61544 Federal Register / Vol. 69, No. 201 / Tuesday, October 19, 2004 / Notices 

Cumberland, Grundy, Hamilton, 

Jackson, Johnson, Meigs, Polk, Rhea, 

and Roane Counties in the State of 

Tennessee constitute a disaster area due 

to damages caused by severe storms and 

flooding occurring on September 16–20, 

2004. Applications for loans for 

physical damage as a result of this 

disaster may be filed until the close of 

business on December 6, 2004 at the 

address listed below or other locally 

announced locations: Small Business 

Administration, Disaster Area 2 Office, 

One Baltimore Place, Suite 300, Atlanta, 

GA 30308. 

The interest rates are:

Percent 

For Physical Damage: 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.900 

Non-Profit Organizations With 

Credit Available Elsewhere ... 4.875 

The number assigned to this disaster 

for physical damage is P06806.

(Catalog of Federal Domestic Assistance 

Program Nos. 59008).

Dated: October 13, 2004. 

Cheri L. Cannon, 

Acting Associate Administrator for Disaster 

Assistance.

[FR Doc. 04–23400 Filed 10–18–04; 8:45 am] 

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #P067] 

Territory of U.S. Virgin Islands 

As a result of the President’s major 

disaster declaration for Public 

Assistance on October 7, 2004 the U.S. 

Small Business Administration is 

activating its disaster loan program only 

for private non-profit organizations that 

provide essential services of a 

governmental nature. I find that the 

islands of St. Croix, St. John, and St. 

Thomas in the Territory of U.S. Virgin 

Islands constitute a disaster area due to 

damages caused by Tropical Storm 

Jeanne occurring on September 14–17, 

2004. Applications for loans for 

physical damage as a result of this 

disaster may be filed until the close of 

business on December 6, 2004 at the 

address listed below or other locally 

announced locations: U.S. Small 

Business Administration, Disaster Area 

1 Office, 360 Rainbow Blvd., South, 3rd 

Floor, Niagara Falls, NY 14303. 

The interest rates are:

Percent 

For Physical Damage: 

Non-Profit Organizations Without Credit Available Elsewhere: .................................... 2.900. 

Non-Profit Organizations with 

Credit Available Elsewhere: .. 4.875. 

The number assigned to this disaster 

for physical damage is P06708.

(Catalog of Federal Domestic Assistance 

Program No. 59008.)

Dated: October 13, 2004. 

Cheri L. Cannon, 

Acting Associate Administrator for Disaster 

Assistance.

[FR Doc. 04–23402 Filed 10–18–04; 8:45 am] 

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

Audit and Financial Management 

Advisory (AFMAC) Committee Meeting 

The U.S. Small Business 

Administration’s Audit and Financial 

Management Advisory Committee 

(AFMAC) will be hosting its second 

meeting to discuss such matters that 

may be presented by members, and staff 

of the U.S. Small Business 

Administration, or others present. The 

meeting will begin on Monday, 

November 8, 2004, starting at 9 a.m. 

until noon. The meeting will be held at 

the U.S. Small Business Administration 

Headquarters, located at 409 3rd Street, 

SW., Washington, DC 20416, in the 

Chief Financial Officer’s Conference 

Room, 6th Floor. 

Anyone wishing to attend must 

contact Thomas Dumaresq in writing or 

by fax. Thomas Dumaresq, Chief 

Financial Officer , 409 3rd Street SW., 

Washington DC 20416, phone (202) 

205–6506, fax: (202) 205–6869, e-mail: 

thomas.dumaresq@sba.gov.

Matthew K. Becker, 

Committee Management Officer.

[FR Doc. 04–23403 Filed 10–18–04; 8:45 am] 

BILLING CODE 8025–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration 

Advisory Circular 23–23, 

Standardization Guide for Integrated 

Cockpits in Part 23 Airplanes

AGENCY: Federal Aviation 

Administration (FAA), DOT.

ACTION: Notice of issuance of advisory 

circular. 

