59–006 

110TH CONGRESS REPT. 110–337 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

FEDERAL AVIATION ADMINISTRATION EXTENSION ACT 

OF 2007 

SEPTEMBER 20, 2007.—Ordered to be printed 

Mr. RANGEL, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

[To accompany H.R. 3540] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 3540) to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, having considered the same, report favorably 

thereon without amendment and recommend that the bill do pass. 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

PURPOSE

The bill, H.R. 3540 (the ‘‘Federal Aviation Administration Extension Act of 2007’’), temporarily extends the taxes dedicated to, and 

the authority to make expenditures from, the Airport and Airway 

Trust Fund. 

SUMMARY

The bill extends, through December 31, 2007, the present-law 

taxes regarding the transportation of passengers by air, the transportation of cargo by air and aviation fuel taxes. The taxes are extended at their current rates. The bill also extends the expenditure 

authority for the Airport and Airport Trust Fund through December 31, 2007. 


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B. BACKGROUND AND NEED FOR LEGISLATION

The taxes dedicated to the Airport and Airway Trust Fund generally do not apply after September 30, 2007. The Trust Fund expenditure authority also terminates on October 1, 2007. 

C. LEGISLATIVE HISTORY

Background 

H.R. 3540 was introduced in the House of Representatives on 

September 17, 2007, and was referred to the Committee on Ways 

and Means. 

Committee action 

On August 1, 2007, the Subcommittee on Select Revenue Measures of the Committee on Ways and Means conducted a hearing on 

aviation taxes. 

The Committee on Ways and Means marked up H.R. 3540 on 

September 18, 2007, and ordered the bill favorably reported. 

II. EXPLANATION OF THE BILL 

A. TEMPORARY EXTENSION OF AIRPORT AND AIRWAY TRUST FUND

TAX AND EXPENDITURE PROVISIONS

PRESENT LAW

The Airport and Airway Trust Fund (‘‘AATF’’) provides funding 

for capital improvements to the U.S. airport and airway system 

and funding for Federal Aviation Administration (‘‘FAA’’) operations and programs, among other purposes. The Internal Revenue 

Code (the ‘‘Code’’) contains the provisions that dedicate revenues 

from certain excise taxes to the AATF, provide the relevant expenditure provisions governing the purposes for which AATF monies 

may be spent, and set the period for when those expenditures may 

occur. The excise taxes credited to the AATF are (1) taxes imposed 

on the transportation of persons by air; (2) taxes imposed on the 

transportation of property by air; (3) fuels taxes imposed on gasoline used in commercial aviation and noncommercial aviation; and 

(4) fuels taxes imposed on kerosene (jet fuel) and other aviation 

fuels used in commercial aviation and noncommercial aviation. The 

tables below summarize the various tax rates. 

TABLE 1.—TAXES ON COMMERCIAL AVIATION 

[Other than fuel taxes] 

Tax type Tax rate 

Domestic air passenger tax ..................... 7.5 percent ad valorem tax plus $3.40 per domestic flight segment in 2007. 

Use of international air facilities tax ...... $15.10 per arrival or departure in 2007 ($7.50 for departures only for domestic 

segments beginning or ending in Alaska or Hawaii). 

Air cargo tax ............................................ 6.25 percent ad valorem tax. 

TABLE 2.—TAXES ON FUEL USED IN AVIATION 

Fuel type Tax rate 1

(cents per gallon) 

Jet Fuel and liquids other than aviation gasoline: 

Commercial aviation ............................................................................................................................. 4.3 


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1The fuel tax consists of two components: 4.3 cents per gallon dedicated to the AATF and 0.1 

cent per gallon dedicated to the Leaking Underground Storage Tank Trust Fund. The higher 

fuel tax imposed on noncommercial aviation similarly consists of an AATF component (21.8 

cents per gallon for jet fuel, 19.3 cents for aviation gasoline) plus 0.1 cent per gallon for the 

Leaking Underground Storage Tank Trust Fund. For an exempt use (such as for the exclusive 

use of a State or local government), only the Leaking Underground Storage Tank Trust Fund 

tax of 0.1 cent per gallon applies. Except where specifically stated, the rates stated in this document are the AATF rates (i.e., do not include the 0.1 cent-per-gallon Leaking Underground Storage Tank Trust Fund rate). 

TABLE 2.—TAXES ON FUEL USED IN AVIATION—Continued 

Fuel type Tax rate 1

(cents per gallon) 

Noncommercial aviation ........................................................................................................................ 21.8 

Aviation gasoline: 

Commercial ............................................................................................................................................ 4.3 

Noncommercial ...................................................................................................................................... 19.3 

1 Excluding 0.1 cent for Leaking Underground Storage Tank tax. 

With the exception of 4.3 cents per gallon of the fuel tax rates, 

the taxes imposed and dedicated to the AATF do not apply after 

September 30, 2007.1 The AATF expenditure authority expires on 

October 1, 2007. The purposes for which AATF funds may be expended are fixed as of the date of enactment of the Vision 100— Century of Aviation Reauthorization Act (Pub. L. No. 108–176, December 12, 2003). 

