HB 2434 Increases Aviation Fuel Tax

Signed into Law by Gov Brown on 07/19/21
Status (overview) of bill:https://olis.oregonlegislature.gov/liz/2021R1/Measures/Overview/HB2434

This bill increases tax on jet fuel (1 to 3 cents) and aviation gasoline (9 to 11 cents), including Mo-Gas, only to return in grants that requires matching. Requires 3/5 vote for tax increase. Changes the percentages of distribution allocated to certain aviation programs.

Fiscal Responsibility
House Bill 2075 was passed during the 2015 Legislative Session. The measure amended ORS 319.020 by increasing aircraft fuel (Avgas) tax from nine cents to eleven cents per gallon and increasing Jet fuel tax from one cent to three cents per gallon. The Aviation System Action Program fund goes into three programs: Critical Oregon Airport Relief (COAR) program receives 50%; Rural Oregon Aviation Relief (ROAR) receives 25%; and State Owned Airports Reserve (SOAR) program funds 25%. The bill is set to sunset on January 2, 2022. Over the course of six years, the ASAP program is estimated to provide over $20M in funding to airports throughout Oregon. HB 2434A n increases the COAR distribution from 50% to 75% and it also adds a fourth priority to the COAR program, which is to assist commercial air service to rural Oregon. The remaining 25% will fund the SOAR (State Owned Airports) program for infrastructure and safety improvements at federally and non-federally funded state-owned airports. The programs keep their same priorities but the ROAR program is moved under the COAR program with their priorities.

Local Control
The amendment to this bill doesn’t just remove the sunset to continue aviation programs, but it increases the fuel tax and moves the Rural Oregon Aviation Relief grant program under the Critical Oregon Airport Relief program that appears to require matching funds and are subject to the priorities of the COAR program.

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