Congress Expected to Adjourn This Week

December 8, 2014

By Bill Deere, NATA Senior Vice President for Government and External Affairs

The lame duck session of congress is expected to adjourn this week after addressing several must-pass items of interest to aviation.

Late today, the House Appropriations Committee is expected to unveil a “cromnibus,” legislation to fund the government for the rest of the year.  The legislation will combine a short-term funding extension for the Department of Homeland Security and funding for the balance of the fiscal year for other government operations including the FAA.  Any major funding increases are expected to fall on the international side, addressing the Ebola outbreak, operations in Syria and Iraq, and assistance to Ukraine and the Baltic states.  The House is expected to consider the legislation Wednesday, leaving the Senate one day to consider the legislation in advance of the expiration of the government’s current funding bill.

Also this week, the Senate is expected to consider a one year extension of approximately 50 tax provisions that expired at the end of 2013, including bonus depreciation and section 179 expensing.  Last week, the House passed a one year extension after House-Senate negotiations over longer-term extensions for certain provisions including bonus depreciation and section 179 expensing stalled in the face of a possible presidential veto threat.  Late last week, the office of Senate Majority Leader Reid reached out to leading members of the coalition in support of bonus depreciation, including NATA, to refute a news story that suggested the Senate might not have time to pass the House tax extenders bill before adjourning.

Finally, Senate Majority Leader Reid and Minority Leader McConnell must still agree on a final package of nominations for floor action before adjournment.  Among those nominees awaiting floor action is Christopher Hart to serve as Chairman of the NTSB.  Hart’s nomination cleared the Senate Commerce Committee in July but has yet to be acted on.

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Aviation and the Lame Duck Session

November 14, 2014

By Bill Deere, NATA Senior Vice President for Government and External Affairs

The mid-term elections are concluded, the people have spoken, and Congress returned on Wednesday from two months of campaigning for a lame duck session that is expected to end in mid-December.  For those of you unfamiliar with the term, “lame duck session” is the nickname for a session of Congress that follows an election and includes lawmakers who will not be members of the next Congress, having decided to retire or were defeated.

Initially, it was thought that should control of the Senate change hands as a result of the election, very little legislative activity would occur in the lame duck.  However, even with Republicans winning control of the Senate, an effort is being made to act on at least two fronts, appropriations and taxes.

FAA Appropriations

Before adjourning, lawmakers approved legislation funding the government through December 11th. The legislation also contained other provisions including a nine month extension of the Export-Import Bank.  As a result, the FAA has been operating since October 1st at funding levels below the increases recommended for the agency by the House and Senate Appropriations Committees.

The expiration of government funding on December 11th was deliberately chosen by House and Senate appropriators to give them time to develop an “omnibus” spending package for the balance of the fiscal year.  This omnibus bill would literally wrap all twelve spending bills into one massive piece of legislation.  Should that occur, we expect the FAA will secure a funding increase that will also include bill language requiring funding of contract towers and prohibiting the development of unauthorized user fees.

Of course, the biggest decision is whether or not to move such a package.  At this writing it appears House Republicans are divided about whether to take up a full year spending package or extend government funding for a few months and revisit the issue in the new Congress.

Tax Extenders

NATA has been serving as one of the leading members of a multi-industry coalition of supporters that includes the U.S. Chamber and the National Association of Manufacturers, in support of renewing a package of approximately 55 tax provisions that expired at the end of 2013.

The “extenders” of particular interest to our industry are the immediate expensing of 50% of new investments in equipment and software commonly referred to as “bonus depreciation” and its small business counterpart known as Section 179 expensing.

The House and Senate have approached the issue in different manners.  The Senate Finance Committee approved a two-year extenders package that included bonus depreciation and Section 179.  The full House approved a series of bills making certain extenders permanent changes in tax law, including both Bonus and Section 179.