REASONS FOR CHANGE

The Committee believes it is appropriate to temporarily extend 

the taxes and expenditure authority for the trust fund pending resolution of a longer-term reauthorization bill. 

EXPLANATION OF PROVISION

The provision extends the present-law taxes dedicated to the 

AATF through December 31, 2007. The taxes are extended at their 

current rates. The provision extends the expenditure authority for 

the AATF through December 31, 2007, and adds the extension act 

as an authorizing act for purposes of determining the purposes for 

which AATF funds may be expended. 

EFFECTIVE DATE

The provision is effective on the date of enactment. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the votes of the Committee on Ways and Means in its consideration of the bill, H.R. 3540, the ‘‘Federal Aviation Administration Extension Act of 2007.’’

The bill, H.R. 3540, was ordered favorably reported by voice vote 

(with a quorum being present). 

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d)(2) of rule XIII of the Rules of the 

House of Representatives, the following statement is made conVerDate Aug 31 2005 02:53 Sep 21, 2007 Jkt 059010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR337P1.XXX HR337P1

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cerning the effects on the budget of the revenue provisions of the 

bill, H.R. 3540 as reported. 

The bill is estimated to have the following effects on Federal 

budget receipts for fiscal years 2008–2017: 


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B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the bill involves no new or increased budget authority. 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the statement by CBO was requested. However, it has 

not been provided at this time. 

D. MACROECONOMIC IMPACT ANALYSIS

In compliance with clause 3(h)(2) of rule XIII of the Rules of the 

House of Representatives, the following statement is made by the 

Joint Committee on Taxation with respect to the provisions of the 

bill amending the Internal Revenue Code of 1986: the effects of the 

bill on economic activity are so small as to be incalculable within 

the context of a model of the aggregate economy. 

E. PAY-GO RULE

In compliance with clause 10 of rule XXI of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the revenue provisions of the 

bill, H.R. 3540, as reported: the provisions of the bill affecting revenues have no effect on the deficit or the surplus for either: (1) the 

period comprising the current fiscal year and the five fiscal years 

beginning with the fiscal year that ends in the following calendar 

year; and (2) the period comprising the current fiscal year and the 

ten fiscal years beginning with the fiscal year that ends in the following calendar year. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives (relating to oversight findings), the Committee advises that it is appropriate and timely to enact the revenue provisions included in the bill as reported. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill contains no measure that authorizes funding, so no statement of general performance goals and objectives for which any measure authorizes funding is required. 

C. CONSTITUTIONAL AUTHORITY STATEMENT

With respect to clause 3(d)(1) of rule XIII of the Rules of the 

House of Representatives (relating to Constitutional Authority), the 


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Committee states that the Committee’s action in reporting this bill 

is derived from Article I of the Constitution, Section 8 (‘‘The Congress shall have Power To lay and collect Taxes, Duties, Imposts 

and Excises * * *’’). 

D. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with section 423 of 

the Unfunded Mandates Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the revenue provisions of 

the bill contain no Federal private sector mandates or Federal 

intergovernmental mandates on State, local, or tribal governments. 

E. APPLICABILITY OF HOUSE RULE XXI 5(b) 

Clause 5 of rule XXI of the Rules of the House of Representatives 

provides, in part, that ‘‘A bill or joint resolution, amendment, or 

conference report carrying a Federal income tax rate increase may 

not be considered as passed or agreed to unless so determined by 

a vote of not less than three-fifths of the Members voting, a 

quorum being present.’’ The Committee has carefully reviewed the 

provisions of the bill, and states that the provisions of the bill do 

not involve any Federal income tax rate increases within the meaning of the rule. 

F. TAX COMPLEXITY ANALYSIS

Section 4022(b) of the Internal Revenue Service Reform and Restructuring Act of 1998 (the ‘‘IRS Reform Act’’) requires the Joint 

Committee on Taxation (in consultation with the Internal Revenue 

Service and the Department of the Treasury) to provide a tax complexity analysis. The complexity analysis is required for all legislation reported by the Senate Committee on Finance, the House 

Committee on Ways and Means, or any committee of conference if 

the legislation includes a provision that directly or indirectly 

amends the Internal Revenue Code and has widespread applicability to individuals or small businesses. 

The staff of the Joint Committee on Taxation has determined 

that a complexity analysis is not required under section 4022(b) of 

the IRS Reform Act because the bill contains no provisions that 

amend the Code and that have ‘‘widespread applicability’’ to individuals or small businesses. 

