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Passenger Facility Charges
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[Federal Register: May 30, 2000 (Volume 65, Number 104)]
[Rules and Regulations]
[Page 34535-34543]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my00-11]
[[Page 34535]]
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Part II
Department of Transportation
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Federal Aviation Administration
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14 CFR Part 158
Passenger Facility Charges; Final Rule
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 158
[Docket No. FAA20007402; Amendment No. 1582]
RIN 2120AH05
Passenger Facility Charges
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
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SUMMARY: This action amends regulations pertaining to passenger
facility charges (PFC's) to incorporate administrative and statutory
changes in the procedures to establish PFC's based on recent enactments
by Congress and records of decision by the FAA. This action is issued
as a final rule without prior notice and comment because the changes
are administrative and/or required by statute. Also the immediate
adoption of these regulations is in the public interest and is
necessary for public safety.
DATES: Effective June 29, 2000.
FOR FURTHER INFORMATION CONTACT: Eric Gabler, Office of Airport
Planning and Programming, Federal Aviation Administration, 800
Independence Avenue, SW, Washington, DC 20591; Telephone: (202)
2673845.
SUPPLEMENTARY INFORMATION:
Final Rule Procedure
This final rule amends 14 CFR part 158 to incorporate
administrative and statutory changes to the PFC program. The FAA has
determined that this action can be issued as a final rule without prior
public notice and comment because the amendments are rules of agency
procedure required by statute. Further, the FAA has found prior public
notice and comment on this action is contrary to the public interest.
The PFC's approved pursuant to this action are needed without delay to
provide funds for public safety projects, security projects, and other
projects of public benefit.
While this rule is effective 30 days after publication,
applications for PFC authority may be submitted immediately. Also, the
FAA anticipates issuing guidance to assist public agencies applying for
authority to impose PFC's.
Availability of Final Rules
An electronic copy of this document may be downloaded using a modem
and suitable communications software from the FAA regulations section
of the FedWorld electronic bulletin board service (telephone (703)
3213339), and/or the Government Printing Office's electronic bulletin
board service (telephone (202) 5121661).
Internet users may access recently published rulemaking documents
through the FAA's web page at http://www.faa.gov/avr/arm/nprm/nprm.htm
or the Government Printing Office's web page at http://
www.access.gpo.gov/nara.
Any person may obtain a copy of this document by submitting a
request to the Federal Aviation Administration, Office of Rulemaking,
ARM1, 800 Independence Avenue, SW, Washington, DC 20591, or by calling
(202) 2679680. Communications must identify the docket number of this
final rule.
Persons interested in being placed on the mailing list for future
rulemaking documents should request from the above office a copy of
Advisory Circular No. 112A, Notice of Proposed Rulemaking Distribution
System, which describes the application procedure.
Background
The PFC program was established by the Aviation Safety and Capacity
Expansion Act of 1990. The Act was enacted on November 5, 1990 and is
codified at 49 U.S.C. 40117. On May 29, 1991, the Department of
Transportation adopted new regulations to establish the PFC program,
under which the FAA Administrator, under authority delegated by the
Secretary of Transportation, could authorize a public agency to impose
a PFC of $1, $2, or $3 per enplaned passenger at a commercial service
airport the public agency controls. The proceeds from such PFC's are to
be used to finance FAA-approved eligible airport-related projects that
preserve or enhance safety, security, or capacity of the national
airport system; reduce noise from an airport that is part of such
system; or furnish opportunities for enhanced competition between or
among air carriers. The rule, which added a new part 158, became
effective on June 28, 1991. As of March 1, 2000, 825 PFC applications
had been approved or partially approved for 314 airport locations, with
all but one airport location collecting at the $3 PFC level.
On April 5, 2000, President Clinton signed into law the Wendell H.
Ford Aviation Investment and Reform Act for the 21st Century (AIR 21).
This law made several modifications to the PFC program, including
allowing a public agency to apply to the FAA to increase the PFC level
that it may charge to $4 or $4.50.
These changes, as well as those administrative and statutory
changes required by the Federal Aviation Administration Authorization
Act of 1994 (1994 Act), the Federal Aviation Reauthorization Act of
1996 (1996 Act), and the recodification of the Federal Aviation Act of
1958 are adopted in part 158 by this action.
Section-by-Section Analysis
Subpart A--General
Section 158.3Definitions
The following definitions are added or revised:
Allowable cost. Prior to April 5, 2000, allowable cost was defined
to include only those costs incurred on or after November 5, 1990. AIR
21 expands this definition to include costs of terminal development
referred to in 158.15(b)(3) but incurred after August 1, 1986, provided
the development is at an airport smaller than a medium hub airport and
the total passenger boardings at that airport declined by at least 16
percent between calendar year 1989 and calendar year 1997.
Commercial service airport. This section is amended by removing the
citation 49 U.S.C. app. 2202(17).
Covered airport. Before PFC's are approved for collection, AIR 21
requires a covered airport to file a competition plan. AIR 21 defines
covered airport as a medium or large hub airport at which one or two
air carriers control more than 50 percent of the passenger boardings.
Frequent flier award coupon. The 1994 Act prohibits collection of a
PFC from a passenger who obtained the ticket for air transportation
with a frequent flier award coupon. Frequent flier award coupon means a
zero-fare award of air transportation provided by an air carrier to a
passenger in exchange for accumulated travel mileage credits in a
customer loyalty program, but does not include the redemption of
accumulated credits for additional or upgraded service on trips for
which the passenger has paid a published fare. Two-for-the-price-of-one
and similar marketing programs, and air transportation purchased for
the passenger by other parties are not included in the definition.
