Sunday, November 5, 2017

Fixing New Hampshire airplane registration fees

By Patrick Abrami

Last late February, the House Ways and Means Committee (HWAMC) received HB124 that called for the elimination of all airplane registration fees. This bill passed the full House on a voice vote per the recommendation of the Transportation Committee. Since it involved revenue the bill made its way to the HWAMC as the second committee.

The reason for the bill was to eliminate the very complex system of coming up with fees, especially for the first 10 years of a plane being registered in New Hampshire, that is based on millage rates and weight. The owner of a new large plane based upon this formula could pay a fee upwards of $300,000 for the first year. We heard testimony from representatives with interests at the airports in Nashua and Portsmouth who have hanger space but no new customers because of this fee structure. We also heard testimony from the airports, some 25 in New Hampshire, mostly small, who indicated if the registration fees were eliminated so would the approximately $250,000 annually in assistance to these airports who count on this revenue.

A subcommittee was formed that month with me as chair. We only had time for two meetings since we had to vote all bills out of the House by the end of March. We all agreed that this was a problem worth fixing. We tried hard in March to come up with a solution, but as I told the more than 25 interested people in the audience, “we are running out of runway.” All of the constituencies agreed to our retaining the bill to work on it in the fall.

I was appointed chair of a subcommittee made up nine members that met five times this fall. Each time there were representatives from DOT Aeronautics, small plane owners, large plane owners, small airports, large airports, airport base operators, the commercial airports, and other interested parties. After meeting with members of the Finance Committee it was clear no money would be coming from the general fund to help lower the fees. New Hampshire raises in round numbers $1 million in registration fees and another $250,000 in fuel taxes for a total of $1,250,000, which in theory is utilized to fund DOT Aeronautics operations as well as provide money to help our airports. The challenge to the committee and the constituencies was to make changes in fee and tax rates that resulted in revenue neutral totals. This was a classic zero-sum game.

All of the constituencies made proposals. If the revenue wasn’t enough we went back to the drawing board. Then the compromises from the different constituencies began. The committee heard what everyone was saying and crafted a grand compromise. What made the compromise somewhat easy was that our Jet A and aviation gasoline taxes were some of the lowest in the country, but our registration fees were some of the highest. The resulting registration formula was changed to 100 percent weight based. The three types of fuel taxes, which are Jet A for commercial planes, Jet A for private planes, and aviation gasoline for piston planes were all raised in a modest manner, which still resulted in our rates being much less than most states including Massachusetts. The $1,250,000 per the compromise amendment will come from $430,000 in registration fees and $820,000 in fuel taxes. The subcommittee voted 9-0 “ought to pass” as amended. The full committee voted 22-1 “ought to pass.”

We hope these changes will be enough to convince a 42-plane time-share company based in Portsmouth to stay in New Hampshire. Without this change they would have to pay $6,280,000 in registration fees over 10 years as they modernized their fleet, but if they moved to Massachusetts the registration fees over 10 years would be $132,000. Massachusetts came after the larger plane market big time by getting rid of their sales tax on planes and only charging up to $300 to register a plane per year. The Massachusetts Achilles heel is that their fuel taxes and overall fuel costs are much higher than New Hampshire. The whole fuel tax and overall cost per gallon discussion is complex, especially why planes refuel where they do.

We are hopeful if this bill as amended becomes law that there will be resurgence in private aviation in New Hampshire.

Republican Patrick Abrami is a state representative from Stratham and vice chair of the House Ways and Means Committee.

Original article can be found here ➤ http://www.seacoastonline.com

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