Randall S. Fiertz Director, Office ofAirport Compliance and Management Anal ysis Federal Aviation Administration 800 Independence Avenue, SW Washington, D.C. 20591 San Francisco International Airport December 2, 2015 VIA EMAIL AND U.S. MAIL randall.fiertz @faa.gov

RE: Compliance with the Policy andProcedures Concerning the Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel Dear Mr. Fiertz: The San Francisco International Airport (the "Airport") is submit t ing this letter to report on its compliance with the Policy andProcedures Concerning the Use of AirportRevenue; Proceeds From Taxes on Aviation Fuet (the " Amendment"), which amended the Policy and Procedures Concerning the Use of Airport Revenue2 (the "1999 Policy") promulgated by the Federal Aviation Administra tion. Non-Sponsor State and Local Taxing Authorities : In compliance with Section IV.D ofthe amended 1999 Policy, the Airport has sent the attached l etters to all non-sponsor taxing authorities ofwhich it has notice (including the State ofCalifornia and several local taxingjurisdictions). The Airport has also taken reasonable action within its power to influence thesejurisd i ctions to comply with the requirements ofthe Amendment, including ongoing dialogue with State and local officials both directly and through trade organizations . Sponsor Compliance: The Airport is an enterprise department ofthe Ci ty and County of San Francisco (the "City") that is operated by the City's Airport Commission. The City has accepted Federal assistance and executed grant agreements and other documents required for the receipt ofsuch assistance at the Airport. The City is therefore considered an "airport sponsor" as defined in the 1999 Policy.3 The City and a related transportati o n agency receive a portion ofthe proceeds ofthe Bradley-Burns Local Uniform Sales and Use Tax that is levied on jet fuel dispensed at the Airport. The Airport and the City believe that a portion ofthis tax may be grandfathered pursuant to Section II.B.2 ofthe Policy, as amended, and may submit a request to the FAA in the near future for such a determination, and to report on further steps the City is taking to comply with the Amendment. In the meantime, please do not hesitate to contact David J. Stevens, Deputy City Attorney, at (650) 821-5064 with any questions or for additional information.

Attachments 1 79 Fed. Reg. 66282 (Nov . 7, 20 14). 2 64 Fed. Reg. 7696 (Feb. 16, 1999). 3 64 Fed. Reg. at 7716. AIRPORT**COMMI~SION** CITY AND COUNTY OF SAN FRANCISCO EDWIN M. LEE MAYOR LARRY MAZZOLA PRESIDENT LINDA S . CRAYTON VICE PRESIDENT ELEANOR JOHNS R ICHARD J . GUGGENHIME PETER A. STERN Post Office Box 8097 San Francisco, C alifornia 94128 Tel 650.821 .5000 Fax 650.821.5005 www.flysfo.com JOHN L. MARTIN AIRPORT DIRECTORcc: James Lomen, FAA San Francisco Airports District Office Manager The Honorable Edwin M. Lee, Mayor Jose Cisneros, City Treasurer Benjamin Rosenfield, City Controller Kate Howard, San Francisco Budget Director She1yl L. Bregman, Airport General Counsel Julian Potter, ChiefAdministrative and Policy Officer

Status Letter from SFO to FAA vl 12-2-15San Francisco International Airport

**Octop~r** 

### 26, . 2015 The II9n

_ orable Edwin M. Lee Mayor, City & County of San Francisco # 1 Dr. Carlton B. Goodlett Place, Room 

### 200 SanFrancisco, CA 

### 94102 ATIN; Kate Howard, Budget Director TRANSMITTED VIA EMAIL

SUBJECT:

**Fed~** Aviation,

**Ad.rr_rini.~tration** Policy 

## on Proceeds from Taxes on Aviation

**Fue~** DearMayor Lee: 

### As you are



### aw~e, my staf.fhas



### held}ir~Ihninacy discuSsions 

## With your office regarding a



### ~ecent amendment to the Policy and

**Pro~dures** Concerning the Use of Airport Revenue, first promulgated by the Federal Aviation Administration (FAA) 

### in Feb

_ ruary, 

### 1999

**(s~** 

### 64 Fed. Reg. 

### 7696). The volicy amendment was issued by the FAA on November 

## 1, 2014, and canbe found 

### at 79 

### Feq. Reg, 

### <'628.2_. The City 

### and County 

### ofSan Francisco and its Airport Commission have accepted many federal

**gran~~** for capital projects at 

### San Francisco International.Aiiport and are therefore bound by various federal ·legal requii:eme,nts; inclu,qmg federal 

### grant asSQiari.ces and FAA poiic.les and procedures. Federal law on the subject ofthe

**~~** ofairport revenues is embodied in the revenue use policy mentioned above and provides

**~** airport revenues generally tnay oi:Lly be used fot airport-re lated purposes. The airport revenue use

**requirem~nts** also apply to the procee4s pf state and local government tax. e.

s on the sale of aviation fuel. The recent policy amendment confirms that state and local taxe$ on

**avi~tioQ** fuel, . whether part of a general .sales 

### tax or otherwise 2 and whether imposed by

**~** airport

**o~erator** or by state 

### ot

**loc~** taxi,ng

**Cl-uthoritl~s,** ate subject to the fede.ral restrictions on the uses ofairport revenue, Generally speaking, thi:s

**m~ail$** that

**proc~ds** from

**~es** on

**~yja:tion** fuel m'ilst be us. ed for the capital or operating expenses of the airport where the fuel js solq, of the local airport

**~ystem,** or of either facilities owned or operated by the airport and directly ai::J.d Substantially related to 

### ai:t

**tr~portation.** The · revenue restricpons apply to taxes· on all aviation fuel dispensed at an- airport, regardless of where the taxes on the sale of:(4el at fu,e a.Uport are collected,

**b~t** not to revenues from ?JlY tax 

### in effect on December 

### 30, 1987. The policy' amendment

**~oes** '<;lpply to 

### any "new assessment or imposition of a tax on aviation fuel, even if the tax could have been imposed

**earli~** under a statute enacted befor . e

**Dece.ml;>e~** 

### 30,. 19. 87.'; (See 

### 79 Feq. Reg. 

### 66282-01; Final

**Policy~** Section IV.D.4, subsections c and d:) The

**Br~dley-B\lfOs** Local Uiriform

**S~es** and Use 

## Tax applies to avl.ation fuel dispensed at the Airport. As ofJanuary 1, 

### 2008, state law Wa$ am,en4ed to distribute the proceeds ofthe Bradley-Bums Tax onjet fuel (:a type ofaviation fuel) dispensed at the Airport equally to the City and to San Mateo County, (Rev. & Tax. Code, 