Since 1994, the FAA has incorporated the definition of frequent flier
award coupon in its individual PFC records of decision.
Medium or large hub airport. Since the enactment of the PFC
program, there have been additional conditions on approval of PFC's at
commercial service airports if the airports have more than 0.25 percent
of the total number of passenger boardings at all such airports
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in the U.S. for the prior calendar year. The FAA consistently has
referred to such an airport with more than 0.25 percent and up to 1
percent of the total number of passenger boardings to be a medium hub
airport, and an airport with more than 1 percent of the total number of
passenger boardings to be a large hub airport. The FAA is replacing
references to an airport with more than 0.25 percent of commercial
service enplanements in the regulation with the term medium or large
hub.
Nonrevenue passenger. The 1994 Act prohibits collection of a PFC
from a nonrevenue passenger. Nonrevenue passenger means a passenger
receiving air transportation from an air carrier for which remuneration
is not received by the air carrier. Air carrier employees or others
receiving air transportation, for which token service charges are
levied are considered nonrevenue passengers. Infants for whom a token
fare is charged also are considered nonrevenue passengers. Since 1994,
the FAA has incorporated the definition of nonrevenue passenger in its
individual PFC records of decision.
Public agency. This definition has been expanded to allow a private
sponsor of an airport participating in the Pilot Program for Private
Airport Ownership to apply for PFC authority under the terms and
conditions that apply to a public agency. The Pilot Program on Private
Ownership of Airports was established by Congress in 1996 and directs
the FAA to allow program participants to apply for PFC authority.
Section 158.5Authority To Impose PFC's
The FAA is amending this section to include PFC levels of $4 and
$4.50, as authorized by AIR 21, in addition to the pre-existing levels
of $1, $2, and $3.
Section 158.7Exclusivity of Authority
AIR 21 clarifies and strengthens the independent status of a public
agency's PFC authority relative to State or other political
subdivisions. This section is amended in accordance with the specific
terms of AIR 21.
Section 158.9Limitations
The following statutory limitations are added to the previously-
listed prohibitions: (1) Collection of a PFC from nonrevenue
passengers; (2) collection of a PFC from a passenger who obtained the
ticket for air transportation with a frequent flier award coupon; (3)
imposition of a fee on passengers on flights, including flight
segments, between 2 or more points in Hawaii; or (4) imposition of a
fee on passengers on an aircraft having a seating capacity of less than
60 passengers in Alaska.
Section 158.11Public Agency Request Not To Require Collection of PFC's
by a Class of Air Carriers or Foreign Air Carriers or for Service to
Isolated Communities
This section is amended to include new provisions of AIR 21 that
allow a public agency to request that certain classes or categories of
air transportation not collect the PFC. These provisions include
passengers enplaned on a flight to an airport receiving scheduled
passenger service and having fewer than 2,500 passenger boardings each
year; and to an airport in a community that has a population of less
than 10,000 and is not connected by a land highway or vehicular way to
the land-connected National Highway System within a State. The public
agency may request any or all of these exclusions.
Section 158.15Project Eligibility at PFC Levels of $1, $2, or $3
This section is revised to explicitly include the 1994 statutory
requirement that all proposed projects be adequately justified to
receive PFC fundinga standard the FAA has been applying since the
implementation of part 158 in 1991 in PFC records of decision. Also,
AIR 21 makes other revisions necessary in this section. AIR 21 creates
a special category of project eligibility for terminal development work
associated with construction of gates and related areas if the project
will enable additional air service by an air carrier with less than 50
percent of annual passenger boardings at an airport.
Section 158.17Project Eligibility at PFC Levels of $4 or $4.50
Section 158.17 is added to provide eligibility requirements for
PFC's at the $4 or $4.50 level. Applicants requesting authority to
impose PFC's at the $4 or $4.50 level must meet these eligibility
requirements in addition to those in section 158.15.
AIR 21 allows a project to be funded at a $4 or $4.50 PFC level if
the project cannot be paid for from funds reasonably expected to be
available through programs referred to in 49 U.S.C. 48103 (the Airport
Improvement Program (AIP)).
Section 158.17 also incorporates the statutory provision that
conditions funding of a surface transportation or terminal project at
the $4 or $4.50 level on a finding that the public agency has made
adequate provision for financing the airside needs of the airport,
including runways, taxiways, aprons, and aircraft gates. The FAA will
use financial and planning data, information in the PFC application,
and information on funding availability under AIP, to determine
eligibility.
Also, AIR 21 establishes an additional requirement for projects at
medium and large hub airports. In particular, a project for a medium or
large airport is eligible for PFC funding at levels of $4 or $4.50,
only if the project will make a significant contribution to: improving
air safety and security; increasing competition among air carriers;
reducing current or anticipated congestion; or reducing the impact of
aviation noise on people living near the airport.
The FAA will develop specific criteria for the significant
contribution requirement through individual PFC records of decision. As
with prior records of decision, the FAA will consider all relevant
factors, including but not limited to the following in assessing
whether the significant contribution requirement has been met:
Safety and securityDoes the project advance airport security and/or
safety? Projects that address security and safety requirements of 14
CFR part 107 and part 139, respectively, are usually given highest
priority for AIP discretionary funds.
