FAA Bill Could Carry Tax Act Fixes, Self-Driving Car Measure

The bill to reauthorize federal aviation programs could host non-aviation legislation, including corrections to the 2017 tax act and the Senate’s self-driving car bill.

The Federal Aviation Administration reauthorization bills (H.R. 4, S. 1405) include language protecting airline passengers, and address drone access to airspace, among other items. Many FAA programs are funded through the Airport and Airway Trust Fund, which is paid for through taxes on items such as domestic and international airfares, and taxes on jet fuel.

The current authorization, a six-month extension passed in the omnibus spending bill, expires Sept. 30.

Republicans are eyeing the FAA reauthorization bill as the route to passing their tax priorities this year since it will contain a tax title. GOP lawmakers are aiming to correct mistakes in the 2017 Tax Cuts and Jobs Act and curb the number of short-term tax provisions known as extenders.

“It’s a magnet,” Senate Commerce, Science and Transportation Committee Chairman John Thune (R-S.D.) told Bloomberg Government. Thune is also on the Finance Committee.

“It is always a target because it’s got a tax title,” Thune said. He would prefer a clean bill, he said.

Tax Issues

Democrats have been opposed to voting for corrections to the tax law without Republicans including a Democratic tax priority in the legislation. The 2017 tax act passed without any support from the minority party.

The omnibus spending bill, passed in March, included a change to how agriculture co-operatives can claim a deduction for pass-through entities.

In exchange for some Democrats supporting the bill, GOP leaders agreed to include an increase to the low-income housing tax credit. A similar negotiation could play out with the FAA bill, Republican aides said.

House Ways and Means Committee Republicans will meet with members of both parties this week to hear the case for keeping tax extenders, such as tax credits for biodiesel and renewable energy property, on the books. Rep. Vern Buchanan (R-Fla.), who chairs the Ways and Means tax policy subcommittee, said he would like to cut the number of remaining extenders to about five, down from nearly 40. Some should be made permanent, while others should be eliminated or phased out over time, Buchanan has said.

“We’re going to have to litigate all those tax issues at some point in the future—some of the technical corrections and things like that—but my hope is that we can kind of keep this just confined to just aviation tax stuff that we have to deal with,” Thune said.

Most of the extenders expired at the end of 2017, meaning that lawmakers need to make a decision by the end of this year about how to proceed. A fall extension of the FAA or a December deadline—if Congress only authorizes a short-term extension by the end of September—is the easiest path forward to move an extenders deal, the aides said.

Hitch a Ride

Another possible item that could hitch a ride on the FAA bill is the Senate’s AV START Act (S. 1885) that would create a federal framework for self-driving cars.

The bill would regulate autonomous cars and trucks lighter than 10,000 pounds, such as those developed by Ford Motor Co., Alphabet Inc.’s Waymo LLC, Lyft Inc., and Uber Technologies Inc.

Thune (R-S.D.) and a Democratic co-sponsor on the bill, Sen. Gary Peters (D-Mich.), have been working through members’ issues to try to prepare the bill for expedited floor action. Sens. Richard Blumenthal (D-Conn.), Dianne Feinstein (D-Calif.), and Edward Markey (D-Mass.) continue to place holds on the bill, keeping it from consideration under unanimous consent.

Thune and Peters have both said they are keeping an open mind about how to move the bill if no agreement is possible, but that their preference is unanimous consent.

“I have always sort of hoped that we’d get the AV stuff kind of worked out at least with most folks and get a consent agreement or get time on the floor again with a consent agreement to allow limited amendments,” Thune told Bloomberg Government. “If we get up against it and we’re toward the end of the fiscal year and we’ve got FAA to get done and we still have AV hanging out there, we’ll see.”