SUMMARY: This notice announces the 

issuance of Advisory Circular (AC) 23–

23, Standardization Guide for Integrated 

Cockpits in Part 23 Airplanes. The AC 

acknowledges the General Aviation 

Manufacturers Association (GAMA) 

Publication #12, ‘‘Recommended 

Practices and Guidelines for an 

Integrated Flightdeck/Cockpit in a 14 

CFR Part 23 (or equivalent) Certificated 

Airplane,’’ as an acceptable means for 

showing compliance with applicable 

requirements for electronic displays in 

part 23 airplanes. The AC acknowledges 

a publication that was developed using 

a public process; therefore, we are 

issuing the AC in a final form.

DATES: The Manager of the Small 

Airplane Directorate issued Advisory 

Circular 23–23 on September 30, 2004.

FOR FURTHER INFORMATION CONTACT: Mr. 

Lowell Foster, Standards Office, ACE–

111, 901 Locust, Kansas City, Missouri 

64106; telephone 816–329–4125. 

How to Obtain Copies: A paper copy 

of AC 23–23 may be obtained by writing 

to the U. S. Department of 

Transportation, Subsequent Distribution 

Office, DOT Warehouse, SVC–121.23, 

Ardmore East Business Center, 3341Q 

75th Ave., Landover, MD 20785, 

telephone 301–322–5377, or by faxing 

your request to the warehouse at 301–

386–5394. The AC will also be available 

on the Internet at http://

www.airweb.faa.gov/AC.

A copy of the GAMA Publication #12 

is available from GAMA. Their Web site 

is http://www.gama.aero. A combined 

industry and FAA team developed the 

GAMA publication.

Issued in Kansas City, Missouri on 

September 30, 2004. 

Dorenda D. Baker, 

Manager, Small Airplane Directorate, Aircraft 

Certification Service.

[FR Doc. 04–23389 Filed 10–18–04; 8:45 am] 

BILLING CODE 4910–13–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration 

[Docket No. 16227] 

Policy and Procedures Concerning the 

Use of Airport Revenue: Petition of the 

Sarasota-Manatee Airport Authority To 

Allow Use of Airport Revenue for 

Direct Subsidy of Air Carrier 

Operations

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT).

ACTION: Denial of petition; disposition 

of comments. 

Federal Register / Vol. 69, No. 201 / Tuesday, October 19, 2004 / Notices 61545

SUMMARY: On March 10, 2003, the 

Sarasota-Manatee Airport Authority 

(SMAA) petitioned the FAA to amend 

the Policy and Procedures Concerning 

the Use of Airport Revenue (Revenue 

Use Policy). FAA requested comments. 

This notice responds to the comments 

received and denies the petition.

ADDRESSES: Comments received on the 

petition are available for public review 

in the Dockets Office, U.S. Department 

of Transportation, Room Plaza 401, 400 

Seventh Street, SW., Washington, DC 

20590–0001. The documents have been 

filed under FAA Docket Number 2003–

16227. The Dockets Office is open 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

The Dockets Office is on the plaza level 

of the Nassif Building at the Department 

of Transportation at the above address. 

Also, you may review public dockets on 

the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

Charles Erhard, Manager, Airport 

Compliance Division, AAS–400, Federal 

Aviation Administration, 800 

Independence Ave. SW., Washington, 

DC 20591, telephone (202) 267–3085.

SUPPLEMENTARY INFORMATION: 

I. The Petition 

On March 10, 2003, the Federal 

Aviation Administration (FAA) received 

a petition from Frederick J. Piccolo, 

President, Chief Executive Officer of the 

Sarasota Manatee Airport Authority 

(SMAA), requesting that the FAA 

provide an opportunity for notice and 

comment on SMAA’s proposed change 

to FAA’s Policy and Procedures 

Concerning the Use of Airport Revenue 

(Revenue Use Policy). The petitioner 

requested that the FAA amend the 

Revenue Use Policy to permit certain 

airport sponsors to use airport revenue 

for the direct subsidy of commercial 

airline service under specific and 

limited circumstances. The FAA has 

interpreted Federal law to prohibit an 

airport sponsor that is the recipient or 

subject of Federal assistance for airport 

improvements from using airport 

revenue for a direct subsidy to an air 

carrier, and that interpretation is 

reflected in the Revenue Use Policy. The 

petitioner represents that some airport 

sponsors have been able to provide 

either financial subsidies or revenue 

guarantees carriers to secure airline 

service using non-airport funds. These 

airport sponsors are general-purpose 

municipalities that can use funds from 

non-airport sources for general 

economic development without 

restriction on their use under the 

Revenue Use Policy. In contrast, those 

airport sponsors governed by a specialpurpose airport authority cannot 

provide direct subsidies to carriers, or 

use any revenue for general economic 

development, because all of their funds 

are considered airport revenue subject 

to the requirements in Federal law and 

the Revenue Use Policy. 

