[Federal Register Volume 88, Number 186 (Wednesday, September 27, 2023)]
[Proposed Rules]
[Pages 66319-66336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20559]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 158

[Docket No.: FAA-2022-1315; Notice No. 23-14]
RIN 2120-AL86


Update and Clarification of the Passenger Facility Charge 
Regulations

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to amend its Passenger Facility Charge 
regulations to implement changes to an existing pilot program that 
resides within the Passenger Facility Charge program. This 
Congressionally mandated pilot program simplifies the process for 
public agencies controlling commercial service airports to obtain FAA 
authority to impose and use Passenger Facility Charges to fund airport 
development projects. The FAA also proposes to reaffirm existing 
program requirements and update or remove obsolete references within 
the Passenger Facility Charge regulations. Further, this proposed 
action removes certain Passenger Facility Charge program requirements 
eliminated in the 2018 FAA reauthorization legislation.

DATES: Send comments on or before November 27, 2023.

ADDRESSES: Send comments identified by docket number FAA-2022-1315 
using any of the following methods:
    <bullet> Federal eRulemaking Portal: Go to www.regulations.gov and 
follow the online instructions for sending your comments 
electronically.
    <bullet> Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
    <bullet> Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.
    <bullet> Fax: Fax comments to Docket Operations at 202-493-2251.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments 
from the public to better inform its rulemaking process. DOT posts 
these comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at 
www.regulations.gov at any time. Follow the online instructions for 
accessing the docket or go to the Docket Operations in Room W12-140 of 
the West Building Ground Floor at 1200 New Jersey Avenue SE, 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this action, contact Jane Johnson, Office of Airports, Airports Policy 
Branch, APP-510, Federal Aviation Administration, 800 Independence 
Avenue SW, Room 619, Washington, DC 20591; telephone (202) 267-5878; 
email <a href="/cdn-cgi/l/email-protection#b4ded5dad19adedbdcdac7dbdaf4d2d5d59ad3dbc2"><span class="__cf_email__" data-cfemail="d4beb5bab1fabebbbcbaa7bbba94b2b5b5fab3bba2">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

[[Page 66320]]

Table of Contents

I. Executive Summary
II. Overview of the Proposal
III. Authority for this Rulemaking
IV. History of the PFC Program
V. Discussion of the Proposal
    A. 2018 Reauthorization Act
    1. Changes to Project Eligibility for PFC Levels Above $3
    2. Changes to Applications and Notices of Intent
    B. PFC Program Oversight
    1. Reporting, Recordkeeping and Audit Requirements
    2. Federal Oversight, Informal Resolution, and Termination
    C. Miscellaneous Amendments
    1. Changes to Subpart A
    2. Changes to Subpart B
    3. Changes to Subpart C
    4. Changes to Subpart D
    5. Changes to Subpart E
    6. Changes to Subpart F
    7. Changes to Appendix A
    8. Section Cross-Reference Table
VI. Regulatory Notices and Analyses
    A. Regulatory Evaluation
    1. Need for the Regulation
    2. Baseline for the Analysis
    3. Benefits
    4. Costs
    5. Regulatory Alternatives
    B. Regulatory Flexibility Determination
    C. International Trade Impact Assessment
    D. Unfunded Mandates Assessment
    E. Paperwork Reduction Act
    F. International Compatibility
    G. Environmental Analysis
VII. Executive Order Determinations
    A. Executive Order 13132, Federalism
    B. Executive Order 13175, Consultation and Coordination With 
Indian Tribal Government
    C. Executive Order 13211, Regulations That Significantly Affect 
Energy Supply, Distribution, or Use
    D. Executive Order 13609, International Cooperation
VIII. Additional Information
    A. Comments Invited
    B. Availability of Rulemaking Documents

List of Abbreviations and Acronyms Frequently Used in This Document

AIP--Airport Improvement Program
ALP--Airport Layout Plan
CBI--Confidential Business Information
CFR--Code of Federal Regulations
DOT--U.S. Department of Transportation
FAA--Federal Aviation Administration
FOIA--Freedom of Information Act
ICAO--International Civil Aviation Organization
IRFA--Initial Regulatory Flexibility Analysis
NEPA--National Environmental Policy Act
NPIAS--National Plan of Integrated Airport Systems
NPRM--Notice of Proposed Rulemaking
OIG--Office of Inspector General
OMB--Office of Management and Budget
PFC--Passenger Facility Charge
RFA--Regulatory Flexibility Act
RIA--Regulatory Impact Analysis
SBA--Small Business Administration
U.S.C.--United States Code

I. Executive Summary

    The FAA proposes to amend its PFC regulations to implement changes 
to a Congressionally mandated pilot program that simplifies the process 
for public agencies controlling commercial service airports to obtain 
FAA authority to impose and use PFCs to fund airport development 
projects. The FAA also proposes to reaffirm existing PFC program 
requirements and update or remove obsolete references within the PFC 
regulations. Further, this proposed action removes certain PFC program 
requirements eliminated in the 2018 FAA reauthorization legislation.

II. Overview of the Proposal

    The FAA Reauthorization Act of 2018 (2018 Reauthorization Act),\1\ 
codified at 49 U.S.C. 40117, mandated several changes to the Passenger 
Facility Charge (PFC) program. The 2018 Reauthorization Act removed 
previously existing PFC program requirements and mandated changes for 
other PFC program requirements. This rulemaking action proposes to 
amend the PFC regulations in part 158 to implement the mandated 
changes.
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    \1\ Public Law 115-254, October 5, 2018.
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    The FAA also proposes to amend the PFC regulations to improve PFC 
program oversight. On December 18, 2018, the U.S. Department of 
Transportation, Office of Inspector General (OIG) issued Report No. 
AV2019015, ``Most Public Agencies Comply with Passenger Facility Charge 
Program Requirements, But FAA Can Improve the Use of Its Oversight 
Tools.'' In that report, the OIG made several recommendations to 
improve the FAA's oversight and administration of the PFC program.\2\ 
These recommendations pertained primarily to PFC reporting, 
recordkeeping, and audit procedures. Through this rulemaking, and as 
detailed in sections V.B.1. and V.B.2, the FAA is proposing to 
formalize in regulations policies that the FAA implemented in May 2019, 
in response to the OIG's recommendations.\3\
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    \2\ OIG Report No. AV2019015 at 3.
    \3\ See PFC Update 71-19, ``Oversight of Public Agency Passenger 
Facility Charge (PFC) Program,'' issued April 1, 2019, on the FAA 
internet website.
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    Further, the FAA is proposing several miscellaneous amendments to 
the PFC regulations, including but not limited to: replacing obsolete 
references, correcting grammar or rewording language for clarity, and 
re-organizing and re-numbering sections to facilitate other amendments 
proposed in this rulemaking action. See section V.C.10. in this 
preamble for a cross-reference table listing CFR units that the FAA 
proposes to rename, re-number, or both.

III. Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is 
found in Title 49 of the United States Code (U.S.C.). Subtitle I, 
section 106 describes the authority of the FAA Administrator. Subtitle 
VII, Aviation Programs, describes in more detail the scope of the 
agency's authority. This rulemaking is promulgated under the authority 
described in subtitle VII, part A, subpart I, section 40117. Under that 
section, the FAA is charged with prescribing regulations to impose a 
passenger facility fee to finance eligible airport-related projects.
    This rulemaking is also promulgated pursuant to 49 U.S.C. 106(g), 
40116, 47106, 47111, 47114-47116, 47524, and 47526.

IV. History of the PFC Program

    The PFC program was established by the Aviation Safety and Capacity 
Expansion Act of 1990 (Pub. L. 101-508; enacted November 5, 1990) which 
authorized the Secretary of Transportation (Secretary) to approve local 
imposition of PFCs of $1, $2, or $3 per enplaned passenger and to use 
PFC revenue for approved projects. That Act also required the Secretary 
to issue regulations necessary to implement this authority. The Act 
directed the Secretary to develop an application procedure, establish 
terms and conditions for granting PFC authority, set up a system for 
collecting, handling, and remitting PFC revenue to the appropriate 
public agency, and establish recordkeeping and audit requirements and 
procedures for termination. On May 22, 1991, the FAA issued a final 
rule adopting new regulations to establish the PFC program in part 
158.\4\
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    \4\ 56 FR 24254 (May 29, 1991).
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    Pursuant to the Wendell H. Ford Aviation Investment and Reform Act 
for the 21st Century (AIR 21), the FAA issued a final rule amending 
part 158 on May 23, 2000.\5\ That action amended the PFC regulations to 
incorporate administrative and statutory changes in the procedures to 
establish PFCs, including increasing the PFC level that a public agency 
may charge from $1, $2, or $3 to $4 or $4.50.
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    \5\ 65 FR 34536 (May 30, 2000).
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    On January 7, 2005, the FAA issued a final rule further amending 
part 158.\6\ In that rulemaking action, the FAA created a new pilot 
program, as statutorily mandated by Vision 100--Century of Aviation 
Reauthorization

[[Page 66321]]

