34536 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 158

[Docket No. FAA–2000–7402; Amendment

No. 158–2]

RIN 2120–AH05

Passenger Facility Charges

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This action amends

regulations pertaining to passenger

facility charges (PFC’s) to incorporate

administrative and statutory changes in

the procedures to establish PFC’s based

on recent enactments by Congress and

records of decision by the FAA. This

action is issued as a final rule without

prior notice and comment because the

changes are administrative and/or

required by statute. Also the immediate

adoption of these regulations is in the

public interest and is necessary for

public safety.

DATES: Effective June 29, 2000.

FOR FURTHER INFORMATION CONTACT: Eric

Gabler, Office of Airport Planning and

Programming, Federal Aviation

Administration, 800 Independence

Avenue, SW, Washington, DC 20591;

Telephone: (202) 267–3845.

SUPPLEMENTARY INFORMATION:

Final Rule Procedure

This final rule amends 14 CFR part

158 to incorporate administrative and

statutory changes to the PFC program.

The FAA has determined that this

action can be issued as a final rule

without prior public notice and

comment because the amendments are

rules of agency procedure required by

statute. Further, the FAA has found

prior public notice and comment on this

action is contrary to the public interest.

The PFC’s approved pursuant to this

action are needed without delay to

provide funds for public safety projects,

security projects, and other projects of

public benefit.

While this rule is effective 30 days

after publication, applications for PFC

authority may be submitted

immediately. Also, the FAA anticipates

issuing guidance to assist public

agencies applying for authority to

impose PFC’s.

Availability of Final Rules

An electronic copy of this document

may be downloaded using a modem and

suitable communications software from

the FAA regulations section of the

FedWorld electronic bulletin board

service (telephone (703) 321–3339),

and/or the Government Printing Office’s

electronic bulletin board service

(telephone (202) 512–1661).

Internet users may access recently

published rulemaking documents

through the FAA’s web page at http://

www.faa.gov/avr/arm/nprm/nprm.htm

or the Government Printing Office’s web

page at http://www.access.gpo.gov/nara.

Any person may obtain a copy of this

document by submitting a request to the

Federal Aviation Administration, Office

of Rulemaking, ARM–1, 800

Independence Avenue, SW,

Washington, DC 20591, or by calling

(202) 267–9680. Communications must

identify the docket number of this final

rule.

Persons interested in being placed on

the mailing list for future rulemaking

documents should request from the

above office a copy of Advisory Circular

No. 11–2A, Notice of Proposed

Rulemaking Distribution System, which

describes the application procedure.

Background

The PFC program was established by

the Aviation Safety and Capacity

Expansion Act of 1990. The Act was

enacted on November 5, 1990 and is

codified at 49 U.S.C. 40117. On May 29,

1991, the Department of Transportation

adopted new regulations to establish the

PFC program, under which the FAA

Administrator, under authority

delegated by the Secretary of

Transportation, could authorize a public

agency to impose a PFC of $1, $2, or $3

per enplaned passenger at a commercial

service airport the public agency

controls. The proceeds from such PFC’s

are to be used to finance FAA-approved

eligible airport-related projects that

preserve or enhance safety, security, or

capacity of the national airport system;

reduce noise from an airport that is part

of such system; or furnish opportunities

for enhanced competition between or

among air carriers. The rule, which

added a new part 158, became effective

on June 28, 1991. As of March 1, 2000,

825 PFC applications had been

approved or partially approved for 314

airport locations, with all but one

airport location collecting at the $3 PFC

level.

On April 5, 2000, President Clinton

signed into law the ‘‘Wendell H. Ford

Aviation Investment and Reform Act for

the 21st Century’’ (AIR 21). This law

made several modifications to the PFC

program, including allowing a public

agency to apply to the FAA to increase

the PFC level that it may charge to $4

or $4.50.

These changes, as well as those

administrative and statutory changes

required by the Federal Aviation

Administration Authorization Act of

1994 (1994 Act), the Federal Aviation

Reauthorization Act of 1996 (1996 Act),

and the recodification of the Federal

Aviation Act of 1958 are adopted in part

158 by this action.

Section-by-Section Analysis

Subpart A—General

Section 158.3 Definitions

The following definitions are added

or revised:

Allowable cost. Prior to April 5, 2000,

allowable cost was defined to include

only those costs incurred on or after

November 5, 1990. AIR 21 expands this

definition to include costs of terminal

development referred to in

§ 158.15(b)(3) but incurred after August

1, 1986, provided the development is at

an airport smaller than a medium hub

airport and the total passenger

boardings at that airport declined by at

least 16 percent between calendar year

1989 and calendar year 1997.

Commercial service airport. This

section is amended by removing the

citation ‘‘49 U.S.C. app. 2202(17).’’

Covered airport. Before PFC’s are

approved for collection, AIR 21 requires

a ‘‘covered airport’’ to file a competition

plan. AIR 21 defines ‘‘covered airport’’

as a medium or large hub airport at

which one or two air carriers control

more than 50 percent of the passenger

boardings.

Frequent flier award coupon. The

1994 Act prohibits collection of a PFC

from a passenger who obtained the

ticket for air transportation with a

frequent flier award coupon. Frequent

flier award coupon means a zero-fare

award of air transportation provided by

an air carrier to a passenger in exchange

for accumulated travel mileage credits

in a customer loyalty program, but does

not include the redemption of

accumulated credits for additional or

upgraded service on trips for which the

passenger has paid a published fare.

‘‘Two-for-the-price-of-one’’ and similar

marketing programs, and air

transportation purchased for the

passenger by other parties are not

included in the definition. Since 1994,

the FAA has incorporated the definition

of frequent flier award coupon in its

individual PFC records of decision.

