Rockefeller-Lott bill seeks to lighten burden on airlines

Sens. Jay Rockefeller (D-W.Va.) and Trent Lott (R-Miss.) have crafted a bill that would dramatically change the system for funding the air traffic control system by shifting more of the burden from commercial airlines to general aviation.

The bill, seeking to reauthorize the Federal Aviation Administration (FAA), will be introduced sometime this week, according to an aide to Rockefeller. Industry sources said it will be opposed by general-aviation groups, which represent corporate jets and operators of smaller planes run on piston-fired and propeller engines.

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Sources familiar with the measure being prepared by staff on a Senate aviation subcommittee chaired by Rockefeller said it would phase out a 4.3 cent per gallon fuel tax paid by commercial airlines. One industry source estimated this could save airlines about $500 million annually.

It would also raise the fuel tax paid by operators of smaller turbine-engine planes from 21 cents per gallon to 49 cents per gallon, and would introduce a new user fee for turbine-powered and turbine-propped aircraft that use the air traffic control system.

Unlike a proposal backed by the FAA, planes that run on piston-fired engines or propellers would not be affected by the new fees or taxes, sources said. The newer bill would also not replace a ticket tax paid by passengers on commercial airlines with the new user fees and taxes, as the FAA-backed bill would have done. Groups representing general aviation were livid with the FAA-backed bill.

Not imposing the user fees and increased fuel taxes on propeller and piston-driven planes would provide cover against arguments that the tax would unfairly hit small planes used for farming and medical care in rural communities or for flight lessons.

Still, one industry source complained that the Senate bill appears to be a “huge giveaway” to commercial airlines, and that it would provide those airlines a tax break at the expense of smaller planes. This source also said general-aviation groups are wary of user fees since those could eventually be imposed on all users of the air traffic control system, and not just jets, and that smaller turbine-powered planes provide necessary services to rural communities.

The source also said all of general aviation would oppose the increased fuel taxes and user fees.

The Senate bill could provoke a fight with the House, which has been more opposed to any user fees. The Senate, filled with members representing states with major-hub airports, is traditionally friendlier to commercial airlines.

The House, by contrast, includes many members who fly their own planes and who serve districts where the main airport is served by general aviation.

The changes are intended to shift some of the burden of paying for a modernized air traffic control system from commercial airlines to corporate jets, a fast-growing segment of the aviation industry. Groups representing commercial airlines and the FAA itself charge that corporate jets are using the air traffic control system more, but not paying their fair share.

But groups representing general aviation argue heavy fuel taxes and user fees would ground planes and devastate small businesses and communities that do not sit on major hubs serviced by airlines. They are joined by some groups representing rural America, including the National Farmers Union.

The Senate bills sets up a heavy lobbying fight between two well-armed interest groups that have been generous to members with oversight on aviation.

So far in the 2007-08 cycle, Rockefeller has reported $14,000 from political action committees (PACs) connected to commercial airlines and their trade association, according to PoliticalMoneyLine.com. He has also received thousands of dollars from PACs with groups opposed to the FAA’s proposal, including $3,000 from the Aircraft Owners and Pilots Association (AOPA) PAC and $2,000 from the National Air Transportation Association PAC.

Lott has not reported any contributions from either side so far in this cycle, but received about $13,000 from commercial airline PACs in the 2005-06 cycle, as well as $5,000 from AOPA, according to PoliticalMoneyLine.