04/,27/2007 10:16 FAX M

.. i.**~2f** UUIWtvJ OY:UY 

### AS0-600 AIRPORTS DIVISION i!!J010/013 

# 0

U.S. Department afTranapal1llllon SOU!IIem Region TEL,4043056730.

Airports Division (ASO..SilQ) F'.O Box 2063«1 P. 0021004

F""er.ol**A~**

. Admlnlatlrion A11anlit, Georgia 31)3:20-0036**~M-3~00** FAX: 404-305-6730 lntemet email: 8.AS().flllO@llla.gov 

### May 24,2000



### Mr. Wtnston B. Sitton Assistaru Attorney General 

### Tax Division · 425 Fifth 

### A venue North 

### .NashVIlle, TN. 37243 Dear 

### Mr. Sitton: This reply is in 

### MpOnse to 

### your May 18, 2000, letter and May 19, 2000, FAX concerning the 

### Gl'alldfalher 

### Provisions of49 U.S.C. §§ 

### 47107 and 

### 47133. 

### You indil=ate that the 

### Tennessee Legisla\IJ!C 

### is cumntly 

### examining a proposal to 

### change to gcnenll putposes 

### a 4.S% stare 

### IIlUl!pO!tation fuel &ax, 

### the aviation portion ofwhich is 

### currently being used to fund 

### state aviation programs. 'lou have asked to 

### confirm your previous

.. tfucusaion with FAA 

### officials concerning the 

### applicability to the 

### SIIUe's aviaii.on fuel w: ofthe 

### grandfather provisions of49 

### 0 .S.C. §§47107(b)(l) and 47133(8.) relaling to 

### local aviation fuel taxes. State aviation fuel 

### taxeS are governed by 

### 49 U,S.C. §147107(b)(3) and 47133(e). 

### It i3 not 

### necessary to 

### reach this 

### lesaJ issue, haw 

### ever, becallSC C!VCD 

### i1 

### the slate 

### avialion fuel tax 

### c:unently being 

### Jevifl:i in accordanee with 

### Chapter 931 were to 

### qualitY for the 

### grandfather 

### exempti011, that 

### grandfathering woukfbe 

### limited to 

### tbe tax that 

### was in 

### effect on Doolmber 30, 1987, 

### when the 

### Ahwa.y Saft\ty and Capacity

### Exp;ul!ion**Ac~** 

### of 1987 (ASCEA) amended the Ail]lon 

### and Airway 

### Improvement Act 

### of**198~** (MIA). 

### The 

### oripnal fCYCRIJe**u~e** lltatute, 

### !!eetion Sll{a)(12) 

### ofthe AAlA, did l10t**~ly** 

### te!erellCe fuel 

### taxes. As 

### a result. 

### some 

### c:ontr'IJVefS)' DrOGe 

### conceming whether 

### the remictivc language Wllllld 

### cover certain twl:S 

### on aviation fuel. To 

### avoid future 

### confusion over taxes on avialioQ fuel, 

### Congress in 1987 

### through ASCEA 

### amended section Sl1(a)(12) 

### and added**~** Sll(d).**Thu~.** 

### section 511(a)(l2) 

### was 

### amended to read, • ••• all 

### revenuM generated by the 

### airpon, if

### it i! 

### apublic airport, 

### and 

### any loc.d IIIXCS 

### on aviation fuel (other 

### than ll!Xes 

### in effea on 

### December 30, 1987) 

### will be 

### expended



### ...**~** 

### for airport 

### purposes. The 

### current provisions mad 

### similarly 

### today•. See, 

### 49 

## u.s.c. §§47107(b)(l) and 

### 47133(a). Section Sll(d) was also added

### by 

### the 1987 Amendment. TlW 

### section slll.ted, · .04/.27/2007 10:16 FAX MAY.-24'0011'/BDI 09:09 lfiJOll/013 

## AS0-600 AIRPORTS DIVISION TEL:4Qq3D5673D

Nothing in**sub~** (a)(l2} of this sectlon shall p=!lldethe use ofstate taxes on aviation fuel to support a Btate &1/:iation program orpreclude the use ofalrportrevenue on or offthe 

