"Passenger Facility Charge Program, Non-Hub Pilot Program and Related Changes"

Thursday, June 10, 2004

Passenger Facility Charge Program, Non-Hub Pilot Program and Related
Changes
The Federal Register


DATES: Send your comments on or before August 9, 2004.

ADDRESSES: You may send comments (Identified by Docket Number
FAA-2004-17999) using any of the following methods:

* DOT Docket Web site: Go to http://dms.dot.gov and follow the
instructions for sending your comments electronically.

* Government-wide rulemaking Web site: Go to http://www.regulations.gov
and follow the instructions for sending your comments electronically.

* Mail: Docket Management Facility; U.S. Department of Transportation,
400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC
20590-001.

* Fax: 1-202-493-2251.

* Hand Delivery: Room PL-401 on the plaza level of the Nassif Building,
400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.

For more information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.

Privacy: We will post all comments we receive, without change, to
http://dms.dot.gov, including any personal information you provide. For
more information, see the Privacy Act discussion in the SUPPLEMENTARY
INFORMATION section of this document.

Docket: To read background documents or comments received, go to
http://dms.dot.gov at any time or to Room PL-401 on the plaza level of
the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Sheryl Scarborough, Airports Financial
Analysis & Passenger Facility Charge Branch, APP-510, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591;
telephone: (202) 267-8825; facsimile: (202) 267-5302; e-mail:
sheryl.scarborough@xxxxxxxx

SUPPLEMENTARY INFORMATION:

Comments Invited

The FAA invites interested persons to join in this rulemaking by filing
written comments, data, or views. We also invite comments about the
economic, environmental, energy, or federalism impacts that might result
from adopting the proposals in this document. The most helpful comments
reference a specific portion of the proposal, explain the reason for any
recommended change, and include supporting data. We ask that you send us
two copies of written comments.

We will file in the docket all comments we receive, as well as a report
summarizing each substantive public contact with FAA personnel about
this proposed rulemaking. The docket is available for public inspection
before and after the comment closing date. If you wish to review the
docket in person, go to the address in the ADDRESSES section of this
preamble between 9 a.m. and 5 p.m., Monday through Friday, except
Federal holidays. You may also review the docket using the Internet at
the web address in the ADDRESSES section.

Privacy Act: Using the search function of our docket web site, anyone
can find and read the comments received into any of our dockets. This
includes the name of the individual sending the comment (or signing the
comment for an association, business, labor union). You may review
DOT's complete Privacy Act Statement in the Federal Register
published on April 11, 2000 (65 FR 19477-78), or you may visit
http://dms.dot.gov.

Before acting on this proposal, we will consider all comments we receive
on or before the closing date for comments. We will consider comments
filed late if it is possible to do so without incurring expense or
delay. We may change this proposal because of the comments we receive.

If you want the FAA to acknowledge receipt of your comments on this
proposal, include with your comments a preaddressed, stamped postcard on
which the docket number appears. We will stamp the date on the postcard
and mail it to you.

Availability of Rulemaking Documents

You can get an electronic copy using the Internet by:

(1) Searching the Department of Transportation's electronic Docket
Management System (DMS) Web page (http://dms.dot.gov/search);

(2) Visiting the Office of Rulemaking's Web page at
http://www.faa.gov/avr/arm/index.cfm; or

(3) Accessing the Government Printing Office's Web page at http://
www.access.gpo.gov/su-docs/aces/aces140.html.

You can also get a copy by sending a request to the Federal Aviation
Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue,
SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to
identify the docket number, notice number, or amendment number of this
rulemaking.

Background

History

The Aviation Safety and Capacity Expansion Act of 1990, codified under
49 U.S.C. 40117, created the passenger facility charge (PFC) program on
November 5, 1990. The Aviation Safety and Capacity Expansion Act of 1990
allowed a public agency to impose a PFC of $1, $2, or $3 for each
enplaned passenger at commercial service airports that the public agency
controls. The public agency can then use this PFC revenue to finance
FAA-approved, eligible airport-related projects. The FAA's
regulations that govern the PFC program are at 14 CFR part 158 and
became effective on June 28, 1991.

