OKLAHOMA CITY, OK – During the 2017 state legislative session, the Oklahoma Aeronautics Commission (OAC) prepared a flight plan and aggressive agenda to bring much needed fiscal stability to the Oklahoma Airport System (OAS) and measures that will 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 and aerospace businesses, and military aviation produce almost $44 billion in annual economic activity in Oklahoma. An in depth look at the state’s public airports, including civilian and military, the study measured the total economic impact of each individual airport and then combined these individual airport impacts to determine the overall economic impact of the 109 airports in the OAS and the state’s three Air Force bases: Altus, Tinker, and Vance.
“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. 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 shortage of $800M insofar as meeting the needs of the 109 airports in the OAS over the next twenty years. Agency officials believed the increase in fees would assist in meeting those needs. “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 OAS. The state has the lowest tax rate of the 47 states that impose an aviation fuel tax. The rate in Oklahoma is $.0008 per gallon. Collections of the fuel tax yield to the Commission about $80,000 annually and may not pay for administering the collection of the tax. “Currently, a commercial airline pays only $5.44 to the state when it fills up a Boeing 737 at Will Rogers World Airport. 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,” said Bird. No bill was ever filed due to opposition from commercial airlines.
Two other revenue stabilizing measures that would have supported the needs of the OAS 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 foregone revenue in excess of $3.7 million to the state. Second, there was an effort to raise the $4.5M cap placed on the agency in 2015, limiting their main source of revenue, the aircraft excise tax. “It is widely known that $3M was taken from Aeronautics in 2014 and now we contribute annually to the state’s General Revenue fund because of the cap starting with $1.2M we gave in FY 2017,” said Bird.
A measure was also passed directing OAC 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 OAC 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.
“APPPA was designed as a permitting process to ensure compatible development around Oklahoma's public-use airports. OAC has done a good job in a fair and balanced way administering the program for the past seven years and enjoys a good reputation for working with companies and landowners. The clean-up language was passed to ensure the permitting process remained efficient for persons and businesses affected and to update the law based on current airport industry practices,” said Ortega.
Two aviation days were declared in statute celebrating and commemorating aviation and aerospace in the state. 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 recurring December 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, December 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 August 19 annually 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.
August 19 coincides with the birthday of Orville Wright who, with his brother Wilbur, made significant contributions to powered flight.
“When OAC brought the bill request to me, I began researching why we might need an aviation and aerospace day, and why we should place it in statute. Oklahoma has a rich aviation history, and a lot of aerospace firsts, including that Wiley Post invented the first pressured flight suit here. He discovered the jet stream. We need to do what we can in this state to not only recognize, but encourage and nurture the next generation of aerospace,” said Kidd. “As highlighted earlier this summer in the announcement of the aviation economic impact study, the impact upon the state’s overall economy has been nothing like it was during the last serious downturn of the oil & gas industry. A robust aviation industry has certainly reduced the impact of the energy downturn this time,” concluded Kidd.
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, available November 1, was designed by Oklahoma artist Christopher Nick and is the only plate of its kind available to aviation and aerospace enthusiasts. The plate will cost motorists $35 with $24 of the fee to be deposited in the OAC revolving fund.
Individuals may order the plate at the Tax Commission website at https://www.ok.gov/tax/documents/708-E.pdf