CapacityDoes the project support or is it part of a capacity
project to which the FAA has allocated Federal resources or that would
qualify for such resources? For example, is the project included in an
AIP letter of intent or does it satisfy the FAA's benefit-cost criteria
for large AIP discretionary investments? Has the project been
identified in an FAA Airport Capacity Enhancement Plan? Does the
project alleviate a constraint on airport growth or service?
NoiseDoes the project affect the noise-impacted areas around the
airport? Historically, projects addressing noisier areas than projects
that would address less noisy areas, all other factors being equal,
have been given higher priority for AIP discretionary grants.
CompetitionDoes the project mitigate or remove barriers to
increased airline competition at the airport (e.g., cause an increase
in common use gates at a gate-constrained airport)? Has the project
been identified as an essential component in the airport's competition
plan or other similar documents submitted to the FAA?
Section 158.19Requirement for Competition Plans
A new section has been added to implement a requirement to develop
a competition plan. Under AIR 21, no
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public agency controlling a covered airport, defined as a medium or
large hub airport at which one or two air carriers account for more
than 50 percent of the passenger boardings, may impose a PFC unless the
public agency has submitted a competition plan to the FAA. AIR 21
requires that each plan meet statutory requirements and that the plan
must be reviewed periodically to ensure successful implementation. The
requirement to develop a plan does not apply to PFC authority in effect
before April 5, 2000.
Covered airports are required to submit competition plans to
receive new AIP grants in FY 2001 and thereafter. Because there are
more covered airports under the AIP than there are participating in the
PFC program, and because AIP grants are issued on an annual basis,
instructions for such plans are provided under the AIP. Such plans
prepared for AIP may be used for PFC projects.
Subpart BApplication and Approval
Section 158.23Consultation With Air Carriers and Foreign Air Carriers
The requirement under 158.23(a)(2) that a public agency consult
with its air carriers and foreign air carriers on the PFC level is
amended to read the PFC level for each project. *** The FAA anticipates
that PFC applications may include several projects qualifying at
different PFC levels, depending on the contribution of each project.
Section 158.25Applications
This section is amended to allow for processing competition plans
required by 158.19 and determination of the PFC level for each project
required in revised 158.23.
Section 158.29The Administrator's Decision
Section 158.29 is amended to require all projects approved for
collection of PFC's to meet the requirements of 158.15. In addition,
projects approved for collection of a PFC at a level of more than $3
must meet the requirements of 158.17. Previously, paragraphs
(a)(1)(ii), (a)(1)(iii), (b)(1)(ii) and (b)(1)(iii) referenced separate
components of 158.15.
Under the 1994 Act, the FAA is prohibited from approving a PFC
application if an airport is not in compliance with 49 U.S.C. 47107(b)
governing the use of airport revenues. The FAA includes a determination
that the public agency has not been found in violation of 49 U.S.C.
47107(b) in its PFC records of decision. Section 158.29 is amended to
reflect this requirement.
A new paragraph is added to 158.29 to acknowledge that, if
applicable, the public agency must submit a competition plan.
Section 158.29 also is amended to require the Administrator to
specify a PFC level for the application, and total approved PFC revenue
including the amounts approved at $3 and less, $4, and/or $4.50. The
FAA anticipates that PFC applications may include various projects,
some qualifying at a level of $3 or less, and others at $4 or $4.50.
The public has the opportunity to comment on the PFC levels for these
projects in the notice and comment process provided in 158.27(e)
Section 158.31Duration of Authority To Impose a PFC After Project
Implementation
Section 158.31 is amended to remove the words section of 9304(c) or
9703 of the Airport Noise and Capacity Act of 1990 (Pub. L. 101508,
Title IX, subtitle D.
Section 158.37Amendment of Approved PFC
Section 158.37(b) is amended to reflect the new requirements of
158.17 and 158.19 to obtain authority to increase a previously approved
PFC level to $4 or $4.50.
Subpart CCollection, Handling, and Remittance of PFC's
Section 158.45Collection of PFC's on Tickets Issued in the U.S.
AIR 21 adds several new classes of passengers from whom a PFC may
not be collected and this section is revised accordingly.
Section 158.49Handling of PFC's
The 1996 Act included a provision clarifying that PFC's held by air
carriers after collection constitute a trust fund held for the
beneficial interest of public agencies. Section 158.49 is amended in
accordance with the specific terms of this provision.
Subpart DReporting, Recordkeeping and Audits
Section 158.63Reporting Requirements: Public Agency
Section 158.63 is amended to require the public agency to indicate
the PFC level the FAA approved for each project as authorized by AIR
21. In addition, the phrase medium or large hub airports replaces the
phrase airports enplaning 0.25 percent or more of the total annual
enplanements in the U.S. for the prior calendar year as determined by
the Administrator (see discussion pertaining to new definitions in
158.3).
Subpart FReduction in Airport Improvement Program Apportionment
Section 158.93Public Agencies Subject to Reduction
Section 158.93 is amended to substitute the phrase medium or large
hub in place of enplanes 0.25 percent or more of the total annual
enplanements in the U.S. (see discussion pertaining to new definitions
in 158.3).
Section 158.95Implementation of Reduction
This section is amended to reflect AIR 21 requirement that the
effective date of AIP apportionment reduction is changed to the first
fiscal year following the year in which the collection of the fee
imposed under 40117 is begun. Also, AIR 21 establishes separate
reduction levels for airports depending on the level of PFC imposed.
