On Tuesday, May 30, 2000, AOPA President Phil Boyer received four pages of "Post-hearing Questions Submitted by Senator John McCain." A subsequent check revealed the only other nominee to the Management Advisory Council to receive additional questions was Debbie Branson, a trial lawyer from Dallas, Texas.
As requested, Phil Boyer responded to the questions with 12 pages of answers at 5 p.m. on Friday, June 9, 2000. The following Tuesday morning, Chairman McCain circulated a draft agenda to the membership of the Commerce Committee indicating Phil Boyer and Debbie Branson's names would not be sent to the full Senate for confirmation.
Excerpts of Phil Boyer's responses to some of Senator McCain's questions are provided below:
In your press release following the confirmation hearing for the Management Advisory Council nominations, you again misrepresented my position. Not once did you mention that my proposal is to impose user fees merely on corporate aircraft use of the air traffic control system, not its use by the entire general aviation population. Isn't it unfair and misleading at best to characterize the proposal as "general aviation user fees?" What will you do to correct this misrepresentation in your contacts with AOPA members?
I regret the Chairman feels as though I have misrepresented his position. Our press release simply and briefly reiterated my position regarding user fees. The Chairman is well aware that AOPA primarily represents piston-powered, propeller-driven aircraft and 25 percent of the piston powered fleet, comprising almost 54,000 aircraft, are classified by the official FAA registry as corporate aircraft. As I attempted to explain at the hearing, those who own corporate jets are only a small-subset of the AOPA membership, and this group of companies, flight departments, and manufacturers are the core of completely different associations in Washington, D.C. However, corporate aviation is part of the general aviation community, and I will never play a part in any strategy designed to "divide and conquer" our community. AOPA opposes all aviation user fees, including general aviation user fees.
In your remarks at the nomination hearing, you stated that "...at the present time paying through the fuel tax is the best method for paying for access for general aviation aircraft." Given that fees for other sectors of aviation have gone up recently—including those charged the traveling public, which will pay for a hike in the passenger facility charge—do you believe that fuel taxes should be increased for corporate aircraft to reflect more accurately the corporate jets' use of the air traffic control system?
Congress, under heavy protest from the air transport industry, chose to increase airline taxes in 1997 despite warnings that such an increase, coupled with increased passenger demand, would once again trigger unspent balances in the aviation trust fund. To suggest other segments of aviation should therefore also pay more is proving "two wrongs make a right."
Even with passage of AIR-21 there is still over a $9.4 billion balance in the aviation trust fund. Those taxes were collected to run and improve the nation's air transportation system, and until they are spent, I do not feel there is any justification for increasing any excise taxes, including those paid by segments of general aviation. As you know, the passenger facility charge (PFC) allows airports with commercial traffic to raise funds for targeted improvements. PFC revenues are not deposited into the trust fund, and the airports taking advantage of those fees and the associated projects rarely, if ever, benefit general aviation. Similar to the tax increase of 1997, I do not think an increase in PFCs should be linked with the general aviation tax burden. In this regard AOPA, under my leadership, never felt PFCs were our issue. Therefore, we have never supported, commented on, been against legislation relative to their establishment, or increases.
In your remarks at the nomination hearing, you stated that we came to agreement when an FAA reform bill approved by the Commerce Committee several years ago exempted recreational aviation (in contrast to corporate aviation) from the payment of proposed air traffic control user fees. If that is the case, I would appreciate your restating this position for the record, specifically your support for legislation exempting recreational aircraft from such user fees.
AOPA never came to agreement with the authors of S.1239 on the subject of user fees. Although I expressed my concerns to the committee about the user fee approach throughout the legislative process, on November 8, 1995, in a letter to Commerce Committee Chairman Larry Pressler I stated:
"As the Senate Commerce Committee prepares to mark up legislation to reform the Federal Aviation Administration we want to reemphasize our opposition to the substantial new user fees that would be imposed on the aviation industry under the reform legislation by Senators McCain, Ford, and Hollings.... No segment of the aviation industry is exempt from the new training, licensing, and regulatory fees imposed under the bill, and this is the area that will have the greatest impact on our members.... In fairness to the sponsors of the bill, the latest version of S.1239 offers an exemption from ATC user fees for "sport and recreation aircraft." But since 60 percent or more of our members use general aviation aircraft for business purposes some or all of the time, this exemption apparently would not apply to them."