The first major revisions to the PFC Program occurred on May 30, 2000.
At that time, a final rule was issued that incorporated changes mandated
by the Federal Aviation Administration Authorization Act of 1994, the
Federal Aviation Reauthorization Act of 1996, the Wendell H. Ford
Aviation Investment and Reform Act for the 21st Century (AIR-21), and
the recodification of the Federal Aviation Act of 1958. While this final
rule made many changes to the PFC program, the most significant change
increased the permitted PFC level by allowing public agencies to impose
a $4 or $4.50 PFC as authorized in AIR-21.

On December 12, 2003, President Bush signed the Vision 100-Century of
Aviation Reauthorization Act (Vision 100) into law. Vision 100 mandates
many changes to the PFC program and this proposed rule addresses several
of these changes. This notice proposes revisions to part 158 to
implement a 3-year non-hub pilot program and related streamlining
provisions. Vision 100 requires the FAA to propose regulations
implementing the pilot program within 180 days of enactment of the
Vision 100 pilot program section. A separate rulemaking in the future
will address the other statutory and non-statutory changes to the PFC
program that are not subject to the statutory deadline.

Statement of the Issue

To impose a PFC, use PFC revenue, or amend an approved PFC, all public
agencies must apply for FAA approval through the same process by
following the application rules set forth in part 158. The application
and approval process is the same for airports of all sizes, every
project type, and projects previously reviewed by the FAA in other
contexts. Vision 100 requires streamlining the general PFC process and
creating a pilot program for non-hub airports to test certain
streamlining procedures and to reduce the burdens on public agencies and
the FAA under the existing procedures. One such burden involves
re-creating paperwork that has already been filed with, and, in some
cases, reviewed by the FAA. For example, non-hub airports often apply to
use PFC revenue either as their matching share for an Airport
Improvement Program (AIP) grant or as a supplement to AIP funding. In
these cases, the FAA has already reviewed the project under the AIP
grant procedures. This duplication of efforts creates inefficiencies for
both non-hub airports and the FAA.

In 2002, the FAA examined the PFC program to identify ways to preserve
the public interest goals and the existing checks and balances while
removing unnecessary, duplicative, and time-consuming steps. The FAA
undertook a study of applications and projects approved over the
previous five years. This study examined the distribution of PFC funding
among projects and airport types. The FAA also studied the extent to
which AIP grants partially funded PFC projects. Finally, the FAA
examined the characteristics of projects generating air carrier
objections during the consultation process and the FAA's public
notice and comment process. As a result of this study, the FAA
recommended enactment of the non-hub pilot program and other PFC
streamlining initiatives included in Vision 100 and this rulemaking. The
results of this study are discussed more fully in the section-by-section
analysis below.

General Discussion of the Proposals

The FAA is required by statute and regulation to issue the final agency
decision on each PFC application within 120 days of the receipt of the
application. The current PFC application and review process is the same
for all airports regardless of the size of the airport, the PFC
collection amount, or the nature of the projects. This process has grown
in complexity as the program has matured, leading to calls from airports
and air carriers to speed up the process.

Vision 100 mandates creating a pilot program for non-hub airports to
test new PFC application and application approval procedures. This NPRM
proposes regulations to create the Non-Hub Airport Pilot Program (pilot
program). The entire text of the pilot program subsection in Vision 100
reads:

"(1) PILOT PROGRAM FOR PASSENGER FACILITY FEE AUTHORIZATIONS AT NONHUB
AIRPORTS.-

"(1) IN GENERAL.-The Secretary shall establish a pilot program to test
alternative procedures for authorizing eligible agencies for nonhub
airports to impose passenger facility fees. An eligible agency may
impose in accordance with the provisions of this subsection a passenger
facility fee under this section. For purposes of the pilot program, the
procedures in this subsection shall apply instead of the procedures
otherwise provided in this section.