Specifically, in the case of a PFC level of $3 or less, the reduction
is maintained at the previous level of 50 percent of the projected
revenues from the PFC in the fiscal year but not more than 50 percent
of the amount of AIP formula monies that otherwise would be
apportioned. However, in the case of a PFC level of more than $3, the
reduction is set at 75 percent of the projected revenues from the PFC
in the fiscal year but not more than 75 percent of the amount of AIP
formula monies that otherwise would be apportioned. Section 158.95 is
amended to reflect these statutory provisions. This means, in the case
of an airport raising its PFC level from $3 to more than $3, the higher
reduction of apportionments would take place in the first fiscal year
following the year in which the collection of the PFC level of more
than $3 is begun.
Section 158.97Special Rule for Transitioning Airports
AIR 21 provides that certain small hub airports transitioning to
medium hub airport status are protected through FY 2003 against a loss
in combined year-to-year AIP apportionment and PFC revenues caused by
entitlement reductions under 49 U.S.C. 47114(f) (the amended 158.95).
Accordingly, a new section 158.97 is added in accordance with this
statutory requirement. This provision applies to FY 2000 through FY
2003.
Regulatory Evaluation Summary
Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs that
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each Federal agency shall propose or adopt a regulation only upon a
reasoned determination that the benefits of the intended regulation
justify its costs. Second, the Regulatory Flexibility Act of 1980
requires agencies to analyze the economic effect of regulatory changes
on small entities. Third, the Trade Agreement Act of 1979 directs
agencies to assess the effect of regulatory changes on international
trade. Fourth, Public Law 1044 requires federal agencies to assess the
impact of any federal mandates on state, local, tribal governments, and
the private sector. In conducting these analyses, the FAA has
determined this final rule is not a significant regulatory action under
section 3(f) of Executive Order 12866 and, therefore, is not subject to
review by the Office of Management and Budget. This final rule is not
considered significant under the regulatory policies and procedures of
the Department of Transportation (44 FR 11034, February 26, 1979). This
final rule would not have a significant impact on a substantial number
of small entities. In addition, this rule would not constitute a
barrier to international trade. Finally, the FAA has determined that
the proposal would not impose a federal mandate on state, local, or
tribal governments, or the private sector of $100 million per year.
Benefit-Cost Analysis
This final rule amends part 158 to be consistent with current
statutes governing the PFC program. These new statutory provisions will
enable airport authorities to increase the PFC in order to collect more
funds for enhancing the safety, security and capacity of their
facilities; reducing noise in nearby communities; and enhancing airline
competition to the benefit of air travelers. The FAA estimates that up
to $750 million annually in PFC funds will be made available to
airports to make these improvements. As a result of the higher
percentage of returned AIP apportioned funds attributable to these
higher PFC collections, an additional $72 million in AIP funding could
be available to small airports by FY 2002. Under the provisions of the
statute, this amount would be almost doubled through FY 2003 if AIP
funds are appropriated at $3.2 billion or more. Some air travelers will
incur a small increase (12 percent) in the cost of their ticket to
obtain these benefits although over the long run these passengers will
receive compensating benefits from improved infrastructure financed
with the higher PFC funds. These costs reflect the voluntary action of
airports and are not required either by statute or the current
amendment to the rule. The costs of implementing the mandated changes
in the PFC program application and administrative procedures are costs
attributable to the statute and are not costs of this rule.
Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act (SBREFA) of
1996 requires the FAA to comply with small entity requests for
information or advice about compliance with statutes and regulations
within its jurisdiction. Therefore, any small entity that has a
question regarding this document may contact their local FAA official.
Internet users can find additional information on SBREFA on the FAA's
web page at http://www.faa.gov/avr/arm/sbrefa.htm and may send
electronic inquiries to the following Internet address: 9-AWA-
SBREFAfaa.gov.
Paperwork Reduction Act
Information collection requirements in the amendment to part 158
previously have been approved by the Office of Management and Budget
(OMB) under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), and have been assigned OMB Control Number 21200557.
Some relatively minor requirements for information collections are
associated with this amendment, and these are required by AIR 21. The
additional paperwork submission requirements will not become mandatory
until FAA provides for notice and comment, and the changes are
submitted to OMB for review and approval.
International Compatibility
In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to comply with
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA
determined that there are no ICAO Standards and Recommended Practices
that correspond to these regulations.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 establishes as a principle
of regulatory issuance that agencies shall endeavor, consistent with
the objective of the rule and of applicable statutes, to fit regulatory
and informational requirements to the scale of the business,
organizations, and governmental jurisdictions subject to regulation. To
achieve that principle, the Act requires agencies to solicit and
consider flexible regulatory proposals and to explain the rationale for
their actions. The Act covers a wide-range of small entities, including
small businesses, not-for-profit organizations and small governmental
jurisdictions.
Agencies must perform a review to determine whether a proposed or
final rule will have a significant economic impact on a substantial
number of small entities. If the determination is that it will, the
agency must prepare a regulatory flexibility analysis (RFA) as
described in the Act.
However, if an agency determines that a proposed or final rule is
not expected to have a significant economic impact on a substantial
number of small entities, section 605(b) of the 1980 act provides that
the head of the agency may so certify and an RFA is not required. The
certification must include a statement providing the factual basis for
this determination, and the reasoning should be clear.