Medium or large hub airport. Since

the enactment of the PFC program, there

have been additional conditions on

approval of PFC’s at commercial service

airports if the airports have more than

0.25 percent of the total number of

passenger boardings at all such airports

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations 34537

in the U.S. for the prior calendar year.

The FAA consistently has referred to

such an airport with more than 0.25

percent and up to 1 percent of the total

number of passenger boardings to be a

‘‘medium hub’’ airport, and an airport

with more than 1 percent of the total

number of passenger boardings to be a

‘‘large hub’’ airport. The FAA is

replacing references to an airport with

more than 0.25 percent of commercial

service enplanements in the regulation

with the term ‘‘medium or large hub.’’

Nonrevenue passenger. The 1994 Act

prohibits collection of a PFC from a

nonrevenue passenger. Nonrevenue

passenger means a passenger receiving

air transportation from an air carrier for

which remuneration is not received by

the air carrier. Air carrier employees or

others receiving air transportation, for

which token service charges are levied

are considered nonrevenue passengers.

Infants for whom a token fare is charged

also are considered nonrevenue

passengers. Since 1994, the FAA has

incorporated the definition of

nonrevenue passenger in its individual

PFC records of decision.

Public agency. This definition has

been expanded to allow a private

sponsor of an airport participating in the

Pilot Program for Private Airport

Ownership to apply for PFC authority

under the terms and conditions that

apply to a public agency. The Pilot

Program on Private Ownership of

Airports was established by Congress in

1996 and directs the FAA to allow

program participants to apply for PFC

authority.

Section 158.5 Authority To Impose

PFC’s

The FAA is amending this section to

include PFC levels of $4 and $4.50, as

authorized by AIR 21, in addition to the

pre-existing levels of $1, $2, and $3.

Section 158.7 Exclusivity of Authority

AIR 21 clarifies and strengthens the

independent status of a public agency’s

PFC authority relative to State or other

political subdivisions. This section is

amended in accordance with the

specific terms of AIR 21.

Section 158.9 Limitations

The following statutory limitations

are added to the previously-listed

prohibitions: (1) Collection of a PFC

from nonrevenue passengers; (2)

collection of a PFC from a passenger

who obtained the ticket for air

transportation with a frequent flier

award coupon; (3) imposition of a fee on

passengers on flights, including flight

segments, between 2 or more points in

Hawaii; or (4) imposition of a fee on

passengers on an aircraft having a

seating capacity of less than 60

passengers in Alaska.

Section 158.11 Public Agency Request

Not To Require Collection of PFC’s by a

Class of Air Carriers or Foreign Air

Carriers or for Service to Isolated

Communities

This section is amended to include

new provisions of AIR 21 that allow a

public agency to request that certain

classes or categories of air transportation

not collect the PFC. These provisions

include passengers enplaned on a flight

to an airport receiving scheduled

passenger service and having fewer than

2,500 passenger boardings each year;

and to an airport in a community that

has a population of less than 10,000 and

is not connected by a land highway or

vehicular way to the land-connected

National Highway System within a

State. The public agency may request

any or all of these exclusions.

Section 158.15 Project Eligibility at

PFC Levels of $1, $2, or $3

This section is revised to explicitly

include the 1994 statutory requirement

that all proposed projects be adequately

justified to receive PFC funding—a

standard the FAA has been applying

since the implementation of part 158 in

1991 in PFC records of decision. Also,

AIR 21 makes other revisions necessary

in this section. AIR 21 creates a special

category of project eligibility for

terminal development work associated

with construction of gates and related

areas if the project will enable

additional air service by an air carrier

with less than 50 percent of annual

passenger boardings at an airport.

Section 158.17 Project Eligibility at

PFC Levels of $4 or $4.50

Section 158.17 is added to provide

eligibility requirements for PFC’s at the

$4 or $4.50 level. Applicants requesting

authority to impose PFC’s at the $4 or

$4.50 level must meet these eligibility

requirements in addition to those in

section § 158.15.

AIR 21 allows a project to be funded

at a $4 or $4.50 PFC level if the project

cannot be paid for from funds

reasonably expected to be available

through programs referred to in 49

U.S.C. 48103 (the Airport Improvement

Program (AIP)).

Section 158.17 also incorporates the

statutory provision that conditions

funding of a surface transportation or

terminal project at the $4 or $4.50 level

on a finding that the public agency has

made adequate provision for financing

the airside needs of the airport,

including runways, taxiways, aprons,

and aircraft gates. The FAA will use

financial and planning data, information

in the PFC application, and information

on funding availability under AIP, to

determine eligibility.

Also, AIR 21 establishes an additional

requirement for projects at medium and

large hub airports. In particular, a

project for a medium or large airport is

eligible for PFC funding at levels of $4

or $4.50, only if the project will make

a significant contribution to: improving

air safety and security; increasing

competition among air carriers;

reducing current or anticipated

congestion; or reducing the impact of

aviation noise on people living near the

airport.

The FAA will develop specific criteria

for the ‘‘significant contribution’’

requirement through individual PFC

records of decision. As with prior

records of decision, the FAA will

consider all relevant factors, including

but not limited to the following in

assessing whether the significant

contribution requirement has been met:

Safety and security—Does the project

advance airport security and/or safety?

Projects that address security and safety

requirements of 14 CFR part 107 and

part 139, respectively, are usually given

highest priority for AIP discretionary

funds.

Capacity—Does the project support or

is it part of a capacity project to which

the FAA has allocated Federal resources

or that would qualify for such

resources? For example, is the project

included in an AIP letter of intent or

does it satisfy the FAA’s benefit-cost

criteria for large AIP discretionary

investments? Has the project been

identified in an FAA Airport Capacity

Enhancement Plan? Does the project

alleviate a constraint on airport growth

or service?

