Oklahoma boosts aircraft registration fees 50%

A 50% increase in aircraft registration fees, a new aviation-themed license plate, and a new airport inspection program go into effect Nov. 1, 2017, in Oklahoma as part of an effort to provide “fiscal stability” to the Oklahoma Airport System.

During the 2017 state legislative session, the Oklahoma Aeronautics Commission (OAC) prepared a “flight plan” to bring fiscal stability to the state’s airport system, along with measures designed to promote the thriving aviation and aerospace industry throughout the state.

The agency recently completed a two-year comprehensive Statewide Aviation & Aerospace Economic Impact Study reporting that airports, off-airport aviation businesses, and military aviation produce almost $44 billion in annual economic activity in Oklahoma.

“When the commission began crafting its 2017 legislative initiatives, we knew that aviation played a key role in the state, but the industry exceeded our expectations when we determined it was the second largest industry in the state,” said Victor Bird, director of the Aeronautics Commission.

The agency began its revenue stabilization efforts by requesting a 50% increase to aircraft registration fees. This was achieved through Senate Bill 433 by Sen. Eddie Fields, R-Wynona, and Rep. Harold Wright, R-Weatherford.

According to commission officials, the fees were established in 1976 and remained unchanged until this year.

“OAC is a non-appropriated agency and they have taken some hits in recent years. There are no general revenue funds that support the state airport system, yet the agency currently contributes to general revenue. The bill was necessary to preserve pavement conditions at our airports,” said Fields, who serves as the Aviation Caucus Senate Co-Chair.

The commission reported a predicted shortage of $800 million over the next 20 years. Agency officials say the jump in fees will assist in meeting the needs of the 109 airports in the state over the next two decades.

“Aircraft registration fees go directly back into pavement maintenance and development of the system. Much like a person registers their car annually, aircraft owners also do so through the Oklahoma Tax Commission. The users of the system pay for the system, and the commission believes this is the fairest approach to maintaining a viable system of airports,” said Grayson Ardies, airport division manager for OAC.

A measure increasing the aviation fuel tax was also discussed among lawmakers to further stabilize the needs of the state’s airport system.

According to state officials, Oklahoma has the lowest tax rate of the 47 states that impose an aviation fuel tax: $.0008 per gallon. Collections of the fuel tax yield about $80,000 annually, which actually may not pay for administering the collection of the tax, officials noted.

“Currently, a commercial airline pays only $5.44 to the state when it fills up a Boeing 737 at Will Rogers World Airport,” Bird said. “The aviation community has always financially contributed to the state and national air transportation system. Fuel taxes allow aircraft users to pay state and federal taxes at the pump. This is the fairest way to pay for the maintenance of any infrastructure system — those who use it the most, pay the most.”

However, no bill was filed due to opposition from commercial airlines, agency officials report.

Two other measures that would have supported the needs of the state’s airport system also were requested last session.

First was a modification to the aircraft excise tax charter exemption tax code requiring aircraft owners to show they’re using the aircraft at least 50% of the time as a “charter.” The Incentive Evaluation Commission indicated in its November 2016 report that all exempt sales of aircraft resulted in a loss of revenue topping $3.7 million to the state.

Second, there was an effort to raise the $4.5 million cap placed on the agency in 2015, limiting its main source of revenue, the aircraft excise tax.

“It is widely known that $3 million was taken from Aeronautics in 2014 and now we contribute annually to the state’s General Revenue fund because of the cap, starting with $1.2 million we gave in FY 2017,” said Bird.

A measure was also passed directing the agency to administer an airport inspection program for all public-use airports within the state of Oklahoma. House Bill 1681, by Fields and Wright, obligates all airport owners to provide access to airport facilities for conducting inspections and requires the commission to submit a written report to each airport detailing the findings of the inspections. There is no fee associated to the inspections and no fiscal impact to the individual airports.

There was also a modification to the Aircraft Passenger and Pilot Protection Act (APPPA) accomplished through House Bill 2179 by Rep. Charles Ortega, R-Altus, and Sen. Joe Newhouse, R-Broken Arrow. The original bill was passed in 2010 and provided authority for the Oklahoma Aeronautics Commission to protect public-use airports, including military airports, from incompatible, encroaching development.

The goal of the revisions was to simplify the permitting process for businesses and developers that have to comply with it and to update existing language to ensure it is in line with current airport industry standards.

Additionally, two aviation days were declared by law.

The first, Senate Bill 230 by Sen. Paul Scott, R-Duncan, and Rep. Scott Biggs, R-Marlow, enacted an annual Oklahoma Women in Aviation and Aerospace Day every Dec. 9.

“Pearl Carter Scott flew with Wiley Post at the age of 13. The Chickasaw Nation produced a film about the aviators’ life, and I was proud to be of service in memorializing her date of birth, Dec. 9, and encouraging young women to pursue aviation and aerospace workers,” said Scott.

Secondly, Senate Bill 47 by Sen. Chris Kidd, R-Waurika, and Rep. Jeff Coody of Grandfield, championed the bill that runs concurrent to National Aviation Day, which is observed in the United States on Aug. 19 — Orville Wright’s birthday — to celebrate the history and development of aviation and aerospace.

“I know the state is facing difficult times now, and passing these aviation-promoting bills last spring may appear trivial compared to the issues we are currently addressing during the special session, but aviation has propped up the economy when other industries have been lagging or in decline. Aviation lifts Oklahoma up and I thought we needed to celebrate that,” said Coody, who serves as the Aviation Caucus House Co-Chair.

The last of the six bills passed created a state aviation license plate with proceeds to be used to promote the awareness of aviation and aerospace, and providing financial support for aviation education programs to address the need for a skilled and competent aviation workforce.

The special interest plate, now available, will cost motorists $35 with $24 of the fee deposited in the aeronautics commission’s revolving fund.

(Evangle Luo of TTFLY shared with you)