	Introduction

Since the 1971 creation of the user-supported airport and airway trust fund under provisions of the Airport and Airway Development and Revenue Acts of 1970 (P.L. 91-259; the 1970 Act) there has been disagreement over the appropriate use of the trust fund's revenues. Some supporters also hoped that these provisions would also assure a significant general fund share for the Federal Aviation Administration's (FAA) operating budget. This report begins with a background discussion of the establishment of the Airport and Airway Trust fund (hereafter referred to as the trust fund) and the spending policy conflict that arose from different views concerning the legitimate use of the trust fund revenue during both the debate over the creation of the trust fund and the first years of its existence. It then examines the 22-year era when Congress imposed a variety of "cap and penalty" provisions on aviation trust fund spending in an effort to both encourage full funding of the FAA's capital programs spending as well as assuring a significant general fund share to support the FAA's operations. 106-181 ) in March 2000, and that were continued through FY2007 by Vision 100—Century of Aviation Reauthorization Act ( P.L. 108-176 ). The goal of the cap and penalty provisions continued to be to insure that the aviation trust fund operate primarily as a capital account supporting AIP and F&E while operating, in part, as a user pays system to support some operations spending. Because there was no penalty provision for the funding of AIP and F&E below the statutory caps and because opposition to the lack of adherence to the caps was insufficient to prevent passage of the transportation appropriations bill, Congress was able to fund the FAA at a level that began reducing the unexpended balance in the trust fund. FAA Funding in the Cap and Penalty Era (FY1977-FY1998)

The success of the various cap and penalty provisions was mixed and its apparent successes were marked with unintended consequences. As was mentioned earlier, the broader budget environment can trump the spending mechanisms. Current FAA Funding Guarantees

During the reauthorization debate that preceded the passage of the Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century ( P.L. One makes it "out-of-order" in the House or Senate to consider legislation that does not use all aviation trust fund receipts and interest annually. The second, the "capital priority provision," makes it "out-of-order" to consider any bill that provides a general fund appropriation for any year under AIR-21 or Vision-100 for RE&D or O&M if the sum of the AIP obligation limitation and the appropriation for F&E are below their authorized levels. Congress has been rescinding this pop-up budget authority in recent years. The bill would retain the point-of-order enforcement mechanisms. This environment might have encouraged adherence to the cap and penalty provisions during the appropriations process.
Since the 1971 creation of the user-supported airport and airway trust fund in the Airport and Airway Development and Revenue Acts of 1970 (P.L. 91-259) there has been disagreement over the appropriate use of the trust fund's revenues. Some Members of Congress viewed the trust fund as primarily a capital account that would fund the Federal Aviation Administration (FAA) airport and airway (mostly air traffic control) capital requirements. Others, including the Office of Management and Budget (OMB), some executive agencies, as well as some members of congressional appropriations and budget committees, viewed the trust fund as the basis for a user-pay system that would also fund some or all of the FAA's operations expenses.
Since 1976, Congress has passed and amended a series of legislative provisions designed to "guarantee" the full funding of the FAA's capital programs—the Airport Improvement Program (AIP) and Facilities and Equipment program (F&E). From FY1977 through FY1990, the guarantees consisted of a variety of "cap and penalty" provisions which set a legislated cap on the amount of aviation trust fund money that could be used to fund FAA operations. In addition, penalty mechanisms were put in place that would reduce the cap by formula amounts in proportion to the capital programs' shortfall of appropriated funding from their authorized amounts. Although the cap and penalty provisions had some apparent early success, there was growing resistance to passing appropriations bills that adhered to the penalties during the 1980s. In 1990, Congress removed the penalty. Some form of cap continued through 1998.
In 2000, the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (P.L. 106-181; AIR21) included two new spending guarantees. One made it "out-of-order" in the House or Senate to consider legislation that failed to use all trust fund receipts and interest annually. The second made it out-of-order to consider any bills that provided any funding for research or operations if it failed to fully fund AIP and F&E at their authorized levels. These guarantees were extended through FY2007 in Vision 100-Century of Aviation Reauthorization Act (P.L. 108-176; Vision 100). AIP has been nearly fully funded under these provisions. F&E has not during recent years.
Both the cap and penalty, and the point of order enforced guarantees have had mixed success. The success depends on the support that enforcing the mechanism has maintained during the appropriations process. The history of these guarantees indicates that the broader budgetary situation can trump the spending guarantees.
Aviation funding guarantees have received consideration during the FAA reauthorization debate of the 110th Congress. Options discussed during the debate have included retaining the current system, modifying the current guarantees, resurrecting a mechanism analogous to the cap and penalty provisions, reconsidering taking the trust fund "off-budget," or erecting budgetary "fire walls" as was done for the highway and transit programs in 1998.