All costs are fully recoverable through the PFC, if approved.
Accordingly, pursuant to the Regulatory Flexibility Act, 5 U.S.C.
605(b), the Federal Aviation Administration certifies that this rule
will not have a significant impact on a substantial number of small
entities.
International Trade
The Trade Agreement Act of 1979 prohibits Federal agencies from
engaging in any standards or related activities that create unnecessary
obstacles to the foreign commerce of the United States. Legitimate
domestic objectives, such as safety, are not considered unnecessary
obstacles. The statute also requires consideration of international
standards and where appropriate, that they be the basis for U.S.
standards. In addition, consistent with the Administration's belief in
the general superiority and desirability of free trade, it is the
policy of the Administration to remove or diminish, to the extent
feasible, barriers to international trade, including both barriers
affecting the export of American goods and services to foreign
countries and barriers affecting the import of foreign goods and
services into the United States.
In accordance with the above statute and policy, the FAA has
assessed the potential affect of this final rule and has determined
that it will impose the same costs on domestic and international
entities for comparable services and thus has a neutral trade impact.
Executive Order 13132, Federalism
The FAA has analyzed this action under the principles and criteria
of Executive Order 13132, Federalism. We
[[Page 34540]]
determined that this action would not have a substantial direct effect
on the States, on the relationship between the national Government and
the States, or on the distribution of power and responsibilities among
the various levels of government. Therefore, we determined that this
action does not have federalism implications.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (the Act)
codified in 2 U.S.C. 15011571, requires each Federal agency, to the
extent permitted by law, to prepare a written assessment of the effects
of any Federal mandate in a proposed or final agency rule that may
result in the expenditure by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more
(adjusted annually for inflation) in any one year. Section 204(a) of
the Act, 2 U.S.C. 1534(a), requires the Federal agency to develop an
effective process to permit timely input by elected officers (or their
designees) of State, local, and tribal governments on a proposed
significant intergovernmental mandate. A significant intergovernmental
mandate under the Act is any provision in a Federal agency regulation
that would impose an enforceable duty upon State, local, and tribal
governments, in the aggregate, of $100 million (adjusted annually for
inflation) in any one year. Section 203 of the Act, 2 U.S.C. 1533,
which supplements section 204(a), provides that before establishing any
regulatory requirements that might significantly or uniquely affect
small governments, the agency shall have developed a plan that, among
other things, provides for notice to potentially affected small
governments, if any, and for a meaningful and timely opportunity to
provide input in the development of regulatory proposals.
This final rule does not contain a Federal intergovernmental or
private sector mandate that exceeds $100 million a year. While PFC
collections are likely to increase by at least $100 million per year,
the cause of that impact is not the rule but the statute that permits
the increase in the maximum PFC level. The increase will be triggered
by the decisions of individual public agencies to seek the increase and
not by any action of the federal government. If a project meets the
statutory criteria for approval, the FAA must approve the project.
Moreover, any increase costs associated with obtaining approval to
impose the higher fee are fully recoverable through PFC funding.
Environmental Analysis
The FAA concludes that issuance of this final rule is not a major
Federal action significantly affecting the quality of the human
environment within the meaning of the National Environmental Policy Act
of 1969. The potential environmental effects of any project funded with
PFC revenues are already addressed under 158.29(b)(1)(iv), which
requires all applicable requirements pertaining to the National
Environmental Policy Act of 1969 (NEPA) to be satisfied before the
Administrator may approve the project to use PFC funds. A copy of this
assessment has been placed in the docket.
Energy Impact
The energy impact of the notice has been assessed in accordance
with the Energy Policy and Conservation Act (EPCA) Pub. L. 94163, as
amended (43 U.S.C. 6362) and FAA Order 1053.1. It has been determined
that the rule is not a major regulatory action under the provisions of
the EPCA.
List of Subjects in 14 CFR Part 158
Air carriers, Airports, Passenger facility charge, Public agencies,
Reporting and recordkeeping requirements.
The Amendment
In consideration of the foregoing, the Federal Aviation
Administration amends part 158 of Title 14 of the Code of Federal
Regulations as follows:
PART 158PASSENGER FACILITY CHARGES (PFC'S)
1. The authority citation for part 158 is revised to read as
follows:
Authority: 49 U.S.C. 106(g), 4011640117, 47106, 47111,
4711447116, 47524, 47526.
2. Revise 158.1 to read as follows:
158.1 Applicability.
This part applies to passenger facility charges (PFC's) as may be
approved by the Administrator of the Federal Aviation Administration
(FAA) and imposed by a public agency that controls a commercial service
airport. This part also describes the procedures for reducing funds to
a large or medium hub airport that imposes a PFC.
3. Amend 158.3 as follows:
a. Amend the definition of Allowable cost by adding a new sentence
at the end of the definition.
b. Revise the definitions of Commercial service airport and Public
agency;
c. Add definitions of Covered airport, Frequent flyer award coupon,
Medium or large hub airport, and Nonrevenue passenger, in alphabetical
order. The revisions and additions read as follows:
158.3 Definitions.
* * * * *
Allowable cost *** Costs of terminal development incurred after
August 1, 1986, at an airport that did not have more than .25 percent
of the total annual passenger boardings in the U.S. in the most recent
calendar year for which data is available and at which total passenger
boardings declined by at least 16 percent between calendar year 1989
and calendar year 1997 are allowable.
