Aviation Fuel Taxes and Revenue Diversion 101
Transcript
machine-generatedCommittee Chair Senator June Robinson: Good afternoon. Calling the Ways and Means Committee to order for January 26, 2026. Today on our agenda, we have a work session about aircraft fuel taxes and then we will move from there into public hearing. We have eight bills listed for public hearing. So we’ll start with the work session if we can have the folks presenting come up.
Just Ann right Richart. How do you say Richart? Thank you. Richart and Steve Yuing. Just begin whenever you’re ready.
Ann B. Richart (Aviation Division, WSDOT): All right, I’ll jump right in then. So, I wanted to start by just introducing the aviation division of WSDOT a little bit because we are a very small division. Including myself, we have a total of 12 people. So, a lot of people aren’t familiar with exactly what we do. So, I just wanted to give you that background. We foster the development of aeronautics and the state’s aviation system to support sustainable communities and statewide economic vitality. So, what that means is we provide roughly $3.5 million a year in grants and loans to Washington airports. We maintain and manage 16 emergency access airports. So, those are the ones that you’re likely to think of as like a dirt strip. These are the ones that provide important emergency access or in some cases recreational access, but there’s nobody else there to look after them. We also do planning of the state’s aviation system. So while the airports do individual planning in conjunction with the FAA, we are the entity that does the systemwide planning and kind of determines and helps the FAA understand what the Washington system of airports is and what it means and how it works. As part of that, we inspect general aviation airports for safety on behalf of the FAA. So that’s a function that FAA does on the commercial service airports. We also provide expertise to WSDOT and to other agencies and to the public on drones. So that’s a new emerging field for us. We provide technical assistance to Washington airports and to communities that might have concerns or interest in airports. And then we register aircraft, drones, and aircraft dealers. So, that’s who we are.
Today you’re going to be discussing the FAA’s aviation fuel tax regulation. So, I wanted to give you a little history and I just have to tell you this is a brief history because there’s actually a lot that has been going on for many years on this. So it actually started in 2014 which was when FAA adopted a rule, a policy about the appropriate use of fuel tax aircraft fuel tax related revenue. But that policy looked back to 1987. So the triggering date was any fuel taxes that existed prior to this date December 30th 1987 were grandfathered. So, this policy doesn’t apply to aircraft fuel taxes prior to 1987. It does apply to any fuel taxes that were implemented from December 30th, 1987 forward.
Senator: If I could just interrupt you. So, are these fuel taxes that the state has imposed?
Ann: Thank you for the clarification. Yes, these are state fuel taxes.
Senator: Okay. And they’re paid by someone buying fuel for their aircraft. Is that correct?
Ann: Sometimes it’s paid by the distributor that sells the fuel to the person fueling their aircraft. So, it’s whoever it is that’s paying the tax at whatever level.
Senator Conway: A manufacturer is not involved in this fuel tax. Only owners of airport airplanes. This has no impact on Boeing, I guess, was the question I’m asked.
Ann: Not on Boeing. No.
Senator Conway: All right. I mean, they do fly airplanes, so they buy fuel.
Ann: Correct. From that perspective. Yes.
Ann: Okay. So it was actually in December 8th of 2017 that every state was required to be compliant with this rule of reinvesting all aviation fuel taxes in aviation. So, in June 28th of 2017, that’s when the state was being proactive before the deadline, submitted an action plan to the FAA, describing how we would comply with the rule. But FAA didn’t approve that action plan. So, after that, this August body, the Senate, passed Senate Bill 6168, which required the Department of Revenue to develop an action plan hopefully that would be compliant and submit that to the Senate. Department of Revenue did work with Department of Licensing and Department of Transportation on developing that action plan and that was approved by the FAA in 2022.
So then in 2024, we got a letter from the FAA that said, “Okay, you have an approved action plan. We want to audit that, audit what you’ve been doing to make sure that Washington state is doing what you said you were going to do in the action plan.” So we got that letter in April of ’24. In July of ’24 we sent a response which included a list of projects that were not funded from the state aeronautics account but were funded from a variety of different accounts. But were reinvested in statewide aviation related projects. So it took a little while, a little bit over a year. We submitted that response in July of ’24. In October of ’25, so this is just a few months ago now, we got a letter from the FAA that said, “Okay, some of those projects that you’ve listed, some of them are good. Some of them absolutely don’t count. They’re not good. And some of them we don’t know if they’re good or not. We need some more information.” And so that’s where we are right now. What we have done is requested an extension of an additional 60 days from FAA. So that was granted. So we now have until February 18th. So couple more weeks yet to put together a response to FAA’s letter. So that’s where we are now.
