NATA News

President Obama unveiled his Fiscal Year 2013 Budget today that included his infamous $100 per-flight user fee on all flights, including general aviation, using air traffic control. According to the President’s budget, this fee would generate an estimated $7.4 billion over 10 years and the total charges collected from aviation users would finance roughly three-fourths of airport investments and air traffic control system costs. This proposal first surfaced during the President’s deficit reduction proposal given to the Joint Select Committee on Deficit Reduction or “super committee” that failed to reach an agreement on reducing the federal deficit by 1.2 trillion dollars.

Also included in the budget proposal was the elimination of bonus depreciation for aircraft. The proposal would change depreciation schedules for general aviation aircraft that carry passengers to seven years to be consistent with the treatment of commercial aircraft. This would reduce the deficit by $2 billion over 10 years, according to the budget proposal.

The Congressional Budget Office estimated that the government was running a $349 billion deficit through January, compared with $419 billion at this point last year. That translates into a 2012 deficit of about $1.1 trillion, down from $1.3 trillion in 2011.

“While extremely disappointing, it is not shocking that the FY 2013 budget continues the theme that has been displayed by this administration since it took office,” stated NATA President and CEO James K. Coyne. “General aviation will continue to play an integral in the U.S. and global economy. It is time for this president and his administration to recognize that value by dispensing with flight fees and curtailed bonus depreciation schedules and, instead, focus on ways to improve and grow the general aviation industry.”

NATA will provide a complete analysis of the programs and funding important to its members later this week.

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NATA is seeking support for the inclusion of legislative language in H.R. 7, the American Energy and Infrastructure Jobs Act of 2012 (the Highway Bill) to repeal the "fuel fraud" provision.

The fuel fraud provision, which was included in the 2005 Highway Bill, changed the collection of taxes for non-commercial aviation jet fuel and required the funds to be deposited into the Highway Trust Fund. This diversion of aviation fuel tax revenue has cost the Airport and Airway Trust Fund approximately $50 million annually since the bill’s enactment and is anticipated to cost another $500 million over the next ten years. This policy has increased Highway Trust Fund revenues at the expense of the Airport and Airway Trust Fund. In addition, the burdensome process of filing for the 2.5-cent-per-gallon refund with the IRS has put an undue burden on aviation businesses although there is no substantial evidence to prove that fuel fraud is taking place.

Contact your Members of Congress in both the U.S. House of Representatives and the U.S. Senate today encouraging them to support a repeal of the onerous fuel fraud tax.

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Last Friday, 8 aviation trade groups sent a letter to leaders of the U.S. House of Representatives encouraging Congress to repeal the onerous fuel fraud tax that was included in the 2005 Highway Bill.  According to the groups:

“This provision is a solution in search of a problem, as evidence of large scale fraud in the sale of jet fuel has never been demonstrated. In fact, this provision is harming our national airspace system by depriving it of funds needed to enhance safety and efficiency. It is imperative that all revenue from taxes on jet fuel, used in aviation, are deposited in the Airport and Airway Trust Fund, which is why we respectfully request the inclusion of a provision in H.R. 7 that would repeal the so-called fuel fraud provision.”

To read the group letter in its entirety, please click here.

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What is the purpose of a tax? To raise revenue for the government you say? Well, that is only part of its purpose. In addition to taxes being a source of revenue, they are, as anyone who has claimed a credit for installing energy efficient appliances or windows is aware, also used to control behavior. Taxing something affects how much, or little, people use that something. The result of this year-after-year tinkering with the tax code to control behavior is a massive web of confusion that is now more than 16,000 pages long.

Click here to read this blog post in its entirety.

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Last week, NATA Vice President of Government and Industry Affairs Eric R. Byer sent a letter criticizing the Star Tribune in Minneapolis, MN, for a recent article that called into question 3M’s use of corporate aircraft.

To read Byer’s letter, please click here.

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The U.S. Senate has approved the final version of the long-delayed FAA reauthorization bill. The vote on the conference report to H.R. 658, the FAA Modernization and Reform Act of 2012, was 75 to 20 — clearing the way for the President to sign the bill into law.

The legislation provides nearly $16 billion per year to the FAA through fiscal year 2015 (FY 15), and authorizes $3.35 billion annually for AIP through FY 15.

To view NATA’s Legislative Report on the bill, please click here.

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Members of the U.S. House of Representatives formed the Yellow Pages Caucus in an effort to help ensure that the government isn’t taking over activities that should be performed by the private sector. The caucus is dedicated to reliance on the private sector, rather than the government, to provide commercially available goods and services to the government. This effort will reduce the size and scope of government, and create private jobs.

Not only do federal agencies duplicate the services that can be provided by private business, many also engage in unfair government competition with the private sector. For this reason Representative John J. Duncan, Jr. (R-TN) and Senator John Thune (R-SD) introduced legislation, H.R. 1474/S. 785 the Freedom from Government Competition Act, to combat unfair government competition with the private sector. 

Fourteen members of the U.S. House of Representatives have joined the caucus: Pete Sessions (R-TX), Diane Black (R-TN), Marsha Blackburn (R-TN), Mo Brooks (R-AL), Mike Coffman (R-CO), Jeff Duncan (R-SC), John J. Duncan, Jr. (R-TN), Richard Hanna (R-NY), Nan Hayworth (R-NY), Bill Huizenga (R-MI), Lynn Jenkins (R-KS), Tom McClintock (R-CA), Kevin Yoder (R-KS), and Todd Young (R-IN).