* * * * *
Commercial service airport means a public airport that annually
enplanes 2,500 or more passengers and receives scheduled passenger
service of aircraft.
Covered airport means a medium or large hub airport at which one or
two air carriers control more than 50 percent of passenger boardings.
* * * * *
Frequent flier award coupon means a zero-fare award of air
transportation that an air carrier or foreign air carrier provides to a
passenger in exchange for accumulated travel mileage credits in a
customer loyalty program, whether or not the term frequent flier is
used in the definition of that program. The definition of frequent
flier award coupon does not extend to redemption of accumulated credits
for awards of additional or upgraded service on trips for which the
passenger has paid a published fare, two-for-the-price-of-one and
similar marketing programs, or to air transportation purchased for a
passenger by other parties.
* * * * *
Medium or large hub airport means a commercial service airport that
has more than 0.25 percent of the total number of passenger boardings
at all such airports in the U.S. for the prior calendar year, as
determined by the Administrator.
Nonrevenue passenger means a passenger receiving air transportation
from an air carrier or foreign air carrier for which remuneration is
not received by the air carrier or foreign air carrier as defined under
Department of Transportation Regulations or as otherwise determined by
the Administrator. Air carrier employees or others receiving air
transportation against whom token service charges are levied are
considered nonrevenue passengers. Infants for whom a token fare is
charged are also considered nonrevenue passengers.
* * * * *
[[Page 34541]]
Public agency means a State or any agency of one or more States; a
municipality or other political subdivision of a State; an authority
created by Federal, State or local law; a tax-supported organization;
an Indian tribe or pueblo that controls a commercial service airport;
or for the purposes of this part, a private sponsor of an airport
approved to participate in the Pilot Program on Private Ownership of
Airports.
* * * * *
4. Amend 158.5 by revising the first sentence to read as follows:
158.5 Authority to impose PFC's.
Subject to the provisions of this part, the Administrator may grant
authority to a public agency that controls a commercial service airport
to impose a PFC of $1, $2, $3, $4, or $4.50 on passengers enplaned at
such an airport. ***
5. Amend 158.7 by revising paragraph (a) to read as follows:
158.7 Exclusivity of authority.
(a) A State, political subdivision of a State, or authority of a
State or political subdivision that is not the eligible public agency
may not tax, regulate, prohibit, or otherwise attempt to control in any
manner the imposition or collection of a PFC or the use of PFC revenue.
* * * * *
6. Amend 158.9 by revising paragraph (a) to read as follows:
158.9 Limitations.
(a) No public agency may impose a PFC on any passenger
(1) For more than 2 boardings on a one-way trip or in each
direction of a round trip;
(2) On any flight to an eligible point on an air carrier that
receives essential air service compensation on that route. The
Administrator makes available a list of carriers and eligible routes
determined by the Department of Transportation for which PFC's may not
be imposed under this section;
(3) Who is a nonrevenue passenger or obtained the ticket for air
transportation with a frequent flier award coupon;
(4) On flights, including flight segments, between 2 or more points
in Hawaii; or
(5) In Alaska aboard an aircraft having a certificated seating
capacity of less than 60 passengers.
* * * * *
7. Revise 158.11 to read as follows:
158.11 Public agency request not to require collection of PFC's by a
class of air carriers or foreign air carriers or for service to
isolated communities.
(a) Subject to the requirements of this part, a public agency may
request that collection of PFC's not be required for
(1) Passengers enplaned by any class of air carrier or foreign air
carrier if the number of passengers enplaned by the carriers in the
class constitutes not more than one percent of the total number of
passengers enplaned annually at the airport at which the fee is
imposed; or
(2) Passengers enplaned on a flight to an airport
(i) That has fewer than 2,500 passenger boardings each year and
receives scheduled passenger service; or
(ii) In a community that has a population of less than 10,000 and
is not connected by a land highway or vehicular way to the land-
connected National Highway System within a State.
(b) The public agency may request this exclusion authority under
paragraph (a)(1) or (a)(2) of this section or both.
8. Amend 158.15 by revising the section heading, by revising
paragraphs (b) introductory text and (b)(1) through (b)(5), by adding a
new sentence to the end of paragraph (b)(6), and by adding new
paragraph (c) to read as follows:
158.15 Project eligibility at PFC levels of $1, $2, or $3.
* * * * *
(b) Eligible projects are any of the following projects
(1) Airport development eligible under subchapter I of chapter 471
of 49 U.S.C.;
(2) Airport planning eligible under subchapter I of chapter 471 of
49 U.S.C.;
(3) Terminal development as described in 49 U.S.C. 47110(d);
(4) Airport noise compatibility planning as described in 49 U.S.C.
47505;
(5) Noise compatibility measures eligible for Federal assistance
under 49 U.S.C. 47504, without regard to whether the measures have been
approved pursuant to 49 U.S.C. 47504; or
(6) *** In the case of a project required to enable additional air
service by an air carrier with less than 50 percent of the annual
passenger boardings at an airport, a project for constructing gates and
related areas may include structural foundations and floor systems,
exterior building walls and load-bearing interior columns or walls,
windows, door, and roof systems, building utilities (including heating,
air conditioning, ventilation, plumbing, and electrical service), and
aircraft fueling facilities adjacent to the gate.
(c) An eligible project must be adequately justified to qualify for
PFC funding.