Okay, so we’ve been talking about compliance. So, this is kind of very down and dirty simple. What FAA requires in order to comply with their regulation. First we and every time I say we, I mean the state of Washington. So, the state of Washington has to document the actual aviation fuel tax revenue that’s been collected. So, first we know how much money we’re talking about. The requirement in the FAA regulation is that those funds must be deposited into an account that’s dedicated solely to airport capital improvements, aviation noise mitigation programs, statewide aviation programs as defined and identified by the FAA. Previously in that when the action plan was approved, FAA had approved at that time the use of the word that we’re using is offsets in lieu of depositing the funds in a dedicated account. So a moment ago when I talked about that we had submitted to FAA a list of projects that were funded by various accounts. That’s what we’re talking about that the state said rather than putting all of the funds in one account and spending them that way, we’d rather spend them through a variety of programs, but we’ll keep track of those to make sure that we’re still reaching that required kind of dollar amount limit by the FAA.
Senator: Can you give us an example of what an offset is?
Ann: Right off the top of my head I don’t have a specific example but one that you can be comfortable with is the grants that WSDOT gives to airports are often for things like a runway extension project. So there are runway extension projects in Washington state that are funded by grants from the department of commerce. So that’s exactly the same kind of project that is already funded by fuel taxes because that’s how WSDOT aviation is supported. But that same project can be funded through a grant from commerce and that’s one of those other projects. Does that make sense?
Senator: Yes. Thank you.
Ann: So now to kind of finish up with that bullet point, FAA had previously approved the use of these offsets. But now they’re saying, okay, if you’re going to use the offsets, FAA has to have the ability to approve those projects in advance to make sure that they meet FAA’s requirements of being a statewide aviation project. And then I just want to somebody had asked earlier if we were talking about state fuel taxes. So the last bullet point here, I wanted to point out that this same FAA regulation applies to local fuel taxes. However, that’s not really a part of my discussion here because the state of Washington isn’t the party that’s responsible for compliance with the local fuel tax regulations. The airports are responsible for ensuring that their local taxing authorities are compliant with the FAA rules. So similar same rule but different responsible parties.
Okay. So then what this all means roughly speaking and this is a very multi-dimensional many agency partnership, the numbers come from the department of revenue. They’re the ones that know how much fuel tax is collected. So we’ve been working very closely with them. And it looks like going back to that deadline when compliance began back at the end of 2017. So from then until now, there’s been roughly $210 million that’s been collected of aviation fuel taxes that’s not already accounted for being spent on aviation programs. So that’s kind of our target. The penalty in federal law is that rather than just sending us a bill for $210 million, the penalty is that US DOT can withhold grants up to three times that amount. And this is not just FAA grants, but from any US DOT agency, any grants going to the state of Washington. So that would be highway, rail, transit, any of those grants. So the initial rule three times that amount is the penalty. So that’s what could be withheld in grants. And then in 2024, the FAA was reauthorized and that reauthorization legislation increased that enforcement amount to twice what it otherwise was, which means it’s totally now six times the enforcement amount. So that puts us in the ballpark of $1.2 billion of transportation grant funds that could be withheld by the federal government if they chose to take that course of enforcement action. Additionally, FAA has the ability to file a lawsuit. So, that’s the background that I had for you today. Here’s my information if anybody has more questions for me.
Chair: And Steve, are you there for questions or do you have a presentation?
Steve: Correct. I’m just here for questions.
Chair: Okay, great. It looks like we have a few questions. Senator Hasegawa.
Senator Hasegawa: Thanks, Madam Chair. So, I’m just curious on how what authority does the federal government have to tell us how we use our state tax dollars? Is it through the commerce clause issue or and if so can we just tax on that portion of the fuel that’s used within the state?
Ann: I don’t have the citation before me. It is linked to that the state receives grant funding from the US DOT. So, I believe that if the state stopped taking grant money from the federal government, that would relieve us of these responsibilities. I’m not 100% sure of that, though.
Senator Conway: I’m assuming our airlines pay this tax, right, at the airport, major Sea-Tac?
Ann: Airlines are exempted from some of the fuel tax. So they pay a smaller amount of fuel tax and probably my colleague from department of revenue has a better handle on who pays what portion of it.
Steve (Department of Revenue): So when we talk about the fuel tax that is subject to this FAA regulation it is actually a number of taxes Senator. It’s the aircraft fuel tax. It is certain again the you know Ann talked about the non-grandfathered amounts of local sales and use tax. It’s the hazardous substance tax. It’s the petroleum products tax and it’s the oil spill response and oil spill administration tax. So a number of taxes make up the revenue that we’re talking about here that must comply with the FAA regulation. And so, each of those may have different a different taxpayer base. And, if you want, I can I’m happy to talk to you about that or share our tax reference manual that talks about who’s subject to these taxes.
