Washington Wire - 1996-08-19

By Barbara Cook / August 18, 1996

<H1> Washington Wire</H1>Excise Tax Reinstated

President Clinton is expected to sign legislation this week that reinstates the aviation excise taxes through Dec. 31. The taxes will be collected beginning with tickets purchased seven days after the bill receives presidential approval.

Taxes that will take effect are the 10 percent levy on domestic airline tickets and a $6 international departure charge, a 6.25 percent tax on air cargo waybills, and a 17.5-cents-per-gallon tax on jet fuel used in non-commercial aviation.

The taxes, which are funneled into the Aviation Trust Fund, finance safety and security improvements in the nation's air traffic system. Since the authority to levy the taxes expired in January, the uncommitted balance in the trust fund has fallen to just above $2 billion, and the Federal Aviation Administration warned that a crisis would be in the offing if the taxes were not reimposed. It is expected that Congress will take action in September to extend the taxes beyond the Dec. 31 date.

Security Surcharge Suggested

The latest aviation proposal being floated on Capitol Hill is a per-passenger aviation security fee of up to $4 to pay for increased security at the nation's airports. Sen. Frank Lautenberg (D-N.J.) suggested the levy at a Senate Commerce Committee hearing on airline security that was convened in response to last month's fatal crash of TWA Flight 800.

Although the cause of the crash has yet been to be determined, government officials speculate that terrorism will prove to be responsible. Estimates of the cost of what Lautenberg described as "a comprehensive security system" range as high as $6 billion over the next decade.

At the hearing, senators closely questioned Transportation Secretary Federico Peña on whether the government should assume responsibility for screening passengers and baggage, which now is handled by the airlines. Pena said this is one of the issues that will be considered by the Aviation Security Commission headed by Vice President Al Gore. The commissions's recommendations for improving aviation security are to be released within 45 days.

David Plavin, president of the Airports Council International-North America, requested that the federal government take on the responsibility for detecting and deterring terrorism at airports, arguing that it is a national security issue, not just an airline or airport issue.

The House, meanwhile, approved the Aviation Security and Anti-terrorism Act by an overwhelming vote before leaving for its summer recess. The bill calls for the Federal Aviation Administration to install explosives detection devices at airports without waiting for more advanced systems to be developed.

Progress For U.S. Travel Office

The travel industry's efforts to create a federally chartered national tourism organization passed one hurdle this month with the approval by the Senate of the United States Tourism Organization Act (S.1735). Passage of a companion bill (H.R.2579) by the House is likely when Congress returns after Labor Day from its August recess.

The Senate bill establishes the U.S. Tourism Organization, which will be charged with facilitating public-private partnerships for tourism policy, implementing a national travel and tourism strategy to be developed by a separate National Tourism Board, operating travel promotion programs outside the U.S. and promoting travel in general.

Although the legislation contains no provision for federal funding, the creation of the national tourism organization is viewed as an important step toward fashioning a workable successor to the U.S. Travel and Tourism Administration, the Commerce Department unit that shut down in April.

Raising Liability Caps

The Department of Transportation will review an agreement submitted by the Air Transport Association that seeks an increase in the liability limit for passengers killed or injured on international flights out of the United States.

The ATA proposal, which would take effect Nov. 1 if approved, would raise the current $75,000-per-passenger limit to $146,000. In addition, victims or their survivors could seek additional damages by suing under the laws of the victim's home country. Carriers would be allowed to defend themselves against these lawsuits by proving the crash did not result from airline negligence.

The proposal would have no bearing on flights within the United States; there is no limit to the amount of damages that victims of domestic airline crashes and their survivors can win.

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