2010 IPAA State Legislative Priorities
Airport Infrastructure Funding -
At a minimum, increase funding for the highly successful Commercial Service Vertical Infrastructure program to at least $1.75M (current appropriation of $1.5M) and increase General Aviation Vertical Infrastructure program funding to at least $1.0M (current appropriation of $750,000) for facility improvement projects at public-owned, public-use airports in Iowa.
Aviation Tax Policy -
Iowa airports and aviation industry have prudently requested sales and use tax policy changes to remain competitive with our neighboring states. The repeal or capping of any aviation sales and use tax exemption would severely cripple the state's airports and aviation industry.
Airline Service Retention -
Iowa's economy depends on regular, dependable and affordable commercial air service. Keeping service is essential to the economic recovery of all corners of the state. The IPAA supports the establishment of an Air Service Retention Interim Committee made up of a representative from the Department of Transportation's Office of Aviation, a representative from the Department of
Economic Development, a representative from each of the state's commercial service airports, two representatives from commercial airlines serving the state and a member of the majority and minority parties in the House and Senate. The Committee shall develop a plan for the retention of current passenger airline services.
Effective Control of Wildlife Aviation Hazards -
Deer and other animals continue to be hazards to aviation in our state. Pilots and airport managers report an alarming increase in the number of runway incursions by wild animals. Public airports should be allowed to engage in timely and appropriate depredation efforts for their facilities.
Tower and Obstruction Notice -
Effective intergovernmental communications are essential to serving the best interests of all Iowans. In this spirit of cooperation the IPAA believes that city and county officials must consult with airport management or sponsor prior to the approval of any new structure, with a height exceeding 200 feet, within a 10-mile radius of a public airport.
2010 IPAA Federal Legislative Priorities
IPAA supports the following key programs:
Reauthorization of Federal Aviation Programs:
IPAA encourages a five year reauthorization of federal aviation programs that sets spending levels for the Airport Improvement Program (AIP), Essential Air Service, Small Community Development Grants, and other programs that develop and maintain facilities at airports around the country.
A major component of the federal aviation program is the Airport Improvement Program (AIP), which provides funding for airport rehabilitation and development projects. IPAA encourages the reauthorization of the AIP program to provide $3.9 billion in 2009 with $100 million increases every year throughout the reauthorization.
In Iowa, 69 general aviation airports and eight commercial service airports are eligible for funding from the AIP program. Vision 100, which provided AIP funding for the years 2004-2007, has worked well for Iowa airports and IPAA would like to see the basic components of that program remain in place.
IPAA supports maintaining primary and non-primary entitlements within the AIP program to provide a predictable funding stream to commercial and general aviation airports throughout the nation and Iowa.
Fee Structure:
IPAA supports the current system of ticket taxes, fuel taxes, and cargo taxes as a means of providing a revenue stream to the aviation trust fund. If adjustments to the revenue stream are required, they should be made within the existing structure.
Imposing additional user fees would unnecessarily create additional administrative bureaucracy, hurt general aviation activity and safety, and place an unfair burden on general aviation to fund an air traffic control system designed to accommodate hub and spoke airline operations.
Essential Air Service:
IPAA supports the Essential Air Service (EAS) program administered by the U.S. Department of Transportation. The EAS program provides subsidies to continue air service in smaller communities across the nation that would have been negatively impacted by airline deregulation in 1978.
The EAS program has worked well for Iowa and has been responsible for maintaining air service in the Burlington, Fort Dodge, and Mason City regions.
IPAA encourages Congress to fully fund the EAS program at a minimum of $127 million annually. IPAA also strongly opposes any local match requirement.
AMT Provisions
IPAA supports the permanent elimination of the Alternative Minimum Tax (AMT) penalty on all airport revenue bonds. We seek an FAA Reauthorization bill which would allow airports to refund a number of these bonds, as well as a “look-back” provision allowing airports to refund AMT bonds.
This action will prove tremendously successful in lowering capital costs for some airports; IPAA supports a permanent change and an indefinite look-back provision which will result in significant savings to many airports, large and small. Unless Congressional action is taken, IPAA forecasts a significant decrease in future demand for airport bonds to the point where sales of any significant AMT bonds will not be possible, and airports will be forced to postpone projects or issue taxable bonds at much higher cost.
If the AMT penalty is eliminated, airports will be able to undertake additional capital investment projects, maintain lower costs to the traveling public, and most importantly, create and keep jobs by building safer and more efficient airports.
PAA is strongly opposed to:
Diversion of Federal Taxes on Aviation Jet Fuel
IPAA strongly opposes the convoluted tax process of aviation jet fuel. Fuel taxes from the sale of jet fuel are currently taxed at diesel fuel rates and are credited to the Highway Trust Fund. In order for the taxes to be properly credited to the Aviation Trust Fund, the fuel vendor or buyer must apply with the IRS for a refund for the difference between the diesel fuel tax (24.4 CPG) and the jet fuel tax (21.9 CPG).
The process is confusing and places the burden on the fuel vendor or buyer to get the fuel taxes credited to the proper trust fund. In addition, the aviation community seriously questions if fuel tax fraud involving jet fuel and the trucking industry is actually occurring and has seen no statistical evidence to support those claims.
Aircraft Rescue and Fire Fighting Modifications
Proposed legislation could force airports to comply with excessive (and unnecessary) National Fire Protection Association (NFPA) standards. IPAA has been urging lawmakers to resist the Aircraft Rescue and Fire Fighting (ARFF) proposal because the plan would dramatically increase costs, staffing, training, infrastructure and equipment requirements for airports of all sizes and jeopardize commercial air service to small communities like Dubuque, Cedar Rapids, Fort Dodge, and Mason City. There is no justification in terms of safety to support the NFPA position.
User Fees
We believe user fees will damage the fragile general aviation environment. Jet A or aviation fuel already exceeds $4.00 per gallon and in some locations $6.00 per gallon. Operating costs for flight training, medivac, agricultural, small package shipping, and business aircraft uses has skyrocketed over the past seven years. Assessing fees for use of the air traffic control system will end this form of aviation. The effects of such fees in Europe and Canada have devastated private and corporate aviation.
Restructuring Fee Participation levels
There have been a number of proposals to eliminate the $.043 per gallon tax on jet fuel for airlines and force massive increases in General Aviation fuel taxes to cover the difference. This makes no sense. This tax is the only fee paid by the air carriers into the airport and airway trust fund. Financing the FAA, Air Traffic Control services, airport improvements, and terminal projects on GA alone will kill that industry while allowing the primary users of those facilities to have a free ride. Many aircraft operators have voiced concern to us about the impact of fuel tax increases. We believe that their concerns are well founded. A 200-300% tax increase has never encouraged economic growth in any business sector.
For more information on these legislative priorities, please contact IPAA lobbyist Jim Obradovich by phone at 515-554-1072 or via e-mail at jimo@dwx.com.
