Tax-cut legislation proposed by President Bush was passed by Congress at the end of May and was subsequently signed into law by the President. The bill gave the Administration about half of what was desired–$350 billion in cuts versus $726 billion. Whether the legislation will give a boost to the economy remains to be seen.
As a stimulant for aircraft sales, the tax bill contains a provision for an increase in the bonus depreciation percentage on new aircraft from 30 to 50 percent. Specifically, the 50-percent bonus depreciation will be available for new property (the purchaser must be the first to use the asset) acquired after May 5, 2003, and before Jan. 1, 2005. No binding contract should have been in existence before May 6 and for FAR Part 91 operators the property must be placed into service before Jan. 1, 2005.
• The on-again, off-again deal for the Department of Defense to lease 100 Boeing 767s to be converted to KC-767 tankers for Air Force use appeared to be on-again in late May. Earlier this year it had been reported that Pentagon officials meeting as DOD’s “leasing panel” had vetoed the deal. Congress authorized $16 billion for the program last fall as an add-on to DOD funding to replace 100 of the 544 KC-135 tankers still in use but some 40 years old. The 767s would come into service in 2006 and, after six years of leasing, the government would buy the 767s for $4 billion. Supposedly, the lease arrangement would allow Boeing to keep its assembly lines open and save thousands of jobs. The only other competitor for the program was the European consortium Airbus Industrie, and proponent legislators took a dim view of sending this business abroad.
In any case, approval still must come from congressional oversight committees. Following the DOD announcement, Sen. John McCain (R-Ariz.), issued a two-page statement in which he called the deal “a textbook case of bad procurement policy and favoritism to a single defense contractor.” McCain cited a General Accounting Office analysis that showed that modernizing 127 KC-135 tankers would cost only $3.6 billion and pointed out that the current tanker fleet has the highest reliability rate in the Air Force inventory and does not need to be replaced.
• Eleven Congressmen signed a letter to the House Committee on Transportation and Infrastructure indicating their support for language in the FAA Reauthorization bill that authorizes low-level communications and weather services in the Gulf of Mexico in support of the offshore helicopter industry. Cosigners indicated that required communications, surveillance and weather equipment needed to support safe and efficient flight, as well as industry growth, currently does not exist in the region.
• The House Committee on Transportation and Infrastructure approved H.R.2115, the Flight 100-Century of Aviation Reauthorization Act, introduced by Rep. Don Young (R-Alaska). Provisions of the bill would encourage the reopening of Ronald Reagan Washington National Airport to general aviation operations, require the FAA to report back to Congress within 30 days as to why the Washington Air Defense Identification Zone (ADIZ) exists and, should it be continued, every 60 days thereafter. Also included are provisions that if the ADIZ remains in effect, the FAA must implement changes that would improve the efficiency and minimize the operational effect of the ADIZ; allow pilots to appeal the revocation of their pilot licenses for security matters; create a small-business ombudsman within the FAA; and, as an afterthought to the closing of Chicago Meigs Field, impose a penalty of $10,000 for each day that the airport remains closed without having given the required notification. Additionally, the bill would allow on-demand air charter operators using turbine or multi-engine piston aircraft with 10 or fewer seats to sell individual seats at a negotiated price on flights between non-commercial/non-hub airports and other airports.
• The bill would also preserve a $1 million minimum Airport Improvement Program entitlement for airports that have dropped below 10,000 annual passengers, limit the amount of AIP money that can be spent on modifying airport terminals for explosive-detection equipment and prohibit the FAA from requiring an airport to shorten its runway to comply with the FAA's requirement on safety overrun areas.
• H.R.2144, introduced by Rep. Don Young (R-Alaska), chairman of the House Committee on Transportation and Infrastructure, would make technical corrections and improvements relating to aviation security. A jurisdictional dispute arose when members of the newly created Select Committee on Homeland Security suggested that it and not the House Committee on Transportation and Infrastructure consider the bill. Resolution was expected shortly.
Sec. 202 of the bill states, “No later than 30 days after the enactment of this Act, the Under Secretary for Border and Transportation Security of the Department of Homeland Security shall issue regulations allowing nonscheduled air carriers to operate at Ronald Reagan Washington National Airport under a security program approved by the Under Secretary.” NBAA is hoping to expand the requirement to include qualified general aviation aircraft operators who use a TSA-approved security program.
The bill would also repeal the prohibition on banner towing operations around sporting events and require banner towers to complete background checks before operating around those venues; modify rules governing U.S. flight schools that provide training to foreign students who have undergone background checks; provide pilots the ability to appeal the revocation of their pilot license for security matters; and create a small-business ombudsman within the Transportation Security Administration.
• House Resolution 236 expresses the sense of the House of Representatives that U.S. air carriers should establish for all members of the Armed Forces on active duty reduced air fares that are comparable to the lowest air fare for ticketed flights.
• Congressional box score at the end of May stands at 1,177 bills introduced in the Senate and 2,316 in the House.