### §§ 

### 7Z04.03, 7205; see aiso 

### 18 Cal.Code.Regs. § 

### 1802.) The Controller 

### has informed us that the City's one AIRPORT COMMISSION CITY AND COUNTY OF SAN FRANCISCO EDWIN M. LEE MAYOR LARRY MAZZOLA PRESIDENT LINDA S. CRAYTON VICE PRESIDEN T ELEANOR JOHNS RICHARD J. GUGGENHIME PETER A. STERN JOHN L. MARTIN AIRPORT DIRECTOR

**Po~t OfMl:9-8~8097**  San Francl , scq. California 94128 Tel pSQ.821.SOO. O Fax 6S0.82i.SOOS www.fiysfo.comThe Honorable Edwin M. Lee Mayor, City & County of San Francisco Page2 October 26; 2015 percent**sb~e** of Bradley-Bums tax**rev~nue** on jet fuel is transmitted to the City and is treated as General Fund revenue. The San Francisco Colinty Transportation Authority**receiv~s ·**  a one-quarter percent**~hare.** We l3!e s;till reviewing the extent to which the City's "local U!X proceeds from jet fuel dispensed at the Airport are SU;bject to the revenU:e restrictjon:s. The FAA's policy amendinent became eft'ective . on December 8, 2014, but the FAA has provided a**~ee-ye~** tran,sition peri . od. for state a,nd**loc~** goyernments to comply. WiVrin one year of the effective date (December 8, 2015), state and lQcal govep'rments must Sl.lbmit to the FAA a,n**·~action** plan" for compliance. The action plan should reflect the process for amending state · and local tax laws as necessary to comply with the amended policy, and "detail the process necessary to develop reporting requi::r;em.ept& and tracking systems for discrete infonnation on · aviation fuel tax revenues." As the FAA points out, this three-year trc;msition period should provide "state and local governments sufficient time to plan for restructuring of general revenues to adapt to the dedication of aviatioh**fu~J ~**  revenue**~o** airports and · state aviation programs.;, The policy amendment also empowers the**S.** Secretary of**T~spottation** to impose a civil penalty or seek other . sanctions, such as an injunction, . on state and local governments that fail to eom.ply With these reqUirements. Should you have any**que~ti< >ns** **reg~ding** the FAA Fuel Tax Policy**changes~ ple~e**  contact Deputy City Attorney Dave Stevens at (650) 821-5064. cc: RW14all S.**:fi~rtz,** Fe4eta1 Aviati . on Administration Jose Cisneros, Treasurer Sheryl L. Bregman,, Akp.ort General Counsel Julian Potter, SFO,**Chi~f** ACbninisfratiye aQ.d Policy OfficerSan Francisco International Airport October 26,2015 

### Mr. Beh Rosenfield 

### TRANSMITTED VIA EMAil Controller, 

### City & County of

**S~** Francisco #I Dr. Carlton R

**(Joodle~** :Place, Room 316 San Francisco, CA 94102 SLmJE . CT:

**F~d,etal** Aviation A.d.ministtation Policy on Proceedsfrom Taxes onAviation Fuel Dear 

### . Mr · . Rosenfield: As yo-q are aware,

_ my staffhas 

### held preli.ri:llnary discussions with your office regarding 

## arecent amendment to the

**Pol~cy ~d**  ProceQ.u:tes Concerning the Use of Airport Revenue, :fjrst prorimlgated by the Federal Aviation Adnllnistration 

### {FAA) in Fe. btuary, 1999 (see 64 Fed. Reg. 7696). Th¢ policy amendment was issued by the FAA on Nqvember 7, 2014, and can 

### be found at 

### 79 Fed. Reg. $6282. The 

### City and County ofSan Francisco and its Airport Commission

**h.av~** accepted many federal grants for capital projects at San Francisco International Allport and are therefore bound by vario'lls federal legal
**r~ql,liremep.ts, inc~u.Qihg**  fedetal grant assti.rances and FAApolicies and procedures.



### . . Fecierallaw on the subject ofthe use of

### . airport revenues 

### is embodied 

### in the reve nue use policy mentioned above and provide$ that airport revenues geilei"ally may only be used for airport-related purposes. The airport revenue use 

### r~quireD;le~~s also apply to the P.tocee.ds 

## 6f sW.te ahd local government taxes on the sale of aviation fuel. The recent policy amendment con;firms that state and local taxes on aviation fuel, whether part of a general sales 

### tax or otherwise, and whether imp()sed by an <Wport o.perator or 

## .by state or local taxing authorities, are subject to the federal restrictions on the u.Ses ofairport revenue. Generally speaking, this means that proceeds from taxes on aviation fuel must be used for the capital or operating e?qJenses of the airport

**wh~re** the fu,el is sold, of

### the local airport system, or of other facilities owned or operated bythe airport and directly and stjbstantially related to 

### · 84' transportation. The revenue restrittions apply to taxes on 

### · all aviation fuel dispensed at an airport, regardless of

**wher~** tP.e taxes on

**~e** sale of

### fuel at the airport are collected, but not to revenues from any 

### tax in effect on December 30, 1981. The policy amendtnent c}oes· apply to an}'" "p.ew assessment or imposition of

# a tax on aviation fuel, even 

### if



### th~ tax could have been



### impos~ earlier under a st<ttute enacted

**b~fore** December 30, 1987." (See 79 Fed. Reg. 66282-01; Final Policy, Section IV.D.4, l)ubsectic>ns c ahd, d.) The Bradley-Bums Local Uniform Sales and Use Tax

.applies to aviation fuel dispensed at the Airport. 

