GBTA U.S. Advocacy Newsletter – April 2024

Welcome to the April edition of the GBTA U.S. Advocacy Newsletter designed to keep you up to date with what's happening in relation to business travel in the US, and how GBTA is advocating on your behalf.

Key Points

➤ General Overview

Following Congress's recent return from a two-week April recess and many high-priority tasks awaiting completion before the summer recess, April and May are expected to be very busy months on Capitol Hill. We expect there to be a high volume of hearings, reports, and executive orders covering the gambit of political (re: high dollar) priorities. This list includes the FAA reauthorization, Israel/Ukraine wars, credit card rewards programs, NDAA, the Farm Bill, FY25 Appropriations process, data privacy, AI and much more.

➤ Transportation

FAA Reauthorization: Congress passed a short-term FAA extension until May 10th, ahead of a March 8th expiration. The extension (H.R. 7454) passed the House by a vote of 401 to 19 and the Senate by Unanimous Consent. Senate delays have necessitated three short-term extensions, with the current extension set to expire on May 10th. On February 8th, the Senate Commerce, Science, and Transportation Committee held a markup of its version, S. 1939, signaling legislative progress. The next step in the process will be for the full Senate to vote on their FAA bill and then send its version back to the House for final passage. The expectation is that whatever FAA bill passes the Senate will be pre-negotiated to such an extent that the House will approve the Senate version without change. Majority Leader Schumer (D-NY) said the FAA Reauthorization has one chance for Senate Floor time. This means the bill that comes to the Senate Floor must have its outstanding issues negotiated and agreed to with the House. The House will need to vote again on the conferenced bill. The delays in passage have stemmed from debates over mandatory pilot retirement age, pilot training requirements, DCA slot and perimeter rules, and an amendment by Senator Ted Cruz (R-TX) that would require TSA and airports to provide security escorts to Members of Congress, other Federal officials and their families and staff when traveling through airports.

GBTA Actions: GBTA has been pushing for the passage of the FAA Reauthorization bill this year, which will continue to address these issues. GBTA sent letters to Congressional leadership emphasizing the importance of a long-term FAA Reauthorization and urging its swift passage.

Why it Matters: Business travelers need a safe and efficient air travel system. Congress is taking many steps to improve the National Air Space and infrastructure/staffing. GBTA will continue to push for passage of the FAA Reauthorization bill until it is signed into law.

Additionally, GBTA supports legislation working its way through Congress to increase tuition assistance for students to enter into aviation programs. Sens. Tammy Baldwin (D-WI) and Dan Sullivan (R-AK) introduced the bipartisan Flight Education Access Act.

Aviation: The Biden-Harris Administration has allocated $110 million in Bipartisan Infrastructure Law funding to improve safety and efficiency at 71 airports across the U.S. These grants, part of President Biden's Investing in America agenda, aim to modernize airport infrastructure, enhance airfield safety, and create jobs. The funding will support projects such as taxiway improvements, aircraft rescue and fire-fighting enhancements, and snow removal equipment acquisition. The grants are distributed to airports in 32 states (analysis of airports receiving funding) to advance the nation's airport system's safety and efficiency. The funding is from the Airport Infrastructure Grant program, one of three aviation programs created by the Bipartisan Infrastructure Law.

➤ Budget and Appropriations

Agency Budget Process: On Monday, March 11, The White House, the Office of Management and Budget (OMB), and individual agencies rolled out the FY2025 budget request. This officially kicked off the FY2025 budget and appropriations cycle as agencies begin to defend their requests before Congress. Congress controls spending, but the President's Budget is equally important as a messaging document. The request lays out the administration's priorities, including many programs and policies it could pursue through executive action. The proposed budget allocations prioritize various transportation and energy research and development sectors. The Department of Energy's budget includes significant funding boosts for climate and clean energy initiatives, such as a $10.6 billion allocation for R&D programs, including bioenergy and hydrogen technologies. Additionally, $500 million is earmarked for vehicle technologies. The Department of Homeland Security aims to fund the TSA pay equity initiative with $1.5 billion in funding. The Department of Transportation's $25.4 billion budget emphasizes aviation, with a substantial $17.5 billion allocation for the FAA, including plans to raise fuel taxes on business jets. The rail and transit sectors received consideration, with $2.5 billion allocated to Amtrak and substantial funding requests for rail safety and transit grants. The NASA requests included $960 million directed towards aeronautics and investments in green aviation programs focused on developing sustainable commercial airliners.

See here for funding breakdowns by agency: Commerce, Department of Homeland Security, Department of Transportation, Department of Energy, and Department of State.

➤ Tax Package

Wyden-Smith Tax Package: Senate Republicans are hesitant to support the tax deal negotiated by Senate Finance Chairman Ron Wyden and House Ways and Means Chairman Jason Smith, which includes business tax breaks and an expansion of the child tax credit. They argue that the bill's provisions sever the connection between the tax credit and work, potentially discouraging full-time employment and upward mobility. Critics, including Senate Finance ranking Republican Mike Crapo, raise concerns about the bill's impact on work requirements and encouraging part-time or intermittent jobs over steady, full-time work. Meanwhile, business lobbyists are pressing Republicans to pass the bill for provisions like bonus depreciation for equipment. Still, Republicans question the economic and political wisdom of such a move, considering the concessions that would be made to Democratic Members in the process. Senate Republicans may choose to reject the bill.