G. LIMITED TAX BENEFITS

Pursuant to clause 9 of rule XXI of the Rules of the House of 

Representatives, the Ways and Means Committee has determined 

that the bill as reported contains no congressional earmarks, limited tax benefits, or limited tariff benefits within the meaning of 

that Rule. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitVerDate Aug 31 2005 02:53 Sep 21, 2007 Jkt 059010 PO 00000 Frm 00007 Fmt 6659 Sfmt 6601 E:\HR\OC\HR337P1.XXX HR337P1

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ted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

INTERNAL REVENUE CODE OF 1986 

* * * * * * * 

Subtitle A—Miscellaneous Excise Taxes 

* * * * * * * 

CHAPTER 32—MANUFACTURERS EXCISE 

TAXES 

* * * * * * * 

Subchapter A—Automotive and Related Items 

* * * * * * * 

PART III—PETROLEUM PRODUCTS 

* * * * * * * 

Subpart A—Motor and Aviation Fuel 

* * * * * * * 

SEC. 4081. IMPOSITION OF TAX. 

(a) * * * 

* * * * * * * 

(d) TERMINATION.—

(1) * * * 

(2) AVIATION FUELS.—The rates of tax specified in subsection 

(a)(2)(A)(ii) and (a)(2)(C)(ii) shall be 4.3 cents per gallon—

(A) * * * 

(B) after øSeptember 30, 2007¿ December 31, 2007. 

* * * * * * * 

CHAPTER 33—FACILITIES AND SERVICES 

* * * * * * * 

Subchapter C—Transportation by Air 

* * * * * * * 

PART I—PERSONS 

* * * * * * * 

SEC. 4261. IMPOSITION OF TAX. 

(a) * * * 

* * * * * * * 

(j) APPLICATION OF TAXES.—


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(1) IN GENERAL.—The taxes imposed by this section shall 

apply to—

(A) transportation beginning during the period— (i) * * * 

(ii) ending on øSeptember 30, 2007¿ December 31, 

2007, and 

* * * * * * * 

PART II—PROPERTY 

* * * * * * * 

SEC. 4271. IMPOSITION OF TAX. 

(a) * * * 

* * * * * * * 

(d) APPLICATION OF TAX.—

(1) IN GENERAL.—The tax imposed by subsection (a) shall 

apply to—

(A) transportation beginning during the period—

(i) * * * 

(ii) ending on øSeptember 30, 2007¿ December 31, 

2007, and 

* * * * * * * 

Subtitle I—Trust Fund Code 

* * * * * * * 

CHAPTER 98—TRUST FUND CODE 

* * * * * * * 

Subchapter A—Establishment of Trust Funds 

* * * * * * * 

SEC. 9502. AIRPORT AND AIRWAY TRUST FUND. 

(a) * * * 

* * * * * * * 

(d) EXPENDITURES FROM AIRPORT AND AIRWAY TRUST FUND.—

(1) Amounts in the Airport and Airway Trust Fund shall be 

available, as provided by appropriation Acts, for making expenditures before øOctober 1, 2007¿ January 1, 2008, to meet 

those obligations of the United States—

(A) incurred under title I of the Airport and Airway Development Act of 1970 or of the Airport and Airway Development Act Amendments of 1976 or of the Aviation Safety 

and Noise Abatement Act of 1979 or under the Fiscal Year 

1981 Airport Development Authorization Act or the provisions of the Airport and Airway Improvement Act of 1982 

or the Airport and Airway Safety and Capacity Expansion 

Act of 1987 or the Federal Aviation Administration Research, Engineering, and Development Authorization Act 

of 1990 or the Aviation Safety and Capacity Expansion Act 


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of 1990 or the Airport and Airway Safety, Capacity, Noise 

Improvement, and Intermodal Transportation Act of 1992 

or the Airport Improvement Program Temporary Extension Act of 1994 or the Federal Aviation Administration 

Authorization Act of 1994 or the Federal Aviation Reauthorization Act of 1996 or the provisions of the Omnibus 

Consolidated and Emergency Supplemental Appropriations 

Act, 1999 providing for payments from the Airport and 

Airway Trust Fund or the Interim Federal Aviation Administration Authorization Act or section 6002 of the 1999 

Emergency Supplemental Appropriations Act, Public Law 

106-59, or the Wendell H. Ford Aviation Investment and 

Reform Act for the 21st Century or the Aviation and 

Transportation Security Act or the Vision 100—Century of 

Aviation Reauthorization Act or the Federal Aviation Administration Extension Act of 2007; 

* * * * * * * 

(f) LIMITATION ON TRANSFERS TO TRUST FUND.—

(1) * * * 

(2) Exception for prior obligations Paragraph (1) shall not 

apply to any expenditure to liquidate any contract entered into 

(or for any amount otherwise obligated) before øOctober 1, 

2007¿ January 1, 2008, in accordance with the provisions of 

this section. 

* * * * * * * 

Æ 


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