The Federal Aviation Administration (FAA) has formally directed the state of California to provide detailed records about its collection, tracking, and use of aviation fuel tax revenue from 2021 through 2025. The FAA says California has not demonstrated compliance with federal requirements despite more than nine requests for information since 2016.
California must provide the requested accounting records by October 19 or face potential enforcement action. Federal law generally requires aviation fuel tax proceeds to support activities directly related to airport operations and the transportation of passengers and cargo. Aviation businesses and their customers pay these taxes with the expectation that the revenue will be reinvested in the aviation system. The FAA’s inquiry reinforces federal protections against diverting aviation-generated revenue to unrelated purposes and could affect airport funding and aviation tax policy in California.
The FAA letter comes as California legislation to curtail the diversion of aviation tax revenue awaits action by Governor Gavin Newsom, who has until midnight tomorrow to sign or veto the bill. If he takes no action, S.B. 661 will be enacted. Read NATA’s letter urging the governor’s signature here.
NATA will continue to monitor Newsom’s action on S.B. 661, California’s response to the FAA letter, and resulting implications for aviation funding and NATA members operating in the state.