Passage of the massive budget reconciliation bill last week has cleared the way for ramped-up spending on air traffic control modernization, the immediate return of full bonus depreciation, increased research and development expensing, and other business-friendly provisions. President Donald Trump signed the package into law on July 4 after it narrowly passed the House the previous day.
Congress ultimately settled on a $12.52 billion package to move forward with ambitious plans to upgrade, reorganize, and add new air traffic control facilities over the next several years. The funding covers a gamut of projects from telecommunications upgrades and a new air route traffic control center to runway safety measures, air traffic control staffing and training, and additional weather observation systems.
Leading up to passage, Transportation Secretary Sean Duffy called the funding “the down payment America needs for a brand-new air traffic control system.” He acknowledged that additional funding would be necessary for the full overhaul, but during a fireside chat hosted by the Aerospace Industries Association at the Paris Air Show, Duffy had stressed the urgency of securing at least the $12.52 billion to jumpstart the department’s plans. “I want the full amount,” Duffy had said. “But I don’t need the full amount. I think this is the best way to do it.”
The approval of funding has received broad support from industry and lawmakers alike in a unique moment where government leaders and stakeholders have all been in agreement on a path forward.
“NATA [National Air Transportation Association] members experience firsthand the negative impacts of aging ATC infrastructure, insufficient technology at general aviation airports, and inadequate controller staffing in busy airspaces,” said NATA president and CEO Curt Castagna. “By approving this $12.5 billion down payment on ATC modernization, Congress has signaled its support for U.S. Secretary of Transportation Sean Duffy’s comprehensive plan to build a new, state-of-the-art ATC system. In doing so, we will ensure U.S. aviation remains the global gold standard for aviation safety and innovation.”
“This is a long overdue and essential investment in the future of our National Airspace System (NAS),” added Vertical Aviation International COO Mike Hertzendorf. “We commend both the House and Senate for recognizing the urgent need to upgrade outdated infrastructure and for coming together to move this funding forward.”
Beyond the ATC funding, aviation interests had been following numerous other measures in the bill, including the return of bonus depreciation. The bill permits taxpayers to immediately expense 100% of qualified property purchases, including new and preowned business aircraft, effective Jan. 20, 2025. Previously, bonus depreciation was being phased out and set to expire at the end of 2026.
In addition, the bill allows for immediate expensing of research and development costs in the year incurred rather than the previous required five-year schedule, and includes certain other business tax incentives. NBAA called bonus depreciation an effective tool for incentivizing aircraft purchases, which it noted supports 1.3 million in manufacturing and service jobs.
Another measure provides a two-year extension of the Section 45Z Clean Fuel Production Credit, incentivizing the production of sustainable aviation fuel to 2031, but reduces the value of the credit.
“This bill enacts many important initiatives to ensure America’s continued leadership in aviation,” said NBAA president and CEO Ed Bolen. “The business aviation community looks forward to working with Congress and government agency leaders to ensure its full implementation.”