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The Airport and Airway Trust Fund

The Airport and Airway Trust Fund. Understanding the Basics. September 2016. Airport and Airway Trust Fund Brief History. The Airport and Airway Trust Fund (Aviation Trust Fund) was created by the Airport and Airway Development and Revenue Act of 1970 to finance aviation programs

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The Airport and Airway Trust Fund

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  1. The Airport and Airway Trust Fund Understanding the Basics September 2016

  2. Airport and Airway Trust Fund Brief History • The Airport and Airway Trust Fund (Aviation Trust Fund) was created by the Airport and Airway Development and Revenue Act of 1970 to finance aviation programs • Revenues are derived from aviation-related excise taxes on passengers, cargo, and fuel • Of $14.3B in 2015 • Taxes on domestic transportation of persons (69%) • Taxes on international passengers (23%) • Taxes on domestic cargo (3.5%) • Taxes on aviation fuel (4.5%) • Provides the majority of funding for the Federal Aviation Administration • 71.5% in FY 2013 • 80.1% in FY 2014 • 92.8% in FY 2015 • 87.8% in FY 2016 (rest is from the General Fund of the US Treasury)

  3. FAA Funding • The FAA has four main budget accounts: • Grants in Aid for Airports (AIP)100% of funding comes from the Aviation Trust Fund via Contract Authority Appropriations acts include obligation limitations that usually equal level of CAProvides for airport grants and related research and administrative costs • Facilities and Equipment (F&E)100% of funding comes from the Aviation Trust Fund via appropriationsProvides capital and equipment spending for the FAA • Research, Engineering and Development (RE&D)100% of funding comes from the Aviation Trust Fund via appropriationsProvides for applied research for aviation • OperationsFunding source is mixed between Aviation Trust Fund and general fund revenues; both via appropriationsCovers operating expenses of the FAA

  4. FAA Funding Structure and Flow(FY 2016 in millions of dollars) Facilities & Equipment Updated 8/15/16 based on 2016 enacted documented in FY17 President’s Budget submission Total FAA Enacted $16,281

  5. Trust Fund and FAA Budget History and Projections Actual Projected

  6. Trust Fund Excise Taxes Structure

  7. Airport and Airway Trust Fund FY 2015 Excise Tax Revenues (in millions of dollars) Total excise tax revenues $14,268

  8. ATTF Tax receipts FY 2000 and 2015 ($M) Note—Tax receipts on aviation fuel other than gas are jet fuel taxes from general aviation jet fuel purchases. A recent GAO study found that these AATF trust fund receipts do not reflect all of the fuel taxes that were paid. GAO estimated that AATF receipts shortfall is about $150 million to $200 million annually.

  9. FAA Accounts & AATF Funding 1 Includes sequestration

  10. Trust Fund Safeguards • FAA/OST/OMB monitor the Aviation Trust Fund with emphasis on maintaining a positive uncommitted balance • This conservative approach helps to ensure the solvency of the fund • Title 49 of U.S. Code includes a provision (Sec. 48114) titled “Airport and Airway Trust Fund Guarantee” • Total budget resources appropriated from the Aviation Trust Fund each year should be equal to 90% of the estimated revenue and interest credited to the trust fund for that fiscal year; and a truing up for an over- or under- estimate of revenues from prior fiscal years

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