### As ofJanuary 1, 2008, state law was amended to.distribute the proce. eds ofthe Bradley-::Bums Tax on jetfuel (a type ofaviation 

### fq.el)

**dispe~ed** at the Airpprt ,equally to the CitY and to San Mateo County. (Rev. & Tax. Code, 

### §§ 7204.03, 7205; see also 18 Cal.Code.Regs. 

### § 1802.) The Controller has informed us that the City's one percent share ofBradley-Burns tax revenue onjet fuel is transmitted to the City and ' is treated as General Fund revenue. The San Francisco Co. rinty Transportation Authority receives a AIRPORT

**COMMIS**

**SI O~**  CITY AND COUNTY OF SAN FRANCISCO EDWIN · M. LEE MAYOR LARRY MAZZOLA PRESIDENT LINDA S. CRAYTON VICE PRESIDENT ELEANOR JOHNS RICHARD J . GUGGENHIME PETER A. STERN JOHN L. MARTIN AIRPORT DIRECTOR Post
**0~1097** San Francisco, California 94128 Tel 650.821 .5000 Fax 650.821.5005 www.flysfo.comMr. Ben R9senf1.eld Controller, City & County of San Francisco Page2 Oqt6ber 26,2015 one - quarter percent share. We are still re\jewmg the extent to which the City's local tax proceeds from jet fuel dispensed at the Airport are subject to the revenue restrictioil.S. The FAA's policy . amendment became effective on December 8, 2014, but the FAA has provided a three-year transition period for state and local governments to comply. Within one year of the effective date (December 8, 2015), s t ate and local gove :rnm, ents · D;lUst submi,t t o the FAA an

"action plan" for compliance. The action plan should reflect the**proc~ss** for amending state and local tax laws as necessary to comply with the amended policy, · and**"detai~** the process neces.sary to develop reporting reqUirements and tracking Sy-stems for discrete information on aviation fuel tax revenues." As the FAA. points o1,1t, this !hree-year transition period shol.lld provide "state and local governments sufficient time to plan for restructuring of general ;revenues to adapt to the dedication of aviation fuel tax revenue to airports and state av i ation · programs;'' The policy amendment als . o empowers the U.S.**Secret~** of Transporta,tion to impose a civil penalty or seek other sanctions, such as an injunction, on**st~t~** and**loc~l** governments ¢tat fail to comply with these requirements. Should you have aiJ..Y questiohs regarding the FAA Fuel Tax Policy changes, please con"Q,lct Deputy City Attorney Dave Stevens at (650) 821 - 5064.**v/1/)~­ J~**  Airport bitector. cc: Ri:l.ndall S. Fiertz, Federal Aviation Administration Jose Cisneros, Treasurer Sheryl L. Bregman, Airport General Counsel Julian Potter, SFO, Chief Administrative and Policy Officer

### Mr. 

## JobP th.iaP.g California State TJ:easuter Post Office Box 942809 Sacramento, CA 94209-0001 San Francisco International Airport Octo bet 26, 2015



### _ TRANSMITTED VIA EMAIL
SUBJECT: Feder . al 

### A. viation Adrn.iulstration Policy on Proceeds 

### from Taxes on Aviatiqn

**f~el** Dear.MJ;. Chiang: 

### As

**th.~** All:Port Director of SanFr;mcisco International Airport, which is operated by

**th~** ;Airport Commission_ ofthe City and Co@ty of Sap Francisco, 

### i .am writing to you 

### in connection with a recent amendment to the Policy and Procedures Concerning the Use of Airport Revenue, 

### first J?IOmulgated .. 

## by the F.ederal Aviation Administration (FAA) 

## 4'1 February, l999 (see 64 Fed. Reg. 7696). 'The policy a,mendment, which was issued by the FAA on November 7, 20.14, cap. be fo1.1Il4 at 

### 79

**f.e4~** :Reg,, 69282



### ~d **r~quites** the City to inforin you of its provisions and take reasonable actions within the poweJ; of'the City to influence state and local 

### tax laws to co.rifonn to those· requirements . I understand that the FAA has rece4tly visite4 

### with

**S~te** of 

## Californla

**offici~s** oh this matter and that :internal discussions are t.a!Q.ng place. I am

**wri~g** tQ aftmn the Airport's support for these

**di~cbs$knis** and to urge the State to

**comp~y** with the provisions of the FAA's policy amendment to the extent applicable. The City has accepted many FAA grants for capital projects at the Airport and is therefore bound by vatious fede!W legal .requirernents, mcluding federal grant assurances and FAA policies and procedures. Federal law on the subject ofthe use ofairport

**rev~nue** is embodied in the Revenue Use Policy mentioned above and provides that airport reven11es · generally may only be U$e<l for airport..:related

**p~oses.** The airport revenue use requirements also apply to thE? proceeds of certain state and

**loc~** goyetnmenttaxes on the sale ofaviation fuel. The recent policy amendment confirms that state and lo. cal trows OJ:l

**avi~tion** fuel,

**w4~th.¢r** p¥1: of a general sale.s tax or otherwise, and.whether imposed by an . airportoperator or by state or local taxing authorities, are subject to. the f'ederal · testrictions on the 

### uses of - airport revenue. Generally speaking, this means that proceeds from

**~~son** ayiation

**fu~l** mllSt be used for .the capital or operating expenses ofthe airport where the fuel is sold, ofthe lqcal airport

**sy&t~Ill;** or of Qther fapiilties owned or operated by. the airport and directly and substantially related to 

## a# transporta,tion. 

## Xn
. adqitiqn,

**S,tat~** taxes on aviation fuef may be used to support 

### state aviation programs. These restrictions do not apply to taxes 

### in

**~ff(!ct** on orbefo ' re December 

### 30, 1987, The FAA's policy amendment became effective on December 8, 2014, but the FAA has provided a three"'year transition period for state and local governments to comply. Within one year ofthe effective date (December 8, 2015), state and local governments must submit to the FAA an AIRPORT COMMISSION CllY ANO COUNTY , OF SAN FRANCI SCO EDWIN 1\'1• LEE MAYOR LARRY MAZZOLA PRESIDENT LINDA S. CRAYT.ON VICE PRESIDENT ELEANOR JOHNS RICHARD J. GUGGENHIME PETER A,. ' STERN JOHN L. MA'RTIN .(1lRPORT DIRE CTOR Post

**Offit.:l!l-6~8097** San Francisco, California 94i 28 Tel 

### 6so. 821.5000 Fax 650.821 .5005 www.fiysfo.comMr. John Chiang California State T r easurer Page2 October 2 6, 2015 "action plan" for compliance. The action plan should reflec t the process for amending state and local tax laws as necessary to comply with the amended policy , and " detail the process necessary to develop reporting requirements and tracking systems for discrete information on aviation fuel tax revenues." As the FAA points out, this three-year transition period should proviae "state and local governtnents with sufficient thne to plan for restructuring of general revenues to a.Qapt to

the **dedica~on** of aviation fuel tax revenue to airports and state aviation programs." ' ' The **FAA s**  policy amendment also empowers the U.S. Secretary of Transportation to impose a civil pe.halty or seek other sanctions, such as an injunction, on state and local governments that

fail to comply with these requirements. As you know 1 the State of California · is a non - sponsor j uri sdiction that **rec~ives** tax revenues from aviation fuel dispens . ed at the San Francisco International Airport. We have identified two state taxes that apply to aviation fuel: the Sales and Use Tax (Rev. & **T~.** Code, § 6001 et seq.)

