Evolution of a New National Airport Policy

The operation of airports changed in many other ways. The physical size of new airports serving modern jet airline traffic, the noise consider­ations inherent in airport operations, the large facilities necessary to accommodate the millions of passengers passing through the airports, and the newfound safety concerns resulting from the criminal and social developments of the 1960s called for a new and aggressive national airport policy.

Under the Federal Airport Act of 1946, the Federal-Aid Airport Program (FAAP) had been the first peacetime program of financial aid aimed exclusively at promoting development of the nation’s civil airports. It endured for 24 years, but the growing demands of modern commercial aviation rendered that program obsolete.

In 1970, Congress passed the Airport and Airway Development Act in order to address the obvious shortcomings of the nation’s airports and the airway system. The policy statement for this law recognized the inadequacy of the nation’s airport and airway system, and commit­ted the government to its substantial expansion and improvement in order to meet the demands of interstate commerce, the national defense, and the postal service. Congress thereby created the Airport and Airway Trust Fund, which receives revenues from excise taxes paid by users of the National Air Space. Excise taxes are placed on domestic airline passenger tickets, domestic air­line flight segments, international arrivals and departures, air cargo waybills, and aviation fuels used by general aviation. See Table 23-1.

In 1982, after deregulation, Congress amended the existing statute with the Airport and Airway Development Act of 1982, reestablish­ing the FAA’s airport grants program (which had been inactive since 1981) and renaming the Trust Fund program the Airport Improvement Program (AIP). The Trust Fund was originally admin­istered by the CAA in 1946, and sequentially thereafter by the Federal Aviation Agency and then the Federal Aviation Administration.

This Act also amended the Federal Aviation Act of 1958 by requiring, for the first time, that operators of airports serving certificated air car­riers secure “Airport Operating Certificates” by application to the FAA, demonstrating the abil­ity to conduct safe and properly equipped airport operations. These requirements are set forth in Part 139 of the Federal Aviation Regulations.

Endnotes

1. Wilson, John R. M., Turbulence Aloft, 34-35.

2. Fortune magazine, August 1946, 78.

3. Denver International Airport opened in 1995.

4. FAR Part 107, effective March 18, 1972.

PASSENGERS

Domestic Passenger Ticket Tax

Ad valorem tax

7.5% of ticket price (10/1/99 through 9/30/2007)

Domestic Flight

"Domestic Segment” =

Rate is indexed by the Consumer Price Index starting 1/1/02

Segment Tax

a flight leg consisting

$3.00 per passenger per segment during calendar year (CY) 2003

of one takeoff and one

$3.10 per passenger per segment during CY2004.

landing by a flight

$3.20 per passenger per segment during CY2005. $3.30 per passenger per segment during CY2006. $3.40 per passenger per segment during CY2007.

Passenger Ticket

Assessed on tickets on

7.5% of ticket price (same as passenger ticket tax)

Tax for Rural

flights that begin/end

Flight segment fee does not apply.

Airports

at a rural airport.

Rural airport: <100K enplanements during 2nd preceding CY, and either: 1) not located within 75 miles of another airport with 100K+ enplanements, 2) is receiving essential air service subsidies, or 3) is not connected by paved roads to another airport.

International Arrival &

Head tax assessed on

Rate is indexed by the Consumer Price Index starting 1/1/99

Departure Tax

pax arriving or departing

Rate during CY2003 = $13.40

for foreign destinations

Rate during CY2004 = $13.70

(& U. S. territories) that

Rate during CY2005 = $14.10

are not subject to pax

Rate during CY2006 = $14.50

ticket tax.

Rate during CY2007 = $15.10

Flights between

Rate is indexed by the Consumer Price Index starting 1/1/99

continental U. S. and

$6.70 international facilities tax + applicable domestic tax rate (during CY03)

Alaska or Flawaii

$6.90 international facilities tax + applicable domestic tax rate (during CY04) $7.00 international facilities tax + applicable domestic tax rate (during CY05) $7.30 international facilities tax + applicable domestic tax rate (during CY06) $7.50 international facilities tax + applicable domestic tax rate (during CY07)

Frequent Flyer Tax

Ad valorem tax assessed on mileage awards (e. g., credit cards).

7.5% of value of miles

FREIGHT/MAIL

Domestic Cargo/Mail

6.25% of amount paid for the transportation of property by air

Aviation Fuel

General Aviation

Aviation gasoline: $0.193/gallon

Fuel Tax

Jet fuel: $0.218/gallon

Commercial Fuel Tax

$0.043/gallon

TABLE 23-1 Aviation excise tax structure (Taxpayer Relief Act of 1997, Public Law 105-35).