Specifically, the petitioner requested 

an amendment to the Revenue Use 

Policy that would ‘‘permit airports that 

have less than 0.25 percent of the total 

U.S. passenger boardings to use airport 

revenues at their discretion for subsidies 

to air carriers willing to provide service 

to those airports.’’ The petitioner 

suggested the following conditions to be 

contingent to this amendment:

1. The community must have a 

minimum population of 200,000 

residents in the airport’s local county(s). 

2. Airport revenues considered for use 

are not subject to the airline agreement 

in place and do not affect the ratemaking methodology of the agreement. 

3. Subsidy is limited to new service. 

• Airline not presently at the airport. 

• City pair not presently served by 

any airline at the applicant airport. 

4. Subsidy cannot exceed 12 

consecutive months to any airline. 

5. Airline receiving the subsidy must 

be willing to provide the following: 

• Daily scheduled service with a 

minimum seating capacity of 50 seats. 

• Must commit to a minimum of 

twelve consecutive months of service. 

Airline cannot utilize the program 

more than once at the same airport. 

II. Discussion 

A. Summary of Comments 

Comments in support of the petition:

In its petition and subsequently 

submitted comments, the SMAA argues 

that there is an inequity within the 

Revenue Use Policy that places airports 

governed by general-purpose 

municipalities at an advantage over 

airports governed by independent 

authorities. SMAA contends that 

municipally-run airports are free to use 

non-airport revenue to offer subsidies 

for airline service while independent 

authorities are prevented from 

providing subsidies from their airport 

revenues because of the Revenue Use 

Policy. SMAA states that in a few cases 

authority-governed airports have funds 

that FAA defines as airport revenue, but 

the funds are separate and distinct from 

revenues required to support airline 

costs under the airport rate-setting 

methodology. SMAA proposes that 

these funds should be allowed for use 

as a direct subsidy in the manner 

proposed in its petition, because the 

cost of the subsidy will not be borne by 

the incumbent airlines at those airports. 

In addition, SMAA contends that a 

successful subsidy program will add 

airline service and benefit the 

incumbent airlines by reducing their 

airport fees. SMAA also adds that this 

proposal is consistent with the intent of 

Congress, despite legislative language 

that might suggest otherwise, in part 

because SMAA and other airports like it 

are not monopolies, but rather 

experience passenger leakage to nearby, 

larger airports that can serve the same 

population. Therefore, airport 

authorities should have the ability to 

fight passenger leakage by subsidizing 

air service, to promote a long-term 

sustainable market. 

Four airport operators besides the 

petitioner submitted comments in 

support of SMAA’s proposal. Five other 

airport operators submitted comments 

generally in support, but with suggested 

changes in the limiting conditions. One 

airport operator suggested that any 

airport authority offering such 

subsidies, as outlined by the petitioner, 

be prevented from accepting funding 

under the Essential Air Service program. 

The Airports Council International 

North America (ACI) and the American 

Association of Airport Executives 

(AAAE) submitted identical comments 

supporting the petition. ACI/AAAE 

stated that the FAA should allow any 

non-discriminatory subsidies, or at least 

the FAA should accept SMAA’s 

proposal but without SMAA’s proposed 

limits on population or aircraft capacity. 

ACI/AAAE also observed that: 

‘‘Under the current revenue-use 

policy, airport sponsors which are 

general-purpose municipalities may use 

funds from a non-airport source to 

provide direct subsidies. However, 

airport sponsors governed by a specialpurpose airport authority cannot 

provide direct subsidies to air carriers, 

because all the funds are considered 

airport revenue subject to the revenue 

use policy prohibitions. Although 

general-purpose municipalities may use 

non-airport revenues for air carrier 

subsidies, the truth of the matter is that 

these municipalities and other airport 

sponsors, such as State departments of 

transportation, are also facing severe 

financial difficulty. Revising the 

revenue use policy to afford any airport 

the opportunity to offer a subsidy, 

regardless of airport sponsor status, 

should at lease provide a more level 

playing field for airports to solicit new 

routes and services.’’

