Finance Management 

Federal Aviation Administration 

800 Independence Avenue SW 

Washington, DC 20591 

Re: The Los Angeles County Metropolitan Transportation Authority's Action Plan in 

Response to FAA Policy Change 79 FR 66282-01; Docket F AA-2013-0988 

Dear Mr. Brown: 

The Los Angeles County Metropolitan Transportation Authority (Metro) responds to 

the FAA's amendment of its Policy and Procedures Concerning the Use of Airport 

Revenue with the following action plan. The FAA interprets restrictions on the use of 

"local taxes on aviation fuel (except taxes in effect on December 30, 1987) in 49 U.S.C. 

§47107(b) and 49 U.S.C. §47133(a) to include local sales tax revenue derived from 

aviation fuel in addition to local aviation fuel excise taxes. According to the policy, the 

portion of state and local sales tax revenues derived from aviation fuel (except taxes in 

effect on December 30, 1987) should be sent to aviation programs, noise mitigation, 

and airport capital and operating costs. The policy says that state and local 

governments that impose such sales taxes should submit to the FAA an action plan to 

comply with the policy change by December 8, 2015, and implement the action plan 

by December 8, 2017. 

Determining compliance with the policy is inherently difficult. Metro has enacted 

two district taxes, one of which is restricted to specific expenditures, since December 

30, 1987 that will be in effect on December 8, 2017: 

• 0.5% rate enacted by Los Angeles County voters in 1990 (Ordinance #49) 

• 0.5% rate enacted by Los Angeles County voters in 2008 and restricted to 

specific projects (Ordinance #08.01) 

Metro does not segregate district tax revenue derived from aviation and jet fuel from 

other taxable sales. Our sales tax audit contractor, MuniServices, prepared a rough 

estimate of $18 million annually of receipts to Metro from jet fuel sales. We caution 

that this estimate is still being refined as it is complicated because many taxpayers 

comingle sales tax reporting of their retail gas stations NOT at an airport and their jet 

fuel sales at the airport. The internal process to undertake this effort- which is to 

identifY, track and segregate the revenue, is extensive. We are assessing what is 

required to develop a process to meet the reporting requirements and tracking 

systems for discrete information on aviation fuel tax revenues. We would 

appreciate the FAA provide a descriptive definition of the requirements for the 

mandated "tracking system." 
aviation fuel and that Metro is in compliance with federal law. 

Over the next two years, Metro will continue to work with taxing authorities and other 

entities to coordinate collection of data to refine (1) estimates of district sales tax 

revenues derived from aviation fuel and (2) estimates of expenditures on and 

investment in local public use airports, to confirm Metro complies with federal law. 

If, contrary to current estimates, Metro determines that its expenditures on airport 

capital and operating costs do not exceed general sales tax revenues derived from 

aviation fuel, it will act accordingly, including considering legislative solutions, to 

comply with applicable federal law. 

Sincerely, 

Phillip A. Wa ington 

Chief Executive Officer