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 of 49 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 of which 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: of the 

grandfather provisions of 49 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 woukf be 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) of the 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! a public 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, · . 
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lfiJOll/013 

AS0-600 AIRPORTS DIVISION TEL:4Qq3D5673D 

Nothing in sub~ (a)(l2} of this sectlon shall p=!llde the use of state taxes on 

aviation fuel to support a Btate &1/:iation program or preclude the use ofalrport revenue on 

or off the 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 reuonable cpectaUon that their existing programs would be 

excepted ftom tbe amended vmion of the revemltl we requiremmt, but rhat post-ASCEA 

d!angea to the use of 1tate aviation fuel tu; reYI':IIlles would bave to be consistmt with the preASCEA grllll.dfinhered provisions or with the Federal revenue U&e provision haeJ!· Again, we 

b~ that the proper interpretation ofthe A.AlA and its 1987 amendment is generally to limit 

the grandfllther eemption to the stanrtoxy program or tax that WM in effect at the time the MIA 

or its lllllf:tttlmmts wen: enacted. 

As suppan for thi! viBW, we note that Congre5llsaw fit to llmelld § Sll oftbe AAIA in 1989 

(Public Law No. 101-281) by adding asubsemon (g) (now codified at <t9 U.S.C. § 41107@ to 

permit ihe State ofHIEW'IIii, an airport sponsor, use of a certain IIIDOWlt of ~enues generared on 

the sale at off·airjlon locations in the Swe of duty-free merchandise for eligible tr&rlsportll.tion 

· projeeu. Hawaii has had, 3iiK;e its terrl!:orial days. legislation trl!!Uferring fiva percent of airport 

revenili:IB to iu Swe =m-al ~ fund. Thi, provision is legitimately grandtatbercd u a preAAIA !!W:ute controlling the State's financing 1111d providing for the use of airport revenues for 

or.her facilities. 

Had Congress intended the gllllldfinher clause to apply to exempt any revenue diversion of the 

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 

Sme lesislation permitting the dl\lemon of the 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 of that legislation would place it in vio!Won oftbe 

revenue use requirement, the SWc obtalncd Fcdc:.ral PliDIIBI' of the ~ion S 11 (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 or indirectly, Biipctt 

~enue. Pu133e of the legislation to permit gencml use of the proceeds from the aviation fuel 

tax may jeopardize conlinued Federal funding of aitport and IIOUe a.barmeut projects at 

Fcderal.ly-assisted alrporu throughout the Swe of Tenneuee. 

This kltllr has been oooniinated wit1t the Office of the Chief Cou!lliC!m FAA Headqlllll'lCn and 

the Dhector, Offi<:C of Airport 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