Senator Conway: You just mentioned the hazardous fuel tax and reminded me that we’re talking here about the commerce on our bays here and fuel tax on our ships that are coming in out of our ports, it sounds like. Is that correct?
Steve: I’m not sure what we’re talking about. I when I eventually got into this, I was thinking kind of like a gas tax is an aviation tax you pay, you know, when you’re gassing up your airplane or whatever. It sounds like when we’re this fuel tax is much broader in the sense it impacts commerce as well. A lot of commercial activity.
With respect to the state taxes, Senator, I would say that’s correct. With respect to the local sales tax that is part of this revenue stream, it is local sales tax that is derived from fuel sales at airports.
Senator Conway: Okay. Can you give us can we get a breakdown of that? If we’re going to take action on a bill here, I’d like to know more.
Steve: Okay.
Chair: Any other questions for either of our presenters? Okay. Thank you for that overview. That ends the work session and we’re going to move into public hearing. We have three bills at the top of our list that are adjacent to the aircraft fuel tax which is why we had the work session. So we’re going to start with Senate Bill 5989. Tiani, please give us a briefing.
Tiani (Committee Staff): Thank you. Good afternoon Senator Robinson and members of the committee. As Senator Robinson just mentioned, the first three bills you have today are all related to the revenue redistribution of aircraft fuel taxes. The first bill is SB5989 sponsored by Senator Banky. As a brief background, a state sales or use tax of 6.5% of the selling price of aircraft fuel is collected from purchasers and users of aircraft fuel in Washington. The revenue is currently deposited into the state general fund. SB5989 has two main component. First, the bill directs a portion of state sales and use taxes on aircraft fuel to the aeronautics account instead of the state general fund. In FY27, 0.5% of those taxes are redistributed. That percentage will increase to 1% beginning in FY28. The aeronautics account is administered by department of transportation. Expenditure requires appropriation and can only be used for aviation related purposes. Secondly, the bill also requires the aviation division of the department of transportation to report certain information to the legislature, including the annual amount of additional funds awarded for airport project and the estimated amount of funds, excuse me, return to the general fund accounting for sales and business and occupation taxes generated by those funded airport projects. This bill takes effect July 1st, 2026.
Turning to the fiscal impact, there is a partial fiscal note available in your EBB. Even though the bill provides an effective date, the Department of Revenue indicate they cannot implement the change until January 1st, 2027, which is also the earliest date of implementation for the following two bills. In terms of revenue impact, this legislation will decrease the general fund state by an estimate amount of $900,000 for fiscal year 27 and about $4.1 million in FY28. The total four-year outlook impact is approximately $9.2 million. For administration, DOR requests $454,000 in FY27 for 2.3 FTEs to set up program system changes, process and exam data and assess taxpayers with reporting. The 4-year cost is in total $617,000. The fiscal note for WSDOT is not yet available. And that concludes my remark for this bill. Happy to take questions.
Chair: Any questions for Tiani? Okay. Did you want to? Sure. Senator Boehnke.
Senator Boehnke: Thank you, Madam Chair. Real quick, this is really accountability where we got to meet the requirements for the FAA. You heard about the staggering numbers when this is straightforward. We can meet those compliance requirements. We have the accountability within the bill and you’re going to hear some of the testimony that’s going to come out with some of the staggering numbers that they presented to me about getting us into compliance, getting us that trustworthiness and getting the projects up to speed of what we need to do across the board. Aviation safety is a key element of our society nowadays and we want to build this into future operations and looking forward to any answers and chatting. Thank you, Madam Chair.
Chair: Thank you. I think we have one person who signed in in person. John Flanagan, are you here? Please come forward. And if we could have our tech people bring in the folks who signed in remotely so we can hear from them next. We are going to have a one minute timer on testimony today. We have a number of bills and a lot of people who want to testify. So when you see the light turn red, please wrap up. If there’s more that you want to tell us, you are always welcome to submit written testimony. Go ahead.
John Flanagan (Port of Seattle): Thank you, Madam Chair, members of the committee. For the record, John Flanagan, Senior State Government Relations at the Port of Seattle, here today testifying in support of Senate Bill 5989. And I’ll wait on the other ones. We support the measured and incremental approach taken here. Per the testimony that you’ll hear from others today, we appreciate that the bill ensures federally restricted aviation dollars are put back towards aviation related spending without creating deficits in other critical programs. I think of the three bills that you’ll hear on this topic today, this is probably the one that takes the most delicate approach, I’ll say. Thanks.
Chair: Okay. Let’s see, Brad Schuster.
