Congress To Consider Aviation Fuel Fraud Measure

 - November 4, 2015, 11:46 AM

The U.S. House of Representatives is expected to consider an amendment later today that would seek to document the ramifications of a 10-year-old law requiring non-commercial jet fuel to be taxed at the highway diesel fuel rate. The so-called fuel-fraud law, enacted as part of the 2005 highway bill, was designed to discourage highway diesel fuel users from purchasing aviation jet fuel to avoid paying the higher taxes placed on highway diesel fuel. Under the fuel-fraud measure, non-commercial jet fuel is taxed at the highway diesel fuel rate and then deposited into the Highway Trust Fund until approved aviation vendors demonstrate that the fuel was used for aviation purposes.

Aviation leaders have pushed for the repeal of the measure, but that has proved politically difficult since lawmakers are hesitant to take any action to reduce revenues from the troubled Highway Trust Fund. Rep. Mike Pompeo (R-Kan.), however, late last week introduced a measure to seek a Government Accountability Office study to determine how much money is being diverted from the Aviation Trust Fund as a result of the fuel-fraud provision. The measure was cleared by the House Rules Committee yesterday as a prospective amendment to highway reauthorization legislation currently under debate and could come up for a vote this evening.

NATA president and CEO Tom Hendricks wrote a letter to Pompeo strongly backing the amendment, saying the Aviation Trust Fund “receives no revenue from the majority of non-airline jet fuel sales.” Noting the fact that jet fuel has remained more expensive than diesel fuel, Hendricks questioned the need for the fuel-fraud provision in the first place. He also questioned whether design changes in diesel engines “render the [fuel fraud] provision nothing more than a bureaucratic roadblock draining the Airport and Airway Trust Fund of revenues needed for airport improvements and the deployment of a modernized air traffic control system.”