Act \7\ (Vision 100), to test alternative procedures to authorize 
public agencies to impose PFCs and use PFC revenue for eligible 
projects at non-hub airports. Specifically, the FAA added current Sec.  
158.30 to prescribe the procedures a public agency controlling a non-
hub \8\ airport must follow when notifying the FAA of its intent to 
impose a PFC and to use PFC revenue on a project. That section also set 
forth criteria and standards for FAA review and acknowledgment of any 
notice of intent filed under the pilot program, and FAA objection to a 
proposed project. Since Vision 100 required the pilot program to be in 
effect for three years from the date the final rule was enacted, the 
final rule included a sunset provision of May 9, 2008.
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    \6\ 70 FR 14927 (March 23, 2005).
    \7\ Vision 100, 49 U.S.C. 40117(l) (December 12, 2003).
    \8\ Non-hub airport means a commercial service airport that has 
less than 0.05 percent of the passenger boardings. 49 U.S.C. 
47102(14).
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    The Federal Aviation Extension Act of 2008 \9\ authorized the non-
hub pilot program to continue through September 30, 2008. However, when 
Sec.  158.30 expired on May 9, 2008, there were no effective 
regulations in place to guide public agencies and the FAA regarding the 
use of these alternative procedures. Therefore, the FAA published a 
notice in the Federal Register informing public agencies of the 
program's continuing statutory authority, and the FAA periodically 
issued internal agency guidance in the form of PFC updates to inform 
agency personnel of how to administer the non-hub pilot program.
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    \9\ Public Law 110-253, June 30, 2008.
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    The FAA Modernization and Reform Act of 2012 subsequently 
eliminated the expiration date from 49 U.S.C. 40117(l) and the FAA 
continued implementing the non-hub pilot program in accordance with the 
statute in the absence of effective regulations.\10\ The agency 
continued to use the same forms and procedures that were developed 
before the sunset of Sec.  158.30, thereby allowing for seamless 
program continuation.
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    \10\ Although Sec.  158.30 expired on May 9, 2008, the text of 
the regulation continues to be printed in the Code of Federal 
Regulations because of the corresponding removal of the expiration 
date in the 2012 Act. This rulemaking action would remove that 
obsolete language.
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V. Discussion of the Proposal

    The FAA is proposing to amend the PFC program regulations. These 
proposed amendments are grouped into the following three categories 
based on the rationale for the proposed change: 2018 Reauthorization 
Act, PFC Program Oversight, and Miscellaneous Amendments.

A. 2018 Reauthorization Act

    This rulemaking action proposes the following changes to the PFC 
program as mandated by the 2018 Reauthorization Act: (1) changes 
related to project eligibility for PFC levels above $3, and (2) changes 
related to applications and notices of intent for small- \11\, medium- 
\12\, and large-hub \13\ airports.
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    \11\ Small hub airport means a commercial service airport that 
has at least 0.05 percent but less than 0.25 percent of the 
passenger boardings. 49 U.S.C. 47102(25).
    \12\ Medium hub airport means a commercial service airport that 
has at least 0.25 percent but less than 1.0 percent of the passenger 
boardings. 49 U.S.C. 47102(13).
    \13\ Large hub airport means a commercial service airport that 
has at least 1.0 percent of the passenger boardings. 49 U.S.C. 
47102(11).
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1. Changes to Project Eligibility for PFC Levels Above $3
(a) Background
    At the inception of the PFC program, public agencies received 
authority to impose a PFC of $1, $2, or $3. The project eligibility 
requirements are contained in current Sec.  158.15, ``Project 
eligibility at PFC levels of $1, $2 or $3.'' AIR 21 modified the PFC 
program by allowing a public agency to apply to the FAA to increase the 
PFC level that it may charge to $4 or $4.50 in certain instances. 
Project Eligibility requirements at PFC Levels of $4 or $4.50 are found 
in current Sec.  158.17. Section 158.17 (a)(1) requires these projects 
to also meet the eligibility requirements of Sec.  158.15.
    AIR 21 limited projects funded at a $4 or $4.50 PFC level to those 
that could not be paid for from funds reasonably expected to be 
available under the Airport Improvement Program (AIP). The requirement 
for this AIP funds reasonability determination is found in current 
Sec.  158.17(a)(2).
    AIR 21 also conditioned the funding of surface transportation or 
terminal projects at the $4 or $4.50 level on a finding that the public 
agency had made adequate provision for financing the airside needs \14\ 
of the airport. The requirement for this airside needs determination is 
found in current Sec.  158.17(a)(3).
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    \14\ Airside needs include runways, taxiways, aprons, and 
aircraft gates.
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    Further, AIR 21 established additional eligibility requirements for 
projects at medium- and large-hub airports. A project at a medium- or 
large-hub airport was eligible for PFC funding at $4 or $4.50 only if 
the project would make a significant contribution to: improving air 
carrier 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. These requirements 
are contained in current Sec.  158.17(b).
(b) Removal of AIP Funds Reasonability Determination
    The 2018 Reauthorization Act amended 49 U.S.C. 40117(b)(4) by 
removing the AIP funds reasonability determination requirement found in 
current Sec.  158.17(a)(2). With this change in legislation, the FAA no 
longer uses this determination to set the collection level for which 
the project is approved. On May 9, 2019, the FAA issued PFC Update 72-
19, ``Changes to the Passenger Facility Charge Levels Above $3,'' 
directing FAA personnel to cease applying this requirement while 
reviewing PFC applications. In this rulemaking action, the FAA proposes 
to formally remove this requirement from the PFC regulations.
(c) Removal of Significant Contribution Determination
    The 2018 Reauthorization Act also eliminated the significant 
contribution requirement found in current Sec.  158.17(b). As a result, 
the FAA no longer uses it to determine the collection level for which a 
project is approved and no longer requires public agencies to submit 
information related to significant contribution. PFC Update 72-19 
directs FAA personnel to no longer apply this requirement in reviewing 
PFC applications and the FAA proposes to remove the requirement from 
the PFC regulations. Moving forward, the FAA would rely on airside 
needs as the determining factor.
(d) Retention of Airside Needs Determination
    The 2018 Reauthorization Act retains the airside needs 
determination under 49 U.S.C. 40117(d)(4) found in current Sec.  
158.17(a)(3). Since the airside needs determination is the only 
requirement remaining within Sec.  158.17 after making the 2018 
Reauthorization Act changes, aside from the requirement to comply with 
Sec.  158.15, the FAA proposes to combine these two sections. 
Specifically, the FAA proposes to move the airside needs requirement in 
Sec.  158.17(a)(3) to Sec.  158.15 by adding a new proposed paragraph 
(d) to current Sec.  158.15 and restating the airside needs 
requirement, which continues to remain effective. The FAA also proposes 
to rename Sec.  158.15 as ``Project

[[Page 66322]]