9. Add 158.17 to subpart A to read as follows:
158.17 Project eligibility at PFC levels of $4 or $4.50.
(a) A project for any airport is eligible for PFC funding at levels
of $4 or $4.50 if
(1) The project meets the eligibility requirements of 158.15;
(2) The project costs requested for collection at $4 or $4.50
cannot be paid for from funds reasonably expected to be available for
the programs referred to in 49 U.S.C. 48103; and
(3) In the case of a surface transportation or terminal project,
the public agency has made adequate provision for financing the airside
needs of the airport, including runways, taxiways, aprons, and aircraft
gates.
(b) In addition, a project for a medium or large airport is only
eligible for PFC funding at levels of $4 or $4.50 if the project will
make a significant contribution to improving air safety and security,
increasing competition among air carriers, reducing current or
anticipated congestion, or reducing the impact of aviation noise on
people living near the airport.
10. Add 158.19 to subpart A to read as follows:
158.19 Requirement for competition plans.
(a) Beginning in fiscal year 2001, no public agency may impose a
PFC with respect to a covered airport unless the public agency has
submitted a written competition plan. This requirement does not apply
to PFC authority approved prior to April 5, 2000.
(b) The Administrator will review any plan submitted under
paragraph (a) of this section to ensure that it meets the requirements
of 49 U.S.C. 47106(f) and periodically will review its implementation
to ensure that each covered airport successfully implements its plan.
11. Amend 158.23 by revising paragraph (a)(2) to read as follows:
158.23 Consultation with air carriers and foreign air carriers.
(a) ***
(2) The PFC level for each project, the proposed charge effective
date, the estimated charge expiration date, and the estimated total PFC
revenue;
* * * * *
12. Amend 158.25 by revising paragraphs (b)(7) and (b)(8) to read
as follows:
[[Page 34542]]
158.25 Applications.
* * * * *
(b) ***
(7) The project justification, including the extent to which the
project achieves one or more of the objectives set forth in 158.15(a)
and (if a PFC level above $3 is requested) the requirements of 158.17.
In addition
(i) For any project for terminal development, including gates and
related areas, the public agency shall discuss any existing conditions
that limit competition between and among air carriers and foreign air
carriers at the airport, any initiatives it proposes to foster
opportunities for enhanced competition between and among such carriers,
and the expected results of such initiatives; or
(ii) For any terminal development project at a covered airport, the
public agency shall submit a competition plan in accordance with
158.19.
(8) The charge to be imposed for each project.
* * * * *
13. Amend 158.29 by revising paragraphs (a)(1)(ii), (a)(1)(iii),
(a)(1)(v), (a)(1)(vi), (a)(2), (b)(1)(ii), (b)(1)(iii), (b)(1)(iv) and
(b)(2) and by adding paragraphs (a)(1)(vii) and (a)(1)(viii) to read as
follows:
158.29 The Administrator's decision.
(a) ***
(1) ***
(ii) The project will achieve the objectives and criteria set forth
in 158.15;
(iii) If a PFC level above $3 is being approved, the project meets
the criteria set forth in 158.17;
* * * * *
(v) The public agency has not been found to be in violation of 49
U.S.C. 47524 and 47526;
(vi) The public agency has not been found to be in violation of 49
U.S.C. 47107(b) governing the use of airport revenue;
(vii) If the public agency has not applied for authority to use PFC
revenue, a finding that there are alternative uses of the PFC revenue
to ensure that such revenue will be used on approved projects; and
(viii) If applicable, the public agency has submitted a competition
plan in accordance with 158.19.
(2) The Administrator notifies the public agency in writing of the
decision on the application. The notification will list the projects
and alternative uses that may qualify for PFC financing under 158.15,
and (if a PFC level above $3 is being approved) 158.17, PFC level,
total approved PFC revenue including the amounts approved at $3 and
less, $4, and/or $4.50, duration of authority to impose and earliest
permissible charge effective date.
(b) ***
(1) ***
(ii) The project will achieve the objectives and criteria set forth
in 158.15;
(iii) If a PFC level above $3 is being approved, the project meets
the criteria set forth in 158.17; and
(iv) All applicable requirements pertaining to the ALP for the
airport, airspace studies for the project, and the National
Environmental Policy Act of 1969 (NEPA), have been satisfied.
(2) The Administrator notifies the public agency in writing of the
decision on the application. The notification will list the approved
projects, PFC level, total approved PFC revenue, total approved for
collection, including the amounts approved at $3 and less, $4, and/or
$4.50, and any limit on the duration of authority to impose a PFC as
prescribed under 158.33.
* * * * *
158.31 [Amended]
14. In 158.31(d), remove the words section 9304(e) or 9703 of the
Airport Noise and Capacity Act of 1990 (Pub. L. 101508, Title IX,
subtitle D) and add, in their place, the words 49 U.S.C. 47524 and
47526.
15. Amend 158.37 by revising paragraph (b)(1) and adding three
sentences at the end of paragraph (b)(2) to read as follows:
158.37 Amendment of approved PFC.
* * * * *
(b) ***
(1) With the exception of a change in PFC level to more than $3 or
an amendment of a PFC that is subject to a competition plan under
158.19, in the event of no carrier disagreement with a change proposed
under this paragraph (b), the public agency may institute the proposed
amendment unless, within 30 days after providing the notification
required under this paragraph (b), it is notified otherwise by the
Administrator.
(i) If a PFC level of more than $3 is requested, the Administrator
notifies the public agency that the conditions of 158.17 have been met
before the higher level can be instituted.
