December 7, 20 I 5 

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 of the 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 other taxes and 

the City of Paso Robles believes these local expenditures exceed the sales tax rev~nues derived from 

the sale of aviation fuel. 

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 of Administrative Services 

821 Pine Street, Suite A • Paso Robles • California 93446 

(805) 237-3999 FAX (805) 237-6565 
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December 7, 2015 

CITY OF EL PASO DE ROBLES 

uThe Pass of the Oaks" 

Mr. James 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 Pursuant to 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 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 of the tax. 

California's state and local governments already provide extensive services to airports including 

infrastructure maintenance, fire . protection, publi~ safety, environmel)tal protection and noise 

abatement. These services and improvements are funded with general sales taxes and other taxes and 

the City of Paso Robles believes these local expenditures exceed the sales tax revenues derived from 

the sale of aviation fuel. 

Applicable Law that May Require Amendments for Compliance 

• Transaction & 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 years (2024). 

Department of Administrative 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 of airport property 

./ Administrative oversight - General Fund support 

In 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 services, criminal justice and 

transportation). These statewide voter-approved tax rates have been designated for specific purposes. Jt is our 

understanding that the 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 fuel sellers to segregate sales tax revenue derived from the sale of jet 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 of jet fuel. local agencies would need the state to 

change its tax reporting standards to require fuel sellers to quantify the amount of tax derived from the sale of 

aviation fuel to achieve compliance. Segregating and reporting the correct amount of tax revenue will further 

complicate California'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 of the City of Paso Robles to attempt to comply with the requirements set forth by the 

FAA ruling, to the extent it complies with federal law. The City of Paso robles will notify the FAA of specific 

actions, if any, to be completed during the transition period and work with the state to ensure compliance before 

the December 8, 2017 deadline. 

es Throop 

Director of Administrative Services 

cc: 

Paso Robles City Council 

Jim App, City Manager 

Meg Williamson, Asst. City Manager 

Dick McKinley, Dir. of Public Works 

Jay Chamberlain, Department of Finance (Jay.Cbamberlain@dof.ca.gov) 

Department of Administrative Services 

821 Pine Street, Suite A • Paso Robles • California 93446 

(805) 237-3999 FAX (805) 237-6565