and the Motor Vehicle Fuel Tax (Rev. & **T~.** Code , § 7301 et seq . ). With other members of the California Airports Council, we urge the State of California to comply with the provis i ons of the FAA ' s policy amendment to the extent that revenues from those taxes are restricted under the policy

**~endment.** Should you have any questions regarding the FAA Fuel Tax Policy cha,nges, please

**c~ntact** Deputy City Attorney Dave Stevens at (650) 821-5064. cc: State Senators Jerry Hill, Mark Leno and Mike McGuire State Assembly Members David Chiu, Kevin Mullin, Philip Y. ' Ting and Jim Wood Califortlia State Board of Equalization Randall S. Fiertz,

**Fed~** Aviation.Administration

Sheryl L. Bregman, Airport General Counsel Julian Potter, SFO, Chief Administrative and Policy Officer**Mr~** 

### Jolm. 

### Maltbie1 

### Cotmty Manager 

### County Qf San 

### Mateo 400 

### CoWlty**Cent~r** 

### Redwood City, CA 94063-1655 San Francisco lnte· rnational Airport 

### Ocrob¢r26, 2015 

### TRANSMITTED VIA EMAIL 

### S"()BJBCT.: 

### federal Aviation Admiiiistration Policy on Proceeds 

### from**Taxe~** 

### on Aviation FlJel

• · . . Dear 

### Mr.

### Maltbie: 

### Thank you for :tp_e , ¢ting' With Leo**F~rmin** 

### and my staff recently reg"!!ding**~** 

### :qum1Jer of.i$$ues of' COpmton in:teJ;"est**to tp.e** **$~** 

### Ftancis¢o International Airport and San 

### Ma:teo County. ;\s promised in an 

### : earlier**me e~g,**  

### I**~** 

### wr,itirlg to 

### Y<!\1. 

## in coj:lp.eGtion 

### with recent changes· in 

### fe. deral regulations that 

### niay impact the**Cm.~ty** .as 

### the recipient c;>fcer.tain**We~** 

### that**app~y** 

### _ to . aviat1on.. fuel**dispen~ed** 

### · at the. Allport. The Federal Ayiation Administratiqn (FAA)**rc;c~ntly** 

### amendecl its Policy 

### cpiq**Proce4QI~S Con~e.tQing**  

### the**'us~** 

### ofAllport Revenue, which 

### was first promulgated by the.FAA 

### in 

### Febn1ary, 

### 1999 (see 64 

### Fed. Reg. 

### 76. 9()), The 

## pollcy amendment wasJssued by 

### the FAA 

### on**November7** 

### 2014 (see 79**Fed~ R~g.**  

### 66282) and 'ieqQ.ites the 

### City and County ofSan Frandsco, as the 

### operator · (or**"~onsor")** 

### ·ofthe San Francisco**ln~~matjo~** Airpoq, 

### to 

## infow :YO\l 

### ofits provisioliS and take reasonable actions within 

### the power ofthe City to influence**St~;tt~** 

### and local tax**J~ws** 

### to con;f.onp. to those teqtili:ei;ilents. The City has ac. cepted many FAA grants for capital projects at the Airp9rt and is therefore bound 

### by vanpus federal iegal requirements, .including federal grant**ass~ces** 

### · and FAA**polici~s** 

### an,d procedur . es. Fed.erall. a'V'( on the subject ofthe l!Se ofairport revenue is embodied in 

### the Revenue Use Policy mentioned above and**provide~ tP..~t**  

### airport revenues . gen-erally may only be us. ed for airpoft-:telated _purposes. The airport revenue use requirements also 

### apply to**th~** 

### ptoceed

_ s_

qf · certl:l.ip. state 

## anq local go"Vei.nineii t taices on the sale of .aviation fuel. We have identified San 

### Mateo**C~)'[JP.ty"** 

### as a non-sponsor jllri.sdiction that receives 

### tax revenues from .aviation fuel dispensed at the Airport. 

## The recent pqlicy**~endnient** 

### c

_ on:fi.r.tns that state and local taxes.. G>n aviation · fuel,,whether ·part of a general sale

_ s 

## tax or**otherwis~.** 

## and whether**iinpos~d** 

### by**~ ~ort**  

### op , erato;r 

# or by' 

## state or local taxing authorities, are subject to . the 'federal restrictions Qn tb:,e uS.· es .or airport revenue.**G:en~rally** 

### speaking, this 

### means that pro. ceeds from taxes on aviation fuel must be used for the capital or Qperatil!g**expens~s** 

### ofthe ali-port where the fuel is 

### s6Id, ofthe local iliport system, or of other facilities ovvned · or opel;'ated 

### by the**~rport** 

### and ill,rec'Uy and, substantially related to 

### air transportation. These restrictions do not apply to taxes 

# m effect o.n 9r before December**~(),** 

### 1987. The FAA'spolicy amendment became effective on December**8~** 2014, 

### but the FAA has provided a**tbtee-yeat1;r~itioll** 

### period·tor state and local govertunents to comply. Within one year ofthe. AIRPORT COMMISSION CITY AND COUNTY OF .SAN FRANCISCO EDWIN M . LEE />!AYOR**LAR~Y ~AZZOLA**  PRf!SIDENT LINDA S. CRAYTON**VIC~** PRESIDEI'{ T ELEANOR JOHNS RiCHARD J. GUGG. ENHIME PETER A. STERN JOHN L. MARTIN AIRPORT DIRE CTOR Post**0~~~8097** Sfin Francisco, Califorria**~41? 8**  ·rel650.?21.5000 Fax**650.'1 21.50.Q5**  www.flysfo.c;omMr. John **M~tbie,** County Manager County of San Mateo Page2 October 26, 2015 effective date (December 8, 2015), state and local governments must submit to the FAA an

"action plan" for compliance. The action plan should reflect the process for amending state and local tax laws as necessary to comply with the Amended "Policy, and "detail the process necessary to develop reporting requirements and tracking systems for discrete information on

**avi~tion** fuel tax revenues." As the FAA points out, this three-year transition period should provide "state **~d** local govei'Ill)lents sufficient time to plan for restructuring of general revenues to adapt to the dedication of avia4on fuel tax revenue to airports and state aviation programs.'; The FAA's policy (!!Uehdmetit also empowers the U.S. Seeretary of Transportation to impose a civil penalty or _seek other sanctions, such as an **injunc~ion,** on **s~te ~d**  locCl.l governments that

fail to comply with these requirements. · We have idep.tified two San Mateo Col.inty taxes that apply to aviation fuel dispensed at the Airport: the San Mateo County