Brad Schuster (Aircraft Owners and Pilots Association): Good afternoon, Chair Robinson, committee members. On behalf of nearly 10,000 aircraft owners and pilots association members residing in the state, I’m requesting that you all support Washington Senate Bill 5989 with your yes vote today. I’m testifying as a pilot, a Washington state resident, and the North AOPA Northwest Mountain Region Manager. Thank you, Senators Banky and Duerr for sponsoring this important bill. The almost 150 Washington state public use airports are crumbling. It’s our state airport system and serves everyone. At the end of 2023, that system was $60 million short of what has been asked for. As was mentioned, aviation taxes should have all along been going to airports. To answer Senator Hagawa, it’s public law 100-223. It’s called the Airway Safety and Capacity Expansion Act of 1987, which requires that any taxes on fuel enacted after that time need to be directed to airports. Appreciate your support for this bill. Thank you.
Chair: And my apologies, Josh Marcy, are you in the room? I somehow skipped over that you were in person as well. So, please come forward. And then after Josh, we’ll wrap up with Jim Couns on Zoom.
Josh Marcy (Washington Airport Management Association): Hi, good morning. My name is Josh Marcy. I’m the Washington Airport Management Association president. I represent 70 airports of the 130 public use airports in the state of Washington. And WAMA supports 5989. This 5989 directs portions of state retail and use tax on aircraft fuel to WSDOT aeronautics account, directing 1% of the six and a half percent sales tax on fuel to airports throughout WSDOT. As you’ve heard through this session, airports are pretty focused on getting aircraft fuel taxes in compliance and this would help with that. WAMA airports supports this initiative but our highest focus relates to the state and local taxes not being in compliance with FAA grant assurances and airports are economic drivers for the state’s communities and additional funding through WSDOT helps airports maintain that infrastructure. The fiscal note estimates that this would double WSDOT’s annual budget and we must invest in our airports and our communities. Thank you.
Chair: Thank you. Jim Couns.
Jim Couns (Chelan Douglas Regional Port Authority): Yes. Thank you madam chair, ranking member and committee members. Let me start my video. Great. Thank you for the opportunity to testify in support of 5989. We think this is really a great bill. Our focus, I’m the CEO of the Chelan Douglas Regional Port Authority. We own three airports in eastern Washington. Our focus is to get the state of Washington fully compliant with all aviation fuel taxes to go to aviation across the state of Washington. The state now is nine years out of compliance and I believe the FAA is looking very closely at trying to get the state in compliance. WSDOT recently in the presentation earlier today talked about an FAA letter submitted to the state. The FAA says in the last legislative session $82 million of appropriations theoretically to aviation projects do not qualify. $82 million that’s going to have to be reappropriated according to the FAA. This bill is a good start. Thank you.
Chair: Thank you. Okay, that concludes the public testimony and the public hearing on Senate Bill 5989. Let’s move on to Senate Bill 5898. Boy, Senator Boehnke, you really lined up those numbers. All right, Tiani, please give us a briefing.
Tiani: Hello again. For the record, Tiani, committee staff. SB5898 in front of you now is also sponsored by Senator Boehnke. It redirects tax revenues on aircraft fuels from hazardous substance tax, petroleum product tax, and oil spill response tax to the aeronautics account. Under current law, such revenues are deposited into several dedicated accounts. For HST, the motor vehicle fund received the first $50 million for transportation storm water activity and project and three model toxic control accounts receive the remaining funds based on the percentage listed in the bill report. PPT revenue is deposited into the pollution liability insurance program trust account. Revenue from the oil spill response tax are deposited into the oil spill response account.
A partial fiscal note is available in your EBB. On the revenue side, the bill will move an estimated $8.4 million from the model toxic control account and pollution liability insurance trust account to the aeronautics account in FY27 and an estimated amount of $21.6 million in FY28. The four-year number is around $53 million. To note there is a small drafting error where the code revisor was converting the PPT tax rate to its numeric form and this fiscal estimate is based on the assumption that this will be corrected and the rate is unchanged.
Due to the revenue reduction of the model toxics control accounts, Ecology points out in their fiscal note that this bill might have potential impact on both their operating and capital budget. In short, assuming the revenue loss requires equivalent reduction to ecology’s expenditure authority in those MTCA accounts in the 27-29 biennium. This would equal to an amount of $38 million reduction and that is about 57 FTE reduction and $1.7 million reduction in contracts and about $15 million in their grant funding. We are still waiting for the fiscal note for the Washington Pollution Liability Insurance Agency whose budget is supported by the pollution liability insurance trust account. And with that, happy to take questions.
