RICK SNYDER 

GOVERNOR 

Mr. James T. Brown 

STATE OFMICHIGAN 

DEPARTMENT OF TRANSPORTATION 

LANSING 

January 13, 2016 

Airport Compliance and Management Analysis 

Federal Aviation Administration 

800 Independence A venue, SW 

Washington, D.C. 20591 

Dear Mr. Brown: 

Subject: Supplement to the State of Michigan's Action Plan Dated December 8, 2015 

KIRK T. STEUDLE 

DIRECTOR 

This letter supplements and modifies the State of Michigan's "action plan" concerning the use of certain state sales and use tax proceeds from the sale and use of aviation fuel ("Action Plan"), which was filed with the Federal Aviation Administration (FAA) on December 8, 2015. The 

Action Plan was filed in accordance with the FAA's Final Policy Amendment issued November 7, 2014 (FAA Final Policy). As noted in the Action Plan, the key component of the plan is the enactment of legislation to implement a tax revenue "offset" approach consistent with the FAA's July 17, 2015 guidance responding to questions posed to the FAA by the State of Michigan. The legislation will redirect a portion of state sales and use tax revenue from the State 

General Fund into designated funds within the State Aeronautics Code, to be used solely for aviation purposes. 

We are pleased to report that subsequent to the State of Michigan's filing of the Action Plan with the FAA, the Michigan Legislature passed and the Governor signed a six-bill aviation infrastructure funding bill package into law implementing this revenue "offset" approach. The bills (Senate Bills 425,426, 418, 612,613 and 614) are now Public Acts 258,259, 260, 261, 262 and 263 of 2015 with Immediate Effect (attached). Accordingly, these Public Acts supersede and replace the version of the bills (i.e., Senate Bills, 425, 426, 418, 612, 613, and 614 as passed by the Michigan Senate on December 3, 2015) included in Attachment 9 to the Action Plan. 

Although these Public Acts generally follow the substance (including implementation timeframes) reflected in the bills included in the Action Plan as Attachment 9, several key 

substantive changes were made to Senate Bills 425 

d 426 

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Mr. James T. Brown 

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January 13, 2016 

final decision, decision and order, or order in a proceeding finding that the deposit or credit of money to the Qualified Airport Fund (or disbursements from the Qualified Airport Fund as authorized under the Act) do not comply with the federal airport revenue 

use requirements under 49 USC 47107(b) or 49 USC 47133. The transfers to the State Aeronautics Fund shall continue for so long as that FAA or court decision, decision and order, or order is in effect and binding on the state. The amount of funds to be transferred 

must comply with the FAA or court final decision, decision and order, or order. 

• Provides that funds required to be redirected to the State Aeronautics Fund, if the contingency concerning FAA or federal court orders is' triggered, are to be disbursed by the Michigan Department of Transportation (MDOT) to the operator of a qualified airport on a quarterly basis and must be used by the operator of the qualified airpmt only for the 

purposes and in the priority described in the act. If there is more than one qualified airport, the disbursement is made to each in the same proportion that the amount of taxable gallons of aviation fuel sold at the qualified airport bears to the total amount of taxable gallons of aviation fuel sold at all qualified airpmts during the prior fiscal year. MDOT may not disburse money under this provision to an operator of a qualified airport if the disbursement would violate the te1ms of the FAA or federal court decision, decision and order, or order. · 

• Requires a qualified airport to file a report with MDOT describing how money disbursed to the qualified airport was used or otherwise spent. The first report is due by April 1, 2017, and each subsequent report is due by April 1 of each year thereafter. 

Senate Bill426 (2015 P.A. 259) 

• Ensures that funds redirected from the Qualified Airport Fund are credited to the State Aeronautics Fund if an FAA or federal court final decision, decision and order, or order described in 2015 P.A. 258 is issued. 

Under the Public Acts referenced above, informational reports conceming relevant sales and use tax data for a given calendar quarter will be due from taxpayers to the Michigan Department of Treasury in the month immediately following the end of each calendar quarter with the first 

repmts due July 2016. The data from these reports will be used by the State of Michigan to establish the quatterly disbursements into the State Aviation Fund and the Qualified Airpmt Fund described in the Action Plan, which begin October 1, 2016. 

As permitted under the FAA Final Poli

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Please contact me at 517-335-9568, if you have questions or need additional information. 

Sincerely, 

Attachment 

cc: K. Willis, Federal Aviation Administration 

E. Newman, Federal Aviation Administration 

Michael G. Trout 

Executive Administrator 

Office of Aeronautics 

S. Mowery-Schalk, Federal Aviation Administration 

J. Mayfield, Federal Aviation Administration 

N. Forstner, Office ofthe Lt. Governor 

S. Gaglio, Michigan Depruiment ofTreasmy 

D. Brickey, Office of the Attorney General 

K. Steudle, Michigan Depruiment of Transpmiation L. Mester, Michigan Department of Transpotiation 

J. Cranson, Michigan Department of Transportation 

F. Raha, Michigan Department ofTransportation