**Br~dley Bums**  Local Uniform Sales and Use Tax and the San

Mateo County Retail Transactions and Use Tax. My staff will be contacting you iQ. the near future to propose another meeting to discuss this matter and identify ways that the County and the Airport can work together to help the County comply with these FAA regulations. Should you have any questions regarding the FAA Fuel Tax Policy changes, please contact Deputy City Attorney Dave Stevens at (650) 821-5064 . John L. Martip. Airport Director cc: Jim Saco, Budget Director, County of San Mateo Randall S. Fiertz, Federal Aviation Admini s tration

Sheryl L. Bregman, Airport General Counsel Julian Potter, San Francisco International AirportSan Francisco International Airport 

### October 26, 2015 The

**Honor~:Qle** Kary l 

### Matsumoto, Chair San Mateo County Tran sportation Authority 1250 San Carlos A venue 

### TRANSMTITED VIAEl\'IAIL P.O. Box 3006 San Carlos, CA 94070-1306 SUBJECT: Federal Aviation Administration Policy onProceeds from Taxes on Aviation Fuel Dear Chait Matsumoto: As the Airport Director of the :San - Francisco International Airport, which is operated by the Airport Commission ofthe City and eounty of San Francisco, I am writing to you in

### - connection with a, 

### recent arilendment to the Policy anq Procedures Conceriring the Use ofAirport _Revenue, :first promplgated by fife

**.Fed~ral AviatiqnAdministra~Qll**  

### (fAA) 

### in 

### february,

**l99~** 

### (see 64 

### :Fed. Reg. 7696). The policy amendment was -issued by the FAA on November 7, 2014 (see 79 Fed. Reg, 66282) and requires the 

### City, as the operator (or "sponsor") of.the Airport, to infonn you . of its provisions and take

**re~on~ble** 

### actions 

### Within the

**pow~r** 

### of the City to i.Ii:fluence state anq lpcal 

### tax laws to con.fQ· nn to :fupse

_ requirements. We have identified two San Mateo County Transportation Authority taxes that apply to aviation fuel dispei;J.Sed at the Airport that may be impacted by the FAA policy amendment, as further explained below. The Cityhas accepted many FAA grants for capital projects at the Airport and is therefore bound by various federal legal

**requiremen~, inGlu~g**  

### federal grant assurances and FAA policies and procedures. Federal law on the subject ofthe use ofairport revenue is embodied in 

### the Revenue Use Policy mentioned

**abov~** 

### and

**provide~** 

### that airport

**reveril)¢~** 

### . generally may only be u5ed for airport-related plirp9ses. The 

## a4J?o:rt

**teven~~** 

### use

**requll;ement~** 

### also

**~pply** 

### to the· proceeds of certain state - and local government taxes on the sale of aviation fuel. The recent policy ame_ndmeilt eonfums that state and

**loc~ t~es**  

### on aviation fuel, w.hetl;ier

**p~** 

### of a ge peral sales tax or otherwisE!, and whether impose<;! by a,p. 

### ahp<;>rt ope]:ator or by state or local taxing authorities, are subject to the federal restrictions on the uses of airport revenue. ·Generally speaking, this means that proceeds from taxes on aviation fuel must be Used for the capital or operating expenses ofthe · airport where the fuel is sold, ofthe .loc. al airport system, or of other £acUities oWn.e<;l or operated by the

**~ort** 

### ap.d 4jrectly 

### and

**subst~tially** 

### related to air 

### transportation. These restrictions do not apply to taxes in . effect . on or before December 30, 1987. Th e FAA' s policy amendment became effective on December 8, 2014, but the F AA has provided a three-year transition period for state and local goVeinmentS to comply. Within one year · ofthe effective date (December 8, 2015), state and local governments must submit to the FAA an· AIRPORT COMMISSION CITY AND COUNTY OF SAN FRANCI SCO EDWIN M .

**~eE** MAYO ' R LARRY

**MAZZO~A** PRESIDENT LINOfl S. CRAYTON VICE PRESIDENT ELEANOR JOHNS RICttARD J. GUGGENHIME

**T~R** A . STERN JOHN L. MARTIN AIRPORT DIRECTOR Post

**dW~~0~7** S an Fra ncisco, California 94128 Tel 650.821 .5000 F ax

**650.821 5005**  www.flysfo. comThe Honorable Karyl Matsumoto, Chair San Mateo County Transportation Authority Page2 · October 26, 2015

"actio11 plan" fot complianc¢. The action plan should reflec t the process for amendi.ng state and local tax laws as necessary to comply with the A.i:nendeq Policy, and "detail the process necessary to dev.elop reporting requi!emep.ts and tracking systems for**disc;~rete infoqn~on**  on

aviation fuel tax revenues." As the FAA points out; this**tbre~-year** transition peri . od sbould provide "state and local governments sufficient time to plan for restructuring of general revem.1es to adapt to the dedication of aviation fuel tax revenue to airports and state aviation progra.nls." The F AA' · s policy amendment also empowers the U.S. Secretary of Transportation to i:nJ.pose a civil penalty · or seek other sanctions, such as an injunction, on state and local governments that

fail to · comply with these requirements. We have identified two San Mateo County Transportation Authority taxes that apply to aviation fuel dispensed at the Airport: the Sari Mateo County Bradley - Burns Local Uniform Sales and Use Tax (0 . . 25% to county transportation) and the San Mate.o CoUn.ty Transportation Authority Transportation, Tax (lv.ieasure A). My staff will be cop.tacting you in the near future to propose a meeting to discuss this matter and identify ways that the Transportation Authority . and the Airport can work together to help the Transportation Authority comply with these FAA regulations. Should you have any questions regarding the FAA Fuel Tax Policy changes,**ple~se** contact Deputy City Attorney Dave Stevens at (650) 821 - 5064. John L. Martin Ait:port Director cc:**R~dall** S. Fiertz, F¢detal Aviation**A~stration** Sheryl L. Bregman, Airport General · Counsel Julian**Potter~** SFO, Chief Adininistrative and Policy O:fficetSah**Fran~isco** lnternc;ition<!l Airport 

