RICK SNYDER GOVERNOR Mr. James T. Brown STATE OFMICHIGA N DEPARTMENT

OF TRANSPORTATION LA NS ING January 13, 2016 Airport Comp li ance and Management Ana l ysis Federal Aviation Administration 800 Independenc e A venue, SW Washington, D.C. 20591 Dear Mr. Brown: Subject: Supp l ement to the State of Michigan's Act ion Plan Dated Dec ember 8

, 20 1 5 KIRK T

. STEUDLE DIRECTOR

This letter s upplem en ts and modifies the State of Michigan's "actio n plan" concerning the use of certain state sales and u se tax proceeds from the sa l e and u se 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 is sued November 7

, 2014 (FAA Final Policy). As not ed in the Action P l an

, the key component of the
plan

is the enactment of l eg i slation to implement a tax revenue "offset " approach consist e nt with

the

FAA's July 17

, 2015 guidance responding to que st ions posed t o the FAA by the State of Michigan. The l egi s lation will redirect a portion of s tat e sa l es and use tax revenue from the State Genera

l Fund into designated funds within the State Aeronautics Code, to be used s olely for aviation purposes. We are pleased to report that subsequent to the State of Michigan 's filing of the Act i on Plan with

the

FAA

, the Michigan Legislature passed and th e Governor signed a six-bill aviation infrastructure funding bill package into law implementing this revenue "offset" appro a ch. The
bills

(Senate B ill s 425,426

, 418, 6 1 2,613 and 614) are now 

### Public Acts 258,259, 260, 26 1, 262

and

263 of 2015 w i th Immediate Effect (attached)

. Accordingly, these Public Acts supersede

and replace the version of the bill s ( i. e

. , Senate Bi ll s, 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 ge n e rally follow th e substance (including impl ementation timeframes) reflected in the bills included in the Action P l an as Attachment 9, severa l key

s

ub stan tive changes were mad e to Senate Bills 425 and 426 as they mo ve d throug h the

l

egisla tive process to final passage; some of which the State of Michigan believes enhance the Action

Plan's compliance w ith the FAA Final Po li cy. A summary of t he se ke y substant iv e changes

are provided below for your convenience: Senate Bill425 (2015 P.A

. 258)

LH - LAN - 0 (01/03) • Requires the State Treasurer to transf er money from the Qualified Airport Fund to th e
State

Aeronautics Fund 

### if th e FAA (or a federal court o f competent juri s diction) issu es a
AERO N AUTICS BUILDIN G • 2700 PORT LANS IN G ROAD· LAN S I N G, MI C HI GA N 4890 6 www . m ichiga n .gov • (5 1 7) 335 -9283

## Mr. 

## James T. Brown Page 2 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

Ai rp ort 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 qual ifi ed

airport, the disbursement is made to each in the same proportion that the amount of

taxab l e gallons of aviation fuel sold at the qualified airport bears to the tot a l 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 sub s equent 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

r

epmts due July 2016. The data from these reports will be used by the State of Michigan to

establish the quatterly disbursements into the State Aviat i on Fund and the Qualified Airpmt

Fund described in the Action Plan, which begin October 1

, 2016.

As permitted under the FAA Final Policy

, the State of Michigan requested in its Action Plan a

transition period of approximately one year from December 8, 2015, to fully implement the

Action Plan

. We are pleased to report that with the enactment of these Public Acts, Michigan

will meet that deadline. We believe that these actions are consistent with the federal airport revenue use requirements under 49 USC 47107(b) and 49 USC 47133 (including the FAA Final

Policy) and will benefit all of the airports in the Michigan Airport System Plan

.Mr.JamesT.BrownPage3January13,2016Pleasecontactmeat517-335-9568,ifyouhavequestionsorneedadditionalinformation.Sincerely,Attachmentcc:K.Willis,FederalAviationAdministrationE.Newman,FederalAviationAdministrationMichaelG.TroutExecutiveAdministratorOfficeofAeronauticsS.Mowery-Schalk,FederalAviationAdministrationJ.Mayfield,FederalAviationAdministrationN.Forstner,OfficeoftheLt.GovernorS.Gaglio,MichiganDepruimentofTreasmyD.Brickey,OfficeoftheAttorneyGeneralK.Steudle,MichiganDepruimentofTranspmiationL.Mester,MichiganDepartmentofTranspotiationJ.Cranson,MichiganDepartmentofTransportationF.Raha,MichiganDepartmentofTransportation