Noise—Does the project affect the

noise-impacted areas around the

airport? Historically, projects addressing

noisier areas than projects that would

address less noisy areas, all other factors

being equal, have been given higher

priority for AIP discretionary grants.

Competition—Does the project

mitigate or remove barriers to increased

airline competition at the airport (e.g.,

cause an increase in common use gates

at a gate-constrained airport)? Has the

project been identified as an essential

component in the airport’s competition

plan or other similar documents

submitted to the FAA?

Section 158.19 Requirement for

Competition Plans

A new section has been added to

implement a requirement to develop a

competition plan. Under AIR 21, no

34538 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations

public agency controlling a covered

airport, defined as a medium or large

hub airport at which one or two air

carriers account for more than 50

percent of the passenger boardings, may

impose a PFC unless the public agency

has submitted a competition plan to the

FAA. AIR 21 requires that each plan

meet statutory requirements and that the

plan must be reviewed periodically to

ensure successful implementation. The

requirement to develop a plan does not

apply to PFC authority in effect before

April 5, 2000.

Covered airports are required to

submit competition plans to receive

new AIP grants in FY 2001 and

thereafter. Because there are more

covered airports under the AIP than

there are participating in the PFC

program, and because AIP grants are

issued on an annual basis, instructions

for such plans are provided under the

AIP. Such plans prepared for AIP may

be used for PFC projects.

Subpart B—Application and Approval

Section 158.23 Consultation With Air

Carriers and Foreign Air Carriers

The requirement under § 158.23(a)(2)

that a public agency consult with its air

carriers and foreign air carriers on ‘‘the

PFC level’’ is amended to read ‘‘the PFC

level for each project. * * * ’’ The FAA

anticipates that PFC applications may

include several projects qualifying at

different PFC levels, depending on the

contribution of each project.

Section 158.25 Applications

This section is amended to allow for

processing competition plans required

by § 158.19 and determination of the

PFC level for each project required in

revised § 158.23.

Section 158.29 The Administrator’s

Decision

Section 158.29 is amended to require

all projects approved for collection of

PFC’s to meet the requirements of

§ 158.15. In addition, projects approved

for collection of a PFC at a level of more

than $3 must meet the requirements of

§ 158.17. Previously, paragraphs

(a)(1)(ii), (a)(1)(iii), (b)(1)(ii) and

(b)(1)(iii) referenced separate

components of § 158.15.

Under the 1994 Act, the FAA is

prohibited from approving a PFC

application if an airport is not in

compliance with 49 U.S.C. 47107(b)

governing the use of airport revenues.

The FAA includes a determination that

the public agency has not been found in

violation of 49 U.S.C. 47107(b) in its

PFC records of decision. Section 158.29

is amended to reflect this requirement.

A new paragraph is added to § 158.29

to acknowledge that, if applicable, the

public agency must submit a

competition plan.

Section 158.29 also is amended to

require the Administrator to specify a

PFC level ‘‘for the application,’’ and

total approved PFC revenue ‘‘including

the amounts approved at $3 and less,

$4, and/or $4.50.’’ The FAA anticipates

that PFC applications may include

various projects, some qualifying at a

level of $3 or less, and others at $4 or

$4.50. The public has the opportunity to

comment on the PFC levels for these

projects in the notice and comment

process provided in § 158.27(e)

Section 158.31 Duration of Authority

To Impose a PFC After Project

Implementation

Section 158.31 is amended to remove

the words ‘‘section of 9304(c) or 9703 of

the Airport Noise and Capacity Act of

1990 (Pub. L. 101–508, Title IX, subtitle

D.’’

Section 158.37 Amendment of

Approved PFC

Section 158.37(b) is amended to

reflect the new requirements of

§§ 158.17 and 158.19 to obtain authority

to increase a previously approved PFC

level to $4 or $4.50.

Subpart C—Collection, Handling, and

Remittance of PFC’s

Section 158.45 Collection of PFC’s on

Tickets Issued in the U.S.

AIR 21 adds several new classes of

passengers from whom a PFC may not

be collected and this section is revised

accordingly.

Section 158.49 Handling of PFC’s

The 1996 Act included a provision

clarifying that PFC’s held by air carriers

after collection constitute a trust fund

held for the beneficial interest of public

agencies. Section 158.49 is amended in

accordance with the specific terms of

this provision.

Subpart D—Reporting, Recordkeeping

and Audits

Section 158.63 Reporting

Requirements: Public Agency

Section 158.63 is amended to require

the public agency to indicate the PFC

level the FAA approved for each project

as authorized by AIR 21. In addition, the

phrase ‘‘medium or large hub airports’’

replaces the phrase ‘‘airports enplaning

0.25 percent or more of the total annual

enplanements in the U.S. for the prior

calendar year as determined by the

Administrator’’ (see discussion

pertaining to new definitions in

§ 158.3).

Subpart F—Reduction in Airport

Improvement Program Apportionment

Section 158.93 Public Agencies

Subject to Reduction

Section 158.93 is amended to

substitute the phrase ‘‘medium or large

hub’’ in place of ‘‘enplanes 0.25 percent

or more of the total annual

enplanements in the U.S.’’ (see

discussion pertaining to new definitions

in § 158.3).

Section 158.95 Implementation of

Reduction

This section is amended to reflect AIR

21 requirement that the effective date of

AIP apportionment reduction is

changed to ‘‘the first fiscal year

following the year in which the

collection of the fee imposed under

§ 40117 is begun.’’ Also, AIR 21

establishes separate reduction levels for

airports depending on the level of PFC

imposed. Specifically, in the case of a

PFC level of $3 or less, the reduction is

maintained at the previous level of 50

percent of the projected revenues from

the PFC in the fiscal year but not more

than 50 percent of the amount of AIP

formula monies that otherwise would be

apportioned. However, in the case of a

PFC level of more than $3, the reduction

is set at 75 percent of the projected

revenues from the PFC in the fiscal year

but not more than 75 percent of the

amount of AIP formula monies that

otherwise would be apportioned.