### October 

### 2'6, 2015 

### Mr. Jim

## Jiwtnett TRANSMtfTED 

### ViAEMAIL General · Manag((r and Chief Executive Officer San Mateo County Transportation Authority 

## i2so s:m Carlos Avenue 

### P.O; Box 

### 3006 San Carlos, CA 

### _94070-1306 

### SUBJECT: Federal Aviation Adniinistration Policy on Proceeds :from TaX.es on AViation Fuel Dea,r Mr. 

### Hartnett: As the Airport Difector o f the San Francisco International Airport, which is 

### operated by the. 

### Airpo . rt**Co~sion, .pf.th~**  

### - C

. ity a)ld CoWicy 

### QI San Francisco, 

## i ; atn 

### 'writing 

### to you 

### :i.P. c6nne¢tlon**wi~** 

### a recent**arp.en~efl.t** 

### to the J;>olicy and Proce{iures Concerning the 

## Use ofA4Port**R~Venue,** 

### first**prom~gated** 

### by the Federal Aviation Administration (FAA) in**Feb~,** 

### 1999 (see 64 Fed.**R~g. 7~~"6~_.**  

### The policy amendm.ep.t**~as** 

### issued by the FAA on November 7, 2014 (see 79 

### Fed. 

### Reg; 66282) and requires the**City~** 

### as 

### the operator (or "sponsor'') of the Airport, to irifotm you 

### of its**ptpvi~ions** 

### and**t~e f~cnable** **~cti'ons** 

## within the.power of the 

### CitY to influe,nce state**~d .**  

### local 

## tax laws to conform to tb,ose requirements. · we haye identified ' two San Mateo County Transportation AuthoritY taxes that 

## apply to aviation fuel dispen.Sed at the Airport·that m..ay · be impacted, 

### by·fu¢ FAA policy**am~dnient,** 

## as further explaineci below. 'f4e City has**~cc~pted m~y**  

### FAA ; grants. for . capital projects at the Airport**~d** 

### is therefore bound by various federal legal**requirements~** 

### including federal grant assurances . and FAA policies anci procedure.s. Fedetallaw 

## on the subject of**th~** 

## U.Se ¢fairport revenue 

## is embodied 

### in the**R.ev~nue** 

### · use**~olicy** 

### men,ij,9ned

_ above 

# and**prov~dt~S** 

## that ?irport**teyenu~s gen~r~y**  

### may only be used for**airporl-rcilat~d purpos~s,**  

### The**~orl** 

### revenue '\}l)e 

### requirements. also apply to the proceeds of 9€rtain

### state and local governmentfaxes on 

## the**~ale** 

### ofaviatipn fueL . · The recent p(llicy**a,m~ndmeJJ.t** 

### co:ofilms th.a,t state**ap.<;lloq~ ~€$**  op.**avia:tio~** 

### fuel, whethe;r pan of a g¢neral sates ta,x or**othe~se~ ~d**  

### whether imposed by an airport operafor or by state . or local taXing authorities, are subject to the federal restrlctloils t>n 

### the lises ofairport revenue. Generally speaJ,ting, this**m~ans** 

### that · proceeds from ta,xes on**aVi~tion fuelm~t**  

## be**us~d** 

### for the c. apiW or**oper~ting e{{,pens~**  

### of**~e** 

## ainJqrt where the fq.el is soJd, of**th~ loc~**  

### airpt:)rt**s.yste~** 0

### r ofother facilities · ·owned O! 

### operated by the airport and directly and substantially· related to air 

### trilllSportation. These restrictions do not apply to taxes in 

### effect . on . or before December 30, 1987.. The 

### FM's policy arilendineht b.e.cam:e effective on D.ecembet 8, 20.14, b,ut 

### the 

## FAA has proVided 4 

### three-year**t.r~sition** 

### period for , staie <UJ.d**!99~ govetnto,ez;i~**  

### t9 comply. 

### Within one**y~** 

### ofthe AIRPORT COMMISSION CITY A"'O**q:>U~TY** QF SAN FRANCISCO EDWIN M. LEE MAYOR LARRY MAZZOLA PRESI_DENT liNDA S. CRAYTON VICE PRESIDENT . EL .EANOR JOHNS**RIC HAR~**  J. (it.IGGEJ\IHIME PETER Jl. STERN Post Office Box 8097 San Frahcisco,"California 94128 Tel 650. 821.5000 Fax 650.821.5005 www.flysfo.com {AOl04ilS.2.J JOHN L. :MA RTIN A,-RPORTDIIIEi::'roRMr. Jim Hartnett General Manager anq. Chief Executive Officer San Mateo County Transportation Authority Page2 Octobet26, 2015 effective date (December 8, 2015), state and local governments must submit to the FAA an

"action plan" for compliance. The action plan s"P,ould . r:eflect the process for a.IQ.ending state and local tax .laws as necessary to comply with the Amendeq Policy, an.d "detail tij.e ptocess necessary to develop reporting requirements and**trac~g** systems for discrete informatio:p on

avjation fu.el ta;x**reve~ues."** As the FAA points otrt, this three-year transition period . should provide "state and local goverp:ments sufficient tii;ne to plan for restructuring of general revenues to adapt to the dedication - of aviation fuel tax revenue to airports and**~~te** aviatiop. progran1s." The FAA's policy**~endment** also empowers the U.S. Secretary ofTrans_portation to impose a civil penaltY or seek other sanctions, such as an injunction, on state and local governments that

fail to comply with these requirements. We have icien,tineq two Sflll ' Ma.teo Coup.ty J'ransportation Authority taxes that apply to aviation fuel dispensed at the Airport: the San,. Mateo County Bradley-BUI1ls Local Unifonn Sales and Use Tax (0.25% to county transportation) and the San Mateo County TranwofU!.tion Authority Transportation Tax {Measure A). My staff will be contacting you in the near future to propose a meeting to discuss · this matter and identify ways that the Transportation Authority and :the Airport**~an** work together to J:telp the Transportation A.uthority comply with these FAA regulations. · Should you have any questions regarding the FAA Fuel Tax Policy changes, please contact Deputy City Atto,mey Dave Stevens at (650) 821-5064. · ' John L -Martin Airport Director cc: Randall S. Fiertz, Federal Aviation Administration Sheryl L**Bx:egm~~** Airport Gen.ei:al Counsel Julian Potter, SFO, Chief Administrative and Policy OfficerSan Francisto International Airport October**26~** 2015 The Honorabie Scott Wiener, Chair 

