Established in 1970, the Airport and Airway Trust Fund, also known as the Aviation Trust Fund, helps finance the Federal Aviation Administration's (FAA) investments in the airport and airway system, such as construction and safety improvements at airports and technological upgrades to the air traffic control system, as well as FAA operations, such as providing air traffic control and conducting safety inspections. Read more in the Airport & Airway Trust Fund (AATF) Fact Sheet (PDF).
Trust Fund Legislation
The Airport and Airway Revenue Act of 1970 (PDF) (P.L. 91-258) created the Trust Fund to provide a dedicated source of funding for the U.S. aviation system, independent of the General Fund.
The authority to collect aviation excise taxes and to spend from the Aviation Trust Fund must be reauthorized periodically, most recently in the FAA Reauthorization Act of 2018, which was enacted on October 5, 2018. If the FAA's authorization were to expire without an extension, then the agency would be unable to spend any revenues allocated from the Trust Fund.
Section 4007 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PDF) (P.L. 116-136) imposes an excise tax holiday period, effective March 27, 2020 through December 31, 2020, on certain excise taxes that fund the Airport and Airway Trust Fund (AATF). AATF deposits will be affected based on a pause in collections. During this period, collection of federal excise taxes that apply to commercial operations are suspended, including:
- Taxes on transportation of persons and property by air
- Aviation fuel for commercial use.
The U.S. Treasury estimates that the Cash Balance of the Airport and Airway Trust Fund was approximately $15.7 billion on April 30, 2020. That amount is sufficient to cover the FAA's expected outlays for the remaining duration of the tax holiday.
Trust Fund Spending
The Trust Fund provides funds for four major FAA accounts.
- Operations: The Operations account funds the administration, operation, repair, and maintenance of the National Airspace System (NAS) and aviation safety oversight.
- Facilities & Equipment (F&E): The Facilities and Equipment account provides for current infrastructure, and the advancement of NextGen Air Traffic Control (ATC) systems.
- The Research, Engineering and Development (RE&D) account funds the research and services that ensure a safe, efficient, and environmentally compatible air transportation system.
- Grants-in-Aid for Airports: The Grants-in-Aid for Airports (AIP) account funds the FAA's Airport Improvement Program (AIP), which supports the development of a nationwide system of public-use airports to meet the current needs and the projected growth of civil aviation.
Currently, the Trust Fund may cover both capital and operating costs. In FY 2019, it provided all of the funding for two of FAA's four accounts, including the Facilities and Equipment (F&E) account and the Research, Engineering, and Development (RE&D) account.
The Airport Improvement Program (AIP), which provides grants for construction and safety projects at airports, is often funded entirely by the Airport & Airway Trust Fund. Between FY 2018 and FY 2020, however, AIP also received an additional $1.9 billion dollars in discretionary funding for airport grants from the General Fund of the U.S. Treasury, including an additional $400 million from the General Fund in FY 2020.
For questions related to Airport Improvement Program funding, please contact us at FAA's Airport Improvement Program Branch.
The Trust Fund provided approximately 94.4 percent of the funding for the Operations account in FY 2019 and provides about 98.9 percent of the funding for the Operations account in FY 2020. The remainder of the Operations Account is funded by the General Fund revenues.
Trust Fund Income
The Trust Fund provides the primary source of funding for FAA and receives revenues principally from a variety of excise taxes paid by users of the national airspace system. The excise taxes are imposed on domestic passenger tickets, domestic flight segments, and international passenger arrivals and departures, and on purchases of air travel miles for frequent flyer and similar programs. In addition, taxes are imposed on air cargo waybills and aviation fuel purchases. The largest source of excise tax revenues are related to transportation of passengers.
Revenues deposited in the Trust Fund are subject to congressional appropriations and included in the federal budget. Read more about the Current Aviation Excise Tax Structure and Rates (PDF).
FY 2019 Status
The cash balance reflects the total amount of cash in the Trust Fund at any given time. The Airport and Airway Trust Fund had a cash balance of $17.9 billion at the end of FY 2019.
- Airport and Airway Reports – Monthly updates on the Trust Fund's income, activity, and balances are reported by the Fund Management Branch (FMB) of the Bureau of the Fiscal Service of the U.S. Department of the Treasury (Treasury). These reports reflect information received and recorded by the FMB from Treasury's Office of Tax Analysis and the Internal Revenue Service.
- FAA FY 2020 Budget Estimates (PDF) – Trust Fund tax revenue forecasts are included in the Budget Estimates. The Treasury Department forecast of FY 2020 Trust Fund excise tax revenues is $17.04 billion (the Trust Fund also receives interest revenue).
Contact us if you have questions or need more information about the Trust Fund.