Section 158.95 is amended to reflect

these statutory provisions. This means,

in the case of an airport raising its PFC

level from $3 to more than $3, the

higher reduction of apportionments

would take place in the first fiscal year

following the year in which the

collection of the PFC level of more than

$3 is begun.

Section 158.97 Special Rule for

Transitioning Airports

AIR 21 provides that certain small

hub airports transitioning to medium

hub airport status are protected through

FY 2003 against a loss in combined

year-to-year AIP apportionment and

PFC revenues caused by entitlement

reductions under 49 U.S.C. 47114(f) (the

amended § 158.95). Accordingly, a new

section § 158.97 is added in accordance

with this statutory requirement. This

provision applies to FY 2000 through

FY 2003.

Regulatory Evaluation Summary

Changes to Federal regulations must

undergo several economic analyses.

First, Executive Order 12866 directs that

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations 34539

each Federal agency shall propose or

adopt a regulation only upon a reasoned

determination that the benefits of the

intended regulation justify its costs.

Second, the Regulatory Flexibility Act

of 1980 requires agencies to analyze the

economic effect of regulatory changes

on small entities. Third, the Trade

Agreement Act of 1979 directs agencies

to assess the effect of regulatory changes

on international trade. Fourth, Public

Law 104–4 requires federal agencies to

assess the impact of any federal

mandates on state, local, tribal

governments, and the private sector. In

conducting these analyses, the FAA has

determined this final rule is not a

‘‘significant regulatory action’’ under

section 3(f) of Executive Order 12866

and, therefore, is not subject to review

by the Office of Management and

Budget. This final rule is not considered

significant under the regulatory policies

and procedures of the Department of

Transportation (44 FR 11034, February

26, 1979). This final rule would not

have a significant impact on a

substantial number of small entities. In

addition, this rule would not constitute

a barrier to international trade. Finally,

the FAA has determined that the

proposal would not impose a federal

mandate on state, local, or tribal

governments, or the private sector of

$100 million per year.

Benefit-Cost Analysis

This final rule amends part 158 to be

consistent with current statutes

governing the PFC program. These new

statutory provisions will enable airport

authorities to increase the PFC in order

to collect more funds for enhancing the

safety, security and capacity of their

facilities; reducing noise in nearby

communities; and enhancing airline

competition to the benefit of air

travelers. The FAA estimates that up to

$750 million annually in PFC funds will

be made available to airports to make

these improvements. As a result of the

higher percentage of returned AIP

apportioned funds attributable to these

higher PFC collections, an additional

$72 million in AIP funding could be

available to small airports by FY 2002.

Under the provisions of the statute, this

amount would be almost doubled

through FY 2003 if AIP funds are

appropriated at $3.2 billion or more.

Some air travelers will incur a small

increase (1–2 percent) in the cost of

their ticket to obtain these benefits

although over the long run these

passengers will receive compensating

benefits from improved infrastructure

financed with the higher PFC funds.

These costs reflect the voluntary action

of airports and are not required either by

statute or the current amendment to the

rule. The costs of implementing the

mandated changes in the PFC program

application and administrative

procedures are costs attributable to the

statute and are not costs of this rule.

Small Business Regulatory Enforcement

Fairness Act

The Small Business Regulatory

Enforcement Fairness Act (SBREFA) of

1996 requires the FAA to comply with

small entity requests for information or

advice about compliance with statutes

and regulations within its jurisdiction.

Therefore, any small entity that has a

question regarding this document may

contact their local FAA official. Internet

users can find additional information on

SBREFA on the FAA’s web page at

http://www.faa.gov/avr/arm/sbrefa.htm

and may send electronic inquiries to the

following Internet address: 9-AWASBREFA@faa.gov.

Paperwork Reduction Act

Information collection requirements

in the amendment to part 158

previously have been approved by the

Office of Management and Budget

(OMB) under the provisions of the

Paperwork Reduction Act of 1995 (44

U.S.C. 3507(d)), and have been assigned

OMB Control Number 2120–0557. Some

relatively minor requirements for

information collections are associated

with this amendment, and these are

required by AIR 21. The additional

paperwork submission requirements

will not become mandatory until FAA

provides for notice and comment, and

the changes are submitted to OMB for

review and approval.

International Compatibility

In keeping with U.S. obligations

under the Convention on International

Civil Aviation, it is FAA policy to

comply with International Civil

Aviation Organization (ICAO) Standards

and Recommended Practices to the

maximum extent practicable. The FAA

determined that there are no ICAO

Standards and Recommended Practices

that correspond to these regulations.

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980

establishes ‘‘as a principle of regulatory

issuance that agencies shall endeavor,

consistent with the objective of the rule

and of applicable statutes, to fit

regulatory and informational

requirements to the scale of the

business, organizations, and

governmental jurisdictions subject to

regulation.’’ To achieve that principle,

the Act requires agencies to solicit and

consider flexible regulatory proposals

and to explain the rationale for their

actions. The Act covers a wide-range of

small entities, including small

businesses, not-for-profit organizations

and small governmental jurisdictions.

Agencies must perform a review to

determine whether a proposed or final

rule will have a significant economic

impact on a substantial number of small

entities. If the determination is that it

will, the agency must prepare a

regulatory flexibility analysis (RFA) as

described in the Act.

However, if an agency determines that

a proposed or final rule is not expected

to have a significant economic impact

on a substantial number of small

entities, section 605(b) of the 1980 act

provides that the head of the agency

may so certify and an RFA is not

required. The certification must include

a statement providing the factual basis

for this determination, and the

reasoning should be clear.