There is no official FAA or DOT designation for "sport and recreation aircraft," and the fear has been without using legal and technical designators, the legislation could be deemed to apply to the majority of general aviation operations. I learned through experience the importance of terminology and definitions in legislation. Just a few years ago, AOPA was assured the "foreign overflight fee" would not be levied on general aviation. However, when the FAA began to implement the fee, they found they were unable to exempt general aviation because of the way the provision was drafted.
The legislation that established the Management Advisory Council addressed certain duties specifically, such as reviewing the FAA rulemaking cost-benefit analysis and reviewing the agency's process for issuing advisory circulars. How do you expect the council will decide what other issues to comment on, among the issues that fall within the category of management policy, spending, funding, and regulatory matters before the administrator?
Administrator Garvey has achieved a great deal of success at FAA through her use of consensus building with the aviation users. I have spent significant time at meetings such as the RTCA, internal FAA meetings, and industry coalitions working through a variety of options and specific needs with a membership similar to the MAC to reach meaningful compromise on critical issues. I am confident Administrator Garvey will employ a similar consensus building process that should serve the MAC well.
Currently, airlines pay for air traffic control services through the ticket and fuel taxes. Many other countries have transitioned to user fees. What are your views on user fees? How quickly can the United States move toward user fees for domestic air traffic control services? How should general aviation and smaller airlines be handled in such a regime?
The MAC and the air traffic control subcommittee will debate this issue, so all members must keep an open mind. However, for years, the organization I lead has opposed user fees as a primary revenue source for the FAA, even if general aviation were completely exempt from the fees. Under a user fee system, the revenues collected would go directly to the FAA, diminishing the participation of Congress in oversight of the FAA's budget. I feel that congressional oversight is vital in the successful operation of the FAA and should be maximized, not reduced through user fees. Also, user fee collection itself would add a huge new cost burden to the FAA because setting up a system of tracking and collecting fees for each service provided by the FAA would be enormously expensive. At our request, the House treasury appropriations subcommittee requested detailed information from the Internal Revenue Service (IRS) as to the exact costs of administering the current aviation excise tax system. I think the information provided by IRS is significant and cautionary in terms of establishing a fee-based collection system. As you may know, Internal Revenue Code sections 4261 and 4271 impose the taxes on air transportation. In FY96, less than 24 full time equivalents (employees), costing the Internal Revenue Service approximately $1.7 million, certified collections of aviation transportation taxes. That's over $5.5 billion raised with $1.7 million!
I think any new funding system that replaces the excise taxes should not exceed this $1.7 million collection cost. However, I can say with confidence that user fees wouldn't come close. In fact, when the FAA first tried to implement the $75 million in user fees on foreign aircraft that fly over U.S-controlled territory, the agency said it would require $1 million a year alone to collect. Imagine translating that $75 million to $8 billion or more—the amount needed for a 100-percent user fee-funded system, and you get $160 million in collection costs, which is 100 times the cost of collecting the excise taxes. In Europe, simple user fees based on weight and mileage are charged on en route traffic. Yet even these relatively easy-to-calculate fees can cause six-month delays in billing.
Additionally, the General Accounting Office reviewed the entire user fee issue several years ago (GAO/AIMD-98-11) and concluded: "Increased reliance on fee collections as an agency's primary source of funding has implications for federal budgeting and management that may call for a reexamination of the basic principles as well as the actual practices underlying the treatment of fees. Offsetting can inhibit congressional tradeoffs based on the relative merits of programs and can obscure the amount of spending for fee reliant agencies."
If confirmed, is there a particular FAA function or activity that you will focus your attention on?
While there are a myriad of issues to be addressed by the MAC, the one overriding issue no one can lose focus on is safety.