ACI/AAAE acknowledged that GAO 

determined that direct subsidies ‘‘have 

not produced an effective transportation 

solution for passengers at many small 

communities.’’ However, ACI/AAAE 

contend that even though ‘‘direct 

61546 Federal Register / Vol. 69, No. 201 / Tuesday, October 19, 2004 / Notices 

subsidies provided by individual 

airports will not address all or even the 

majority of inadequate air service issues, 

they are a legitimate tool.’’ Finally, ACI/

AAAE contend that the Revenue Use 

Policy is contradictory in that it permits 

airports to spend airport revenues for 

promotional and marketing programs 

and to waive landing and other fees for 

a limited period in order to entice new 

market entrants or encourage incumbent 

airlines to add service, but denies 

airports the ability to directly subsidize 

airline service from airport revenues. 

Five airports submitted comments 

that the SMAA proposal is too narrow 

and would ‘‘result in different treatment 

for different airports.’’ The City of 

Fresno suggested that municipal 

airports be allowed to spend airport 

revenue for direct subsidies without the 

limitations requested in the petition. 

Other airports objected to the 

population limits, the 12-month 

duration limit, and aircraft size limits. 

Two individual users of Sarasota 

Bradenton International Airport 

commented in favor of the proposal, 

citing the high cost of fares at their 

preferred airport and the inconvenience 

of driving to a larger airport in a 

neighboring community. Two Sarasota 

area Chambers of Commerce submitted 

similar comments, stating, ‘‘[t]he lack of 

adequate local air service has been a 

severe impediment to our efforts to 

attract new industry to our area.’’ They 

also stated that the proposal would 

provide a region-wide benefit. 

Comments opposing the petition:

Three airport operators objected to the 

proposal. Generally, these commenters 

noted that unintended, potentially 

detrimental consequences could result 

from such a policy change. These 

consequences could include airports 

bidding for airline service or airlines 

demanding subsidies to keep service in 

a market. The manager of Ithaca 

Tompkins Regional Airport stated, ‘‘In 

our fight for better airline service we 

would lose out to bigger airports simply 

because they can offer more money 

* * * * I think the Sarasota proposal 

could set a dangerous precedent for the 

nation’s smallest airports. In addition, it 

would unfairly discriminate against 

incumbent carriers and create an 

uneven playing field. Ultimately, it 

could start a free-for-all and even end 

up being a detriment to Sarasota itself.’’

The Aircraft Owners and Pilots 

Association (AOPA), the Regional 

Airline Association (RAA), and the Air 

Transport Association (ATA), American 

Airlines, and Continental Airlines all 

submitted comments in opposition. 

AOPA stated that it is strongly opposed 

to the proposal: ‘‘The safety and utility 

of our national air transportation system 

relies on the ability of an airport 

sponsor to maintain an airport in a safe 

and serviceable condition. An airport 

sponsor remains responsible for funding 

airport projects. Using airport revenue 

to subsidize airline service would take 

away from an airport’s ability to fund 

airport improvement projects.’’ AOPA 

also states its concern that air carriers 

will pressure airports to provide such 

subsidies, basing service on the amount 

or availability of the subsidy, instead of 

the underlying market, echoing some of 

the comments from airports in 

opposition. ATA and other users stated 

that the change proposed by the 

petitioner would require a change in 

Federal law, since the law prohibits the 

use of airport revenue for general 

economic development. They noted that 

both the SMAA and the Sarasota area 

Chambers of Commerce acknowledge 

that a purpose of the proposal is general 

economic development. ATA argues 

that the Revenue Use Policy explicitly 

prohibits the use of airport revenue for 

the subsidy of airline service, regardless 

of the governing structure of an airport. 

ATA contends that SMAA’s premise 

that the policy is somehow inequitable 

is flawed because the Revenue Use 

Policy currently treats all airports 

exactly the same. ATA also contends 

that, regardless of the governing 

structure, ‘‘an airport may receive 

financial assistance from local or state 

governments or from private 

organizations without running afoul of 

the Revenue Use Policy.’’ ATA 

concludes that, notwithstanding the 

prohibition of subsidies under Federal 

law and policy, the SMAA proposal, if 

enacted, would violate Federal grant 

assurances 22 and 23, because it would 

limit subsidies to airlines not presently 

serving SMAA and would therefore 

discriminate against incumbent airlines. 