All costs are fully recoverable through

the PFC, if approved. Accordingly,

pursuant to the Regulatory Flexibility

Act, 5 U.S.C. 605(b), the Federal

Aviation Administration certifies that

this rule will not have a significant

impact on a substantial number of small

entities.

International Trade

The Trade Agreement Act of 1979

prohibits Federal agencies from

engaging in any standards or related

activities that create unnecessary

obstacles to the foreign commerce of the

United States. Legitimate domestic

objectives, such as safety, are not

considered unnecessary obstacles. The

statute also requires consideration of

international standards and where

appropriate, that they be the basis for

U.S. standards. In addition, consistent

with the Administration’s belief in the

general superiority and desirability of

free trade, it is the policy of the

Administration to remove or diminish,

to the extent feasible, barriers to

international trade, including both

barriers affecting the export of American

goods and services to foreign countries

and barriers affecting the import of

foreign goods and services into the

United States.

In accordance with the above statute

and policy, the FAA has assessed the

potential affect of this final rule and has

determined that it will impose the same

costs on domestic and international

entities for comparable services and

thus has a neutral trade impact.

Executive Order 13132, Federalism

The FAA has analyzed this action

under the principles and criteria of

Executive Order 13132, Federalism. We

34540 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations

determined that this action would not

have a substantial direct effect on the

States, on the relationship between the

national Government and the States, or

on the distribution of power and

responsibilities among the various

levels of government. Therefore, we

determined that this action does not

have federalism implications.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (the Act) codified in

2 U.S.C. 1501–1571, requires each

Federal agency, to the extent permitted

by law, to prepare a written assessment

of the effects of any Federal mandate in

a proposed or final agency rule that may

result in the expenditure by State, local,

and tribal governments, in the aggregate,

or by the private sector, of $100 million

or more (adjusted annually for inflation)

in any one year. Section 204(a) of the

Act, 2 U.S.C. 1534(a), requires the

Federal agency to develop an effective

process to permit timely input by

elected officers (or their designees) of

State, local, and tribal governments on

a proposed ‘‘significant

intergovernmental mandate.’’ A

‘‘significant intergovernmental

mandate’’ under the Act is any

provision in a Federal agency regulation

that would impose an enforceable duty

upon State, local, and tribal

governments, in the aggregate, of $100

million (adjusted annually for inflation)

in any one year. Section 203 of the Act,

2 U.S.C. 1533, which supplements

section 204(a), provides that before

establishing any regulatory

requirements that might significantly or

uniquely affect small governments, the

agency shall have developed a plan that,

among other things, provides for notice

to potentially affected small

governments, if any, and for a

meaningful and timely opportunity to

provide input in the development of

regulatory proposals.

This final rule does not contain a

Federal intergovernmental or private

sector mandate that exceeds $100

million a year. While PFC collections

are likely to increase by at least $100

million per year, the cause of that

impact is not the rule but the statute

that permits the increase in the

maximum PFC level. The increase will

be triggered by the decisions of

individual public agencies to seek the

increase and not by any action of the

federal government. If a project meets

the statutory criteria for approval, the

FAA must approve the project.

Moreover, any increase costs associated

with obtaining approval to impose the

higher fee are fully recoverable through

PFC funding.

Environmental Analysis

The FAA concludes that issuance of

this final rule is not a major Federal

action significantly affecting the quality

of the human environment within the

meaning of the National Environmental

Policy Act of 1969. The potential

environmental effects of any project

funded with PFC revenues are already

addressed under § 158.29(b)(1)(iv),

which requires all applicable

requirements pertaining to the National

Environmental Policy Act of 1969

(NEPA) to be satisfied before the

Administrator may approve the project

to use PFC funds. A copy of this

assessment has been placed in the

docket.

Energy Impact

The energy impact of the notice has

been assessed in accordance with the

Energy Policy and Conservation Act

(EPCA) Pub. L. 94–163, as amended (43

U.S.C. 6362) and FAA Order 1053.1. It

has been determined that the rule is not

a major regulatory action under the

provisions of the EPCA.

List of Subjects in 14 CFR Part 158

Air carriers, Airports, Passenger

facility charge, Public agencies,

Reporting and recordkeeping

requirements.

The Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends part 158 of Title 14 of the Code

of Federal Regulations as follows:

PART 158—PASSENGER FACILITY

CHARGES (PFC’S)

1. The authority citation for part 158

is revised to read as follows:

Authority: 49 U.S.C. 106(g), 40116–40117,

47106, 47111, 47114–47116, 47524, 47526.

2. Revise § 158.1 to read as follows:

§ 158.1 Applicability.

This part applies to passenger facility

charges (PFC’s) as may be approved by

the Administrator of the Federal

Aviation Administration (FAA) and

imposed by a public agency that

controls a commercial service airport.

This part also describes the procedures

for reducing funds to a large or medium

hub airport that imposes a PFC.

3. Amend § 158.3 as follows:

a. Amend the definition of Allowable

cost by adding a new sentence at the

end of the definition.

b. Revise the definitions of

Commercial service airport and Public

agency;

c. Add definitions of Covered airport,

Frequent flyer award coupon, Medium

or large hub airport, and Nonrevenue

passenger, in alphabetical order. The

revisions and additions read as follows:

§ 158.3 Definitions.

* * * * *

Allowable cost * * * Costs of

terminal development incurred after

August 1, 1986, at an airport that did

not have more than .25 percent of the

total annual passenger boardings in the

U.S. in the most recent calendar year for

which data is available and at which

total passenger boardings declined by at

least 16 percent between calendar year

1989 and calendar year 1997 are

allowable.

* * * * *

Commercial service airport means a

public airport that annually enplanes

2,500 or more passengers and receives

scheduled passenger service of aircraft.

