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Expansion of, or Specification of, Trust Fund Expenditure
Purposes

Area control facilities.--H.R. 4691 would provide that if
the FAA Administrator determines that it is necessary to
augment or substantially modify elements of the FAA's airway
capital investment plan (including a determination that it is
necessary to establish more than 23 area control facilities
(ACFs)), an additional $100 million would be authorized from
the Trust Fund for ACFs for fiscal year 1994 (in addition to
the $2,900 million authorized for FAA F&E for fiscal year
1994).

Military airports.--H.R. 4691 would remove the limitation
on the number of airports which may be designated to
participate in the military airport program (under the Airport
Improvement Program). Also, the bill would provide that up to
$4 million per airport for fiscal years 1993 and 1994 may be
used under the military airport program for construction,
improvement or repair of airport surface parking lots, fuel
farms, and airport utilities.

Terminal development.--H.R. 4691 would make eligible for
AIP funding terminal development of revenue producing areas and
construction of non-revenue producing parking lots for non-hub
airports (those with less than .05 percent of U.S. passenger
enplanements). Before approving a grant for these purposes,
the airport sponsor must certify that the grant will not lead
to deferral of needed airport development affecting safety,
security, or capacity. (The bill also increases the Federal
share to such airports from 75 to 85 percent.)

Definition of airport development.--H.R. 4691 would
specify that the following items would be eligible for funding
under the AIP program: (1) relocation of an air traffic
control tower or any navigational aid, if such relocation is
necessary to carry out an AIP project (currently, funded under
F&E); (2) any construction or purchase of capital equipment
necessary for compliance by the airport under the Americans
with Disabilities Act, the Clean Air Act, and the Federal Water
Pollution Control Act, other than capital equipment which would
primarily benefit a revenue producing area of the airport used
by a non-aeronautical business; and (3) any acquisition of land
for, or work necessary to construct, a pad suitable for
aircraft de-icing (but not including costs of aircraft de-icing
equipment, fluids, or storage facilities for such equipment and
fluids).

Grants to technical institutions.--H.R. 4691 would
authorize grants for up to four vocational technical
institutions (up to $5 million per institution) to acquire or
construct facilities for the advanced training of maintenance
technicians for air carrier aircraft.



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III. Airport and Airway Trust Fund
Authorizations for Fiscal Years 1993-1994
(H.R. 4691 and H.R. 4557)

Trust Fund Authorization Amounts and Balances

Trust Fund authorizations

H.R. 4691, as reported by Public Works, and H.R. 4557, as
ordered reported by Science and Technology, would provide total
Trust Fund authorizations of $7.4 billion for fiscal year 1993
and $8.0 billion for fiscal year 1994, as compared to $6.2
billion for fiscal year 1991 and $6.7 billion for fiscal year
1992.

Table 1 shows the Trust Fund authorization amounts for

fiscal years 1991 and 1992 under present law and for fiscal
years 1993 and 1994 under H.R. 4691 and H.R. 4557, respectively.

Table 1.~--Airport and Airway Trust Fund Program
Authorizations, Fiscal Years 1991-1994

(millions of dollars)

Program 1991 1992 1993 1994
(Present Law) (Projected)
H.R. 4691
Airport Improvement Program (AIP) 1,797.5 1,900.0 2,000.0 2,100.0
Grants to Technical Institutions ---- occ 20.0 -o--
Facilities & Equipment (F&E) 2,095.4 2,394.0 2,700.0 2,900.0
Area Control Facilities (ACF) ---- ---- ---- 100.0
Operations & Maintenance (O&M) 2,002.7 2,109.6 2,221.6 2,401.9
NOAA Weather Reimbursement 34.5 35.4 35.6 37.8
Small Community Air Service ---- 38.6 38.6 38.6
Rental Payments (GSA lease) 28.5 29.9 41.7 41.7
Subtotal 5,958.6 6,507.5 7,057.5 7,620.0
H.R. 4557
Research, Engineering, and
Development 205.0 218.1 297.3 336.0
Total Trust Fund 6,163.6 6,725.6 7,354.8 7,956.0

Trust Fund balance

Under H.R. 4691 and H.R. 4557, the uncommitted Trust Fund
balance is projected by FAA to decline from $7.5 billion at the
end of fiscal year 1992 to $6.3 billion at the end of fiscal
year 1994 (i.e., without the technical correction transfer to
the General Fund). (FAA projects the balance would decline to
$4.1 billion if the transfer is made to the General Fund
through 1992.)