"(2) NOTICE AND OPPORTUNITY FOR CONSULTATION.-The eligible agency must
provide reasonable notice and an opportunity for consultation to air
carriers and foreign air carriers in accordance with subsection (c)(2)
and must provide reasonable notice and opportunity for public comment in
accordance with subsection (c)(3).

"(3) NOTICE OF INTENTION.-The eligible agency must submit to the
Secretary a notice of intention to impose a passenger facility fee under
this subsection. This notice shall include-

"(A) information that the Secretary may require by regulation on each
project for which authority to impose a passenger facility fee is
sought;

"(B) the amount of revenue from passenger facility fees that is proposed
to be collected for each project; and

"(C) the level of the passenger facility fee that is proposed.

"(4) ACKNOWLEDGEMENT OF RECEIPT AND INDICATION OF OBJECTION.-The
Secretary shall acknowledge receipt of the notice and indicate any
objection to the imposition of a passenger facility fee under this
subsection for any project identified in the notice within 30 days after
receipt of the eligible agency's notice.

"(5) AUTHORITY TO IMPOSE FEE.-Unless the Secretary objects within 30
days after receipt of the eligible agency's notice, the eligible
agency is authorized to impose a passenger facility fee in accordance
with the terms of its notice under this subsection.

"(6) REGULATIONS.-Not later than 180 days after the date of enactment of
this subsection, the Secretary shall propose such regulations as may be
necessary to carry out this subsection.

"(7) SUNSET.-This subsection shall cease to be effective beginning on
the date that is 3 years after the date of issuance of regulations to
carry out this subsection.

"(8) ACKNOWLEDGEMENT NOT AN ORDER.-An acknowledgement issued under
paragraph (4) shall not be considered an order issued by the Secretary
for purposes of section 46110.".

Vision 100 states the pilot program will only apply to non-hub airports
and will end three years after the date of issuance of regulations to
carry out the pilot program subsection. Vision 100 defines a non-hub
airport as a commercial service airport that has less than 0.05 percent
of the passenger boardings in the U.S. in the prior calendar year on an
aircraft in service in air commerce. The FAA estimates that non-hub
airports account for over 70 percent of all commercial service airports
and approximately 15 percent of aircraft operations nationwide. The FAA
also estimates that non-hub airports account for about 60 percent of the
PFC applications processed over the last 5 years. Non-hub airports
produce roughly 2 percent of total annual PFC revenue.

The pilot program will:

(1) Require a public agency to consult with air carriers before filing
an application to the FAA to collect or use a PFC. Vision 100 limits the
consultation process to only those air carriers with a significant
business interest at the airport (the significant business interest
standard is also found in statutory changes to the general PFC program);

(2) Require a public agency to provide reasonable notice to and
opportunity for comment by the public before filing an application to
the FAA to collect or use a PFC (this notice and comment requirement is
also included in statutory changes to the general PFC provisions);

(3) Reduce the information a public agency files with the FAA. Instead
of filing the information required by 14 CFR 158.25, a public agency
will file a notice including information such as:

(a) The proposed PFC level and amount to be collected,

(b) The proposed duration of the collection,

(c) A list of projects to be financed with PFC revenue along with the
amount of PFC revenue to be used on each project, and

(d) Information about consultation with the air carriers and the public
comment process;

(4) Require the FAA to acknowledge receipt of notice of intent filed by
the public agency and state any objections to the notice within 30 days
after receipt of the notice; and

(5) Authorize a public agency to impose a PFC unless the FAA states an
objection to imposition within the 30-day time period.

The pilot program differs from current practice in at least three ways:

(1) The pilot program reduces the information a public agency must file
with the FAA;

(2) The pilot program changes the FAA approval process by allowing a
public agency to collect and use a PFC when the FAA acknowledges receipt
of the notice of intent and the FAA does not object to the PFC; and

(3) The FAA's acknowledgment letter is not an agency final order
for purposes of appeal to the U.S. Court of Appeals.

The FAA believes the pilot program will streamline the PFC process, as
required by Congress. In addition, the pilot program will reduce the
burden on public agencies and the FAA for a great number of PFC
applications that make up a small percentage of total PFC revenue.


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