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On February 8, 2012, the U.S. House of Representatives’ Committee on Transportation and Infrastructure’s Subcommittee on Aviation held a hearing to discuss the Global Positioning System’s (GPS) impact on the nation’s transportation infrastructure.

Subcommittee Chairman Tom Petri (R-WI) and members heard testimony from witnesses who agreed that GPS usage is important to all modes of transportation and the economy and that using the system as an element of transportation infrastructure allows for the safe and efficient use of the national airway system. “Efforts must be made to ensure that aviation safety and efficiency benefits made possible by GPS are preserved,” Chairman Petri stated.

The system’s vulnerability to outside interference, due to weak broadcast and competing broadband signals, was also discussed. U.S. Department of Transportation Deputy Secretary John Porcari assured the subcommittee that the agency will work with the appropriate telecommunications groups and aviation stakeholders to draft new GPS spectrum interference standards that will strengthen existing services “vital to economic, public safety, scientific and national security needs.”

To read the subcommittee’s press release and testimonies from witnesses, click here.

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Legislators in Florida and Pennsylvania are considering legislation to exempt aircraft from the states’ sales and use taxes. Both states are experiencing drops in revenue, competitiveness, and jobs as a result of pilots taking their aircraft to maintenance facilities in other states to avoid the extra repair bill costs.
 
In Pennsylvania, lawmakers have been reviewing House Bill 1100 that would eliminate the state’s sales and use tax on fixed-wing aircraft sales, parts, maintenance and repair. The elimination of these taxes would increase the industry’s current $400,000 annual payroll and $1.3 billion economic activity and would generate more jobs than the current 9,000 that the industry supports.

The Florida House of Representatives has been reviewing HB 1213 that would broaden tax exemptions from the sales and use tax on labor and parts used in repairs on aircraft that weigh more than 2,000 pounds. Current law states that maintenance tax exemptions apply to aircraft that weigh 15,000 pounds or more. The bill is part of the chamber’s Economic Development Bill, HB 7087. The Senate is working on a companion bill, SB 1384, which will go in their version of the Economic Development Bill.

Passage of both states’ bills will keep repair stations open for business and allow pilots who visit Pennsylvania and Florida to save money on maintenance, sales and use taxes. Both bills will be in their respective chambers for consideration on February 13. NATA is monitoring the status of the bills and will report to members as decisions are made.

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Last week, NATA Director of Regulatory Affairs Michael France spoke to the South Carolina Aviation Association (SCAA) on the future of aviation gasoline (Avgas). France addressed the issues affecting future uncertainty regarding the availability and use of 100 low lead avgas as well as the general aviation industry’s efforts towards transitioning to an unleaded avgas. “Currently, a drop-in unleaded avgas replacement does not exist,” said France. “This fact creates a number of challenges that must be addressed when evaluating the viability of any non drop-in fuel.”

France served as NATA’s representative on the Unleaded Avgas Transition Aviation Rulemaking Committee (UAT-ARC), which recently completed its work and submitted a preliminary report to the FAA. The final UAT ARC report is expected to be made public by the FAA in early March.

Click here for more information on the SCAA.

Click here for more information on the UAT ARC.

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March 27-30, 2012, in Washington, DC
More than 150 industry leaders will come together one week in Washington for a variety of events, including the FBO Leadership Conference and new FBO Managers Workshop. All events will be held at the Hyatt Regency Washington on Capitol Hill.

Other NATA Capital Week for Aviation Business Events:

• NATA Annual Meeting and Election of NATA Officers
• Day on the Hill Luncheon and Congressional Visits
• NATA Committee Meetings
  

FBO Leadership Conference table-top displays as well as sponsorship opportunities for various Capital Week events are available. Contact Diane Gleason at dgleason@nata.aero to inquire.

Visit www.nata.aero/events to learn more about these events and for links to register today.

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NATA's Spring Training Week will get into full swing in Las Vegas on March 5-6 with its popular Line Service Supervisor Training Seminar. The event continues with the NATA FBO Finance Fundamentals – For New and Seasoned Managers Responsible for the “Bottom Line” in Aviation Services Seminar on March 6-7, NATA’s Safety 1st Trainer Seminar on March 7 and Environmental Compliance Seminar on March 8 (the only one offered in 2012). NATA's Spring Training Week will once again be held in conjunction with the Cygnus Aviation Expo (March 7-9). Spring Training seminars take place at the Las Vegas Convention Center. Meet NATA Safety 1st staff and enter to win fabulous prizes at the NATA Spring Training Week registration desk, located outside room N218 in the North Hall, Level 2 of the Las Vegas Convention Center. Seminar spaces are filling fast, please visit www.nata.aero/springtraining for more details and to register today.

You Won’t Want To Miss
NATA’s 2012 Air Charter Summit
June 11-13
Chantilly/Dulles, VA
www.nata.aero/acs

NATA’s 2012 Aviation Business Roundtable
November 12-13
Arlington, VA

Check www.nata.aero/events frequently for event announcements, details and links to register.

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