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Acknowledgments US Department of Transportation - BTS

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As mentioned above, the Highway Revenue Act <strong>of</strong> 1982 created the Mass Transit Account within the HTF. EffectiveApril 1983, the act provided one cent per gallon <strong>of</strong> the federal excise tax on gasoline sales to be set-aside for theMass Transit Account to help finance transit capital projects. The rate was increased to 1.5 cents per gallon onDecember 1, 1990; to 2 cents per gallon on January 1, 1996; and to 2.86 cents per gallon on October 1, 1997(FHWA, 1999). Although highway users pay these taxes, the funds are treated as federal transit revenues.State and local transit revenues include revenues from operations <strong>of</strong> public mass transportation systems (rapidtransit, subway, bus, railway, and commuter rail services), such as fares, charter fees, advertising income, and otheroperations revenues. They exclude subsidies from other governments to support either operations or capital projects.Air RevenuesThe Tax Equity and Fiscal Responsibility Act <strong>of</strong> 1982, as amended by Omnibus Budget Reconciliation Acts <strong>of</strong> 1990and 1993, the Small Business Job Protection Act <strong>of</strong> 1996, and the Taxpayers Relief Act <strong>of</strong> 1997, provides for thetransfer <strong>of</strong> receipts received in the U.S. Treasury from the passenger ticket tax and certain other taxes paid by airportand airway users to the Airport and Airways Trust Fund (AATF). Effective October 1, 1997, the Taxpayers Relief Act<strong>of</strong> 1997 extends aviation excise taxes for 10 years and includes the following major provisions (FAA, 1999):1. retains existing freight weigh bill, general aviation fuel and gas taxes, and a 6-dollar departure tax ondomestic flights to and from Alaska and Hawaii;2. converts the 10 percent ad valorem tax on domestic passenger tickets to a combination <strong>of</strong> ad valorem andflight segment tax over three years beginning October 1, 1997;3. imposes a new 7.5 percent tax on payments to airlines for frequent flyer and similar awards by banks andcredit card companies, merchants, frequent flyer program partners-other airlines, hotels, or rental carcompanies and other businesses;4. increases the current 6-dollar international departure tax to 12 dollars per passenger and adds a 12-dollarinternational arrival tax;5. lowers tax rates on flights to certain rural airports to 7.5 percent without a flight segment component; and6. transfers revenues from the 4.3 cents-per-gallon aviation fuel taxes currently dedicated to reduce thenational U.S. deficit from the general fund to the AATF.Most <strong>of</strong> this trust fund is used to finance the Federal Aviation Administration's (FAA's) capital programs, namely,Facilities and Equipment; Research, Engineering, and Development; and Airport Improvement Program. Withincertain limits set by Congress, some <strong>of</strong> the remaining money is used to cover FAA operation and maintenanceexpenses. The portion <strong>of</strong> the FAA's operation and Maintenance expenses not paid from the trust fund revenues arefinanced by U.S. Treasury general funds.State and local revenues from air transportation are derived from airport charges. Beginning in 1992, localgovernments began collecting passenger facility charges and spending these revenues (both subject to FAAapproval) to finance capital programs.The collection <strong>of</strong> passenger facility charges was authorized by the Aviation Safety and Capacity Expansion Act <strong>of</strong>1990. 2Waterway and Marine RevenuesFederal water revenues come from four primary sources: the Harbor Maintenance Trust Fund (HMTF), the InlandWaterways Trust Fund (IWATF), the Oil Spill Liability Trust Fund (OSLTF), and tolls and other charges collected bythe Panama Canal Commission.The Harbor Maintenance Trust Fund was established in accordance with the Harbor Maintenance Revenue Act <strong>of</strong>1986. Revenues for this fund are derived from receipts <strong>of</strong> a 0.125 percent ad valorem user fee imposed oncommercial users <strong>of</strong> specified U.S. ports, Saint Lawrence Seaway tolls. On March 31, 1998, per a U.S. SupremeCourt ruling, the tax on exports was terminated (OMB, 2000). This fund is used to finance up to 100 percent <strong>of</strong> theU.S. Army Corps <strong>of</strong> Engineers' harbor operation and maintenance (O&M) costs, including O&M costs associated withGreat Lakes navigational projects, and the fund fully finances the operation and maintenance <strong>of</strong> the Saint LawrenceSeaway Development Corp.

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