Finally, ATA stated, ‘‘the use of any 

airport revenue to subsidize air service 

suggests that other airport needs are 

going unmet, or alternatively that 

charges are higher than they otherwise 

would have to be to maintain a selfsustaining rate structure.’’

B. Summary of Relevant Law and Policy 

Petitions to amend the Revenue Use 

Policy must be evaluated with 

consideration of the controlling Federal 

law. 

Title 49 U.S.C. 47107(b)(1) requires 

that grant agreements for airport 

development grants include an 

assurance that ‘‘the revenues generated 

by a public airport will be expended for 

the capital or operating costs of—(A) 

The airport; (B) the local airport system; 

or (C) other local facilities owned or 

operated by the airport owner or 

operator and directly and substantially 

related to the air transportation of 

passengers or property.’’ A substantially 

similar requirement is included in 49 

U.S.C. 47133, which applies directly to 

any airport that has received Federal 

assistance. In 1994, Congress expressly 

prohibited ‘‘the use of airport revenues 

for general economic development, 

marketing and promotional activities 

unrelated to airports or airport 

systems.’’ 49 U.S.C. 47107(1)(2)(b). 

Sections V and VI of the Revenue Use 

Policy, at 64 FR 7718–20, respectively, 

list uses of airport revenue considered 

to be permitted or prohibited under the 

above statutes. The list of prohibited 

uses of airport revenue in section VI B. 

includes the following: 

‘‘12. Direct subsidy of air carrier 

operations. Direct subsidies are 

considered to be payments of airport 

funds to carriers for air service. 

Prohibited direct subsidies do not 

include waivers of fees or discounted 

landing or other fees during a 

promotional period. Any fee waiver or 

discount must be offered to all users of 

the airport, and provided to all users 

that are willing to provide the same type 

and level of new services consistent 

with the promotional offering. Likewise 

prohibited direct subsidies do not 

include support for airline advertising 

or marketing of new services to the 

extent permitted by Section V of this 

Policy Statement.’’

Some of the commenters discussed 

the applicability of Federal law under 

the Airline Deregulation Act of 1978 

(ADA). Under the ADA’s preemption 

provision, 49 U.S.C. 41713(b), State and 

local governments are prohibited from 

enacting or enforcing any provision 

having the force or effect of law related 

to a ‘‘price, route, or service of an air 

carrier * * *’’

C. Discussion 

Legal issues: The FAA fully 

appreciates the impact of the loss of air 

service at commercial airports and the 

interest of the petitioner and other 

airports in obtaining the ability to 

subsidize air service at their airports. 

While there are policy arguments for 

and against the requested change in 

Federal policy, the initial question in 

reviewing the petition is whether the 

FAA could adopt the requested policy 

change without a change in the 

authorizing statute. As noted above by 

statute, all revenues of the airport must 

be used for airport ‘‘capital or 

operating’’ costs. In its 1999 Revenue 

Use Policy, the FAA interpreted this 

statute to prohibit use of airport revenue 

to subsidize airline service, on the basis 

Federal Register / Vol. 69, No. 201 / Tuesday, October 19, 2004 / Notices 61547

that such a subsidy would not be a 

capital or operating cost of the airport. 

Granting the petition would require a 

reversal of that interpretation. 

There has been no fundamental 

change in the respective roles of airport 

operators and air carriers and other 

airport users at U.S. airports since 1999. 

Nor has there been any amendment to 

the statutes governing use of airport 

revenue that would suggest that 

Congress favored a different 

interpretation. The FAA continues to 

believe that payments to airlines to 

increase airline use of the airport are not 

an operating cost of the airport itself. It 

is clear even from supporting comments 

that airline service is considered 

primarily an economic development 

benefit to the general community. 