eligibility'' \15\ and delete the current text of Sec.  158.17 in its 
entirety. Consolidating the project eligibility requirements into one 
section and changing the section title will improve accessibility and 
comprehension of the requirements.
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    \15\ Prior to AIR 21 and the subsequent final rule allowing for 
the $4 or $4.50 PFC level, all project eligibility requirements were 
listed in Sec.  158.15, which was titled Project eligibility. In 
this rulemaking, the FAA proposes to return to that former structure 
of the PFC regulation for project eligibility.
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    The FAA also proposes administrative amendments to replace 
references to former Sec.  158.17(a)(3) throughout part 158 with 
references to proposed Sec.  158.15(d). These administrative amendments 
are discussed further under section V.C. below.
2. Changes to Applications and Notices of Intent
(a) Background
    The statutory provisions initially authorizing the PFC program 
required public agencies to submit an application to the FAA to obtain 
authority to impose PFCs and use PFC revenue. However, Vision 100 
established the notice of intent process, mandating that the FAA create 
a pilot program to test alternative procedures for authorizing eligible 
agencies for non-hub airports to impose PFCs and use PFC revenue.
    Under the non-hub pilot program, only public agencies controlling 
non-hub airports could use alternative procedures to impose PFCs and 
use PFC revenue on eligible projects under 49 U.S.C. 40117(l). In lieu 
of submitting an application in accordance with 49 U.S.C. 40117(c), as 
prescribed in current Sec.  158.25, public agencies controlling non-hub 
airports simply could submit a notice of intent to impose a PFC and use 
PFC revenue. Under these alternative procedures, within 30 days of 
receipt of the public agency's notice, the FAA either objected to the 
public agency's proposed project(s) or acknowledged the public agency's 
notice of intent.
    The 2018 Reauthorization Act amended 49 U.S.C. 40117(l) by removing 
all references to non-hub airports. This legislative change effectively 
directed the FAA to extend the pilot program to small-, medium-, and 
large-hub airports, permitting these airports to also obtain authority 
to impose PFCs and use PFC revenue using alternative notice of intent 
procedures.
(b) PFC Update 73-20 and Partial Implementation of Program Changes
    Immediately following enactment of the 2018 Reauthorization Act, 
the FAA considered several options for implementing the PFC program 
changes. Since the FAA had been successfully implementing notice of 
intent procedures for non-hub airports for several years, such 
procedures seemed most appropriate for PFC authorizations for small-, 
medium-, and large-hub airports. However, rulemaking to amend part 158 
would have been required to change the application requirements for 
public agencies.
    Recognizing the immediate need for expeditious processing of PFC 
applications, the FAA internally implemented program changes to the 
maximum extent possible. On January 22, 2020, the FAA issued PFC Update 
73-20, ``Streamlined Procedures for Passenger Facility Charge (PFC) 
Authorizations at Small-, Medium-, and Large-Hub Airports.'' This 
interim internal guidance partially implemented the program change by 
streamlining the FAA's internal review of PFC projects meeting specific 
criteria for small-, medium-, and large-hub airports. This interim 
internal guidance did not change the PFC application procedures for 
public agencies. All applications were still required to meet the 
statutory and regulatory requirements of 49 U.S.C. 40117 and part 158.
    PFC Update 73-20 indicated that all PFC applications received by 
the FAA from small-, medium-, or large-hub airports are to be processed 
using the streamlined procedures identified in the PFC update unless 
such applications are excluded in accordance with applicable PFC 
guidance. Therefore, all PFC applications not excluded under PFC Update 
73-20 are to be treated as a notice of intent with FAA review and 
acknowledgment or objection within 30 days.
(c) Proposed Amendments for Full Implementation of Program Changes
    The FAA proposes to amend part 158 to allow for the full 
implementation of program changes originating from the 2018 
Reauthorization Act. The FAA's proposed regulations largely mirror the 
provisions of PFC Update 73-20 to implement the notice of intent pilot 
program.
    The FAA proposes to revise Sec.  158.30 to reflect the 2018 
Reauthorization Act program changes and remove the since-rescinded 
section expiration date, which will provide consistency with current 
practice and law. Current Sec.  158.30 prescribes regulations for 
notice of intent PFC authorizations for non-hub airports; however, 
Sec.  158.30(h) indicates that Sec.  158.30 expired on May 9, 2008. The 
FAA also intends to move some of the provisions found in Sec.  158.30 
to other sections within part 158 to improve readability of the notice 
of intent requirements. The FAA is proposing this re-organization of 
Sec.  158.30 to allow for the inclusion of notice of intent provisions 
stemming from PFC Update 73-20 and the FAA's partial implementation of 
the program changes. These proposed changes are discussed in the 
following paragraphs.
    First, the FAA proposes to amend current Sec.  158.30 by renaming 
the section heading ``Notices of intent.'' While Sec.  158.30(a) 
through (c) would remain largely the same, the FAA is proposing to make 
several changes. For example, the FAA proposes revising current 
paragraph (a) by removing language that limits the applicability of 
Sec.  158.30 to non-hub airports. The FAA is also proposing minor 
changes to the project information requirements of current Sec.  
158.30(b). That paragraph requires public agencies to submit grant-
related information when a PFC project is also funded by an AIP grant. 
The FAA proposes to replace references to AIP grants with ``FAA awarded 
airport grant'' so as to include information about other grants also 
funding the project, such as those authorized under the Bipartisan 
Infrastructure Law (BIL). Further, the FAA is adding a new paragraph, 
proposed Sec.  158.30(b)(8), requiring public agencies to submit 
detailed cost information for non-AIP funded projects that exceed $10 
million.
    Second, the FAA proposes to move the text of current Sec.  158.31, 
``Duration of authority to impose a PFC after project implementation'' 
to an amended Sec.  158.33, and move the text of current Sec.  
158.30(d), which includes the notice of intent review requirements, to 
an amended and proposed Sec.  158.31, ``Review of notices of intent.'' 
In turn, the FAA proposes to move the current text of Sec.  158.33, 
``Duration of authority to impose a PFC before project 
implementation,'' to a newly added proposed Sec.  158.34.
    Proposed Sec.  158.31 describes the FAA's rules for reviewing 
notices of intent and outlines two stages of FAA review. The first 
stage of review, which is prescribed in proposed Sec.  158.31(a), 
addresses the types of applications and projects ineligible for notice 
of intent consideration. The second stage of review, which is 
prescribed in Sec.  158.31(b), addresses the FAA's determinations on 
projects eligible for notice of intent consideration.
    Under proposed Sec.  158.31(a), the FAA will review notices of 
intent to identify projects ineligible for consideration under this 
streamlined process. The FAA intends to notify public agencies in 
writing within 30 days if the FAA determines that a project is 
ineligible for the notice of intent procedure. This

[[Page 66323]]

notification process, outlined in proposed Sec.  158.31(a), was not 
prescribed in PFC Update 73-20.
    The projects ineligible for consideration under proposed Sec.  
158.31(a)(1) through (a)(8) are identical to those ineligible for the 
streamlined procedures under PFC Update 73-20. In determining the types 
of projects ineligible for streamlined procedures under PFC Update 73-
20, the FAA considered the agency's internal delegations of authority 
as delineated in PFC Order 5500.1, ``Passenger Facility Charge,'' 
issued August 9, 2001. That document identifies certain types of PFC 
projects and applications that cannot be processed by the FAA's region 
and district offices because they require a higher level of internal 
FAA review and coordination within agency headquarters. Applications 
involving significant policy precedent, significant legal issues, 
significant controversy, multimodal projects, and significant noise, 
access, or revenue diversion issues are not eligible for streamlined 
processing under PFC Update 73-20. For reasons discussed in the next 
few paragraphs, the FAA proposes to incorporate these provisions within 
the regulations.
    Under proposed Sec.  158.31(a)(1), the FAA intends to review 
notices of intent for significant impacts on policy precedent. The 
FAA's disposition regarding a proposed PFC project could represent a 
significant policy precedent if the agency's decision would establish 
or change the FAA's policy on a project or issue. FAA review of such a 
project would typically require more than the 30 days afforded by the 
notice of intent process because the FAA would need to evaluate any 
potential impacts resulting from a change in policy.
    Similarly, under proposed Sec.  158.31(a)(2), the FAA intends to 
review notices of intent for projects with significant legal issues, as 
determined by the FAA's Office of the Chief Counsel or Office of 
Airports. Projects with significant legal issues involve matters that 
may result in litigation or may include projects where NEPA or 
environmental litigation are present. Such projects might also include 
circumstances where a Director within the FAA's Office of Airports has 
made a determination that the public agency has been found to be 
noncompliant in 14 CFR part 16 proceedings, or the public agency is 
presently a respondent in 14 CFR part 16 proceedings. Again, such 
projects need a level of review that requires more than the 30 days 
afforded by the notice of intent process.
    PFC projects that are the subject of significant controversy are 
also ineligible for streamlined procedures in accordance with Sec.  
158.31(a)(3). Significant controversy is evidenced by opposition 
expressed during a public agency's consultation with air carriers. 
Other indicators of potential significant controversy include adverse 
public comments or opposition to the FAA's proposed action from other 
airport authorities, airport users, Federal, State, or local 
governments, elected officials or communities. Likewise, multimodal 
projects or projects involving significant airport noise, access, or 
revenue diversion issues are also ineligible for these alternative 
procedures in accordance with proposed Sec.  158.31(a)(4) and (a)(5). 
Significant airport noise, access, or revenue diversion issues concern 
those assessing compliance with 49 U.S.C. 47521 et seq. (ANCA) and 49 
U.S.C. 47111(e) (Action on Grant Assurances Concerning Airport 
Revenues).
    The FAA also considered PFC Update 62-10, ``Passenger Facility 
Charge Delegation of Authority,'' issued March 11, 2010, in determining 
the types of projects ineligible for streamlined procedures under PFC 
Update 73-20. That document identifies additional types of PFC projects 
and applications that cannot be processed by the FAA's regional and 
district offices. These include debt service on otherwise ineligible 
projects or blending of two or more PFC decisions to obtain a uniform 
collection level. Such projects and applications require specialized 
review because they tend to be unique and multifaceted. The next few 
paragraphs discuss the FAA's intent to retain these exclusions as 
proposed Sec.  158.31(a)(6) and (a)(7).
    In proposed Sec.  158.31(a)(6), the FAA proposes to exclude 
applications involving debt service from the notice of intent 
streamlined procedures due to the complexity of these applications. 
When applying to use PFC revenue for certain debt service projects, the 
FAA encourages each airport to thoroughly discuss in its application 
those factors it believes most clearly indicate the airport's financial 
need. The FAA will consider the airport's plans to return to financial 
stability in its deliberations on the application. If incurring new 
debt, for any purpose, will help the airport return to financial 
stability as soon as possible, the public agency should discuss this 
factor in the application. The FAA also expects an airport attempting 
to demonstrate that it faces a financial crisis to discuss factors 
likely to affect its ability to make required payments in the future. 
Notice of intent procedures would not be appropriate in such instances 
because the FAA's evaluation process is too extensive to be completed 
within 30 days. A longer time frame for review is necessary because 
this gives the public agency time to respond to any requests for 
information from the FAA should the application not contain all of the 
necessary documentation. For example, if during the course of review, 
the FAA finds that the public agency needs to provide a plan to return 
to financial stability, 30 days is insufficient to allow for the public 
agency to develop and submit the plan in order to move forward with the 
application. Since there is not sufficient time allotted for adequate 
review under the notice of intent process, the FAA proposes to exclude 
these types of projects and applications.
    The FAA proposes to exclude applications for the blending of two or 
more PFC decisions to obtain a uniform collection level under proposed 
Sec.  158.31(a)(7) for reasons similar to debt service on otherwise 
ineligible projects. Prior to the 2018 Reauthorization Act, public 
agencies sought to blend PFC applications to enable PFC collections at 
the higher $4 or $4.50 amount when significant contribution was a 
determining factor. Since the significant contribution determination 
has been eliminated and public agencies no longer need to demonstrate 
significant contribution to collect PFCs at the $4 or $4.50 level, the 
FAA does not anticipate receiving many public agency applications for 
blending. However, in the rare event that a public agency does seek to 
blend applications, the FAA has found that such action requires a 
specialized review and analysis that is likely to exceed the 30 days 
afforded by the notice of intent process. Therefore, the FAA excluded 
blending under PFC Update 73-20 and proposes that application blending 
should remain ineligible for the streamlined notice of intent 
procedures.
    Finally, PFC Update 73-20 describes one more type of PFC project 
ineligible for streamlined processing. Terminal building projects in 
excess of $25 million, except stand-alone passenger boarding bridges, 
are also ineligible for streamlined processing under PFC Update 73-20. 
The FAA proposes to retain this exclusion as proposed Sec.  
158.31(a)(8) for reasons discussed in the following paragraphs.
    The initial justification for non-hub airport notice of intent 
procedures was to achieve PFC program efficiency by eliminating 
duplicative efforts. In 2002, the FAA examined the PFC program to 
identify ways to remove unnecessary,