Similar to the appropriations situation, the fate of extenders remains fluid.  While it is doubtful that the House approach will be fully accepted by the Senate Finance Committee, its chairman, Senator Ron Wyden (D-OR), has indicated his willingness to explore a mix of permanent and multi-year extenders.  While a failure to act this year could make filing season very problematic, there is nevertheless an ongoing discussion about the advantages of acting on extenders retroactively in the new Congress.

NATA and other coalition members are meeting with key members of the tax writing committees and the congressional leadership to coordinate efforts toward adoption of a permanent or multi-year extenders package.

Other Aviation Issues

The House Transportation and Infrastructure Committee is taking advantage of the lame duck session to jump start its work on the FAA reauthorization.  On Tuesday the 18th the full committee will hold a hearing entitled: “FAA Reauthorization: Issues in Modernizing and Operating the Nation’s Airspace.”  In addition, the Senate Commerce Committee approved the nomination of Christopher Hart to serve as Chairman of the National Transportation Safety Board.  Action by the full Senate is still required before adjournment.

Congress has returned….and is about to leave

September 10, 2014

By Bill Deere, NATA Senior Vice President for Government and External Affairs

On Monday, Congress returned from its traditional August recess but will only stay in session for a short time before adjourning again to campaign in advance of the mid-term elections.  The House is expected to leave by September 19th with the Senate adjourning as early as the following week.  In such a brief time, not much is expected by way of legislative action but the first important step was put in place yesterday to avoid a government shut down when current funding expires on October 1st.

Yesterday, the Chairman of the House Appropriations Committee, Representative Hal Rogers (R-KY), unveiled a draft continuing resolution (CR) that will fund the government at current spending levels through December 11th. A CR is legislation designed to keep the government running on a temporary basis until the completion of the twelve regular appropriations bills.  The CR also contains other provisions including a proposal to extend the authorization of the Export-Import Bank until June 30, 2015.   For the FAA it means funding – for the moment at least – below the increased levels recommended for FY2015 by the House and Senate Appropriations Committees.  The House will consider the CR the week of the 15th.

As a result, long-term government funding and final resolution of issues like tax extenders are likely on the back burner until a post-election “lame duck” session.  The duration and issues to be considered in the lame duck will turn on the results of the general election – particularly the battle for control of the Senate.

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More Gridlock in the FAA Budget Process

July 31, 2014

By Bill Deere, NATA Senior Vice President for Government and External Affairs

Congress will shortly adjourn for its annual summer recess and return after Labor Day for a short session before adjourning again in advance of the November general elections.  As a result, it is likely that commencing October 1st the FAA will once again be forced to operate — for at least some period of time — through another stop-gap funding bill.  How did this come to pass?

It wasn’t supposed to. The Bipartisan Budget Act of 2013, the agreement that ended the government shutdown, was supposed to pave the way for the first regular appropriations to fund the government since FY2010.  By establishing the overall discretionary budget ceiling for FY2015, the legislation was intended to provide for at least one year of relative budget peace.

At first that’s what we saw, a return, for at least one year, of regular order in the federal budget process.  As we reported to you in May and June, the House and Senate Appropriations Committees held their budget review hearings and developed the annual spending bills, including the one that funds the FAA.  You may recall there was a lot in those bills about which to be excited.  Both the House and Senate versions provided overall FAA spending levels above the Administration request, funded contract towers, included prohibitions against the development of new user fees, and provided guidance to the agency on important issues including streamlining the certification process and improving the consistency of regulatory interpretation.

While the appropriations process moved along in the House of Representatives, the process has hit a wall in the United States Senate.  Spending bills have been reported out of the Senate Appropriations Committee with bipartisan support.  However the battle for control of the Senate has devolved into a fight over amendments to be made in order during floor consideration of legislation.  The result, only critical “must pass” legislation to fix the problems at the Veterans Administration and prevent a cessation of highway funding are considered, in other words — more gridlock.

Where do we go from here? After November’s general election Congress is expected to return for a “lame duck” session.  We can only hope that post-election the Senate will be able to take up these bills so general aviation does not lose the benefits of the funding and guidance contained in these FAA spending bills.