Another argument made for 

considering subsidies to airlines as a 

cost of airport operation is that there is 

no practical business or economic 

distinction between a subsidy using 

airport revenue, which is now 

prohibited, and a reduction in the fees 

charged to the carrier, which is 

permitted on a temporary promotional 

basis. The FAA’s different treatment of 

subsidies and promotional fee waivers 

is based on specific statutes controlling 

airport revenue and airport fees, 

respectively. When an airport accepts 

Airport Improvement Program (AIP) 

grants, it agrees not to use its revenue 

in ways that might otherwise be legal 

and perhaps even routine for 

Government agencies and businesses 

that are not subject to AIP grant 

assurances. This restriction is grounded 

in Congress’ interest in a ‘‘closed’’

system that dedicates airport revenue 

for airport purposes, and prevents a 

hidden municipal tax on air 

transportation. The requirement to use 

airport revenue for airport purposes is 

absolute; once a federally obligated 

airport receives a dollar of airport 

revenue, that dollar must be used for the 

purposes listed in 49 U.S.C. 47107(b) 

and 47133—effectively the capital and 

operating costs of the airport. If 

subsidizing airline service is not 

considered to be a capital or operating 

cost of the airport, then the airport 

operator cannot use any revenue for that 

purpose, even a small amount, or even 

temporarily.

In contrast, the statutes relating to 

airport rates and charges are much less 

prescriptive. Airport fees are subject to 

broad requirements of reasonableness 

and nondiscrimination, under 49 U.S.C. 

40116 and 47107(a)(1), but the actual 

fees are set by the airport operator. 

Airport operators have substantial 

discretion in setting fees and routinely 

set fees to accomplish a variety of 

objectives. The FAA reviews fee 

methodologies and resulting fees to see 

that they are reasonable and not 

unjustly discriminatory, but does not 

generally inquire in the airport 

operator’s policies or strategic 

objectives. Accordingly, the FAA 

evaluates promotional fee waiver 

programs to ensure the programs are not 

unjustly discriminatory and that the 

costs of a fee waiver are not in any way 

passed on to other operators, but does 

not consider the purposes or 

effectiveness of the program. Given the 

latitude provided the airport operator by 

49 U.S.C. 40116 and 47107(a)(1) to set 

fees, the FAA has found that a 

temporary promotional fee discount or 

waiver is not inconsistent with those 

statutes. In contrast, the laws controlling 

use of airport revenue do not provide 

that latitude, and the FAA believes that 

its respective treatment of revenue use 

and promotional fee waivers is the 

correct interpretation of two 

substantially different statutes. 

Accordingly, we do not believe an 

analogy of subsidies to fee waivers 

justifies a reversal of the interpretation 

that airline subsidies are not a capital or 

operating cost of the airport. 

Finally, some commenters thought 

that the preemption provision in the 

ADA, 49 U.S.C. 41713(b), argue against 

airport subsidies for air carriers. We 

believe that the applicability of section 

41713(b) would be the same for air 

carrier subsidies, which are the subject 

of the petition, and for promotional fee 

waiver programs, which are currently 

permitted under the self-sustaining rate 

requirement (grant assurance 24). A 

particular program might raise a 

preemption issue, but that could be the 

case with fee waiver programs just as 

easily as with subsidy programs. 

Therefore, the fact that some carrier 

subsidy programs could be preempted 

by section 41713(b) is not a factor in 

evaluating whether carrier subsidies in 

general could be allowed at all. 

In summary, the FAA understands 

that the SMAA and many other airport 

operators consider it critical to find 

ways to attract new air service, promote 

airline competition, and reduce ticket 

prices at their airports. Airport operators 

have various options available for this 

purpose that are consistent with the AIP 

grant assurances. However, the FAA 

remains convinced that the policy stated 

in the 1999 Revenue Use Policy, i.e.,

that direct subsidies to airlines to 

provide service are not a capital or 

operating cost of the airport, remains the 

best interpretation of section 41713(b) 

and section 47133. If Congress at any 

point changes the requirements 

applicable to the use of airport revenue, 

the FAA would revise its policy to 

reflect the change. 

The Comments on the SMAA petition 

include a good representation of the 

arguments for and against a change in 

law or policy to permit use of airport 

revenue to subsidize air service. In any 

legislative reconsideration of the 

statutory language that controls use of 

airport revenue, we believe the 

following points raised by commenters 

should be considered. 