[[Page 66324]]

duplicative, and time-consuming steps. The FAA found that while non-hub 
airports accounted for about 60 percent of the PFC applications 
processed over the prior five years, they only produced roughly two 
percent of the total annual PFC revenue. Further, the FAA found that 
non-hub airports often apply to use PFC revenue either as their 
matching share for an AIP grant or as a supplement to AIP funding. In 
such cases involving AIP funds, the FAA has already reviewed the 
project under the AIP grant procedures, thereby producing a duplication 
of efforts that created inefficiencies for both non-hub airports and 
the FAA. Thus, overall, enactment of the non-hub pilot program 
eliminated duplication, improved program efficiency, and supported 
expedited review of PFC projects for non-hub airports.
    Under the non-hub pilot program for notices of intent, when PFC 
projects did not include AIP funds, the FAA required public agencies to 
submit project information sufficient for the FAA to review and 
consider whether the project is eligible for PFCs, meets a PFC 
objective, and is justified before acknowledging or objecting to a 
proposed PFC project. While terminal projects for non-hub airports 
typically fell into this category, the scale of such projects and the 
level of complexity tend to be minimal due to the nature of non-hub 
operations, allowing for review within the 30-day timeframe. However, 
in partially implementing program changes under PFC Update 73-20, the 
FAA concluded that terminal building projects for small-, medium-, and 
large-hub airports, on the other hand, may need more than the 30 days 
afforded under the notice of intent process.
    Endeavoring to retain PFC program efficiencies gained through the 
notice of intent process while still allowing for adequate review and 
evaluation of terminal projects, the FAA implemented a $25 million 
threshold for terminal projects under PFC Update 73-20 regardless of 
airport hub size. Since inception of the PFC program, the vast majority 
of non-hub terminal PFC projects were less than $25 million. The $25 
million threshold allows nearly all non-hub airport terminal projects 
to continue to obtain PFC authority through the notice of intent 
process as they have done historically and allows a vast majority of 
terminal projects for small-, medium-, and large-hub airports to also 
use this process.
    Terminal projects at or over $25 million, in most cases, require a 
more extensive review on the part of the FAA to ensure the project has 
been fully assessed. Concluding from years of experience with terminal 
projects, the FAA found that projects above $25 million tend to involve 
more systems and components than smaller projects and have a greater 
potential to include spaces and equipment ineligible for funding under 
the PFC program. Therefore, these projects require a more comprehensive 
review, such as comparison against comparable projects, which would 
take more than the 30-day notice of intent period. The FAA does not 
propose changes to this limitation found in proposed Sec.  158.31. The 
numerous components associated with projects at or over $25 million 
generally require a more extensive review on the part of the FAA to 
ensure the project has been fully assessed. The application evaluation 
process may include determining if the submission includes sufficient 
documentation to demonstrate adequate justification for the project; 
determining whether the project is eligible for PFC funds; assessing 
the project objective and justification provided by the public agency; 
reviewing submission of detailed financial information; evaluating 
modifications to standards; assessing impacts to airport geometry; and 
determining whether it is necessary to engage in interagency 
coordination. There may be a need to coordinate with border control 
agencies or other Federal agencies on the impact of this application 
and project with respect to these agencies' equities. Other review 
factors can include amount and duration of the PFC; compliance with 
airport revenue use requirements; alternative uses; air carrier and 
public comments; compliance with the Airport Noise and Capacity Act of 
1990 (ACNA); airport layout plan (ALP), airspace, and National 
Environmental Policy Act (NEPA) requirements; the schedule for project 
implementation; and financial viability of the project. Since many of 
these determinations and factors are present when a project reaches the 
$25 million threshold, such projects cannot be streamlined.
(d) PFC Update 50-06 and 2018 Reauthorization Pilot Program 
Implementation
    The FAA proposes a minor revision to the information that public 
agencies must submit to the FAA with a notice of intent when seeking 
authority to impose a PFC. Specifically, the FAA proposes to add 
Sec. Sec.  158.25(b)(8) and 158.30(b)(3)(iv) directing public agencies 
to submit detailed cost information, as required by the Administrator. 
The FAA's policy on requesting this information from public agencies is 
currently outlined in PFC Update 50-06, ``Detailed basis of cost 
information, new project certifications, and changes to the Final 
Agency Decision,'' issued September 8, 2006.
    The FAA issued PFC Update 50-06 in response to Village of 
Bensenville, et al. v. Federal Aviation Administration, a U.S. Court of 
Appeals, District of Columbia Circuit decision, that found the FAA had 
not adequately demonstrated that it had reviewed the cost estimates for 
an Environmental Impact Statement (EIS) project and that the FAA's 
records did not support its findings in its decision.\16\ With the 
issuance of PFC Update 50-06, the FAA began requesting the submission 
of detailed cost information with PFC applications under the authority 
of current Sec.  158.25(b)(18), which directs public agencies to submit 
``[s]uch additional information as the Administrator may require.'' 
Attachment B to the PFC Application Form 5500-1 explicitly requires 
public agencies to submit cost details sufficient to identify eligible 
and ineligible costs if the project amount is over $10 million, as a 
result of the decision by the court.
---------------------------------------------------------------------------

    \16\ Village of Bensenville, et al. v. Federal Aviation 
Administration, 376 F.3d 1114, 1122 (D.C. Cir. 2004).
---------------------------------------------------------------------------

    The detailed cost submission requirement for small-, medium-, and 
large-hub airports has not changed with the availability of the notice 
of intent process, but this requirement will now apply to non-hub 
airports. Prior to the 2018 Reauthorization Act, non-hub airports 
obtaining PFC authority through the notice of intent process were not 
subject to the detailed cost submission requirements. In PFC Update 50-
06, the FAA stated that most non-hub pilot program projects have either 
existing or planned AIP funding, and these grants involve an FAA review 
of the costs. Also, most non-hub pilot program projects request less 
than $10 million in PFC funding authority. Further, the FAA indicated 
the 30-day pilot program-processing period does not provide enough time 
for the FAA to review detailed cost estimates for multiple projects. 
Section 158.30(b)(7) (which expired on May 9, 2008--See footnote 1) 
directed public agencies to include ``any additional information the 
Administrator may require'' with a notice of intent. The FAA proposes 
to include this language in Sec.  158.30(b)(7). Similarly, the FAA does 
not propose to change current policy that non-hub airports must provide 
detailed cost information when submitting an application under Sec.  
158.25 and the project amount is over $10 million.

[[Page 66325]]

    Since the 2018 Reauthorization Act effectively eliminated any 
distinction between hub and non-hub notice of intent submissions, the 
requirement for detailed cost information now extends to non-hub 
airports. The FAA proposes to add a new subparagraph Sec.  
158.30(b)(3)(iv) to clearly indicate within the PFC regulations that 
submission of cost detail information may be required as part of a 
notice of intent filing, regardless of hub size. The FAA anticipates 
the impact of this provision on public agencies will be minimal. Since 
the FAA proposes to restrict the types of projects eligible for 
streamlined procedures, the FAA expects that very few projects would 
require this comprehensive review of material within the 30-day period. 
Further, public agencies already possess detailed cost information for 
proposed projects in most cases. Adding this requirement merely directs 
public agencies to submit such information to the FAA for consideration 
along with a notice of intent filing.

