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"Rockefeller-Lott bill seeks to lighten burden on airlines"

Wednesday, May 2, 2007

Rockefeller-Lott bill seeks to lighten burden on airlines  
By Ian Swanson  

Sens. Jay Rockefeller (D-W.Va.) and Trent Lott (R-Miss.) have crafted a bill
that would dramatically change the system for funding the air traffic
control system by shifting more of the burden from commercial airlines to
general aviation.

The bill, seeking to reauthorize the Federal Aviation Administration (FAA),
will be introduced sometime this week, according to an aide to Rockefeller.
Industry sources said it will be opposed by general-aviation groups, which
represent corporate jets and operators of smaller planes run on piston-fired
and propeller engines. 

Sources familiar with the measure being prepared by staff on a Senate
aviation subcommittee chaired by Rockefeller said it would phase out a 4.3
cent per gallon fuel tax paid by commercial airlines. One industry source
estimated this could save airlines about $500 million annually. 

It would also raise the fuel tax paid by operators of smaller turbine-engine
planes from 21 cents per gallon to 49 cents per gallon, and would introduce
a new user fee for turbine-powered and turbine-propped aircraft that use the
air traffic control system.

Unlike a proposal backed by the FAA, planes that run on piston-fired engines
or propellers would not be affected by the new fees or taxes, sources said.
The newer bill would also not replace a ticket tax paid by passengers on
commercial airlines with the new user fees and taxes, as the FAA-backed bill
would have done. Groups representing general aviation were livid with the
FAA-backed bill.

Not imposing the user fees and increased fuel taxes on propeller and
piston-driven planes would provide cover against arguments that the tax
would unfairly hit small planes used for farming and medical care in rural
communities or for flight lessons.

Still, one industry source complained that the Senate bill appears to be a
"huge giveaway" to commercial airlines, and that it would provide those
airlines a tax break at the expense of smaller planes. This source also said
general-aviation groups are wary of user fees since those could eventually
be imposed on all users of the air traffic control system, and not just
jets, and that smaller turbine-powered planes provide necessary services to
rural communities.

The source also said all of general aviation would oppose the increased fuel
taxes and user fees. 

The Senate bill could provoke a fight with the House, which has been more
opposed to any user fees. The Senate, filled with members representing
states with major-hub airports, is traditionally friendlier to commercial

The House, by contrast, includes many members who fly their own planes and
who serve districts where the main airport is served by general aviation. 

The changes are intended to shift some of the burden of paying for a
modernized air traffic control system from commercial airlines to corporate
jets, a fast-growing segment of the aviation industry. Groups representing
commercial airlines and the FAA itself charge that corporate jets are using
the air traffic control system more, but not paying their fair share. 

But groups representing general aviation argue heavy fuel taxes and user
fees would ground planes and devastate small businesses and communities that
do not sit on major hubs serviced by airlines. They are joined by some
groups representing rural America, including the National Farmers Union. 

The Senate bills sets up a heavy lobbying fight between two well-armed
interest groups that have been generous to members with oversight on

So far in the 2007-08 cycle, Rockefeller has reported $14,000 from political
action committees (PACs) connected to commercial airlines and their trade
association, according to PoliticalMoneyLine.com. He has also received
thousands of dollars from PACs with groups opposed to the FAA's proposal,
including $3,000 from the Aircraft Owners and Pilots Association (AOPA) PAC
and $2,000 from the National Air Transportation Association PAC.

Lott has not reported any contributions from either side so far in this
cycle, but received about $13,000 from commercial airline PACs in the
2005-06 cycle, as well as $5,000 from AOPA, according to PoliticalMoneyLine.

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