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LEGISLATIVE BRIEFINGS

2008 IPAA STATE LEGISLATIVE PRIORITIES
APPROPRIATE ALL AVIATION TAXES/FEES IN NEWLY CREATED AVIATION TRUST FUND:
Beginning in FY 2008, revenues from aviation fuel taxes and aircraft registration fees will be deposited into the State Aviation Fund. The legislation states that 50% be deposited into the State Aviation Fund in FY 2008 and then 100% will be deposited in FY 2009. IPAA thanks legislators for this important legislation passed in the 2006 session and encourages full appropriation of available funds for airport improvement programs. In addition, IPAA encourages the legislature create legislation which also directs the deposit of use taxes collected from aircraft sales into the State Aviation Fund for reinvestment into Iowa’s air transportation system.

VERTICAL INFRASTRUCTURE FUNDING:
Increase Commercial Service Vertical Infrastructure funding to $2.5M, General Aviation Vertical Infrastructure funding to $1.5M for landside development.

AIRPORT PROPERTY TAXATION:
Public property is exempt from property taxes. Public-owned, public use airports are public facilities. IPAA requests that there be legislative clarification that airport property used for agriculture is not subject to property taxation. The main purpose of such property is to maintain runway protection zones for the safety of aviation activities.

EMINENT DOMAIN:
Public-owned airports are important public facilities. Public airports support air transportation that benefits Iowa’s economy and quality of life. IPAA supports the use of eminent domain when necessary for publicly-owned airport projects that play a role in maintaining and increasing safety and in meeting the growing air transportation demands.
  

2008 FEDERAL LEGISLATIVE PRIORITIES

REAUTHORIZATION OF FEDERAL AVIATION PROGRAMS:
We encourage a 5 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 providing service to all Americans.

A major component of the federal aviation program is the Airport Improvement Program (AIP), which provides funding for airport rehabilitation and development projects. We encourage the reauthorization of the AIP program to provide $3.9 billion in 2008 with $100 million increases every year throughout the reauthorization.

We support maintaining primary and non-primary entitlements within the AIP program with State apportionment to provide a predictable funding stream to commercial and general aviation airports through the nation and Iowa.

We support continued funding of the Contract Tower Program.

Of utmost importance is the extension of full year contracting authority for the FAA to release full year entitlement funds as opposed to the current 9 month extension of contracting authority which has resulted in funding shortfalls for projects that have already been approved. In most instances under the 9 month extension the local match components have dramatically increased leaving airports and cities with tough decisions to make regarding delay, downscaling, or cancellation of badly needed airport improvement projects.

USER FEES:
We believe the current funding system for the Airport and Airway Trust Fund is fair and a stable source of revenue. We strongly oppose any effort to impose additional user fees on general aviation. We would support the intent of Senate Bill S2345 to continue the current tax based funding structure, with a 10 year extension of this mechanism.

We support 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.

We would also support a 30% General fund investment for FAA funding, since all Americans benefit by the national air transportation system, all Americans should have a financial stake in it, the AIP trust fund was not originally designed by Congress to fund FAA salaries and operations. It was designed to invest in airport infrastructure development and maintenance, and a 30% General Fund contribution is highly appropriate.

ESSENTIAL AIR SERVICE:
We support 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.

We encourage Congress to fully fund the EAS program at a minimum of $127 million annually. We also strongly oppose any local match requirement.

FEDERAL TAXATION ON AVIATION JET FUEL:
IPAA strongly opposes the current method of taxing 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 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 evidence to support those claims.
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.
©2006 Iowa Public Airports Association