B. PFC Program Oversight

    The proposed regulatory changes to program oversight stem from PFC 
Update 71-19 and a review of current policies. The proposed changes 
formalize the policies contained in PFC Update 71-19, improve the 
informal resolution process, and restructure the current layout of the 
oversight regulations found in part 158 to improve accessibility and 
program compliance.
1. Reporting, Recordkeeping and Audit Requirements
    On April 1, 2019, the FAA issued PFC Update 71-19, Oversight of 
Public Agency Passenger Facility Charge (PFC) Program, in response to 
certain recommendations from the OIG, contained in Report # AV2019015. 
In that report, the OIG asserted that the FAA lacked a process to 
ensure that independent audit reports are timely and include required 
information. The OIG recommended that the FAA establish specific 
timeframes for issuing audit reports and verify that public agencies' 
independent audits are performed annually.
    Public agencies are required to conduct an audit of their PFC 
accounts at least annually in accordance with current Sec.  158.67(c). 
To ensure that these audit reports are submitted in a timely manner, 
PFC Update 71-19 directs the FAA to request that public agencies submit 
annual PFC audit reports 30 calendar days after receipt of the 
auditor's report or 9 months after the end of the audit period. The FAA 
proposes to amend Sec.  158.69 to formalize this guidance to now 
require public agencies to provide a copy of their annual audit to the 
Administrator within 30 calendar days after receipt of the audit or 9 
months after the end of the audit period, whichever is less. The FAA 
also proposes to separate the requirements of current Sec.  158.67(c) 
into four sub-paragraphs to separate four unique existing requirements. 
These sub-paragraphs have been renumbered as Sec.  158.67(c)(1)-(4).
    Further, the FAA is proposing two additional subparagraphs, Sec.  
158.67(c)(5)-(6) to Sec.  158.67(c). Proposed Sec.  158.67(c)(5) 
requires PFC audits to include a schedule of revenues and expenditures 
of the PFC account. This schedule should include the beginning balance 
in the PFC account on the first day of the fiscal year, PFC Collections 
for each quarter, PFC Interest Earned for each quarter, disbursements 
on projects by application for each quarter, and the PFC account 
closing balance. Current FAA policy concerning the submission of a PFC 
schedule is found in FAA Order 5500.1, Passenger Facility Charge, 
August 9, 2001, Paragraph 7-18.b. AUDIT, which indicates that the 
auditor must, as a minimum, provide opinions as well as a schedule of 
PFC transactions. Currently, PFC schedule guidance is included in FAA 
Order 5500.1. The FAA proposes to make this a requirement in the PFC 
regulations.
    Proposed Sec.  158.67(c)(6) requires PFC audits to be performed on 
an actual basis unless some form of reconciliation documentation is 
provided by the auditor. This proposal moves current industry practice 
into a regulatory requirement in order to allow for the real-time 
accounting of actual total collected towards the total PFC collection. 
This requirement will improve transparency and ensure that PFC funds 
are being collected accurately and are accounted for properly.
2. Federal Oversight of Compliance, Informal Resolution, and 
Termination
    The FAA proposes to rename current subpart ``E-Termination'' as 
subpart ``E-Federal Oversight of Compliance, Informal Resolution, and 
Termination'' and move current Sec.  158.71, which prescribes 
regulations for Federal oversight, into subpart E. The FAA proposes to 
consolidate the regulations in subparts D and E, which ensure public 
agency compliance with the requirements of part 158 and 49 U.S.C. 
40117, into the same subpart. The FAA anticipates that consolidating 
the regulations in subparts D and E will improve access to public 
agency obligations and therefore improve compliance.
    The annual PFC audit provides validation of and reconciliation 
between the public agency's audited financial statements and the PFC 
financial data in the FAA's System of Airports Reporting (SOAR) 
database. The FAA relies on SOAR data to evaluate whether the PFC 
collection period is appropriate. Some public agencies have 
inconsistently submitted required annual audit reports. Inaccurate or 
absent data impairs the FAA's oversight and ability to fulfill its 
statutory obligations under 49 U.S.C. 40117(d)(1) and 40117(h).
    In some instances, after receiving a public agency's audit report, 
the FAA may decide to review the imposition and use of PFC revenue. In 
these cases, the public agency should provide a timely and sufficient 
response to any FAA inquiry. Accordingly, the FAA proposes to amend 
current Sec.  158.71 by adding language indicating the Administrator 
may take further action including, but not limited to, informal 
resolution, termination, or other action, as appropriate. The FAA also 
proposes to re-number that section as Sec.  158.83 and rename it 
``Federal oversight of compliance'' to more clearly reflect the 
provisions.
    The FAA also proposes to amend the informal resolution provisions 
of current Sec.  158.83 by removing the requirement that the FAA audit, 
review, or both audit and review a public agency's use of PFC revenue 
or a public agency's collection and remittance of PFC revenue under the 
oversight authority of current Sec.  158.71 before commencing an 
informal resolution process with a public agency. As discussed 
previously, the OIG found the FAA lacks a process to ensure that 
independent audit reports are timely and include required information. 
This proposal is part of a larger effort to create a compliance-
oriented subpart with a clear escalation process. A compliance-oriented 
subpart with a clear escalation process also would enable the FAA to 
engage in informal resolution to address various PFC collection and use 
issues without the FAA having to first audit the public agency or 
initiate termination procedures. The FAA also proposes to re-number 
this section as Sec.  158.85.

C. Miscellaneous Amendments

    The FAA is proposing miscellaneous amendments to the PFC 
regulations. A discussion of these miscellaneous amendments follows.
    The FAA proposes to re-organize and re-number several sections 
within part 158 to facilitate other amendments

[[Page 66326]]

proposed in this rulemaking action. In instances where revised section 
numbers are referenced elsewhere in the PFC regulations, the FAA 
proposes to make corresponding administrative amendments to those 
references within the PFC regulations.
1. Changes to Subpart A
    (a) Section 158.3--Definitions
    The FAA proposes to amend the following definitions:
    <bullet> Approved project. The FAA proposes to replace the 
reference to Sec.  158.30 with Sec.  158.32. This is a technical 
correction.
    <bullet> Bond financing costs. The FAA proposes to add language to 
include the cost of financing other indebtedness, which is consistent 
with PFC Order 5500.1, Appendix 4, August 9, 2001.
    <bullet> Charge effective date. The FAA proposes to insert the word 
``first'' before the word ``date'' and replace the word ``obliged'' 
with the word ``start collecting.'' These amendments provide further 
detail on the FAA's expectation for the charge effective date.
    <bullet> Charge expiration date. The FAA proposes to replace the 
phrase ``cease to collect'' with the phrase ``stop collecting.'' This 
is not a substantive change.
    <bullet> Debt service. The FAA proposes to move the word ``items'' 
from behind the word ``such'' to before the word ``such.'' This is not 
a substantive change.
    <bullet> Exclusive long-term lease or use agreement. The FAA 
proposes to add language to this definition that applies to exclusive 
leases of less than five years that have automatic renewal or carryover 
options, or to leases that have the effect of granting exclusive use 
rights. This proposed change is not a substantive change but has been 
made to align the definition with PFC assurances 5 and 6.
    <bullet> Implementation of an approved project. The FAA proposes to 
replace the word ``nonconstruction'' with ``non-construction.'' This is 
not a substantive change.
    <bullet> Notice of intent (to impose or use PFC revenue). The FAA 
proposes to amend the definition by removing the limited applicability 
to non-hub airports. This amendment is consistent with the 2018 
Reauthorization Act. The FAA also proposes to replace the reference to 
Sec.  158.30 with Sec.  158.32. This amendment harmonizes with the re-
numbering of certain sections. This is a proposed substantive change to 
account for program changes made by the 2018 Reauthorization Act.
(b) Section 158.11--Requests for Air Carrier, Foreign Air Carrier, or 
Isolated Community Exclusion
    The FAA proposes to shorten the title of this section by revising 
it from ``Public agency request not to require collection of PFCs by a 
class of air carriers or foreign air carriers or for service to 
isolated communities'' to ``Requests for air carrier, foreign air 
carrier, or isolated community exclusion.''
(c) Section 158.13--Use of PFC Revenue
    Currently, Sec.  158.13 is titled ``Use of PFC Revenue'' and Sec.  
158.18 is titled ``Use of PFC revenue to pay for debt service for non-
eligible projects.'' Both sections pertain to the use of PFC revenue. 
Current Sec.  158.13(e) provides an exception for the use of PFC 
revenue to pay for debt service for non-eligible projects and 
references current Sec.  158.18. Rather than making this reference, for 
simplicity, the FAA proposes to move the language contained in Sec.  
158.18 into Sec.  158.13(e) and delete Sec.  158.18 entirely.
    Additionally, since the last sentence of paragraph (f) pertains to 
auditing, the FAA proposes to move that language to the auditing 
requirements for approved projects combining PFC revenue and Federal 
grant funds within subpart D. Specifically, the FAA proposes to 
incorporate this language into Sec.  158.67.
(d) Section 158.15--Project Eligibility
    The FAA proposes two amendments to this section: (1) change the 
section title to remove dollar amounts, and (2) add a new paragraph (d) 
which contains the airside needs test language from Sec.  158.17(a)(3). 
This second amendment is necessary because most of the requirements of 
Sec.  158.17 were removed by the 2018 Reauthorization Act and the FAA 
is proposing to delete Sec.  158.17 and move any surviving requirements 
to Sec.  158.15.
    As discussed in section V.A.1. of the preamble, the FAA is amending 
Sec.  158.17(a)(3) to revise the airside needs requirement to align 
with the 2018 Reauthorization Act. The 2018 Reauthorization Act retains 
the airside needs requirement of 49 U.S.C. 40117(d)(4), which provides 
that in the case of an eligible surface transportation or terminal 
project, a PFC project cannot be approved at a collection level higher 
than $3 unless the FAA determines that the public agency has made 
adequate provision for financing the airside needs of the airport.\17\
---------------------------------------------------------------------------