Relative position of airport authorities 

and municipally-owned airports: SMAA 

states that the provisions of the Revenue 

Use Policy, as applied to the governing 

structure of an airport, limit the ability 

to offer subsidies to some airport 

sponsors,but not others. As the policy 

stands now, neither municipal 

governments nor airport authorities can 

spend airport revenue on direct airline 

subsidies. Both municipal governments 

and airport authorities may spend nonairport revenue on subsidies, including 

general fund revenue but also funds 

from local economic development 

authorities and from local businesses 

and business organizations. SMAA 

argues that the inequity arises because 

airport authorities generally do not have 

access to non-airport revenue, while 

municipal and State government airport 

operators do. While this is true with 

respect to general fund revenue, it is 

less true with respect to other sources, 

such as funds provided by local 

businesses or business organizations, 

directly or through guaranteed travel. 

Also, there may be many reasons why 

it would be difficult for a municipal 

airport operator to use general funds for 

an airport project, including a direct air 

carrier subsidy for air service. 

Accordingly, the FAA would agree that 

the lack of direct access to general fund 

revenue may put an airport authority at 

a disadvantage. However, that 

disadvantage is probably not as great as 

the SMAA and some other commenters 

represent.

Effectiveness: Before any effort to 

change the law to clearly permit subsidy 

of air carrier service with airport 

revenue, the effectiveness of such 

subsidies would need to be considered. 

The GAO, in report no. 03–330, 

Commercial Aviation: Factors Affecting 

Efforts to Improve Air Service at Small 

Community Airports, January 2003, 

indicated that direct subsidies for 

airline service have not had a 

demonstrated record of successfully 

sustaining air service once the subsidies 

expire. A temporary subsidy, as 

requested in the petition, would seem to 

have the potential for a long-term 

positive result in only a narrow set of 

circumstances, i.e., where (1) an airline 

61548 Federal Register / Vol. 69, No. 201 / Tuesday, October 19, 2004 / Notices 

did not believe that service would 

currently be profitable, but (2) the 

airline did believe that a modest subsidy 

would cover losses in the short term, 

and (3) the particular market had 

sufficient potential that it would 

support profitable service without a 

subsidy at the end of the promotional 

subsidy period. 

Unintended consequences: Some 

commenters noted that allowing the 

subsidy of air carrier service with 

airport revenue, as proposed by SMAA, 

could produce unintended and counterproductive consequences. Airlines 

could use such a program to demand 

subsidies to maintain existing service at 

an airport. SMAA proposed limitations 

and conditions on the program that 

would limit the scope of subsidies (and 

airline demands for subsidies). 

However, if promotional subsidy of new 

airline service were a permissible use of 

airport revenue, it is not clear what 

authority FAA would rely on to limit 

that use to some airports and not others. 

Several commenters noted another 

possible consequence of a subsidy to 

airlines i.e., a subsidy program could 

reduce funds available for capital 

improvements and operating and 

maintenance costs of the airport. 

Whether a subsidy resulted in a net cost 

to the airport would depend on whether 

fees from new service were sufficient to 

offset the subsidy, and the success of the 

subsidy in generating new service in the 

long term. 

III. Conclusion 

The FAA understands that SMAA and 

other airports consider it essential to 

find ways to attract new air service to 

their airports. While it is unclear 

whether temporary subsidies to airlines 

would be effective in generating new 

service beyond the subsidy period, we 

can understand why SMAA and others 

would like to use every possible tool 

available for this purpose. The FAA has 

interpreted other laws to provide 

flexibility for airport operators, such as 

the ability to reduce or even waive fees 

charged to carriers for a substantial 

promotional period. However, we do 

not find that same flexibility in the laws 

governing the use of airport revenue. 

Congress has repeatedly asserted its 

interest in the strict interpretation and 

enforcement of the use of airport 

revenue for purposes which are clearly 

capital and operating costs of the 

airport. We do not find that the petition 

or comments provide a sufficient basis 

for the FAA to reverse its longstanding 

interpretation that subsidies to airlines 

are not a capital or operating cost of an 

airport. Accordingly, the petition is 

denied.

Issued in Washington, DC on October 6, 

2004. 

Woodie Woodward, 

Associate Administrator for Airports.

[FR Doc. 04–23381 Filed 10–18–04; 8:45 am] 

BILLING CODE 4910–13–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration 

Notice of Availability of Final 

Environmental Impact Statement 

(FEIS), Notice of Holding Period for 

Master Plan Development Including 

Runway Safety Area Enhancement/

Extension of Runway 12–30 and Other 

Improvements of Gary/Chicago 

International Airport located in Gary, IN

AGENCY: Federal Aviation 

Administration (FAA), DOT.

