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“While the FAA does impose several user type fees (such as overflight fees, aeronautical charting fees, foreign repair
station and certification fees, civil aviation registry fees, security finger printing fees, and air taxi registration fees)
these fees taken together represent less than one half of one percent of FAA’s funding base. It is also important to note
that within the United States, there is a significant difference between a user fee and an excise tax. While a user fee is,
in principle, based on the level of service provided by a government entity, an excise tax generally does not vary based
on the level of service received, but rather takes one of two forms: a unit tax or an ad valorem tax.”
SOURCE DATED: 11 JULY 2008.
Airports
The policies on airport charges are set out in the “U.S. Department of Transportation Policy on the Establishment of
Airport Rates and Charges (6 IFR 31994) and the Federal Aviation Administration Grant Assurances (49 USC, 47107,
Sections A1 to A22)
Economic oversight is carried out on a number of different levels:
• U.S. antitrust laws;
• FAA airport improvement grant assurances
• Department of Transport Oversight.”
Air navigation services
“FAA is primarily funded through a combination of aviation user taxes and general fund contributions. FAA does
impose an overflight fee. These fees are developed based on FAA’s cost accounting system and are designed to reflect
the level of service provided.”
SOURCE DATED: 15 AUGUST 2008.
Airports
“In the United States, the majority of commercial service airports are publicly owned by local governments, such as
cities and counties. Furthermore, some state and local governments have established special entities, such as
single-purpose airport authorities or multi-jurisdictional regional authorities, to manage/operate these airports. As an
economic entity, airports in the United States are required to adopt business practices to become as financially
self-sufficient as possible in response to market demands, and to become less dependent on government assistance. At
the same time, there are Federal laws governing the operation and taxation of airports and airport related business
78 SUPPLEMENT TO DOC 9082
which generally require that the proceeds of such taxes be applied to uses that relate to the airport. In addition, Federal
laws, regulations, and U.S. international obligations presently in place restrict the types of alternative fee structures
airports may adopt, especially if airport charges deviate significantly from traditional cost accounting and
cost-allocation methodologies. Requirements that grant-funded airports be available for public use on fair and
reasonable terms and without unjust discrimination provides further regulatory control on an airport’s ability to set
charges.”
Air navigation services
“The Federal Administration’s (FAA) cost accounting system enables the FAA to identify its costs in detail by line of
business (these lines of business are the Air Traffic Organization, Aviation Safety, Airports, and Commercial Space
Transportation). Within the Air Traffic Organization, cost accounting provides a detailed accounting of oceanic,
domestic en route, flight service stations, and terminal area costs. Consistent with ICAO guidance, the cost accounting
system identifies the full cost of providing air navigation services, including appropriate amounts of capital and
depreciation of assets, as well as the costs of maintenance, operation, management, and administration.
The FAA is currently funded from two sources: the Airport and Airway Trust Fund ($12.57 billion in fiscal year 2008,
or approximately 84% of the total FAA budget) and the U.S. General Fund ($2.34 billion in fiscal year 2008). The
Trust Fund derives its revenues from aviation excise taxes described below and detailed in Doc 7100, Tariffs for
Airports and Air Navigation Services, including various passenger ticket taxes and fuel taxes. The General Fund
derives its revenue primarily from individual and corporate income taxes and payroll taxes. The Trust Fund finances
all FAA capital costs (including airport improvement grants, facilities and equipment, and research and development)
and a portion of FAA operation costs. The General Fund finances a portion of FAA operations costs.
While the FAA collects several user fees (such as overflight fees and nominal civil aviation registry fees) these fees
taken together represent less than one half of one percent of FAA’s funding base. It is also important to note that within
the United States, there is a significant difference between a user fee and an excise tax. A user fee is, in principle, a
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