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Aviation security training.--H.R. 4691 would allow the FAA
Administrator to reimburse expenses for the security training
of non-Federal domestic and foreign security personnel relating
to civil aviation security programs.

Study Commission

H.R. 4691 would establish a "National Commission to
Promote a Strong and Competitive Airline Industry"
("Commission"). The Commission is to investigate and study the
financial condition of the U.S. airline industry, the adequacy
of competition in the airline industry, legal impediments to a
financially strong and competitive U.S. airline industry, and
international aviation policy. The Commission is to submit a
final report to the Congress by May 1, 1993. The bill does not
provide specific funding for the Commission.

IV. Possible Option

1. rust Fund Amendments

Adopt conforming amendments to the Trust Fund statute to
(1) permit expenditures from the Trust Fund for fiscal years
1993 and 1994, and (2) allow expenditures from the Trust Fund
for the purposes provided in H.R. 4691 and H.R. 4557, as
reported.

These amendments would have no budgetary effects.
2. Technical Amendment

Adopt the technical correction in H.R. 1555 (as previously
passed by the House) to provide that the 1990 Act increases in
the air passenger and air cargo tax revenues would be retained
in the General Fund through December 31, 1992 (as intended in
the 1990 Act conference agreement).

This amendment would have no budgetary effect.

4 The legal impediments portion of the study is to include a
review and investigation of frequent flier programs, the taxes
and user fees imposed on U.S. airlines, the application of
bankruptcy laws to U.S. airlines, and the obligations of
failing airlines to meet pension obligations. (See sec. 205(d)
of H.R. 4691.)



Joint Committee on Taxation
April 28, 1992
JCX-17-92

MARKUP OF WAYS AND MEANS COMMITTEE
AMENDMENT TO H.R. 4691 (AIRPORT AND AIRWAY
SAFETY, CAPACITY, AND INTERMODAL
TRANSPORTATION ACT OF 1992)

I. Legislative Background

H.R. 4691 (“Airport and Airway Safety, Capacity, and
Intermodal Transportation Act of 1992") was reported by the
House Committee on Public Works and Transportation ("Public
Works") on April 28, 1992. The bill, as reported, amends the
Airport and Airway Improvement Act of 1982 (as amended in 1987
and 1990) to provide airport and aviation program
authorizations (other than FAA R&D) for fiscal years 1993 and
1994,

The House Committee on Science, Space, and Technology
("Science and Technology") ordered reported H.R. 4557 on April
8, 1992. H.R. 4557 provides authorizations for FAA R&D
programs for fiscal years 1993 and 1994. Science and
Technology expects to offer the provisions of H.R. 4557 as an
amendment to H.R. 4691, when H.R. 4691 is considered by the
House.

Public Works has requested that the Committee on Ways and
Means (“Ways and Means") provide a conforming amendment to the
Airport and Airway Trust Fund ("Trust Fund") statute to reflect
the proposed authorizations from the Trust Fund. Public Works
is not requesting any changes in, or further extension of, the
aviation excise taxes at this time.

II. Present Law

Aviation Excise Taxes and Airport and Airway Trust Fund

Under present law, aviation excise taxes are imposed as
follows: 1l0-percent air passenger ticket tax; 6.25-percent air
cargo tax; $6.00 per person international departure tax; and,
fuels taxes for noncommercial aviation (15-cénts-per-gallon tax
on gasoline and 17.5-cents-per-gallon tax on jet fuel). These
taxes are scheduled to expire after December 31, 1995.