Chair: Other questions for Tiani? Okay, thanks for the briefing. Let’s go to public testimony. Let’s see here. Okay. John Flanagan, Eric Ffitch, and Josh Marcy, why don’t we start with you?
John Flanagan (Port of Seattle): Thank you, Chair Robinson, members of the committee. For the record, once again, John Flanagan, senior state government relations at the Port of Seattle. I’m here today testifying other regarding Senate Bill 5898. Although we support the fact that this bill would bring the state back into full compliance with the long-standing FAA guidelines on use of aviation related fuel tax, we are concerned about unintended impacts to other programs that are critical to the port’s operations and to many of the folks that you’ll hear from today, i.e. MTCA. And also we want to be conscious of impacts to other programs or sorry the fact that the legislature has many difficult fiscal decisions to make this year and it’s a big amount of money. Thanks.
Eric Ffitch (Washington Public Ports Association): Thank you, chair, opposing member Gilden. Eric Ffitch, executive director at the Washington Public Ports Association, also signed in other on 5898. Ports around the state develop and operate transportation facilities to promote economic development. That includes airports and marine terminals. We have a nuanced perspective on this proposal. As you can imagine, having just heard from our biggest member, we do support the state getting back into compliance. And have a lot of members who you’ll hear from with that concern. But our ports also draw down the MTCA account, spending remedial action grants on critical environmental cleanups that turn contaminated sites back to productive use. If nothing else, this confirms a position we’ve shared with this committee before that diverting MTCA funds to funds other than environmental cleanup purposes is a challenge for our members. So with that, we’d welcome inclusion in future discussions about this bill and this issue and we thank you for your time.
Josh Marcy (WAMA/Paine Field): Thank you again, Josh Marcy, president of WAMA, also the airport director at Paine Field. We’re supporting 5898 as an investment into Washington’s airports and Washington’s future. Washington airports generate $107 billion a year in business revenues, $26.8 billion in labor income, approximately 410,000 jobs, and $913 million in statewide tax impact. So that’s about from 2018. Right now the WSDOT aviation budget is about $6.8 million. And airports receive less than $2 million from ecology for environmental cleanups. And airports total receive less than $10 million annually from the state. In comparison, we receive about $70 to $80 million a year from the FAA. And we would like to see that change. Senate Bill 5898 is critical to help our airports so we can continue to invest in our future and our capacity and efficiency within aviation in our state. Just for one example, Paine Field has spent approximately $500,000 in state grant funds with the leverage of $16 million in federal grant funds over the past decade.
Chair: Great. Thank you. Okay. Let’s have Frank Dawson and Travis Dutton, please come up.
Dawson Frank (WAMA/Paine Field): Good afternoon. For the record, I’m Dawson Frank. I’m the legislative chair for WAMA, the Washington Airport Management Association and also a deputy director at Paine Field. It is a complicated topic. I’m not going to lie to you. It’s very complicated. But for us the airport side grant assurance 25 airport revenues is what requires our taxes from aircraft fuel after 1987 to go to aviation or airports. There are six state taxes on aircraft fuel. Most of the ones we are talking about today are paid when the fuel is delivered at the airport. Only the state excise tax currently is directed to WSDOT’s aviation fund. There are many numbers here. If I had to have a slogan, it would be 5898 is great because that is the one that gets us in compliance with the FAA for the hazardous substance tax, the petroleum product tax, and the oil spill admin fee. Again, this has a major impact. And please note, if you exclude Sea-Tac, the other 20 largest airports in the state spent $233 million on capital projects in 2024. There’s a big need to fund our infrastructure. Thank you for your time.
Travis Dutton (Washington State Association of Counties): Thank you. Chair, members of the committee, Travis Dutton, representing the Washington State Association of Counties and our county solid waste programs. I really wish I had prepared a slogan as well. But as you’ve heard from quite a few already, MTCA is a critical funding source for a lot of environmental, groundwater, and human health programs. Counties rely heavily on it to manage our household hazardous waste programs. Like gas tax revenue, this account is already facing increasing pressure as counties are asked to do more to meet environmental and public health goals while our revenue declines as the state reduces our reliance on fossil fuels appropriately. So, our concern is that the changes to the aviation fuel tax could further weaken MTCA without addressing how those losses will be offset. We’ve been engaged in discussions around long-term sustainability of MTCA for most of a decade. However, those discussions have not yet led to a clear or durable path forward. As you consider these changes, please consider also pairing them with a plan to keep MTCA account whole so that counties and state agencies can continue delivering these services. Thank you.