Covered airport means a medium or

large hub airport at which one or two air

carriers control more than 50 percent of

passenger boardings.

* * * * *

Frequent flier award coupon means a

zero-fare award of air transportation that

an air carrier or foreign air carrier

provides to a passenger in exchange for

accumulated travel mileage credits in a

customer loyalty program, whether or

not the term ‘‘frequent flier’’ is used in

the definition of that program. The

definition of ‘‘frequent flier award

coupon’’ does not extend to redemption

of accumulated credits for awards of

additional or upgraded service on trips

for which the passenger has paid a

published fare, ‘‘two-for-the-price-ofone’’ and similar marketing programs, or

to air transportation purchased for a

passenger by other parties.

* * * * *

Medium or large hub airport means a

commercial service airport that has

more than 0.25 percent of the total

number of passenger boardings at all

such airports in the U.S. for the prior

calendar year, as determined by the

Administrator.

Nonrevenue passenger means a

passenger receiving air transportation

from an air carrier or foreign air carrier

for which remuneration is not received

by the air carrier or foreign air carrier as

defined under Department of

Transportation Regulations or as

otherwise determined by the

Administrator. Air carrier employees or

others receiving air transportation

against whom token service charges are

levied are considered nonrevenue

passengers. Infants for whom a token

fare is charged are also considered

nonrevenue passengers.

* * * * *

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations 34541

Public agency means a State or any

agency of one or more States; a

municipality or other political

subdivision of a State; an authority

created by Federal, State or local law; a

tax-supported organization; an Indian

tribe or pueblo that controls a

commercial service airport; or for the

purposes of this part, a private sponsor

of an airport approved to participate in

the Pilot Program on Private Ownership

of Airports.

* * * * *

4. Amend § 158.5 by revising the first

sentence to read as follows:

§ 158.5 Authority to impose PFC’s.

Subject to the provisions of this part,

the Administrator may grant authority

to a public agency that controls a

commercial service airport to impose a

PFC of $1, $2, $3, $4, or $4.50 on

passengers enplaned at such an airport.

***

5. Amend § 158.7 by revising

paragraph (a) to read as follows:

§ 158.7 Exclusivity of authority.

(a) A State, political subdivision of a

State, or authority of a State or political

subdivision that is not the eligible

public agency may not tax, regulate,

prohibit, or otherwise attempt to control

in any manner the imposition or

collection of a PFC or the use of PFC

revenue.

* * * * *

6. Amend § 158.9 by revising

paragraph (a) to read as follows:

§ 158.9 Limitations.

(a) No public agency may impose a

PFC on any passenger—

(1) For more than 2 boardings on a

one-way trip or in each direction of a

round trip;

(2) On any flight to an eligible point

on an air carrier that receives essential

air service compensation on that route.

The Administrator makes available a list

of carriers and eligible routes

determined by the Department of

Transportation for which PFC’s may not

be imposed under this section;

(3) Who is a nonrevenue passenger or

obtained the ticket for air transportation

with a frequent flier award coupon;

(4) On flights, including flight

segments, between 2 or more points in

Hawaii; or

(5) In Alaska aboard an aircraft having

a certificated seating capacity of less

than 60 passengers.

* * * * *

7. Revise § 158.11 to read as follows:

§ 158.11 Public agency request not to

require collection of PFC’s by a class of air

carriers or foreign air carriers or for service

to isolated communities.

(a) Subject to the requirements of this

part, a public agency may request that

collection of PFC’s not be required for—

(1) Passengers enplaned by any class

of air carrier or foreign air carrier if the

number of passengers enplaned by the

carriers in the class constitutes not more

than one percent of the total number of

passengers enplaned annually at the

airport at which the fee is imposed; or

(2) Passengers enplaned on a flight to

an airport—

(i) That has fewer than 2,500

passenger boardings each year and

receives scheduled passenger service; or

(ii) In a community that has a

population of less than 10,000 and is

not connected by a land highway or

vehicular way to the land-connected

National Highway System within a

State.

(b) The public agency may request

this exclusion authority under

paragraph (a)(1) or (a)(2) of this section

or both.

8. Amend § 158.15 by revising the

section heading, by revising paragraphs

(b) introductory text and (b)(1) through

(b)(5), by adding a new sentence to the

end of paragraph (b)(6), and by adding

new paragraph (c) to read as follows:

§ 158.15 Project eligibility at PFC levels of

$1, $2, or $3.

* * * * *

(b) Eligible projects are any of the

following projects—

(1) Airport development eligible

under subchapter I of chapter 471 of 49

U.S.C.;

(2) Airport planning eligible under

subchapter I of chapter 471 of 49 U.S.C.;

(3) Terminal development as

described in 49 U.S.C. 47110(d);

(4) Airport noise compatibility

planning as described in 49 U.S.C.

47505;

(5) Noise compatibility measures

eligible for Federal assistance under 49

U.S.C. 47504, without regard to whether

the measures have been approved

pursuant to 49 U.S.C. 47504; or

(6) * * * In the case of a project

required to enable additional air service

by an air carrier with less than 50

percent of the annual passenger

boardings at an airport, a project for

constructing gates and related areas may

include structural foundations and floor

systems, exterior building walls and

load-bearing interior columns or walls,

windows, door, and roof systems,

building utilities (including heating, air

conditioning, ventilation, plumbing,

and electrical service), and aircraft

fueling facilities adjacent to the gate.

(c) An eligible project must be

adequately justified to qualify for PFC

funding.

9. Add § 158.17 to subpart A to read

as follows:

§ 158.17 Project eligibility at PFC levels of

$4 or $4.50.

