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 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. 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.
Trust Fund Spending
Currently, the Trust Fund may cover both capital and operating costs. In FY 2016 and FY 2017, it provided all of the funding for three of FAA's four accounts, including:
- The Facilities and Equipment (F&E) account, which funds technological improvements to the air traffic control system
- The Research, Engineering, and Development (RE&D) account, which funds research on issues about aviation safety, mobility, and the environment
- The Airport Improvement Program (AIP), which provides grants for construction and safety projects at airports. In FY 2018, AIP also received an additional billion dollars in discretionary funding for airport grants from the General Fund of the U.S. Treasury.
The Trust Fund also provided about 91.5 percent of the funding for the Operations account in FY 2017 and provides about 86.7 percent of the funding for the Operations account in FY 2018. The remainder of the Operations Account is funded by the General Fund.
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. In addition to Trust Fund revenues, in most years, General Fund revenues have been used to help fund FAA operations. Read more about the Current Aviation Excise Tax Structure and Rates (PDF).
FY 2018 Status
At the beginning of FY 2018, the Trust Fund had a cash balance of about $15.0 billion.
- 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 2018 Budget Estimates — Trust Fund tax revenue forecasts are included in the Budget Estimates. The Treasury Department forecast of FY 2018 Trust Fund excise tax revenues is $15.7 billion (the AATF also receives interest revenue).
Contact us if you have questions or need more information about the Trust Fund.