(_)COMMISSIONERSJuliePierce,ChairDaveHudson,ViceChairJanetAbelsonNewellArnerichTomButlDavidDurantFederalGloverKarenMitchoffKevinRomickDonTatzinRobertTaylorRandellH.Iwasaki,ExecutiveDirector2999OakRoadSuite100WalnutCreekCA94597PHONE:925.256.4700FAX:925.256.4701www.ccta.netCONTRACOSTAtransportationauthorityDecember8,2015JamesT.BrownFinanceManagementFederalAviationAdministration(FAA)800IndependenceAvenueSWWashington,DC20591Re:CompliancewithanFAARequirementforaSubmitted"ActionPlan"Mr.Brown,TheContraCostaTransportationAuthoritywasnotifiedonthewiththeFAA's"PolicyandProceduresConcerningtheUseofAirportRevenue"withrespecttotheuseofstateandlocalgeneralsalestaxrevenuesthattouchaviationfuelruleafteritsfinaladoption.Ouragency,norouradvocatesorindustryrepresentativeswereawareoftherulemakingprocesssurroundingthispolicychange.TheContraCostaTransportationAuthority(CCTA)isimpactedbythisrulingbecauseouragencyobtainedtherequiredsupermajority(2/3or66.67%)oflocalvoterapprovalin2009tolevyaone-halfofonepercent(.OS%)salestaxforfundingaspecificexpenditureplancomprisedoftransportationprojectsandprograms.Thisvoter-approvedexpenditureplanprovidesfundingofapproximately$80millionperyearforprojectsandprogramsthatserveairportswithinContraCostaCounty,includingimprovementsonhighways,arterialandotherroadwaysthatserveairports.CCTAalsofundstransitservicesthatprovideaccessforbusinesses,commutersandtravelersairportswithintheCounty.TheContraCostaTransportationAuthoritybelievestheFederalGovernmentdoesnothavejurisdictiontoredirectvoter-approvedsalestaxrevenuesascontemplatedbytheregulatorychangeeffectiveinDecember2017.InCalifornia,datafromfuelsalesareaggregated,andestimatingthefiscalimpactoftheredirectionisdifficulttomeasure.Basedonroughestimatesofgallonsusedandaveragefuelprices,ourstaffestimatesredirectionlocalsalestaxdollarsfromavoter-approvedtransportationexpenditureplanwouldresultinalossofapproximately$30,000to$60,000peryearoftransportationfundinginContraCosta.Ourinvestmentofover$80millionperyearinroadsandtransitsystemsfarexceedsamountsderivedfromairportfuelsales.AlthoughouragencyhasgraveconcernswithFAA'sruling,theContraCostaTransportationAuthorityhaspreparedthislettertodescribetheactionplanrequiredbyDecember

8, 2015 Page

2 the FAA and comply

with our understanding

of what

is required

for any "action plan" submitted: Action
Plan Requirement: Applicable

Law • CCTA

is

a local transportation
authority organized

under

the provisions

of the Local Transportation
Authority

and Improvement

Act (the Act). constituting Division

19 of the Public Utilities
Code

of the State

of California, commencing with Section 180000.

In accordance

with the Act, CCTA was created

on February 8, 1988,

by action

of the Board

of Supervisors

of Contra Costa County. • The Act, among other things, authorizes

CCTA

to establish

a retail transactions and use tax applicable

in the incorporated

and unincorporated

territory

of Contra Costa County

in accordance

with the California Transactions

and Use Tax Law {Revenue

and Taxation

Code Sections
7251

et seq.) upon authorization

by the electors voting

on the issue.

On November

2, 2004,

in accordance

with the Act, the voters

of Contra Costa County approved Measure

J by

a 71% majority vote and thereby imposed

a .05% sales
tax rate

in the Contra Costa County

for

a period oftwenty
years, which began

on April!,
2009 and expires

on March

31, 2034.
The sales
tax imposed

by CCTA

is in addition

to sales taxes levied

by other jurisdictions,

both locally

and statewide. Action
Plan Requirement:
Tracking System • CCTA
has commenced

trying

to identify
sales and use tax revenue

to comply
with the requirement.

For implementation
purposes,

issues

will arise with some taxpayers

that co-mingle

sales
tax reporting

of retail

gas station locations

not

at an airport and/or non-fuel related sales
and jet fuel sales. The internal process

to implement

this effort- which

is to identify,
track
and segregate

the applicable revenue,

is extensive.

CCTA staff

is developing

a process forthe reporting requirements

and tracking systems

for specific information

on aviation

fuel tax revenues.

CCTA would appreciate

the FAA providing

a descriptive definition

of the requirements

for the mandated "tracking system." Acton
Plan Requirement: Transition
Period •

It
is CCTA's intent

to comply

with the requirements

set forth
and this tetter serves

as notification

that

a reasonable transition period,

not
to exceed three years,

is needed

to become compliant

with the new rule related

to revenue redirection. In consideration

of the broader concerns outlined above, CCTA also requests

that the FAA consider

a re-evaluation

or immediate
sunset

of the ruling

and commence

an openDecember

8, 2015 Page3 and transparent

public process discussion

with

all stakeholders

to ensure

full participation

by impacted parties.

The Contra Costa Transportation
Authority appreciates

the FAA's consideration

of this request

and looks forward

to

a continuing dialogue about how this new ruling affects voter-approved expenditure

plans. Sincerely, Randell

H. Iwasaki, Executive Director cc:
Julie Pierce, Chair

of the Contra Costa Transportation
Authority The Honorable

Diane Feinstein, United States Senate The Honorable Barbara Boxer, United States Senate The Honorable

Jerry McNerney,
United States House

of Representatives The Honorable

Mark DeSaulnier,

United States House

of Representatives The Honorable

Eric Swalwell, United States House

of Representatives The Honorable

Mike Thompson,

United States House

of Representatives Jay Chamberlain, Department

of Finance Michael Coleman, league

of California

Cities