    \17\ 49 U.S.C. 40117(d)(4)
---------------------------------------------------------------------------

    After removal of the funds reasonability determination and the 
significant contribution requirement, the only provisions of current 
Sec.  158.17(a)(1) that would remain in proposed Sec.  158.17 are those 
relating to the project meeting the eligibility requirements of Sec.  
158.15 and the airside needs requirements of current Sec.  
158.17(a)(3). Therefore, the FAA proposes to delete current Sec.  
158.17 and move the airside needs requirement to a new paragraph within 
Sec.  158.15(d).
(e). Section 158.19--Requirement for Competition Plans
    The FAA proposes to re-number current Sec.  158.19 as Sec.  158.17. 
This amendment reflects re-numbering changes to part 158.
    (f) Section 158.20--Submission of Required Documents
    The FAA proposes four amendments to this section: (1) re-number 
current Sec.  158.20 as Sec.  158.19, (2) revise paragraph (a) to allow 
for electronic submission of documents, (3) revise paragraph (b) 
because the databased referenced has been completed, and (4) move the 
section from subpart B to subpart A.
    The FAA now has the capability of receiving documents 
electronically, which it did not have at the time the regulation was 
written. The FAA's PFC online database, System of Airports Reporting 
(SOAR), for collecting required reports is complete and this proposed 
change reflects this update. The FAA proposes to move this section to 
subpart A because electronic submission provisions should pertain to 
all documents, not just applications.
2. Changes to Subpart B
(a) Section 158.21--General
    The FAA proposes to amend current Sec.  158.21 to indicate that a 
public agency may either submit an application and obtain approval from 
the Administrator to impose a PFC and use PFC revenue or submit a 
notice of intent to impose a PFC and use PFC revenue. Currently this 
section only references PFC applications and FAA approval of PFC 
applications, not notices of intent and FAA acknowledgment of notices 
of intent.
(b) Section 158.25--Applications
    The FAA proposes to add a new sub-paragraph, Sec.  158.25(b)(8), 
directing public agencies to submit detailed cost information, as 
required by the Administrator. This proposed paragraph is similar to 
the cost detail information required by proposed Sec.  158.30(b)(3)(iv) 
discussed in section IV.A.2., the rationale for which is described in 
that portion of the preamble.

[[Page 66327]]

3. Changes to Subpart C
(a) Section 158.37 Amendment of Approved PFC
    The FAA proposes to amend Sec.  158.37 by adding a new paragraph 
(b)(1) requiring the Administrator to find the public agency has 
complied with the Reporting, Recordkeeping and Audit requirements 
before approving a PFC amendment as discussed in section V.B.1. This 
amendment encourages public agency compliance with audit and 
recordkeeping requirements and supports the FAA's oversight of PFC 
audits. Further, this action informs public agencies of the need to 
submit PFC audit reports before submitting requests for amendments.
(b) Section 158.43 Public Agency Notification to Collect PFCs
    The FAA proposes moving the last sentence of paragraph (c) to new 
paragraph (e) without change. This proposed change separates 
requirements for public agencies and air carriers to ensure that 
requirements for each of these entities are clear and accessible.
(c) Section 158.45--Collection of PFCs on Tickets Issued in the U.S.
    The FAA proposes to insert ``on the return'' after ``last two 
enplaning airports.'' This proposed amendment change clarifies when 
PFCs can be collected and harmonizes with Sec.  158.9(a).
4. Changes to Subpart D
(a) Section 158.63--Reporting Requirements: Public Agency
    The FAA proposes to amend paragraph (a)(2) by adding 
``reimbursements'' to the list of information that must be included in 
quarterly reports. This proposed change clarifies that the public 
agency must report expenditures to outside entities as well as 
reimbursements to itself. This change is necessary so that the FAA can 
verify that the reimbursement is consistent with appropriate 
regulations, policies, and standards. It also provides the FAA with the 
relevant information to fulfill its recordkeeping and auditing 
responsibilities under 49 U.S.C. 40117(g).
(b) Section 158.67--Recordkeeping and Auditing: Public Agency
    The FAA proposes to change the title of this section from 
``Recordkeeping and auditing: Public agency'' to ``Accounting and 
auditing: Public agency.'' This change supports general improvement in 
the FAA oversight of the PFC program by making audit requirements 
clearer for public agencies.
(c) Section 158.69--Recordkeeping and Auditing: Collecting Carriers
    The FAA proposes to change the title of this section from 
``Recordkeeping and auditing: Collecting carriers'' to ``Accounting and 
auditing: Collecting carriers.'' This change supports general 
improvement in the FAA oversight of the PFC program by making audit 
requirements clearer for public agencies.
5. Changes to Subpart E
(a) Section 158.85--Termination of Authority To Impose PFCs
    The FAA proposes to re-number current Sec.  158.85 as Sec.  158.87. 
This amendment reflects re-numbering changes to part 158.
(b). Section 158.87--Loss of Federal Airport Grant Funds
    Currently the requirements for loss of Federal airport grant funds 
are found in Sec.  158.87. The FAA proposes to redesignate these 
requirements as Sec.  158.89. This amendment reflects re-numbering 
changes to part 158. Additionally, the FAA proposes to replace a 
reference to Sec.  158.83with Sec.  158.85 and also replace a reference 
to Sec.  158.85 with Sec.  158.87 within proposed Sec.  158.89(a). 
These amendments also reflect re-numbering changes to part 158.
6. Changes to Subpart F
(a) Section 158.95--Implementation of Reduction
    The FAA proposes to amend paragraph (c) to add the word ``either'' 
in front of the number 50 and ``75 percent'' after the word ``or'' to 
reflect the total reduction. These amendments use plain language for 
clarification and do not change the regulatory provisions.
7. Changes to Appendix A
    Public agencies must comply with PFC assurances when implementing a 
project funded with PFC revenue. However, the assurances only reference 
PFC applications and FAA approval of PFC applications, not notices of 
intent and FAA acknowledgment of notices of intent. The FAA proposes to 
revise paragraphs A. 2 and A. 3 to reflect that the requirement to 
comply with PFC assurances also applies to notices of intent and FAA 
acknowledgment of notices of intent.
8. Section Cross-Reference Table
    This section cross reference table is a re-designation listing of 
renumbered CFR units. This table also shows the old CFR unit numbers of 
former provisions along with corresponding new CFR unit numbers and 
current provisions. In instances where the FAA proposes to move a 
requirement from one section to another section, interested persons can 
look up the former section number for the requirement and find the new 
section number for that requirement. Similarly, in cases where the FAA 
is not proposing to change regulatory requirements within a section but 
proposes to re-number a section, interested persons can use the table 
to easily identify the new section number.

                       Table 2--Cross-Reference Listing Current and Proposed CFR Sections
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                  Current Provisions/CFR ReferProposed Provisions/CFR References
----------------------------------------------------------------------------------------------------------------
Sec.   158.11........................  Public agency request not to       Sec.   158.11  Requests for air
                                        require collection of PFCs                        carrier, foreign air
                                        by a class of air carriers                        carrier, or isolated
                                        or foreign air carriers or                        community exclusion.
                                        for service to isolated
                                        communities.
Sec.   158.17(a)(1)..................  Project eligibility at PFC         Sec.   158.15  Project eligibility.
Sec.   158.17(a)(3)..................   levels of $4 or $4.50.         Sec.   158.15(d)
Sec.   158.18........................  Use of PFC revenue to pay for   Sec.   158.13(e)  Use of PFC revenue.
                                        debt service for non-
                                        eligible projects.
Sec.   158.19........................  Requirement for competition        Sec.   158.17  Requirement for
                                        plans.                                            competition plans.
Sec.   158.20........................  Submission of required             Sec.   158.19  Submission of required
                                        documents.                                        documents.
Sec.   158.25(b)(8)..................  Applications.................               Sec.  Applications.
                                                                           158.25(b)(9)
Sec.   158.25(b)(9)..................                                              Sec.
                                                                          158.25(b)(10)
Sec.   158.25(b)(10).................                                              Sec.
                                                                          158.25(b)(11)
Sec.   158.25(b)(11).................                                              Sec.
                                                                          158.25(b)(12)