### llitpon far noise mitigation purposes. This provision is currently codified ou49 u.s.c. i§ 47107(b){3) and 47133(c). Airpon 

### sponsors would have a reuonablecpectaUonthat 

### their existing programs would be 

### excepted ftom tbeamended vmion ofthe revemltlwe requiremmt, but 

### rhat post-ASCEA d!angea to the use of1tateaviation fuel tu;reYI':IIlles would bave to be consistmt with the preASCEA grllll.dfinhered provisions or with theFederal revenue U&e provision haeJ!· Again, we**b~** that the properinterpretation oftheA.AlA and its 1987 amendmentis generally to limit the grandfllther eemptionto the stanrtoxy program

## or tax that WM in effect at

### the time the MIA orits lllllf:tttlmmts 

### wen: enacted. As 

### suppan for thi! viBW, we note 

### that Congre5llsaw fitto llmelld § Sll oftbe AAIA in 1989 (Public LawNo. 101-281) 

### by adding asubsemon (g) (now codified at <t9 U.S.C. § 41107@ to permit 

### ihe State ofHIEW'IIii, an airport sponsor, use ofa certain IIIDOWlt of**~enues** generared on the sale at off·airjlon locations in 

### the Swe ofduty-free merchandise for eligible tr&rlsportll.tion

·projeeu. Hawaii 

### has had, 3iiK;e its 

### terrl!:orial days. legislation trl!!Uferring fiva percent ofairport revenili:IB to 

### iu Swe=m-al**~** fund. Thi, provision is legitimately grandtatbercd u apreAAIA !!W:ute controlling the State's financing 1111d providing for the use of

### airport revenuesfor or.herfacilities. Had Congress intended the gllllldfinher clause to apply to exempt 

### any revenue diversion ofthe apomor, however, § 511 (g) would have 

### been extraneous, 

### since Hawaii would bave been able to rely on that statutory 

### provision to divert the off-airpon revenues 

### without further Congres!ional bleuiug. The State, however, n:qucstcd 

### the Depertrnam ofT!'Rlllportation'• opillion on proposed 

### Smelesislation permitting 

### the dl\lemon ofthe olf-airport, duty-hi

### revenues (beyond 

### that which was originally

### gnn.dfatbered when the A.AlA wu enacted). Upon**r~pt** 

### ofSeaetatid !etten indie4ling that enactment and implementation ofthat legislation would place it in vio!Won oftbe 

### revenue use requirement, the SWc 

### obtalncd Fcdc:.ral PliDIIBI' ofthe**~ion** S11 (i) 

### u a apecial exceptiOIL. 

### P. 003/004



### Accmdill3ly, the State o!Tenn,essee 

### may not rely on the fact 1IW its 1986 Jllte avialion fue:l tax 

### may be. grandfathered to 

### enact new 

### rn.easure.s TO 

### divert, dim:tly 

### orindirectly, Biipctt**~enue.** Pu133e ofthe legislation to permit gencml use ofthe proceeds from the aviation fuel tax 

### mayjeopardize 

### conlinued Federal funding ofaitport and IIOUe 

### a.barmeut projects at 

### Fcderal.ly-assisted alrporu throughout 

### the Swe ofTenneuee. This 

### kltllr has been 

### oooniinated wit1t the Office of the 

### ChiefCou!lliC!m FAA 

### Headqlllll'lCn and 

### the Dhector, 

### Offi<:C ofAirport Safety and Sta.n.dardll. 

### It

### you have my fluther queJtlom ccncerning the ltgal aJPa:CI.!! of

### this 

### U:tt.e:r, 

### please oonmct JOIIII.IIwl 

### Ct'OIIS, AiiportS 

### and 

### Envirolllllelllal Law Division, at (202) 

### 267-3473.**04~27/~007** 10:18 FAX MAY. -14' 

### OO!WEDI 09:10 @]012/013 

## AS0-600 AIRPORTS DIVISION TEL:4043056730



### We appreciate you providing 

### us with 

### information ro make sure that the 

### State of

### Tennessee c:omplli:s with 

### Federal SWUICs•

. Sincm:ly, 

# a.

# &Pi

Step Manager, AirportS Diviliion

ec 

### TDOT. Aeronautics 

### Divition P. 004/004