Washinton, DC

Associations welcome passage of US Budget Reconciliation Bill

The National Business Aviation Association (NBAA) and the General Aviation Manufacturers Association (GAMA), have welcomed the final vote in the House of Representatives of a bill promoting the growth, safety and sustainability of the US aviation industry.

The final legislation preserves $12.52bn to fund replacement of aging air traffic control (ATC) facilities, systems and infrastructure and to bolster controller staffing and training.

Announced by House leaders in April, the ATC funding provision has the support of NBAA and more than 50 other aviation stakeholders comprising the Modern Skies Coalition of aviation associations, trade unions, manufacturers and others.

“We thank congressional leaders for preserving this vital ATC-transformation measure in the final budget-reconciliation bill, which provides a critical downpayment on investments in new technologies, facilities, the controller workforce and other priorities,” said NBAA President and CEO Ed Bolen.

GAMA president and CEO, James Viola, stated: “GAMA appreciates the hard work that was put forth by Congress in the budget reconciliation package to grow and strengthen aviation manufacturing leadership and the overall aviation ecosystem.

"While more investment is needed, this bill provides a much-needed downpayment for modernizing the US air traffic control system. It also provides tax incentives that allow for general aviation manufacturers to further champion innovation and safety, support jobs and spur economic growth. These tax incentives provide a catalyst for US aerospace manufacturers to continue to lead on a global scale and contribute to our industry’s positive trade balance.”

The legislation also includes a permanent reinstatement of full and immediate expensing on purchases of factory-new and preowned aircraft. The current expensing schedule, most recently authorized in the Tax Cuts and Jobs Act of 2017, is phasing out and set to expire in 2027.

Immediate expensing has proven effective for incentivizing aircraft purchase, which in turn helps companies obtain a competitive asset and supports American manufacturing jobs. In the US, business aviation supports 1.3 million high-skill, high-paying manufacturing and service jobs and accounts for $340bn in annual economic activity.

The final legislation also maintains a key provision supporting business aviation’s goal of achieving net-zero carbon emissions by 2050 - an additional two-year extension of the Section 45Z Clean Fuel Production Credit incentivizing production of sustainable aviation fuel to 2031, albeit with a reduction in the credit’s value, which could pose challenges for incentivizing enough production to meet demand.

Bolen concluded: “This bill enacts many important initiatives to ensure America’s continued leadership in aviation. The business aviation community looks forward to working with Congress and government agency leaders to ensure its full implementation.”