(a) A project for any airport is eligible

for PFC funding at levels of $4 or $4.50

if—

(1) The project meets the eligibility

requirements of § 158.15;

(2) The project costs requested for

collection at $4 or $4.50 cannot be paid

for from funds reasonably expected to

be available for the programs referred to

in 49 U.S.C. 48103; and

(3) In the case of a surface

transportation or terminal project, the

public agency has made adequate

provision for financing the airside needs

of the airport, including runways,

taxiways, aprons, and aircraft gates.

(b) In addition, a project for a medium

or large airport is only eligible for PFC

funding at levels of $4 or $4.50 if the

project will make a significant

contribution to improving air safety and

security, increasing competition among

air carriers, reducing current or

anticipated congestion, or reducing the

impact of aviation noise on people

living near the airport.

10. Add § 158.19 to subpart A to read

as follows:

§ 158.19 Requirement for competition

plans.

(a) Beginning in fiscal year 2001, no

public agency may impose a PFC with

respect to a covered airport unless the

public agency has submitted a written

competition plan. This requirement

does not apply to PFC authority

approved prior to April 5, 2000.

(b) The Administrator will review any

plan submitted under paragraph (a) of

this section to ensure that it meets the

requirements of 49 U.S.C. 47106(f) and

periodically will review its

implementation to ensure that each

covered airport successfully implements

its plan.

11. Amend § 158.23 by revising

paragraph (a)(2) to read as follows:

§ 158.23 Consultation with air carriers and

foreign air carriers.

(a) * * *

(2) The PFC level for each project, the

proposed charge effective date, the

estimated charge expiration date, and

the estimated total PFC revenue;

* * * * *

12. Amend § 158.25 by revising

paragraphs (b)(7) and (b)(8) to read as

follows:

34542 Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations

§ 158.25 Applications.

* * * * *

(b) * * *

(7) The project justification, including

the extent to which the project achieves

one or more of the objectives set forth

in § 158.15(a) and (if a PFC level above

$3 is requested) the requirements of

§ 158.17. In addition—

(i) For any project for terminal

development, including gates and

related areas, the public agency shall

discuss any existing conditions that

limit competition between and among

air carriers and foreign air carriers at the

airport, any initiatives it proposes to

foster opportunities for enhanced

competition between and among such

carriers, and the expected results of

such initiatives; or

(ii) For any terminal development

project at a covered airport, the public

agency shall submit a competition plan

in accordance with § 158.19.

(8) The charge to be imposed for each

project.

* * * * *

13. Amend § 158.29 by revising

paragraphs (a)(1)(ii), (a)(1)(iii), (a)(1)(v),

(a)(1)(vi), (a)(2), (b)(1)(ii), (b)(1)(iii),

(b)(1)(iv) and (b)(2) and by adding

paragraphs (a)(1)(vii) and (a)(1)(viii) to

read as follows:

§ 158.29 The Administrator’s decision.

(a) * * *

(1) * * *

(ii) The project will achieve the

objectives and criteria set forth in

§ 158.15;

(iii) If a PFC level above $3 is being

approved, the project meets the criteria

set forth in § 158.17;

* * * * *

(v) The public agency has not been

found to be in violation of 49 U.S.C.

47524 and 47526;

(vi) The public agency has not been

found to be in violation of 49 U.S.C.

47107(b) governing the use of airport

revenue;

(vii) If the public agency has not

applied for authority to use PFC

revenue, a finding that there are

alternative uses of the PFC revenue to

ensure that such revenue will be used

on approved projects; and

(viii) If applicable, the public agency

has submitted a competition plan in

accordance with § 158.19.

(2) The Administrator notifies the

public agency in writing of the decision

on the application. The notification will

list the projects and alternative uses that

may qualify for PFC financing under

§ 158.15, and (if a PFC level above $3 is

being approved) § 158.17, PFC level,

total approved PFC revenue including

the amounts approved at $3 and less,

$4, and/or $4.50, duration of authority

to impose and earliest permissible

charge effective date.

(b) * * *

(1) * * *

(ii) The project will achieve the

objectives and criteria set forth in

§ 158.15;

(iii) If a PFC level above $3 is being

approved, the project meets the criteria

set forth in § 158.17; and

(iv) All applicable requirements

pertaining to the ALP for the airport,

airspace studies for the project, and the

National Environmental Policy Act of

1969 (NEPA), have been satisfied.

(2) The Administrator notifies the

public agency in writing of the decision

on the application. The notification will

list the approved projects, PFC level,

total approved PFC revenue, total

approved for collection, including the

amounts approved at $3 and less, $4,

and/or $4.50, and any limit on the

duration of authority to impose a PFC as

prescribed under § 158.33.

* * * * *

§ 158.31 [Amended]

14. In § 158.31(d), remove the words

‘‘section 9304(e) or 9703 of the Airport

Noise and Capacity Act of 1990 (Pub. L.

101–508, Title IX, subtitle D)’’ and add,

in their place, the words ‘‘49 U.S.C.

47524 and 47526’’.

15. Amend § 158.37 by revising

paragraph (b)(1) and adding three

sentences at the end of paragraph (b)(2)

to read as follows:

§ 158.37 Amendment of approved PFC.

* * * * *

(b) * * *

(1) With the exception of a change in

PFC level to more than $3 or an

amendment of a PFC that is subject to

a competition plan under § 158.19, in

the event of no carrier disagreement

with a change proposed under this

paragraph (b), the public agency may

institute the proposed amendment

unless, within 30 days after providing

the notification required under this

paragraph (b), it is notified otherwise by

the Administrator.

(i) If a PFC level of more than $3 is

requested, the Administrator notifies the

public agency that the conditions of

§ 158.17 have been met before the

higher level can be instituted.

(ii) If a PFC amendment that is subject

to the competition plan requirement is

submitted, the Administrator notifies

the public agency that the plan satisfies

the requirements of § 158.19.