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FAA Appropriations Bill Reaches Senate Floor

June 5, 2014

By Bill Deere, NATA Senior Vice President for Government and External Affairs

Today, the full Senate Appropriations Committee approved for floor action its version of the Transportation and Housing and Urban Development Appropriations bill for fiscal year 2015 that will begin on October 1, 2014. The bill provides $15.86 billion to the FAA for next year, $580 million above the administration request. Similar to its House counterpart, a report prepared by the Committee accompanies the legislation and provides greater detail on the spending levels for individual FAA programs as well as expressions of congressional interest and required reports on a variety of aviation related subjects.

The Committee provided $149 million for the contract tower program including $10.35 million for the cost share program both amounts above the Administration request. These levels track very closely with the levels requested by NATA and number of other aviation associations in a letter to House and Senate Appropriators earlier this year. 

Like its House counterpart, the Senate also expressed support for streamlining the certification process and requested a report on the measures of effectiveness that FAA is applying to its work in implementing the recommendations of the Aviation Rulemaking Committee (ARC).

Senate appropriators expressed particular interest in the FAA’s progress toward improving the consistency of regulatory interpretation.  It exemplified its concern by citing a recent divergence in interpretation between the Seattle, Juneau and Anchorage flight standards district offices. As a result, the Committee directed the FAA to include a section in its annual aviation safety workforce plan devoted to the actions undertaken and planned by the agency to improve the consistency of its regulatory interpretations.

Majority Leader Reid has indicated at least two weeks will be set aside in June for the consideration of appropriations bills. The full House will take up its version of the legislation as early as next week. NATA will continue to keep you apprised as events unfold.

FAA Appropriations and the Road Ahead

May 22, 2014

By Bill Deere, NATA Senior Vice President for Government and External Affairs

On Wednesday, the full House Appropriations Committee approved for floor action the Transportation and Housing and Urban Development Appropriations bill for fiscal year 2015 that will begin on October 1, 2014. Of interest to NATA members, the legislation includes next year’s spending levels for the FAA. Less well known is that a report prepared by the Committee accompanies the legislation and provides greater detail on the spending levels for individual FAA programs as well as expressions of congressional interest and required reports on a variety of aviation related subjects.

While we know the bill provides in total $15.7 billion to the FAA for next year, $446 million above the administration request, the bill language is important as, once enacted, it establishes in law the overall spending levels for the FAA’s major accounts including; operations, facilities and equipment, airport infrastructure grants, and research and development. It also includes bill language for programs important to general aviation including language setting minimum spending levels for the contract tower program ($140 million) and its cost share program ($9.5 million). In fact, earlier in the development of the legislation, NATA joined a number of other aviation associations in a letter to the House and Senate Appropriators requesting this action. Most important, the bill includes language prohibiting the FAA from finalizing or implementing “any regulation that would promulgate new aviation user fees not specifically authorized by law.” This prevents the agency from unilaterally establishing a user fee funded air traffic control system and this type of bill language is known around the Hill as a “limitation.”

The legislation, already 155 pages long, would be many times that size if Congress were to include in the text spending levels for every program within each major category of spending. And because the spending levels would be enacted into law, there could be no deviation from those levels even if a problem were to develop. Hence the need for a report to accompany the legislation that further explains congressional intent. Report language does not have statutory force and departments and agencies are not legally bound by their declarations. But as the Congressional Research Service explains (CRS 98-558), “executive branch agencies take them (report language) seriously because they must justify their budget requests annually to the Appropriations Committees.”

So the report accompanying this year’s Transportation Appropriations bill amplifies on the Committee’s funding for the contract tower program, describing the program as “a safe, cost-efficient mechanism for providing air traffic services to pilots and local communities.” The Committee also expressed its concern about the certification of air operators and the consistency of its rulings across field offices noting, “Lengthy delays in certification approvals present real barriers to companies seeking to operate in the National Airspace System, limiting the economic growth of the aviation industry.” Further, it directed the agency to prepare a report by April 1, 2015 on its progress in making the certification process more efficient.