Carrie Sessions (Department of Ecology): Thank you for fitting me in. Chair Robinson, members of the committee, my name is Carrie Sessions. I work as the director of governmental relations at the Department of Ecology. While questions on the appropriate use of aircraft fuel tax revenue are beyond ecology’s purview, we are concerned that a secondary impact of the bill is a significant reduction of revenue to MTCA. MTCA serves as a primary funding mechanism to fund our state’s work to prevent and clean up pollution and provides critical pass-through money to local governments and tribes to protect communities from pollution and contamination. The decrease in revenue to MTCA would come at a time when current appropriation levels in MTCA are already exceeding anticipated revenue. And so we’re concerned that this will significantly hinder both our and local government’s ability to clean up polluted sites and protect clean water. We ask in your deliberation of this issue to please mitigate the impacts on MTCA. And should the legislature determine that revenue should not be deposited into MTCA, we encourage discussions on ways to backfill this revenue. Thank you.
Chair: Thank you. Okay, let’s go online to Brad Schuster.
Brad Schuster (AOPA): Good afternoon once again, Chair Robinson, committee members. I’m Brad Schuster, aircraft owners pilot association Northwest Mountain region manager, and I’m requesting that all of you support Washington Senate Bill 5898 with your yes vote today. Thank you, Senators Banky, Christian, Cleveland, and Duerr for sponsoring this important bill. Make no mistake about it, public law 100-223, the Airway Safety and Capacity Expansion Act of ’87 requires that any taxes enacted on fuel after 1987 is required to go from those aviation fuel taxes to airports, not other accounts. The request that you continue to divert illegally those funds from some of these other entities, it should never have happened and it needs to stop. Your state public airports are at least $60 million short of what’s needed. This bill takes the first right step towards ensuring that fuel taxes are directed towards airports. Supporting Senate Bill 5898 and Senate Bill 5989 which you just heard about simultaneously provide that assistance to airports and give us a positive first step towards complying with federal law with respect to legal uses of aviation fuel tax. I’m available for questions. Thank you.
Chair: Thanks for joining us. Jim Couns.
Jim Couns (Chelan Douglas Regional Port Authority): Thank you. Ranking member and madam chair and ranking member thank you for the opportunity to speak in support of Senate Bill 5898. This is really important to get into compliance with the Federal Aviation Administration. Every airport in the state that gets FAA money certifies that our aviation fuel taxes are spent within the state. So we are very concerned about that. Just a couple things to remind you. We’re 9 years out of compliance with the Federal Aviation Administration. The director of the department just said we’re $1.2 billion could be what WSDOT could withhold in funds with further non-compliance. And then the FAA’s recent letter to the state disqualified $82 million of previous expenditures that were supposed to be offsets. I think it’s time to comply to make sure that the federal government does not come in with forced compliance. Thank you.
Chair: Thank you. That concludes the public testimony and public hearing on Senate Bill 5898. We’ll move on to Senate Bill 6240. Tiani, please give us a briefing.
Tiani: Hello again. And for the record, Tiani, committee staff. SB6240 in front of you creates a state aircraft noise and air quality mitigation account to receive a portion of hazardous substance tax revenue on aviation fuel. Beginning October 1st, 2026, the deposit amount equals to the portion of the tax rate exceeding $1.48 per barrel multiplied by the number of barrels of aviation fuel. The HST rate on aviation fuel is $1.48 per barrel for fiscal ’26 and the tax rate is adjusted annually by inflation. Expenditure from the new account may be used only by the department of commerce to establish a grant program to fund mitigation strategies within aviation impacted communities related to aviation related air quality and noise impact. The bill also requires taxpayers on the possession of aviation fuel to report to the department of revenue the quantity of barrels and tax on a separate line.
In terms of fiscal impact for revenue shift, the bill would move an estimated $120,000 from MTCA account to the new account in FY27, an estimated amount of $800,000 in FY28 and around $2.2 million over the 4-year outlook. Similar to last bill, ecology indicate that they may experience corresponding reduction in their capital and operating budget due to the revenue loss of MTCA accounts. For implementation, DOR will incur total cost of $237,000 in FY27 and around $300,000 over 4-year outlook period. Department of Commerce fiscal note shows an indeterminate impact as a grant program will be subject to appropriation. And before I wrap up for reference, there is a comparison table in your electronic bill book. The table includes taxes involved of each bill and their distribution policy, the usage of the funds that are being distributed, the effective date of the bill and also the fiscal impact of the first full year of implementation. And the last line is whether the taxes are subject to the federal aviation administration policy. And with that, I’ll stop talking.
Chair: Thank you for preparing the chart for us. That’s really helpful. Senator Duerr.
Senator Duerr: Thank you, Madam Chair. One quick question. Is this an allowable use of MTCA funds for this? Because don’t aren’t MTCA funds supposed to go for toxic cleanup?