The Omnibus Budget Reconciliation Act of 1990 ("1990 Act")
provided for increases in the following aviation excise taxes:
the air passenger tax from 8 percent to 10 percent; the air
cargo tax from 5 percent to 6.25 percent; the gasoline tax for
noncommercial aviation from 12 cents to 15 cents per gallon;
and the jet fuel tax for noncommerical aviation from 14 cents


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to 17.5 cents per gallon. Under the conference agreement for
the 1990 Act,” the revenues from these increases in the
aviation taxes were to be retained in the General Fund (rather
than transferred to the Trust Fund) through December 31, 1992,
and to be transferred to the Trust Fund for 1993-19952
However, due to a statutory drafting omission in the 1990 Act,
revenues from the increases in the air passenger and air cargo
taxes were not retained in the General Fund through 1992 as
intended in the conference agreement. Thus, a technical
correction,is needed to reflect the intent of the conference
agreement. Currently, such revenues are being credited to the

Trust Fund.

Trust Fund Expenditure Purposes

Background

The 1990 Act also provided an extension of Trust Fund
program authorizations at increased levels for fiscal years
1991 and 1992, and added contract authority from the Trust Fund
for payments under the Small Community Air Service Program
("essential air services") for fiscal years 1992-1998.

The present Trust Fund statute (Code sec. 9502(d))
authorizes amounts to be paid out of the Trust Fund for
obligations incurred under the previous airport and airway
authorization Acts from 1970 to 1990 (as those Acts were in
effect on the date of enactment of the Aviation Safety and
Capacity Expansion Act of 1990). Also, amounts are authorized
to be paid out of the Trust Fund for obligations incurred under
the Federal Aviation Act of 1958, as amended, which are
attributable to planning, research and development,
construction, or operations and maintenance of (1) air traffic
control, (2) air navigation, (3) communications, or (4)
supporting services for the airway system. In addition,
administrative expenses of the Department of Transportation
attributable to Trust Fund-related activities described above
are authorized from the Trust Fund. Trust Fund expenditures
are authorized through September 30, 1992.

1 1990 Act Conference Report (H. Rept. 101-964), pp.
1054-1055.

2 Revenues from the aviation tax rates as in effect before the
1990 Act continue to go to the Trust Fund (through 1995).

3° such a technical correction is included in H.R. 1555, as
passed by the House on November 26, 1991.



Trust Fund expenditure programs

The Airport and Airway Trust Fund expenditure programs
authorized under present law are generally as follows:

(1) Airport Improvement Program (AIP)--

(a) Airport planning--Planning for airport systems for
airport master plans and noise compatibility planning for air
carrier airports eligible for terminal development costs.

(b) Airport construction--Construction, improvement or
repair of a public airport.

(c) Airport terminal facilities--Non-revenue producing
public-use areas which are directly related to movement of
passengers and baggage at certified air carrier airports having
required safety and security equipment (but not for
construction of public parking facilities for passenger
automobiles or construction, alteration, or repair of a hanger
or any airport building unless used to house facilities or
activities directly related to safety of persons at the
airport).

(d) Land acquisition--Includes acquisition of land or
property interests for airport noise control purposes.

(e} Airport-related equipment--Airport security
equipment required by DOT regulations, snow removal equipment,
noise suppressing equipment, navigation aids, and safety
equipment required for airport certification.

(£)} Airport noise compatibility--Includes
sound-proofing of public buildings.

(2) Facilities and Equipment Program (F&E)--Costs of
acquiring, establishing, and improving air navigation
facilities.

(3) Research, Engineering, Development, and Demonstration
Program {R&D)--Projects in connection with FAA research and
development activities.

{4) Operations and Maintenance Programs (O&M)--Flight
check and maintenance of air navigation facilities; services
provided under international agreements relating to the U.S.
share of joint provision of air navigation services.

(5) Small Community Air Service Program--Contract
authority for fiscal years 1992-1998 for payments to ensure
that eligible localities receiving airline service at the time
of deregulation continue to have airline service.