Why it Matters: Major provisions of the two most consequential tax laws passed in the last decade - the Tax Cuts and Jobs Act of 2017, and the Inflation Reduction Act of 2022 - are set to expire in 2025, including corporate tax policies and tax incentives for sustainable technologies such as EV's and SAF. The current tax negotiations do not include extensions of key GBTA priorities, but set the stage for future actions in late 2024 and 2025.

➤ Sustainability

SEC Climate Disclosure Rule: In March, the SEC approved its climate disclosure rule in a 3-2 vote, dropping Scope 3 emissions that are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain. Business travel is considered a Scope 3 emission, and modifying other requirements to withstand potential legal challenges. Republicans and some business groups had criticized the rule for going too far, while progressives were unhappy with the weakened proposal.

In recent updates on the matter, on April 4, the SEC notified the US Court of Appeals for the Eighth Circuit that it would halt the implementation of its climate reporting rules amid legal challenges. The halting of climate reporting rules will most likely expedite the court's decision on the rule's legality. The pause eliminates the need for back-and-forth requests to halt the rule, allowing for a quicker resolution. Challengers argue the SEC exceeded its authority with the rules, while business interests applaud the decision, citing protection from burdensome regulations. The SEC defended the rules' validity but also acknowledged potential regulatory uncertainty during ongoing legal challenges. Historically, pauses by the SEC have resulted in eventual court rulings against the agency's rules. The Eighth Circuit is expected to take time to decide on the fate of the climate rules, with the possibility of the case reaching the U.S. Supreme Court. If implemented, the rule mandates disclosures on climate-related risks, mitigation activities, board oversight, and climate-related targets, with extended phase-in dates.

GBTA Actions:In June 2022, GBTA filed comments with the SEC supporting the inclusion of Scope 3 emissions reporting. GBTA believes that reporting business travel emissions as part of scope 3 emissions when they are material will create a sense of ownership over travel-related emissions and incentivize companies to work with travel providers on solutions for decarbonizing the industry.

EPA Passenger Vehicle Emission Standards: The Environmental Protection Agency (EPA) released a final rule establishing the strictest emissions limits yet for passenger vehicles from 2027 to 2032, aiming to combat climate change. This regulation includes a delayed transition timeline for the auto industry from internal combustion engine (ICE) vehicles to electric vehicles (EVs) and hybrids, eliciting criticism for ignoring market demands and imposing significant costs. Despite adjustments to the proposed rule, requiring a lower proportion of EVs in new car sales by 2032, the EPA asserts that the standards align with climate goals, aiming to slash over 7 billion tons of climate pollution. However, critics question the rule's climate benefits, while stakeholders in the auto industry express concerns about the feasibility of meeting the new benchmarks and the potential impact on jobs.

Why it Matters: Auto emissions are a significant source of business travel emissions, and the transition to more sustainable technologies, including electric vehicles, is critical to decarbonizing the business travel ecosystem. GBTA supports policies to incentivize EV adoption and make charging infrastructure more widespread and reliable.

Sustainable Aviation Fuel (SAF): The FAA has announced a Notice of Funding Opportunity for airport improvement grants totaling nearly $270 million, which includes provisions promoting SAF infrastructure. These grants, part of President Biden's Investing in America agenda, aim to achieve the Biden Administration's SAF goals. Priority project categories include SAF processing, storage, and distribution facilities that offer at least a 50% reduction in greenhouse gas emissions. Grants are also available for projects aimed at reducing lead emissions from aviation fuel, such as planning for unleaded fuel infrastructure and constructing run-up locations to minimize community exposure. Applications are due by May 2.

GBTA Actions: GBTA supports the wide-scale adoption of SAF in the U.S. and abroad as the only near-term solution to decarbonizing air travel. GBTA supported the original Sustainable Skies Act, which became the model for the current SAF tax credit and is an active member of the SAF BTC Coalition.

➤ GBTA Signs Stakeholder Letter to the FCC

GBTA cosigned a letter to the FCC with other travel and transportation-focused organizations raising concerns about the Ligado Order, approving a ground-based 5G network that may interfere with GPS, weather forecasting satellites, and other essential aviation communications technologies. The letter urges the Biden Administration to work with the FCC to stay and ultimately set aside the Order, allowing the project to progress. This action follows an independent technical review by the National Academies of Sciences, Engineering, and Medicine ("NAS") analyzing the potential interference issues related to the Ligado Order. The NAS report confirms that the proposed operations would cause harmful interference across various deployment scenarios, creating potential safety risks for air travel.

Why it Matters: Aviation communications and safety implications directly impact business travelers and are vital to the air traveler's experience. These issues can easily impede our ability to travel safely and efficiently.

GBTA Actions: Signing onto the Ligado Order letter is another way GBTA has demonstrated support for passenger safety.

➤ Upcoming Events

GBTA U.S. Legislative Summit: June 10-12, 2024, Washington, DC

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