Tiani: Yeah, under current law revenues from hazardous substance tax are going to MTCA but this bill, I’m talking specifically for the second one 5898, it will distribute the revenue to aeronautics account. So MTCA account would receive less revenue as a result of this bill.
Chair: Okay, any other questions? All right, thank you for the briefing. Let’s hear from I see John Flanagan ready to go. So, let’s have John Flanagan, Eric Ffitch, Peter Godlooski.
John Flanagan (Port of Seattle): Thank you, Chair Robinson, members of the committee. For the record, one final time, John Flanagan, senior state government relations at the Port of Seattle, here testifying other regarding Senate Bill 6240. We appreciate the prime sponsor’s intention under the bill and support her efforts to dedicate a portion of aviation fuel taxes towards ongoing mitigation, but we’d like to work on the bill with her to restructure a little bit. For example, we’d prefer to see 6240 attached to a broader fix on the ongoing aviation fuel tax diversion issue and to see mitigation added to the allowable uses of the aeronautics account potentially. And then a cap on the per-annum or per-biennial cycle, something like that. We hope to continue working with the prime sponsor to find a solution that’s agreeable to all of the interested parties. Thanks.
Eric Ffitch (Washington Public Ports Association): Thank you, Madam Chair. Once again, Eric Ffitch, Washington Public Ports Association, signed in with a thrilling and helpful other position on 6240. This proposal appears to dedicate some portion of the hazardous substance tax to an aviation related purpose. And as I said before, we appreciate the need to resolve revenue diversion issues. However, we are concerned that at least as currently drafted, this new account might not be compliant with FAA requirements and hence not get us closer to that solution. And it does continue the concerning trend of transfers out of MTCA, further threatening the solvency of that account. Thank you.
Peter Godlooski (Association of Washington Business): Good evening, Madam Chair, members of the committee. For the record, Peter Godlooski with the Association of Washington Business signed in con this evening. Echoing the same concerns you just heard from Eric about the transfer out of the transfer of the HST from the MTCA account. We are concerned by the ongoing pressures on the MTCA account and the draw down that has been identified by the Department of Ecology. We do not think this is the best path forward and would urge a no on this. Thank you.
Chair: Thank you. Dawson Frank and JC Harris, please come forward.
Dawson Frank (WAMA/Paine Field): Good afternoon again. Dawson Frank for the record with the Washington airport management association legislative chair. Airports oppose 6240 as currently written for two reasons. WSDOT aviation department and the aeronautics account is the best steward of funds to airports. They do a lot with a limited budget to make a huge impact in the over 100 airports in the state. And in the airport’s eyes, any state tax on aircraft fuel should be directed to WSDOT to manage it. Directing funds to commerce complicates the issue and does not focus on the state’s aviation plan. And we’re always worried about making sure we are in compliance with our FAA grant assurances. The state through WSDOT has very similar airport grant assurances as the FAA does and keeping in compliance with the FAA’s requirements. So please help ensure we continue to focus on our economic drivers at airports and make sure that any tax dollars from aircraft fuel are directed to WSDOT. We ask you oppose 6240 as currently written and thank you for your time.
JC Harris (Sea-Tac Noise.Info): Good afternoon. My name is JC Harris. I’m here today on behalf of Sea-Tac Noise.Info which is 1,300 homeowners with bad port package sound insulation. Bbecause I am the only person you will hear from today with port package issues. I beg a few extra seconds. I’m going off script here. I think it’s fair to say that revenue diversion, title 49, is Byzantine. And just the fact that you’re dealing with three bills today says something. The FAA and the will of Congress is to take a very dim view of revenue diversion. Although sound insulation is a legitimate use of airport funds, it is rarely provided for. The reason we support 6240 is because it establishes a fundamental principle: ongoing structural revenue for the few people who live around the airport who suffer from the impacts so that the rest of the state can obtain billions of dollars of ongoing benefit. We have no opinion on the other two bills because no matter how many millions of dollars they may generate, it makes us no difference if none of them can be applied to people living under the flight path. I urge you to support SB6240 and I thank you for your time.
Chair: Thanks. Thanks for being here. Okay, we’re going to go online. Brian Davis.
