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NATA Statement On House Approval of Pompeo Fuel-Fraud Amendment

NATA Statement On House Approval of Pompeo Fuel-Fraud Amendment

Washington, DC, November 4, 2015 –Today, the U.S. House of Representatives approved an amendment to the highway bill offered by Representative Mike Pompeo of Kansas.  The Pompeo amendment requires the Government Accountability Office (GAO) to conduct a study of diversions of non-commercial jet fuel tax revenues to the Highway Trust Fund.

National Air Transportation Association President and CEO Thomas L. Hendricks praised the amendment stating, "NATA appreciates Representative Pompeo’s leadership on this important issue.  His amendment provides critical visibility to enable Congress to fully understand the impact of this revenue diversion to general aviation consumers, businesses and the Airport and Airway Trust Fund.” 

Since 2005, federal excise taxes on the sale of non-commercial jet fuel to the general and business aviation fleets have been diverted into the Highway Trust Fund, depriving the Airport and Airways Trust Fund of much needed funding.  This “Washington idea,” the so-called “fuel-fraud” provision, was quietly enacted in response to a concern that the 2.5-cent per gallon difference between the highway diesel and jet fuel tax rates would somehow incent truckers to use jet fuel. This ignored the fact that in 2005 the average price of diesel was $2.44pg and Jet A $3.75pg.  Today, the average price of diesel is $2.86pg and Jet A is $4.71pg. This even greater disparity in price further removes any incentive to use jet fuel in highway vehicles.  

An archaic and overly bureaucratic refund mechanism and subsequent transfer to the aviation fund is available, yet seldom used by many operators.  Notably, the IRS provides no mechanism for non-commercial general aviation end-users to apply for the refund. Thus the Airport and Airways Trust Fund receives no revenue from the majority of general and business aviation jet fuel sales because non-commercial end users are not permitted to apply for the refund themselves.  

Hendricks continued, “We urge the GAO to review the questions outlined in the Pompeo amendment and the underlying 2005 law and importantly, whether the significant cost disparity between jet and diesel fuel justifies the necessity of this provision. We also hope GAO examines whether fuel additives and diesel engine design changes since 2005 also render the provision nothing more than a bureaucratic roadblock draining the Airport and Airway Trust Fund of revenues needed for airport improvements and the deployment of a modernized air traffic control system.” 

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NATA, the voice of aviation business, is the public policy group representing the interests of aviation businesses before Congress and the federal agencies.

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