General aviation late last week won a major battle, but not yet the entire war, against user fees. The House of Representatives last Thursday approved H.R.2881, the FAA Reauthorization Act of 2007, and the next morning the Senate Finance Committee drastically modified the tax provisions in its companion bill, S.1300.

The House legislation would raise the tax on jet-A from 21.8 to 35.9 cents a gallon and the tax on avgas from 19.3 to 24.1 cents a gallon. The airline taxes–including 7.5 percent on tickets and a 4.3-cents-per-gallon tax on jet fuel–will remain at existing levels. Money from the tax hikes on GA fuel would be earmarked exclusively for air traffic control modernization.

Likewise, the Finance Committee bill would raise the general aviation jet fuel tax from 21.8 cents per gallon to 36 cents per gallon. However, S.1300 still contains a $25 per flight user fee for turbine IFR operations, a provision spearheaded by Senators Jay Rockefeller (D-W.Va.) and Trent Lott (R-Miss.). The Bush Administration and the airlines support this user fee, while general aviation does not.

AOPA president Phil Boyer praised Finance Committee chairman Max Baucus (D-Mont.) and ranking member Sen. Chuck Grassley (R-Iowa), saying their “financing bill would provide all the money needed for the aviation system through a combination of aviation taxes and general treasury funds. And the amounts provided would eliminate the need for the $25 user fee the Commerce Committee passed in May.”

AOPA and other GA trade groups are lobbying to get the user-fee language removed from the bill, most likely by an amendment to strike the fee. Considering that a similar amendment came within one vote of succeeding in the Commerce Committee, such an amendment stands a good chance of succeeding, AOPA said.

Since H.R.2881 passed in the House (by a vote of 267 to 151), all eyes are now on the Senate. The Senate majority leader, Harry Reid (D-Nev.), will schedule a time for S.1300 to be debated on the floor, probably in mid-October at the earliest.
Once the Senate approves S.1300, House and Senate leaders will appoint members to a conference committee, which will draft a compromise bill. AOPA said that, for the most part, a compromise agreement might not be too difficult.

However, two provisions in H.R.2881 could cause some friction. Namely, the House bill would reopen contract negotiations with air traffic controllers and change which unions could organize FedEx truck drivers. S.1300 contains neither provision, and President Bush said he would veto any FAA reauthorization containing this language.

The president has also threatened to veto the final FAA funding bill if doesn’t have user fees. But AOPA said there is practically no support for the administration’s funding proposals within Congress, so it seems unlikely that the Bush Administration would shut down the air transportation system over the issue.

Yesterday the House passed an extension to the current FAA authorization bill, and the Senate is expected to follow suit.