ACTION: Notice of availability, notice of 

holding period. 

SUMMARY: The Federal Aviation 

Administration (FAA) is issuing this 

notice to advise the public that a Final 

Environmental Impact Statement 

(FEIS)—Master Plan Development 

Including Runway Safety Area 

Enhancement/Extension of Runway 12–

30 and Other Improvements, Gary/

Chicago International Airport, has been 

prepared and is in a 30-day holding 

period before a Record of Decision can 

be signed and issued. Written requests 

for the FEIS and written comments on 

the FEIS can be submitted to the 

individual listed in the FOR FURTHER

INFORMATION CONTACT. The holding 

period will commence on October 22, 

2004 and will close on November 22, 

2004. 

Public Availability: Copies of the FEIS 

may be viewed during regular business 

hours at the following locations: 

1. Gary/Chicago International Airport, 

6001 West Industrial Highway, Gary, 

Indiana 46406. 

2. Chicago Airports District Office, 

Room 312, Federal Aviation 

Administration, 2300 East Devon 

Avenue, Des Plaines, Illinois 60018. 

3. Gary Public Library, 220 West 5th 

Avenue, Gary, Indiana 46402. 

4. Hammond Public Library, 564 State 

Street, Hammond, Indiana 46320. 

5. East Chicago Main Library, 2401 

East Columbus Drive, East Chicago, 

Indiana 46312. 

6. IU Northwest Library, 3400 

Broadway, Gary Indiana 46408. 

7. Lake County Main Library, 1919 

West 81st Avenue, Merrillville, Indiana 

46410–5382.

8. Purdue Calumet Library, 2200 

169th Street, Hammond, Indiana 46323–

2094. 

The FEIS will be available during the 

Council on Environmental Quality’s 

required 30-day holding period from 

October 22, 2004 to November 22, 2004. 

The FAA will accept comments until 

November 23, 2004 at the address listed 

in the section entitled FOR FURTHER

INFORMATION CONTACT.

FOR FURTHER INFORMATION CONTACT:

Prescott C. Snyder, Airports 

Environmental Program Manager, 

Federal Aviation Administration, 

Airports Division, Room 315, 2300 East 

Devon Avenue, Des Plaines, Illinois 

60018. Mr. Snyder can be contacted at 

(847) 294–7538 (voice), (847) 294–7036 

(facsimile) or by e-mail at 9–AGL–GYY–

EIS–Project@faa.gov.

SUPPLEMENTARY INFORMATION: At the 

request of the Gary/Chicago Airport 

Authority, the FAA has prepared an 

Environmental Impact Statement. The 

review addressed specific 

improvements at the Gary/Chicago 

International Airport as identified 

during the 2001 Airport Master Plan 

process and the 2003 Railroad 

Relocation Study, and shown on the 

2001 Airport Layout Plan. The following 

improvements have been grouped into 

four categories and are identified as ripe 

for review and decision: (1) 

Improvements associated with the 

existing Runway 12–30, the primary air 

carrier runway at the airport, relocate 

the E.J. & E. Railroad, acquire land 

northwest of the airport to allow for 

modifications to the runway safety area, 

relocate the airside perimeter roadway 

(including providing a southwest access 

roadway), relocate the Runway 12–30 

navaids, improve the Runway Safety 

Area for Runway 12, relocate the 

Runway 12 threshold to remove prior 

displacement, and acquire land 

southeast of the airport, located within 

or immediately adjacent to the runway 

protection zone; (2) Extension of 

Runway 12–30, (1356 feet), relocate the 

Runway 12–30 navaids, extend parallel 

taxiway A to the new end of Runway 12, 

construct deicing hold pads on Taxiway 

A at Runway 12 and Runway 30, and 

develop two high-sped exit taxiways; (3) 

Expansion of the existing passenger 

terminal to accommodate projected 

demands; and (4) analysis of sites 

adjacent to the extended runway for 

potential aviation related development, 

including a future new passenger 

terminal and air cargo area. 

The purpose and need for these 

improvements is reviewed in the FEIS. 

All reasonable alternative have been 

considered including the no-action 

alternative.