CSAC Bulletin Article

FAA Amendments Seek to Preserve County Revenue

October 5, 2017

Current federal threats to county sales tax revenue could be mitigated through pending amendments to the Federal Aviation Administration (FAA) reauthorization bill. CSAC strongly supports the language authored by Congressional Representatives Alan Lowenthal (CA-47) and Grace Napolitano (CA-32) to protect local, voter-approved taxes for either general or specific purposes. Our letter is available here.

On December 8, 2014, the FAA made a final rulemaking that contradicts the Congressional intent and 29 years of practice by saying that any state or local tax on aviation fuel, whether the tax was specifically targeted at aviation fuel or was a general sales tax on products that included aviation fuel, must be spent on airports and airport systems. The original law passed in 1987 required state and local agencies to spend aviation fuel excise tax revenue on airport uses and clearly stated it did not apply to other taxes imposed by local governments, or to state taxes”. Additional background is available from the CSAC Bulletin.

Representative Bill Shuster (PA-9), Chair of the Transportation and Infrastructure Committee, is renewing calls for the House to take up his six-year FAA bill. Although Congress just passed a short-term aviation patch that runs through March, Rep Shuster is aggressively promoting the need for action on a long-term reauthorization. It remains unclear if he has the votes to move his bill (due to longstanding concerns with unrelated provisions), the House Rules Committee is reopening the amendment process for the legislation. If all proceeds as the chairman intends, the bill could be on the floor next week or the following week.

The Lowenthal/Napolitano amendment protects 45 states and approximately 10,000 local governments that have general sales taxes from federal government intrusion. Specifically, the language would maintain the FAA policy that excise taxes on aviation fuel must only be spent on aviation projects. However, it would exempt from the 2014 FAA rule voter-approved general sales taxes in effect prior to September 30, 2017. In addition, it would allow for general sales taxes on aviation fuel to be spent on surface transportation projects in addition to aviation projects.

For more information about this proposal, please contact CSAC Legislative Representative Dorothy Johnson.

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