The Committee also looked at a variety of other issues including performance based navigation, providing its work with funding above the administration request. Finally, on the research side, the Committee provided additional funding for alternative general aviation fuels stating that it “looks forward to updates on the continued progress on this initiative as it effectively balances environmental improvement with aviation safety, technical challenges, and economic impact.”

The full House will take up the legislation in the next two weeks. Meanwhile, the Senate Appropriations Committee has begun the development of its own version of the bill. The passage of the bills by their respective chambers will trigger a “conference” between House and Senate Appropriators to resolve the differences between the two versions. These are important pieces of legislation that have a great impact on the future of the FAA and the industry. NATA will continue to keep you apprised as events unfold.

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Should I Participate in the NATA Workers’ Compensation Insurance Program Strictly Based on Price?

March 27, 2014

The National Air Transportation Association is celebrating a highly successful first-year anniversary of the NATA Workers’ Compensation Insurance Program, administered exclusively by Beacon Aviation Insurance Services. As we move forward into our second year, the question has come up: “Should I select the NATA Workers’ Compensation Insurance Program strictly because of the price?” The short answer is no.

To give you an overview of workers’ compensation, you should know that almost every business with employees in the United States faces the need to acquire workers’ compensation insurance. Most states (with a few exceptions) essentially require employers to purchase an insurance policy to handle their statutory obligations for workers who are injured or made ill due to a workplace exposure. Whether your business is small or large, handling the expense and effort of meeting statutory obligations is a challenge.

Workers’ compensation laws provide fairly comprehensive and specific benefits to workers who suffer workplace injury or illness. Benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation. Failure to carry workers’ compensation insurance or, otherwise, meet a state’s regulations in this regard can leave an employer exposed not only to paying these benefits out of pocket, but also to paying penalties levied by the states. So, how do you balance the need of providing this vital coverage while protecting your bottom line?

First, we should examine how the costs of workers’ compensation insurance are created. Your premium includes the estimated annual pay of your employees, multiplied by the rate (cost) for each of your individual class codes (specific job classifications). This rate is then combined with other taxes, fees, and either debit or credits (discounts or additional premium based on factors, such as loss history and optional coverage) that are available to your specific company. Once all of those are added up, we come up with your specific estimated annual premium.

The closest thing there is to a uniform set of rules for premium computation was established by the National Council on Compensation Insurance (NCCI). This organization creates policy forms and writes the rules for premium computation in the majority of states.

Now that you have your premium, you should also look at: what is the carrier’s history and financial strength?; will your claims be handled quickly and efficiently; and, what other services are available to help you operate a safer work environment and ultimately save premium dollars?

Backed by A-Rated Companion P&C (a subsidiary of Blue Cross Blue Shield), the NATA Workers’ Compensation Insurance Program™ includes all applicable credits, access to one of the most comprehensive loss control and safety minded programs in the industry, direct access to the nation’s largest physician and provider networks, no-cost, loss control services, and an industry-leading dividend plan that pays out in full, just 10 months after your policy’s expiration date.

Along with checking out all the facts of your coverage, you may also want to look into recommendations from industry leaders. One recommendation comes from NATA President & CEO Thomas L. Hendricks, “NATA is thrilled with the growth and member acceptance of this program in its inaugural year. Our participating members are finding the EZ Pay option plans, quicker dividend payouts and up-front rewards, for those with the best worker safety experience, to be the most attractive benefits of this program.”

Beacon Aviation Insurance is available to help answer any of your questions or concerns, offer you more information on your specific premium, and work with your agent to obtain a quote from the NATA Workers’ Compensation Insurance Program.

You can reach Beacon Aviation Insurance directly at 941-953-5390 or; and through your current insurance agent.

Submitted by Bob McManus, CPCU
VP, Partner
Beacon Aviation Insurance Services

Article first appeared in NATA’s first quarter Aviation Business Journal. Click here to read more.


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