(iii) The public agency shall notify the

carriers of the effective date of any

change to the approved PFC resulting

from the amendment, subject to the

limitation that the effective date of any

new charge shall be no earlier than the

first day of a month which is at least 60

days from the time the public agency

notifies the carriers.

(2) * * * If a PFC level of more than

$3 is requested, the Administrator must

find that the conditions of § 158.17, and

§ 158.19 if applicable, have been met

before that PFC level can be instituted.

If the amendment is approved, the

Administrator advises the public agency

and notification to the carriers will be

as provided under paragraph (b)(1) of

this section. The notification to the

carrier includes any findings required

by § 158.17 or § 158.19.

16. Amend § 158.45 by revising

paragraph (d) to read as follows:

§ 158.45 Collection of PFC’s on tickets

issued in the U.S.

* * * * *

(d) In addition to the restriction in

paragraph (c) of this section, issuing

carriers and their agents shall not collect

PFC’s from a passenger covered by any

of the other limitations described in

§ 158.9(a).

* * * * *

17. Amend § 158.49 by revising

paragraph (b) to read as follows:

§ 158.49 Handling of PFC’s.

* * * * *

(b) PFC revenue must be accounted

for separately by collecting carriers, but

the revenue may be commingled with

the carrier’s other sources of revenue.

The PFC revenues that are held by an

air carrier or an agent of the carrier after

collection of a PFC constitute a trust

fund that is held by the air carrier or

agent for the beneficial interest of the

public agency imposing the PFC. Such

carrier or agent holds neither legal nor

equitable interest in the PFC revenues

except for any handling fee or retention

of interest collected on unremitted

proceeds as authorized in § 158.53.

* * * * *

18. Amend § 158.63 by revising

paragraphs (a) and (c) to read as follows:

§ 158.63 Reporting requirements: Public

agency.

(a) The public agency shall provide

quarterly reports to carriers collecting

PFC’s for the public agency with a copy

to the appropriate FAA Airports office.

The quarterly report shall include PFC

revenue received from collecting

carriers, interest earned, and

expenditures for the quarter; cumulative

PFC revenue received, interest earned,

expenditures, and the amount

Federal Register / Vol. 65, No. 104 / Tuesday, May 30, 2000 / Rules and Regulations 34543

committed for use on currently

approved projects, including the

quarter; the PFC level for each project;

and the current project schedule.

* * * * *

(c) For medium or large hub airports,

the public agency must provide the

FAA, by August l of each year, an

estimate of PFC revenue to be collected

for each such airport in the ensuing

fiscal year.

§§ 158.71, 158.81, and 158.83 [Amended]

19. Remove the words ‘‘section

1113(e) of the Federal Aviation Act’’

and add, in their place, the words ‘‘49

U.S.C. 40117’’ in the following places:

a. § 158.71(a) and (b);

b. § 158.81; and

c. § 158.83.

§ 158.87 [Amended]

20. In § 158.87, in paragraph (a)

remove the words ‘‘section 507 of the

AAIA of 1982, 49 U.S.C. App. 2206’’

and add, in their place, the words ‘‘49

U.S.C. 47114’’; and, in paragraph (c)

remove the words ‘‘49 U.S.C. App.

2218’’ and add, in their place, the words

‘‘49 U.S.C. 47111(d)’’.

§ 158.93 [Amended]

21. In § 158.93 introductory text,

remove the words ‘‘section 507(a)(1) of

the Airport and Airway Improvement

Act of 1982’’ and add, in their place, the

words ‘‘49 U.S.C. 47114’’.

22. Section 158.95 is amended by

revising paragraphs (a) and (b) to read

as follows:

§ 158.95 Implementation of reduction.

(a) A reduction in apportioned funds

will not take effect until the first fiscal

year following the year in which the

collection of the PFC is begun and will

be applied in each succeeding fiscal

year in which the public agency

imposes the PFC.

(b) The reduction in apportioned

funds is calculated at the beginning of

each fiscal year and shall be an amount

equal to—

(1) In the case of a fee of $3 or less,

50 percent of the projected revenues

from the fee in the fiscal year but not by

more than 50 percent of the amount that

otherwise would be apportioned under

this section; and

(2) In the case of a fee of more than

$3, 75 percent of the projected revenues

from the fee in the fiscal year but not by

more than 75 percent of the amount that

otherwise would be apportioned under

this section.

* * * * *

23. Add § 158.97 to subpart F to read

as follows:

§ 158.97 Special rule for transitioning

airports.

(a) Beginning with the fiscal year

following the first calendar year in

which an airport has more than .25

percent of the total number of boardings

in the U.S., the sum of the amount that

would be apportioned under 49 U.S.C.

47114 to the public agency controlling

that airport in a fiscal year, after

application of § 158.95, and the

projected PFC revenues to be collected

in such fiscal year, shall not be less than

the sum of the apportionment to such

airport for the preceding fiscal year and

the PFC revenues collected in the

preceding fiscal year.

(b) Paragraph (a) of this section shall

apply for fiscal years 2000 through

2003.

Appendix A to Part 158 [Amended]

24. In Appendix A to part 158, in

paragraph A.2 remove the words ‘‘the

Aviation Safety and Capacity Expansion

Act of 1990’’ and add, in their place, the

words ‘‘49 U.S.C. 40117’’; and in

paragraph B.12 remove the words

‘‘sections 9304 and 9307 of the Airport

Noise and Capacity Act of 1990’’ and

add, in their place, the words ‘‘49 U.S.C.

47524 and 47526’’.

Issued in Washington, DC, May 23, 2000.

Jane F. Garvey,

Administrator.

[FR Doc. 00–13348 Filed 5–23–00; 4:23 pm]

BILLING CODE 4910–13–U