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Senate Finance votes to increase jet fuel taxes 65 percent to fund airport modernization
February 11, 2011
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  • By Pete Kasperowicz

    February 8, 2011

    The Senate Finance Committee today approved legislation that would provide $400 million per year for air traffic control modernization efforts, and would obtain these funds by raising jet fuel taxes by 65 percent.

    The committee approved the Airport and Airway Trust Fund Reauthorization Act, which is essentially the tax title of the Federal Aviation Administration (FAA) authorization bill. The Senate is considering the FAA bill on the Senate floor today, and is expected to complete its work by next week.

    The bill approved by voice vote in the Committee today would increase general aviation jet fuel taxes to 35.9 cents per gallon, up from the current 21.8 cents. That increase would fund the new Air Traffic Control System Modernization Account in the Airport and Airway Trust Fund (AATF).

    Senate Finance Committee Chairman Max Baucus (D-Mont.) said today that a long-term authorization of the AATF is needed because short term extensions are hindering the modernization of U.S. airports.

    “Last week the Committee heard testimony from the Government Accountability Office on the state of the Trust Fund,” Baucus said. “GAO described the importance of NextGen, the satellite-based means of air traffic control. NextGen will help us make better use of our airspace.”

    The Senate approved similar tax legislation last year as part of the FAA bill, which the Senate approved in 93-0 vote.

    The tax bill considered today would also repeal an exemption from Airport and Airway Trust Fund (AATF) taxes that is currently given to small aircraft. Language added by Sen. John Ensign (R-Nev.) ensures that the repeal of the exemption only applies to turbojet-powered planes.

    It also includes language from Sen. Tom Coburn (R-Okla.) that would only allow 90 percent of AATF revenues to be spent each year, to make sure that the fund is not depleted.

    The bill also allows tax-exempt bond financing for fixed-wing emergency medical aircraft, which is currently permitted for helicopters.

    Source: THE HILL
    Date: 2011-02-08