[[Page 66328]]

 
Sec.   158.25(b)(12).................                                              Sec.
                                                                          158.25(b)(13)
Sec.   158.25(b)(13).................                                              Sec.
                                                                          158.25(b)(14)
Sec.   158.25(b)(14).................                                              Sec.
                                                                          158.25(b)(15)
Sec.   158.25(b)(15).................                                              Sec.
                                                                          158.25(b)(16)
Sec.   158.25(b)(16).................                                              Sec.
                                                                          158.25(b)(17)
Sec.   158.25(b)(17).................                                              Sec.
                                                                          158.25(b)(18)
Sec.   158.30(a).....................  PFC Authorization at Non-Hub    Sec.   158.30(a)  Notices of intent.
Sec.   158.30(b).....................   Airports.                      Sec.   158.30(b)
Sec.   158.30(c).....................                                  Sec.   158.30(c)
Sec.   158.30(d).....................  FAA review of notices of        Sec.   158.31(b)  FAA review of notices
                                        intent..                                          of intent.
Sec.   158.30(e).....................  FAA acknowledgment of notices   Sec.   158.32(a)  FAA acknowledgment of
Sec.   158.30(f).....................   of intent.                     Sec.   158.32(b)   notices of intent.
Sec.   158.30(g).....................                                  Sec.   158.32(c)
Sec.   158.31........................  Duration of authority to           Sec.   158.33  Duration of authority
                                        impose a PFC after project                        to impose a PFC after
                                        implementation.                                   project
                                                                                          implementation.
Sec.   158.33........................  Duration of authority to           Sec.   158.34  Duration of authority
                                        impose a PFC before project                       to impose a PFC before
                                        implementation.                                   project
                                                                                          implementation.
Sec.   158.67........................  Recordkeeping and auditing:        Sec.   158.67  Accounting and
                                        Public agency.                                    auditing: Public
                                                                                          agency.
Sec.   158.69........................  Recordkeeping and auditing:        Sec.   158.69  Accounting and
                                        Collecting carriers.                              auditing: Collecting
                                                                                          carriers.
Sec.   158.71........................  Federal oversight............      Sec.   158.83  Federal oversight.
Sec.   158.83........................  Informal resolution..........      Sec.   158.85  Informal resolution.
Sec.   158.85........................  Termination of authority to        Sec.   158.87  Termination of
                                        impose PFCs.                                      authority to impose
                                                                                          PFCs.
Sec.   158.87........................  Loss of Federal airport grant      Sec.   158.89  Loss of Federal airport
                                        funds.                                            grant funds.
----------------------------------------------------------------------------------------------------------------

VI. Regulatory Notices and Analyses

    Federal agencies consider impacts of regulatory actions under a 
variety of Executive orders and other requirements. First, Executive 
Order 12866 and Executive Order 13563 direct that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify the costs. Second, 
the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires 
agencies to analyze the economic impact of regulatory changes on small 
entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits 
agencies from setting standards that create unnecessary obstacles to 
the foreign commerce of the United States. Fourth, the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to 
prepare a written assessment of the costs, benefits, and other effects 
of proposed or final rules that include a Federal mandate that may 
result in the expenditure by State, local, and tribal governments, in 
the aggregate, or by the private sector, of $100,000,000 or more 
(adjusted annually for inflation) in any one year. The current 
threshold after adjustment for inflation is $177,000,000, using the 
most current (2021) Implicit Price Deflator for the Gross Domestic 
Product. This portion of the preamble summarizes the FAA's analysis of 
the economic impacts of this rulemaking.
    In conducting these analyses, the FAA has determined that this 
rulemaking: will result in benefits that justify costs; is not an 
economically ``significant regulatory action'' as defined in section 
3(f) of Executive Order 12866; will not have a significant economic 
impact on a substantial number of small entities; will not create 
unnecessary obstacles to the foreign commerce of the United States; and 
will not impose an unfunded mandate on State, local, or tribal 
governments, or on the private sector.

A. Regulatory Evaluation

1. Need for the Regulation
    The proposed rule would amend the PFC regulations to: first, codify 
changes that have been self-implemented through the 2018 
Reauthorization Act; second, improve PFC program oversight and 
administration based on the OIG report's recommendations primarily 
concerning reporting, recordkeeping and audit processes; and third, 
replace obsolete references, correct grammar or reword language for 
clarity, and re-organize and re-number sections of part 158.
2. Baseline for the Analysis
    Five major sources of airport capital development funding are (1) 
the AIP; (2) PFCs imposed pursuant to Federal law; (3) tax-exempt 
bonds; (4) state and local grants; and (5) airport operating revenue 
from tenant lease and other revenue-generating activities such as 
landing fees.
    The AIP has been providing Federal grants for airport development 
and planning since the passage of the Airport and Airway Improvement 
Act of 1982 (Pub. L. 97-248). AIP funding is usually spent on projects 
that support aircraft operations such as runways, taxiways, aprons, 
noise abatement, land purchase, and safety or emergency equipment. The 
funds obligated for AIP are drawn from the airport and airway trust 
fund, which is supported by a variety of user fees and fuel taxes.
    Airports use different combinations of these sources depending on 
the individual airport's financial situation and the type of project 
being considered. Smaller airports' individual grants are of much 
smaller dollar amounts than the grants going to large and medium hub 
airports. Therefore, the smaller airports are much more dependent on 
AIP to meet their capital needs. Larger airports are much more likely 
to issue tax-exempt bonds or finance capital projects with the proceeds 
of PFCs.
    The PFC program was established in 1990 and modified in 2005 to 
institute a pilot program for non-hub airports to streamline the 
application process in order for them to access the PFC revenues more 
efficiently and rapidly. The streamlined application process ensures 
the non-hub airports' PFC

[[Page 66329]]

applications be treated as a notice of intent with the FAA review and 
acknowledgment within 30 days instead of 120 days.
    PFC Update 73-20 published in January 2020 gave notice that the FAA 
would review and acknowledge all allowed PFC applications received from 
small-, medium-, or large-hub airports within 30 days using streamlined 
procedures. This rulemaking proposes to codify this significant policy 
change into the FAA's part 158 regulations.
    According to the National Plan of Integrated Airport Systems 
(NPIAS), which details the amounts and types of airport development 
eligible for Federal funding under the AIP over the next five years, 
there are nearly 3,300 public-use airports within the national airport 
system. The 2023-2027 NPIAS \18\ published on September 30, 2022, 
identified 238 non-hub, 80 small-hub, 35 medium-hub and 30 large-hub 
airports in addition to 2,904 other public-use airports.
---------------------------------------------------------------------------

    \18\ ``Appendix A: List of NPIAS Airports'' following this link: 
www.faa.gov/airports/planning_capacity/npias/current Last accessed 
on November 16, 2022.
---------------------------------------------------------------------------

    This proposed rulemaking would affect 145 small-, medium-, and 
large-hub airports. As explained in the preceding paragraphs, proposed 
changes do not concern either the 2,904 other airports that do not use 
PFC revenues or the 238 non-hub airports that are currently benefiting 
from the streamlined application process over the last two decades.
3. Benefits
    The FAA examined the proposed changes and identified one provision 
that would benefit approximately 145 small-, medium-, and large-hub 
airports. Specifically, these airports would continue to use the 
streamlined application process shortening the FAA's review and 
acknowledgment period to 30 days from 120 days beyond the expiration of 
the PFC Update 73-20. The FAA recognizes these gains in efficiency and 
faster service time to the affected airports. However, these benefits, 
which would continue to accrue to those airports, are not quantified or 
monetized.
4. Costs
    The FAA has evaluated the cost impacts to the stakeholders involved 
in this proposed rulemaking, which includes the airports and the FAA. 
As discussed in the preceding preamble section, the FAA determined that 
the proposed changes would have no additional cost impacts to airports 
and the FAA.
5. Regulatory Alternatives
    This rulemaking proposes amendments to the PFC regulations to 
address statutorily mandated program changes, program oversight 
improvements, and minor administrative changes, such as removing or 
correcting obsolete references.
    There are no legally supportable regulatory alternatives to 
implementing the statutory requirements for the proposed changes. The 
alternative to rulemaking would be to leave the existing system of 
orders, guidance, and policy documents in place. However, this is 
untenable long-term as decentralized program requirements hinder the 
FAA's ability to ensure compliance and transparency.

