National Legislative Update: Approved Highway Trust Fund Fix, House Approves Aviation Bill

Senate Finance Committee Approves Highway Trust Fund Fix

The Senate Finance committee on September 21 unanimously approved “The American Infrastructure Investment and Improvement Act,” legislation that will generate new revenues for the Highway Trust Fund (HTF) Highway Account to meet SAFETEA-LU investment commitments. The measure would also raise revenues for the Airport and Airways Trust Fund to support increased federal aviation program investment. The Bush Administration and the Congressional Budget Office both project existing Highway Account revenues will fall short of SAFETEA-LU highway investment commitments by $4.3 billion in FY 2009. Left unaddressed, Highway Account revenues could only support a FY 2009 federal highway program of $27 billion—36 percent below the SAFETEA-LU guaranteed amount. The HTF provisions approved by the Finance Committee, however, would raise approximately $5.7 billion in new Highway Account revenues—more than adequate to maintain HTF solvency through FY 2009. Full Senate action on the HTF proposal is expected later this year during consideration of legislation to reauthorize the federal aviation programs.

House Approves Aviation Bill Including Aviation Fuel Tax Increase

The House of Representatives on September 20 approved a four-year reauthorization of the federal aviation programs that would boost Airport Improvement Program (AIP) funding by $100 million annual increments from $3.8 billion in FY 2008 to $4.1 billion in FY 2011. The measure, H.R. 2881, would also increase the passenger facility charge (PFC) cap from $4.50 to $7.00 generating approximately $1 billion per year for airport capital projects. Bush Administration officials on September 19 declared they would recommend President Bush veto the bill in its current form, citing concerns that the Administration’s proposed federal aviation “user fees” financing plan was not adopted by Congress. The Administration also called the measure’s AIP investment levels “excessive and unjustified” and further noted its $6.00 PFC cap recommendation was superseded by the House. The 267 to 151 vote fell short of the two-thirds majority required to overturn a veto.