### TRANSMITTED VIA EMAIL**S~** lirlmcisqo TranSPortation Authority

## Board. Ci Hall · . . 

### . ty . 1 

### Dr. Carl top.**~** GooQlett Place, Room 

## 444 San Francisco, CA 

### 94102-4689 

### sm,}ECT: . Fe9.era:I A.viatlon Adtriinistt:ation Policy on Proceeds from Taxes on Av:iation Fuel 

### Dear Chafr Wiener: As the . .AU:Port Pirectpr of

## San Francisco Internatio.iJ.al 

## Airport, which. is operated by the**Aiip~rt** Commission 

### o.f

### tb: e 

### G.ity**~d** 

### Com;ty 

### . of**S~ Fran~jsco,**  I 

### am "Writing t6 you 

### in

### conneeti~ 

## "With a recent amendment t9 the Policy and PJ.:qc· edure. s**GQnc~rping** th-e Use of :Nrport Revenue, 

### :titst promhlgate. dby the Federal Aviation Administration 

### inFebruary; 

### 1999 (see**~4** Fed. Reg, 

### 769,6). The 

## p9fio/ ru;D.e;nd,tnerit 

### was .iSsued 

## by the FAA, on**No~ember 7~** **2014 ~**  and can · be found at 

### 79· Fed. Reg.**6928~ .**  'Ille City and 

### CQunty of Sa,n**Et~cisco ~d** **i~** A.irport Commission have accepted many federal gn;tnts for capital proje9ts at the San l"r<Plcisco ,Iri.tematfonai Allport and are therefore bound by various federallegalrequirements, inCl"Qding federal grant**~Sut@.9¢s ~d.**  

# rAA policies**~W,.d pro** **cedtrr~.** The City 

### and the San Franciseo Courizy Transportation Authority : each**rece~ve** a**~hai:e** of the**:Sradl~y-Burns** ta,k revenue onjet fuel dispensed at 

# the Airport, the use of 

### whicP, is pote:J,11;i. ally**~pacted** 

### by the recent policy**~en~ent.** 

### My 

## sta.ff has**h~ld** prelim.iruiry·discussions with the Mayor's office and the CityControllerregarcfulg this

### J:p.atter~ Federal.law on 

## the subject**ofth~** \\Se of afrporttevenues 

## is embodied 

### in the revenue use policy IQ.en:fioned ab<;>ve a,nd provides**th~t ~ori:**  reVetl.ues**ge.:p.era)~y m~y**  

### <?IllY be used fQr**~crt** related purposes. The airport -revenue use reqUirements also apply to the proceeds of, state and local govei:ninent taxes on the sale of 

### a:viatio:i:l 

## fuei. The re. cent policy . amendment . confi:rnls that 

### $ie and**~peal ~e** **s** on**avi(}ti~:>n** :fiiel, whether**p~** of 

## a**g'e)l~ta{ s~es**  tax or othetwise, 

## and wP,etb.er in.J.posed by an ail:port**ope:~;ator** Qr by**stat~** pr**lqc~** 

### - tmQ:ng**~~tb:orities,** are**~qject** to "l;h,e federal restrictions on the uses of airport**revenu~.** Generally speakip,g,**tiM~** p;1eans**th~t** proceeds :frQin taxes on**avl~tio:r.i** fuel must he used for the capital or op. eratfu,g · expenses of the 

### aiiport**w4~re** the

### ~I ill sold, qf

### ¢.~ 

### l<:>c. a.l**~ort syste~**  

## or ofothet 

## facilities o\viled 

## or operated by the ail:port and direCtly 

### an4**substan~ally re~a~ed**  tQ**~** transpottati:on. · · The revenue restrictions apply to "taXes oil 

### all aviati · on fuel di5pensed at an airport, regardless of wl;lere**¢.~taxes** on the**~al~** of

### fuel ?tthe**~ort ~e**  cQilected, but-not to . revenues from any 

### tax 

### in effect on Dece!llper 30, 

### 1987. The policy amenqmep.t does apply**~Q** . a:t:l.Y**'new ~~essmeht**  or 

### jmpos!ti 0 

### n. of a 

### taX' on aviation fuel, even 

### ff the 

### tax could have been imposed earlier under a**statut~** epJicteq**b~fore** DeceJPb¢r 30,**19~7. ''**  (See 

## 79 . Fed. 

### Reg. 6628;2.:0l: Einal**Policy~** Section 

### IV.DA, subsections c and d .) The Bradley-Bums Local Uniform "Sales**an~** Use Tax AIRPORT COMMI.SSION CITY AND COUNTY OF SAN FRANC IScO EDWIN M. LEE MAYOR LARRY MAZZOLA PRE SIDE NT LINDA S . CRAYTON VIC

EPRE SIDEN T ' ELEANOR JOHNS RICHARD J. GUGGENHIME PETER A. ST.fRN Post O. ffice Box 8097 San Francisco, California 94T 28 Tel 650.821.5000 Fax 650.821.5005 wiNw.flysfo.com {1

) 0304J:Z g ) JOHN L . MARTIN

· . Ai

fiPORT DIRECT ORThe Honora.ble Scott Wiener, Chair San Francisco**Transportati~lQ .** **A~thority** Board Page2 October 26,2015**applie~** to c:tviatipn fuel cljspensed a,t the**Airport~** As . of Jantiaty 1, 2008, state law was amended to distribute the**proce~ds** of the Bradley-Bums**tID~;** on jet fuel (a type of aviation fuel) dispensed at the Airport equally to the City and to San Mateo County. (Rev. &; Tax. Code, §§ 7204.03, 7205; see also 18 Cal.Code.Regs. § 1802.) The Transportati . on Authority receives a one-cwarter percent share ofBradley-Btnns tax revenue onjet fuel dispensed at the Airport. The FAA's policy amendment became effective on DecemberS, 2014, but the FAA has pi'o'vided a three-year transition period for state and local governments to comply. Within one year of '!he effective date (De.cember 8, 2015), state and local governments must submit to the FAA an

"action plan'; for compljance. The action plan should**refl~ct** the process for amending state and local tax laws as necessary to comply witl;l the ame.nded policy, and '' . detail the proc . ess necessary to develop reporting requirements and tracking systems for discrete information on aviation fuel tax revenu¢s." As the FAA points out, this tbree-yeat transition period should provide "state and local governments s1lfficient tin)e to plan :for te . structurihg of general revenues to adapt to the dedicati9n of aviation fuel tax revenue 1p airports and stat . e aviation**pto.gr~s."** The policy amendment also empowers the U.S. Secretary of Transportation to impose a civil pe-nalty or seek other**s~ctions,** such as · an ihjunction, oil state and local govetninents that fail to comply with these requirements. Should you have any questions regarding the FAA Fuel Tax Policy changes, please contact Deputy City Attorney Dave Stevens . at · (650) 82.1-5064.**~y~­ J~~**  Airport Director cc: Randall'S. Fiertz, Federal Aviation Administration Sheryl L. Bregman, Airport General Co'Unsel**J~ian** Pottet, SFO, Chief**A~sttative** ap.d PQljcy Offlc;:er

### Ms. Tilly Chang Executive Director

**S~** 

### F.r.ancisco Transportation Autherity 

### 145$ Marl<et Street, 22nd 

### Floor San Francisc<;>, CA 9410.3 San Francisco International Airport 

### October 26,2015



### . TRANSMITTED VIA EMAIL
SUBJECT: Federal Aviation Administration Policy on Proceeds from Taxes on Aviation Fuel

. . 

