### December 7, 20 I5 

## CITY OF EL PASO DE ROBLES 

# "The Pass of the 

# Oaks"

Mr. James T. Brown (Email: James.T.Brown@faa.gov) Finance Management Federal Aviation Administration 

### BOO Independence Avenue SW Washington, DC 20591 

### PASO 

## ROBLES



# 12$ 1811 · 2014

Subject: Action Plan Submission Pursuant to FAA Policy and Procedures Concerning the Use of Airport Reven'-'e (79 Fed. Reg . 66282-01, November 7, 2014). Dear Mr. Brown : This letter is in response to the request for an action plan for the City of Paso Robles to. convey its intent to comply with the FAA ruling related to sales tax revenues derived from aviation fuel sales to the extent that ruling complies with federal law. This in_cludes the process likely necessary to amend any non-compliant local ordinances to achieve



## complia **~ce** and the development of reporting requirements and tracking systems for specific information on aviation fuel tax revenues which in California means "jet fuel" as other types of aviation fuels are exempt from sales tax in this state. It is our understanding that the State of California will be submitting an action plan pertaining only to the state's portion ofthe tax. California's state and local governments already provide extensive services to airports including infrastructure maintenance, fire protection, public safety, environmental protection and noise abatement. These services and improvements are funded with general sales taxes and othertaxes and the City of Paso Robles believes these local expenditures exceed the sales tax

**rev~nues** derived from the sale ofaviation fue l . Applicable Law that May Require Amendments for Compliance • Transaction 

### & Use Tax- 

### Yl cent tal;< adopted in November 2012, with tax collection starting in April 2013. This tax is a general tax, which may be used for any operating cost within the city, and has a sunset of 12 years (2024).
Department ofAdministrative Services 821 Pine Street, Suite A • Paso Robles • California 93446 (805) 237-3999 FAX (805) 237-6565**.\. \~Aso** 



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December 7, 2015 

## CITY OF 

# EL PASO DE ROBLES 

# uThe 

# Pass of the 

# Oaks"

Mr. J ames T. Brown (Email: James.T.Brown@faa.gov) Finance Management Federal Aviation Administration 

### 800 Independence Avenue SW Washington, DC 

### 20591 PASO 

# RoBLES



# 12$ 1889 · 1014

Subject: Action Plan Submission Pursuantto FAA Policy and Procedures Concerning the Use of Airport Revenue (79 Fed. Reg.

**66282~1,** November 7, 

### 2014). Dear Mr. Brown : This letter is in response to the request for an action plan for the City of Paso Robles to _

convey its intent to comply with the 

### FAA ruling related to sales tax revenues derived from aviation fuel sales to the extent that ruling complies with federal law. This includes the process likely necessary to amend 

# .. any non-compliant local ordinances to achieve compliance and the development of reporting requirements and tracking systems for specific information on aviation fuel tax revenues which in California means "jet fuel" as othertypes ofaviation fuels are exempt from sales tax in this state. It is our understanding that the State ofCalifornia will be submitting an action plan pertaining only to the state's portion ofthe tax. California's state and local governments already provide extensive services to airports including infrastructure maintenance, fire . protection,

**publi~** safety, envi ronmel)tal protection and noise abatement. These services and improvementsare funded with general sales taxes and othertaxes and the City of Paso Robles believes these loca l expenditures exceed the sales tax revenues derived from the sa le ofaviation fuel. Applicable Law that May Require Amendments for Compliance • Transac tion 

### & Use Tax- Y2 cent

**ta~** adopted in

**Nov~mber** 

### 2012, with tax collection starting in April 

### 2013. This tax is a general tax, which may be used for arw operating cost within the city, and has a sunset of 

### 12 yea rs 

### (2024).
Department ofAdministrative Services 821 Pine Street, Suite A • Paso Robles • California 93446 (805) 237-3999 FAX (805) 237
-6565

### • City of Paso Robles Municipal Airport- estimated transaction 

### & use tax in 2015 is $5,000 or less. • Estimated General Fund costs for operating assistance to City Airport is more than $5,000 ./ Fire Station located on airport- General Fund support ./ Public Safety Services - General Fund support ./ Ingress/egress to Airport, including roads, and public transportation - General Fund support ./ Weather Services- no administrative cost for use ofairport property ./ Administrative oversight - General F und support I n addition to the locally imposed transaction and use tax rate, the City of Paso Robles receives revenues derived from the state sales and use tax rate for the purposes of (health and human servi c

es, criminaljustice and transportation). Thes e statewide voter-approved tax rates have been designated for specific purposes. Jt is our understanding that t he state will provide an action plan response as it relates to necessary steps for assuring compliance related to these revenues. Reporting Requirement and Tracking System The City of Paso Robles in conjunction with its advisors has begun to identify the required data and steps necessary to comply. The internal process to undertake this effort, including developing a tracking system for discrete information on aviation fuel tax revenues, is complex and extensive. For example, the State Board of Equalization, the tax collection agency with which the City of Paso Robles has a contract for sales tax collections, does not require jet f uel sellers to segregate sales tax revenue derived from the sale ofjet fuel from other types of taxable sales made by the same vendor. Therefore, it is presently impossible for the City of Paso Robles to determine the exact amount of sales tax derived from sales ofjet fuel. local agencies would need the state to change its tax reporti ng standards to require fuel sellers to quantify the amount oftax derived from the sale of aviation fuel to achieve compliance. Segregating and reporting the correct amount of tax revenue will further complicate Calif ornia's already complex sales tax system and increase administrative costs. Transition Period If, contrary to current expectations, the City of Paso Robles determines that its expenditures on airport capital and operating costs do not exceed sales tax revenues derived from aviation fuel, it will consider legislative solutions. It is the intent ofthe City of Paso Robles to attempt to comply with the requirements set forth by the FAA ruling, to the extent it complies w ith federal law. The City of Paso robles will notify the FAA of specific actions, ifany, to be co mpleted duringthe t ransition period and work with the state to ensure compliance before the December 8, 2017 deadline.

es Throop Director ofAdm i nis trat ive Services cc: Paso Robles City Council Jim App, City M anager MegWilliamson , Asst. City Manager Dick McKinley, Dir. of Public Works Jay Chamberlain , Department ofFinance (Jay.Cbamberlain @dof.ca.gov)
Department ofAdministrative Services 821 Pine Street, Suite A • Paso Robles • California 93446 (805) 237-3999 FAX (805) 237-6565