicians for air carrier aircraft. 2. Facilities and Equipment Program (F&E).—Costs of acquiring, establishing, and improving air navigation facilities. 3. Research, Engineering, Development, and Demonstration Program (R&D).—Projects in connection with FAA research and development activities. 4. Operations and Maintenance Programs (O&M).—Flight check and maintenance of air navigation facilities; services provided under international agreements relating to the U.S. share of joint provision of air navigation services. 5. Small Community Air Service Program.-Contract authority for fiscal years 1992-1998 for payments to ensure that eligible localities receiving airline service at the time of deregulation continue to have airline service. 6. Vocational Technical Institutions.-Grants to up to four vocational technical institutions for the acquisition of facilities for the advanced training of maintenance technicians for air carrier aircraft. MISCELLANEOUS The Secretary of the Treasury is required to report to the Congress each year on the financial condition of the Trust Fund. The House Committee on Public Works and Transportation has jurisdiction over airport and airway development and improvement programs. The statutory provisions establishing the Airport and Airway Trust Fund and governing its operations are located at section 9502 of the Internal Revenue Code. FINANCIAL STATUS OF TRUST FUND Table 2 is based on information from the Appendix to the U.S. Budget for fiscal year 1994. Table 2 sets forth the balances remaining in the Fund after these commitments have been taken into account, called the uncommitted balances, for fiscal years 1977-1994. |