### As 

### the Airport Director ofSan Francisco Interna1ional.Airp0rt, which is operated by the Airport Coz:nnllssion ofthe 

### City and County of San Francisco, 

### l 

### am 

## vVrlt.W.g 

# 'p you ll,i 

### c. onn.ection 

### 'with a

**re~ent arn,~~dme.nt**  

### to the Policy and · Procedures

**Concer~g** 

### the 

### Use ,of Allport

**Revenue~** 

### firs:t promUlgated by

**th~ Fede~**  

### A-viation AdminiStration ih ' February, 1999 

### (see 64 

### Fed. Reg, 7696). 

### The policy amendment was issueQ. by

**~e** 

### FAA on November 7, 2014, and can be found at 

### 79 Fed. . Reg. 66282. 

### The . City and

**Co~** 

### of 

### San

**Fran~sco** 

### and its Nrport CoJ.fui'J.ission have

**ce;pled** 

### l;llBhyfederal gtants for capital projects at the 

### San FraJ?.c"iS9Q )l:lterna1;ioill\l Airport and



### . are tb,eryf<;>re botQl.d by

### vailous federal legal requirements, including federal 

### grant assurances 

### and FAA policies and

**proced\ll'e~.** 

### The City

**~d** 

### the San Francisco County Transportation Authority each receive a share 

### offh:e Bradley-Bums tax 

### revenue onjet f4el 

### diSJ?ensed at the AUpqrt, the 

### use of which is potentiai.ly impacted by the· recent policy

**~endment.** 

### . MY 

## stw. has 

### held preliminary

**4i~cussions** 

### with the Mayor's 

## office and the City Controller regarding this matter. Federal law 

### on the subject of ihe use of airport revenues is embodied 

### iit tte revenue use policy mentione

_ d

**~bove** 

### and proVides that 

### airport revenues generally may only be used for airportrelate<;! p'ilrppses. The airpqrt 

### revenue :USe :teqJ.lirements also apply to the proceeds of state and local gov:emment taxes op. the $ale of

**a,vi~tipn**

**'** 

### fu,el. The recent policy amendment confinns that state and local taxes 

### on aviation fuel, whethe-r part of a general sales tax 

### or

**o~etw.ise,** 

### and whether imposed 

### l?Y an airport operator or by state or local taxing

**authotiti~s.** 

### are subject to ti:te

**fede~** 

### testriPtions 

### on

**~e** 

### U$es 

### ofairport revenue. Generally speaking, this 

### means that proceeds 

### · :troJD. taxes on .ayiatiop.

**f1,1~1 m~t**  

### be 

### used

**f~r** 

### the Qa:{>jtal 

## ot

**O:{>¢fatih~** 

### expenses 

### of the airport

where.the 

### fuel is

**sold~** 

### ofthe \local airport syStexn,. or 

# of other facilities

**owne~** 'Or 

### operated by 

### the airport and 

### directly arid substantially related to 

### air transportation. The revenue restrictions apply to 

### 'tc,lXes . OP. 

### all aviation

**fu~l** 

### dispen.Sed at 

## an airport, reg . ardless of where the taxes on: the sale offuel .at 

### the -airport are

**collect~d,** 

### but not 

### tQ f.eVenu.es froni any taX 

### in 

### effect on December 30, 1987. 

### The policy amendment does apply to any "new 

### assessmep.t or imposition 

### ofa tax 

### on ·aviatio..n :fuei, 

### even if

### the tax could have been imposed earlier 

### under a statute enacted before December 30, 1987." 

### (See 79 Fed. 

### Reg. 69282-0l; 

### Final Policy,

**S~ctipn** 

### Iy.D.4, subsections . c

**and ~.)**  

### The Bradley-Bums Local Uniform Sales and Use Tax; a,pplies 

### t<?

**av~ation** 

### fuel. dispensed.

**a~ ~e**  

### Airport. As of

### January 1, 2008, 

### state law was amended AIRPORT COMMISSION CI TY AND COUNTY OF SAN FRANCISCO EDWIN M.LEE

**MAYQ~** LARRY MAZZOLA PRESIDENT LINDA S. CRAYTON VICE PRESIOENT ElEANOR JOHNS RICHARD J. GtJGGENHIME PETER A. STERN JOHN L .'MARTIN AIRPORTDIRECTOR Post

**O(IbS~\W5. ~097**  San Frilncisco,

**C~lifornia** 94128 lei 650.8215000 Fax 650.8215005 www.flysfo.comMs. Tilly Chang Executive Director San Francisco Transportation Authority Page2 October 26,2015 to distribute the proceeds of the Bradley-.Burns Tax on**j~t** fuel (a type of aviation fuel) dispensed at the Airport equally to the City and to San Mateo County. (Rev. & Tax.**Cod~,** §§ 7204.03, 7205; see also 18 Cal.Code.Regs. § 1802.) The Transportation Authority receives a one:..quarter percent. share ofBradley-Burns tax revenue on jet fuel dispensed at the )\.irport. The FAA's policy amendment oecame effective on December 8, 2014, but the FAA has provided a three-year transition period for state and local government$ to comply. Within one Y¢Clf of the**effectiv~** date (Pecerriber 8, 2015), state and local governments must . submit to the FAA an**·~action** plan" for compliance. The ;iCtion plan should reflect the process for amending state and local tax laws as necessary to comply with the amen,cled policy, and "de . tai1 the process necessary to develop reportfu.g requirements and tracking systems for discrete information on aviation fuel tax**reve1;11,1es~"** As. the FAA points**out~** this three-year transition period should provide "state and

l6 ' cal government$. sufficie:o.t**tim~** to**p~an** for resnvetuiing of g e neral revenues to adapt to the dedication · of aviation fuel tax reven,ue to airports and sta,te aviation programs." The policy amendment also empowers the U.S. Secretary of Transportation to impose a civil penalty or seek**Qth~r** sanctiqns, sucP. .as an injunction, on state and local governments that fail to comply**~th $e~re**  req¢rementl). · · ShoUld you have any questions: regarding the FAA Fuel Tax Policy changes, please contact Deputy C,ity**Atto~ey** Dave Stevens at (650) 821-5064. Airport Director cc: Randall S .**.Fiertz~** Federal Aviation Administration Sheryi L.**Bregman~** Ahport General Counsei Julian Potter, SFO, Chief**A~tta:tive** and Policy Offi.cet