Congress adjourned on July 14th and is beginning a seven-week recess. Before leaving, it took action on two important pieces of aviation legislation.
The House and Senate approved and sent to President Obama an extension of the FAA’s funding and aviation taxes at current levels through September 30, 2017.
The legislation is more than a simple extension and includes provisions related to unmanned aerial vehicles, airport security, and streamlining the third-class medical process. Significantly, the legislation
does not include a House proposal to corporatize air traffic control. NATA members should be rightly proud of their role in preventing the inclusion of this House provision that negatively impacts our Part 135 members and general aviation as a whole.
Though the battle is won, the debate continues. Commenting after Senate approval of the FAA bill, former Secretary of Transportation James Burnley stated, “Big ideas and big reforms take time. I think [House] Chairman Shuster is very clear in saying he intends to work on this next year.” Related reporting contrasted Burnley’s remarks with those of NATA calling on Congress to “drop this divisive proposal in 2017 and approve legislation that represents consensus work of the House, Senate and aviation stakeholders.”
Taxation of Aircraft Management Services
In addition, on July 13th the House Committee on Ways and Means approved bipartisan legislation (H.R. 3608) sponsored by Representative Pat Tiberi (R-OH), which clarifies that aircraft management services are not subject to air transportation taxes. Senators Sherrod Brown (D-OH) and Rob Portman (R-OH) previously introduced companion legislation (S.2092) in that Chamber.
Committee action yesterday marks another milestone in NATA’s efforts to reverse a March 2012 IRS Chief Counsel Advice Memorandum that concluded aircraft owners employing aircraft management services and allowing its use for occasional charter operations should apply the 7.5 percent Federal Excise Tax (FET) on amounts paid for those management services. In May 2013, the IRS suspended assessments of the tax pending further clarifying regulations. While we continue to work with Treasury and the IRS, legislation clarifying the issue would be the most effective means of addressing the issue.
NATA worked with others to redraft this legislation in 2015 to include input from the powerful Joint Committee on Taxation. Earlier this year, the Joint Committee informed the tax-writing committees that the legislation’s impact on future federal revenues is insignificant, an important step in the progress of any tax-related legislation. Though approved by a voice vote, consideration of the legislation did spark some controversy (time stamp 43:22). NATA will continue to educate lawmakers on the necessity of the legislation and pursue all available paths toward its enactment.
Congress returns September 6th for a brief session before adjourning to campaign in advance of the November 8th general election.
One issue that must be resolved by lawmakers in the early Fall is spending levels for federal agencies, including the FAA. At this writing, it appears Congress will continue funding the FAA (and all other federal agencies) at current levels for at least some period of time after the start of the new fiscal year that commences October 1st.
Final resolution of federal spending issues will probably await the results of the 2016 general election.
NATA launched a grassroots campaign in response to the House Transportation Committee’s FAA reauthorization proposal to establish a user fee-funded air traffic control corporation. The legislation — which poses a significant threat to the entire general aviation community — was approved by the House Transportation and Infrastructure Committee on February 11th.
NATA created a special webpage — www.nata.aero/nocorporation — providing additional information and easy steps general aviation businesses can take to contact their elected representatives in opposition to this proposal.
“The hour has rarely been graver for general aviation and we are calling on all aviation businesses to join us. Your immediate personal outreach to your elected representatives is critical to staving off the corporatization of ATC and the imposition of user fees on segments of general aviation. We want make it clear that industry insiders don’t get to decide the future of our nation’s air traffic control system.”