	Introduction

The Airport and Airway Trust Fund (AATF), sometimes referred to as the aviation trust fund, is the major funding source for federal aviation programs. In order to for avoid disruptions, both the authority to collect aviation excise taxes and to spend from the trust fund must be reauthorized periodically by Congress. Aviation Taxes and Fees

Trust fund revenue is derived principally from a variety of taxes paid by users of the national aviation system. Revenue sources for the trust fund include taxes on airline passenger ticket sales, segment fees, air cargo fees, and aviation fuel taxes paid by both commercial and general aviation aircraft (see Table 1 ). In FY2016, the AATF received revenues of over $14.4 billion, with nearly 70% coming from taxes and fees levied on transportation of passengers. Although the stream of trust fund revenues has been relatively stable in recent years, the long-term vitality of the AATF remains a concern for many. If airlines continue to seek additional revenue from ancillary fees as an alternative to increasing base ticket prices, federal aviation programs and activities may become more dependent on contributions from the general fund. It also modified the taxes to form the aviation tax structure in place today. The Administration's budgets for FY2016 and FY2017 did not include such a proposal. Federal aviation taxes would remain in place to fund other FAA operations. Between FY2012 and FY2016, the general fund provided between 7.2% (FY2015) and 28.9% (FY2012) of FAA's total annual funding. Conceptually, that portion of the cost of operating the airway system that is appropriated from the general fund is supposed to equate to the amount military, government, and untaxed beneficiaries of the aviation system might have contributed to the trust fund through the payment of user fees, if there were user fees to be paid. The FAA budget is divided into four major accounts:
Grants-in-Aid for Airports (Airport Improvement Program, or AIP) Facilities and Equipment (F&E) Research, Engineering, and Development (RE&D) Operations and Maintenance (O&M) (partly supported by the trust fund, with the remainder coming from the general fund)
The first two accounts, AIP and F&E, are considered "capital" accounts or programs because they deal with the development of airport and airway infrastructure. It funds the technological improvements to the air traffic control system, including installation of a satellite-based air traffic control system referred to as the Next Generation Air Transportation System (NextGen). Annual Appropriations

Most FAA spending, including most spending from the AATF, requires annual appropriations by Congress. Status of the Trust Fund

At the end of FY2016, the aviation trust fund was projected to have a cash balance of over $14.3 billion. The prospect of user-fee funding for air traffic services could raise a number of issues regarding AATF revenues and expenditures. To offset user-fee collections, Congress may consider options to restructure AATF revenues, such as lowering fuel, ticket, and cargo taxes.
The Airport and Airway Trust Fund (AATF), sometimes referred to as the aviation trust fund, has been the primary funding source for federal aviation programs since 1972. It provides all funding for three major accounts of the Federal Aviation Administration (FAA): the Airport Improvement Program (AIP), Facilities and Equipment (F&E), and Research, Engineering, and Development (RE&D). It also pays for most spending from FAA's Operations and Maintenance (O&M) account.
The trust fund is funded principally by a variety of taxes paid by users of the national aviation system. Revenue sources for the trust fund include taxes on airline passenger ticket sales, the flight segment tax, air cargo taxes, and aviation fuel taxes paid by both commercial and general aviation aircraft. In FY2016, the trust fund received revenues of over $14.4 billion in aviation taxes and fees. Between FY2012 and FY2016, the trust fund provided between 71% and 93% of FAA's total appropriations, with the remainder coming from the general fund of the U.S. Treasury.
In order to avoid disruptions, both the authority to collect aviation excise taxes and to spend from the trust fund must be reauthorized periodically by Congress. The latest such legislation, P.L. 114-190, reauthorized FAA, other civil aviation programs, and the collection of taxes to fund the AATF through FY2017. However, a full FY2017 appropriation has not been enacted. P.L. 114-254 extended funding of FAA programs and activities at the FY2016 annualized level of $16,281 million through April 28, 2017.
The balance in the aviation trust fund is projected to increase over the next few years. However, the AATF's long-term vitality remains subject to a variety of forces. Poor economic conditions or external events could curb demand for air travel, reducing revenue from the ticket taxes that are the main source of AATF funding. Changing airline business practices, particularly unbundling of ancillary fees for particular amenities from airfares, are adversely affecting AATF revenue, as only base airfares are subject to ticket taxes. The financial future of the trust fund also depends on future spending decisions, including FAA plans for substantial investment in the Next Generation Air Transportation System (NextGen) satellite-based air traffic control system.
Proposals to shift air traffic control services from FAA to a government-owned corporation with an independent board of directors, which are expected to reemerge, raise a number of issues regarding AATF revenues and expenditures. A version of such a proposal approved by the House Transportation and Infrastructure Committee in 2016 would have allowed the corporation to impose user fees on some flights, principally commercial aviation. If user fees were to fund air traffic services, FAA would no longer require aviation tax revenues for this purpose. Congress might then consider options to restructure FAA's financing mechanisms, such as lowering the aviation taxes that flow into the AATF or eliminating the general fund component of FAA funding.