Brian Davis (Burien Airport Committee): Sorry about that. Good afternoon, Chair Robinson, members of the committee. My name is Brian Davis. Speaking on my own behalf, but very much out of my experience as vice chair of the Burien Airport Committee. Our airport communities recognize the economic importance of Sea-Tac International. But in Burien, the airport does more harm than good. The Port of Seattle is currently pursuing a multi-billion dollar expansion that would allow a 30% increase in aircraft operations over the next 10 years. Federal noise regulations do not take into account the devastating cumulative impacts of this ever-increasing traffic. SB6240 would help facilitate the repair and replacement of those noise insulation port packages installed over the years in homes near the airport. Many have failed. Many of the people who live in those properties can’t afford the necessary repairs. Earmarking a small share of the proceeds from the aviation fuel tax would set up allocation of critical funds for this work. And I would argue that programs like this are exactly why the tax exists. If you combine these funds with the potential funding stream, state, federal, and local, you’d have a pool of resources large enough to where we could actually get some repairs done. And so far, there has not been one port package fixed. We must step up our protection of residents below the flight path. SB6240 would help make that happen. And I thank you.
Brad Schuster (AOPA): Good afternoon once again, Chair Robinson, committee members. I am Brad Schuster, the AOPA Northwest Mountain Region Manager, urging requesting your opposition to Washington Senate Bill 6240 and your no vote in this committee. First of all, to make clear, the FAA through the part 150 process does provide funding for noise impacted residences following a part 150 study. This bill’s creation of a noise and air quality mitigation account would both unnecessarily duplicate the FAA noise program and unnecessarily duplicate the efforts of the FAA energy emissions division and eliminate gasoline lead emissions programs which are collectively making great progress towards eliminating lead in aviation fuel by 2030. Codification of a state level aviation noise emissions account through this bill would be tantamount to endorsing continued illegal theft from your state airports via the revenue diversion from aircraft fuel taxes. As we said, our state airports need at least $60 million more. I request that your committee does not pass Washington Senate Bill 6240 as your opposition to this bill is in the best interest of Washington state aviation and all Washingtonians. Thank you. I’ll remain available for questions.
Rebecca Deming (City of Des Moines): Chair Robinson, Vice Chair, and members of the committee. I am Rebecca Deming, the community development director for the city of Des Moines. I am here today to express the city’s strong support for Senate Bill 6240. As a community located directly under the primary flight paths of Sea-Tac airport, the residents of Des Moines face a disproportionate environmental and public health burden from airport operations. For years, our community has experienced the cumulative impacts of ultrafine particles and persistent aircraft noise which disrupt daily life, education, and long-term health outcomes. SB 6240 is a vital step towards environmental justice for airport impacted communities by directing a portion of the hazardous substance tax already collected on aviation fuel back into the communities most affected by its use. This bill provides a sustainable funding source for essential mitigation efforts. For the city of Des Moines, this is not just a policy request. It’s a fiscal and ethical necessity. The cost of mitigating these regional impacts should not fall solely on the local taxpayers of small cities. We urge you to pass it out of committee and ensure residents receive environmental protections and health safeguards they deserve. Thank you.
Debi Wagner: Hello, I’m a former administrator of Quiet Skies Coalition of Burien and I would like to state that your decision on this will reflect whether you are pro-industry and for the airports or for the people who are suffering under the flight path and the onslaught of the terrible pollution, sleepless nights, unmitigated environmental hazards that are coming from the noise and emissions from these aircraft flying over them over 600 times per day. The airport is pumping nearly 700 million gallons of jet A fuel annually which has a huge environmental impact. So if you care about the health of the people living around the airport, many children, all these environmental justice eligible communities, you’ll do the right thing and show that you care about the people you serve. Thank you.
Maria Batayola (Aviation Community Health Environment and Climate Advocates): Thank you, Chair Robinson, and the rest of the committee. My name is Maria Batayola and I serve as chair of Aviation Community Health Environment and Climate Advocates. Our core team includes Beacon Hill Council, Duwamish River Community Coalition, Climate Solutions, Defenders of Highline Forest and 350 Action Seattle. I think the really important piece here is when we’re talking about environmental impact mitigation, it isn’t just the built environment, but also the built environment of the people who have been impacted in terms of their health. The legislature has been really positive in our experience for 10 years now going back to 2017. You funded health impact study, other impact study, flight demand increase. You also funded in 2024 air health mitigation study and failed aviation soundproofing packages. And then you also passed climate commitments act that identified air pollution overburdened communities in south Seattle and south King County that will be from aviation. So a fact of it is that airport has limited noise pollution mitigation and no air pollution mitigation program. The 2025 King County strategic climate action plan identified Sea-Tac as emitting 13% of all King County greenhouse gas emissions. The journey’s been too long. We’re patient with the studies. Please help us as we continue to suffer. Please pass 6240. Thank you so much for the extra time.
Chair: Thank you. Thanks for joining us. Okay, that concludes public testimony and the public hearing on 6240.
1This is a machine-generated transcript generated on the fly by Google/Youtube/AI. Accuracy totally not guaranteed. Provided only as a convenience and to help people with disabilities. Caveat lector!