(ii) If a PFC amendment that is subject to the competition plan
requirement is submitted, the Administrator notifies the public agency
that the plan satisfies the requirements of 158.19.
(iii) The public agency shall notify the carriers of the effective
date of any change to the approved PFC resulting from the amendment,
subject to the limitation that the effective date of any new charge
shall be no earlier than the first day of a month which is at least 60
days from the time the public agency notifies the carriers.
(2) *** If a PFC level of more than $3 is requested, the
Administrator must find that the conditions of 158.17, and 158.19 if
applicable, have been met before that PFC level can be instituted. If
the amendment is approved, the Administrator advises the public agency
and notification to the carriers will be as provided under paragraph
(b)(1) of this section. The notification to the carrier includes any
findings required by 158.17 or 158.19.
16. Amend 158.45 by revising paragraph (d) to read as follows:
158.45 Collection of PFC's on tickets issued in the U.S.
* * * * *
(d) In addition to the restriction in paragraph (c) of this
section, issuing carriers and their agents shall not collect PFC's from
a passenger covered by any of the other limitations described in
158.9(a).
* * * * *
17. Amend 158.49 by revising paragraph (b) to read as follows:
158.49 Handling of PFC's.
* * * * *
(b) PFC revenue must be accounted for separately by collecting
carriers, but the revenue may be commingled with the carrier's other
sources of revenue. The PFC revenues that are held by an air carrier or
an agent of the carrier after collection of a PFC constitute a trust
fund that is held by the air carrier or agent for the beneficial
interest of the public agency imposing the PFC. Such carrier or agent
holds neither legal nor equitable interest in the PFC revenues except
for any handling fee or retention of interest collected on unremitted
proceeds as authorized in 158.53.
* * * * *
18. Amend 158.63 by revising paragraphs (a) and (c) to read as
follows:
158.63 Reporting requirements: Public agency.
(a) The public agency shall provide quarterly reports to carriers
collecting PFC's for the public agency with a copy to the appropriate
FAA Airports office. The quarterly report shall include PFC revenue
received from collecting carriers, interest earned, and expenditures
for the quarter; cumulative PFC revenue received, interest earned,
expenditures, and the amount
[[Page 34543]]
committed for use on currently approved projects, including the
quarter; the PFC level for each project; and the current project
schedule.
* * * * *
(c) For medium or large hub airports, the public agency must
provide the FAA, by August l of each year, an estimate of PFC revenue
to be collected for each such airport in the ensuing fiscal year.
158.71, 158.81, and 158.83 [Amended]
19. Remove the words section 1113(e) of the Federal Aviation Act
and add, in their place, the words 49 U.S.C. 40117 in the following
places:
a. 158.71(a) and (b);
b. 158.81; and
c. 158.83.
158.87 [Amended]
20. In 158.87, in paragraph (a) remove the words section 507 of the
AAIA of 1982, 49 U.S.C. App. 2206 and add, in their place, the words 49
U.S.C. 47114; and, in paragraph (c) remove the words 49 U.S.C. App.
2218 and add, in their place, the words 49 U.S.C. 47111(d).
158.93 [Amended]
21. In 158.93 introductory text, remove the words section 507(a)(1)
of the Airport and Airway Improvement Act of 1982 and add, in their
place, the words 49 U.S.C. 47114.
22. Section 158.95 is amended by revising paragraphs (a) and (b) to
read as follows:
158.95 Implementation of reduction.
(a) A reduction in apportioned funds will not take effect until the
first fiscal year following the year in which the collection of the PFC
is begun and will be applied in each succeeding fiscal year in which
the public agency imposes the PFC.
(b) The reduction in apportioned funds is calculated at the
beginning of each fiscal year and shall be an amount equal to
(1) In the case of a fee of $3 or less, 50 percent of the projected
revenues from the fee in the fiscal year but not by more than 50
percent of the amount that otherwise would be apportioned under this
section; and
(2) In the case of a fee of more than $3, 75 percent of the
projected revenues from the fee in the fiscal year but not by more than
75 percent of the amount that otherwise would be apportioned under this
section.
* * * * *
23. Add 158.97 to subpart F to read as follows:
158.97 Special rule for transitioning airports.
(a) Beginning with the fiscal year following the first calendar
year in which an airport has more than .25 percent of the total number
of boardings in the U.S., the sum of the amount that would be
apportioned under 49 U.S.C. 47114 to the public agency controlling that
airport in a fiscal year, after application of 158.95, and the
projected PFC revenues to be collected in such fiscal year, shall not
be less than the sum of the apportionment to such airport for the
preceding fiscal year and the PFC revenues collected in the preceding
fiscal year.
(b) Paragraph (a) of this section shall apply for fiscal years 2000
through 2003.
Appendix A to Part 158 [Amended]
24. In Appendix A to part 158, in paragraph A.2 remove the words
the Aviation Safety and Capacity Expansion Act of 1990 and add, in
their place, the words 49 U.S.C. 40117; and in paragraph B.12 remove
the words sections 9304 and 9307 of the Airport Noise and Capacity Act
of 1990 and add, in their place, the words 49 U.S.C. 47524 and 47526.
Issued in Washington, DC, May 23, 2000.
Jane F. Garvey,
Administrator.
[FR Doc. 0013348 Filed 52300; 4:23 pm]
BILLING CODE 491013U