Whether the Airport and Airway Trust Fund was created solely to finance aviation infrastructure, File: B-281779, Date: February 12, 1999

B-281779 Feb 12, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST The Airport and Airway Trust Fund was not created solely to finance aviation infrastructure. When the trust fund was authorized in 1970. The balance of funds (after airport development) was to be allocated for certain administrative expenses. When the funding of Federal Aviation Administration (FAA) operation and maintenance costs from the trust fund was prohibited. Tables were included tracing amendments to two important sections from the 1970 Act on the uses of the Trust Fund from 1970-1998. Chairman: This is in response to your December 10. You specifically questioned whether or not the trust fund was created solely to finance aviation "infrastructure. How "infrastructure" was defined during the congressional deliberations. View Decision Subject: Whether the Airport and Airway Trust Fund was created solely to finance aviation infrastructure File: B-281779 Date: February 12, 1999 DIGEST The Honorable Frank R. Wolf Chairman, Subcommittee on Transportation and Related Agencies Committee on Appropriations House of Representatives Dear Mr. Chairman: This is in response to your December 10, 1998, letter concerning Congress' intent in establishing the Airport and Airway Trust Fund (trust fund) in 1970. You specifically questioned whether or not the trust fund was created solely to finance aviation "infrastructure," and if so, how "infrastructure" was defined during the congressional deliberations. You also asked us to review the amendments to the law creating the trust fund. After examining the Airport and Airway Development and Revenue Acts of 1970 and the accompanying legislative history, we conclude that in 1970 the trust fund was not created solely to finance aviation infrastructure. When the trust fund was authorized in 1970, the balance of funds (after airport development) was to be allocated for certain administrative expenses, for research and development activities, and for the maintenance and operation of air navigation facilities. The term "infrastructure" does not appear in the statute or in the legislative history. In our review of the amendments to the law creating the trust fund, we found that Congress has continuously authorized the trust fund to finance non-infrastructure expenses such as research and development costs. With the exception of a four-year period during fiscal years 1973-1976, when the funding of Federal Aviation Administration (FAA) operation and maintenance costs from the trust fund was prohibited, and fiscal year 1984, when the appropriation act specified use of general fund monies, /1/ Congress has also authorized the trust fund to finance FAA operation and maintenance costs. In 1976, Congress capped the amount available for operation and maintenance costs and added a penalty clause. The cap and penalty clause were adjusted several times, and the penalty clause was eliminated in 1990. BACKGROUND In 1970 Congress enacted the Airport and Airway Development and Revenue Acts to deal with the inadequacy of the nation's airport and airway system to meet the current and projected growth in aviation at the time. /2/ The 1970 act is comprised of two titles: title I is the Airport and Airway Development Act of 1970 and title II is the Airport and Airway Revenue Act of 1970. We will refer to these two laws simply as the 1970 act. Title I authorized federal funds, at least $250 million a year for 5 years, for the acquisition, establishment and improvement of air navigational facilities and another $280 million a year for 5 years for airport development. Title II established a trust fund comprised of aviation-related excise taxes to finance these activities. The aviation excise taxes included an increase in the gasoline tax on general aviation, an increase in the passenger ticket tax for domestic flights, a new tax on international commercial passengers, a new tax on air freight waybills, and a new annual aircraft registration tax. DISCUSSION To answer your question regarding whether the trust fund was created solely to finance aviation infrastructure, we looked first to the statute for some guidance on the word "infrastructure." However, "infrastructure" is not defined or used in the act and is not discussed in the accompanying legislative history. /3/ It is also not a term found in the federal accounting standards glossary, or in budget definitions. Webster's defines infrastructure as "the underlying foundation or basic framework (as of a system or organization)." /4/ When we use this definition and examine the 1970 act in terms of what would be considered "basic framework" or "underlying foundation," we find that sections 14a, 14b, and 14c authorized airport development, which was defined as any work involved in constructing, improving, or repairing a public airport.