B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act (RFA) of 1980 \19\, as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 \20\ and 
the Small Business Jobs Act of 2010 \21\, requires Federal agencies to 
consider the effects of the regulatory action on small businesses and 
other small entities and to minimize any significant economic impact. 
The term ``small entities'' comprises small businesses and not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
---------------------------------------------------------------------------

    \19\ Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 601-612.
    \20\ Public Law 104-121, 110 Stat. 857, Mar. 29, 1996.
    \21\ Public Law 111-240, 124 Stat. 2504 Sept. 27, 2010.
---------------------------------------------------------------------------

    The FAA identified 145 airports that are owned and operated by both 
small and non-small entities. In order to estimate the number of small 
entities, the FAA used the Table of Size Standards \22\ issued by the 
Small Business Administration (SBA) for the North American Industry 
Classification System (NAICS) and found two NAICS codes that these 
airports would fall under: 488111 (Air Traffic Control) and 488119 
(Other Airport Operations). SBA's size standards generally define small 
businesses based on the number of employees or annual receipts. For 
these two NAICS codes, the size standard is established as $35 million 
(i.e., entities with annual receipts under $35 million are qualified as 
small businesses).
---------------------------------------------------------------------------

    \22\ Small Business Administration (SBA). 2022. Table of Size 
Standards. Effective July 14, 2022. www.sba.gov/document/support-table-size-standards.
---------------------------------------------------------------------------

    Using the U.S. Census data for 488111 and 488119 NAICS codes,\23\ 
the FAA estimated that, with the exception of 13 airports reporting 
over $35 million annual revenue, the remaining 132 airports are 
classified as small entities.
---------------------------------------------------------------------------

    \23\ www.data.census.gov/cedsci/table?q=488119&g=0100000US&n=488111&tid=CBP2020.CB2000CBP Last 
accessed November 3, 2022.
---------------------------------------------------------------------------

    The FAA did not identify any economic impacts on small entities 
that would be affected by the proposed rule. Therefore, the FAA 
proposes to certify that the rule will not have a significant economic 
impact on a substantial number of small entities. The FAA welcomes 
comments on the basis for this certification.

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979,\24\ as amended by the Uruguay 
Round Agreements Act,\25\ prohibits Federal agencies from establishing 
standards or engaging in related activities that create unnecessary 
obstacles to the foreign commerce of the United States. Pursuant to 
these Acts, the establishment of standards is not considered an 
unnecessary obstacle to the foreign commerce of the United States, so 
long as the standard has a legitimate domestic objective, such as the 
protection of safety, and does not operate in a manner that excludes 
imports that meet this objective. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards.
---------------------------------------------------------------------------

    \24\ Public Law 96-39
    \25\ Public Law 103-465
---------------------------------------------------------------------------

    The FAA has assessed the effect of this proposed rule and 
determined that its purpose is to ensure the safety of U.S. civil 
aviation. Therefore, this proposed rule is in compliance with the Trade 
Agreements Act.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 \26\ requires 
each Federal agency to prepare a written statement assessing the 
effects of any Federal mandate in a proposed or final agency rule that 
may result in an expenditure of $100 million or more (in 1995 dollars) 
in any one year by State, local, and tribal governments, in the 
aggregate, or by the private sector; such a mandate is deemed to be a 
``significant regulatory action.'' The FAA currently uses an inflation-
adjusted value of $177 million in lieu of $100 million. This proposed 
rule does not contain such a

[[Page 66330]]

mandate; therefore, the requirements of Title II of the Act do not 
apply.
---------------------------------------------------------------------------

    \26\ Public Law 104-4.
---------------------------------------------------------------------------

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 \27\ requires that the FAA 
consider the impact of paperwork and other information collection 
burdens imposed on the public. According to the 1995 amendments to the 
Paperwork Reduction Act \28\, an agency may not collect or sponsor the 
collection of information, nor may it impose an information collection 
requirement unless it displays a currently valid Office of Management 
and Budget (OMB) control number.
---------------------------------------------------------------------------

    \27\ 44 U.S.C. 3507(d).
    \28\ 5 CFR 1320.8(b)(2)(vi).
---------------------------------------------------------------------------

    The FAA has determined that there would be no new information 
collection associated with this proposed rulemaking. The Office of 
Management and Budget (OMB) previously approved the FAA to collect such 
information under the provisions of the Paperwork Reduction Act of 1995 
\29\ via OMB Control Number 2120-0557.
---------------------------------------------------------------------------

    \29\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    On November 22, 2021, OMB approved a revision of the FAA's 
previously approved information collection. That revision reflected 
changes in the estimated burden resulting from the 2018 Reauthorization 
Act and the FAA's implementation of PFC Update 73-20. While this 
rulemaking proposes to codify these changes into the regulations, there 
are no new information collection actions resulting directly from this 
rulemaking action.

F. International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to conform to 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these proposed regulations.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 5-6.6 and involves no extraordinary 
circumstances.

VIII. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order (E.O.) 13132, Federalism. The agency has 
determined that this action would not have a substantial direct effect 
on the States, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government, and, therefore, would not have 
Federalism implications.

B. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Consistent with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments,\30\ and FAA Order 1210.20, 
American Indian and Alaska Native Tribal Consultation Policy and 
Procedures,\31\ the FAA ensures that Federally Recognized Tribes 
(Tribes) are given the opportunity to provide meaningful and timely 
input regarding proposed Federal actions that have the potential to 
affect uniquely or significantly their respective Tribes. At this 
point, the FAA has not identified any unique or significant effects, 
environmental or otherwise, on tribes resulting from this proposed 
rule.
---------------------------------------------------------------------------

    \30\ 65 FR 67249 (Nov. 6, 2000).
    \31\ FAA Order No. 1210.20 (Jan. 28, 2004), available at http://www.faa.gov/documentLibrary/media/1210.pdf.
---------------------------------------------------------------------------

C. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

    The FAA analyzed this proposed rule under E.O. 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). The agency has determined that it 
would not be a ``significant energy action'' under the Executive order 
and would not be likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

D. Executive Order 13609, International Cooperation

    Executive Order 13609, ``Promoting International Regulatory 
Cooperation,'' promotes international regulatory cooperation to meet 
shared challenges involving health, safety, labor, security, 
environmental, and other issues and to reduce, eliminate, or prevent 
unnecessary differences in regulatory requirements. The FAA has 
analyzed this action under the policies and agency responsibilities of 
Executive Order 13609 and has determined that this action would have no 
effect on international regulatory cooperation.

VIII. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. The agency 
also invites comments relating to the economic, environmental, energy, 
or federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. To ensure the docket does not contain 
duplicate comments, commenters should send only one copy of written 
comments, or if comments are filed electronically, commenters should 
submit only one time.
    The FAA will file in the docket all comments it receives, as well 
as a report summarizing each substantive public contact with FAA 
personnel concerning this proposed rulemaking. Before acting on this 
proposal, the FAA will consider all comments it receives on or before 
the closing date for comments. The FAA will consider comments filed 
after the comment period has closed if it is possible to do so without 
incurring expense or delay. The agency may change this proposal in 
light of the comments it receives.
    Confidential Business Information: Confidential Business 
Information (CBI) is commercial or financial information that is both 
customarily and actually treated as private by its owner. Under the 
Freedom of Information Act (FOIA),\32\ CBI is exempt from public 
disclosure. If your comments responsive to this NPRM contain commercial 
or financial information that is customarily treated as private, that 
you actually treat as private, and that is relevant or responsive to 
this NPRM, it is important that you clearly designate the submitted 
comments as CBI. Please mark each page of your submission containing 
CBI as ``PROPIN.'' The FAA will treat such marked submissions as 
confidential under the FOIA, and they will not be placed in the public 
docket of this NPRM. Submissions containing CBI should be sent to the 
person in the FOR FURTHER INFORMATION CONTACT section of this document. 
Any commentary that the FAA receives which is not

[[Page 66331]]

specifically designated as CBI will be placed in the public docket for 
this rulemaking.
---------------------------------------------------------------------------

    \32\ 5 U.S.C. 552.
---------------------------------------------------------------------------

B. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the 
internet by--
    1. Searching the Federal eRulemaking Portal at www.regulations.gov;
    2. Visiting the FAA's Regulations and Policies web page at 
www.faa.gov/regulations_policies; or
    3. Accessing the Government Printing Office's web page at 
www.GovInfo.gov.
    Copies may also be obtained by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW, Washington, DC 20591, or by calling (202) 267-9677. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this proposed rule, 
including economic analyses and technical reports, may be accessed from 
the internet through the Federal eRulemaking Portal.

List of Subjects in 14 CFR Part 158

    Air carriers, Airports, Passenger facility charge, Public agencies, 
Reporting and recordkeeping requirements.

The Proposed Amendments

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend 14 CFR part 158 as follows:

PART 158--PASSENGER FACILITY CHARGES (PFCS)

0
1. The authority citation for part 158 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40116-40117, 47106, 47111, 47114-
47116, 47524, 47526.

0
2. In part 158, remove the text ``PFC's'' wherever it appears, and add 
in its place the text ``PFCs''.
0
3. Amend Sec.  158.3 by revising the definitions for ``Approved 
project'', Bond financing costs'', ``Charge effective date'', Charge 
expiration date'', ``Debt service'', ``Exclusive long-term lease or use 
agreement'', ``FAA Airports office'', ``Financial need'', 
``Implementation of an approved project'', and ``Notice of intent (to 
impose or use PFC revenue)'' to read as follows:


Sec.  158.3  Definitions.

* * * * *
    Approved project means a project for which the FAA has approved 
using PFC revenue under this part. The FAA may also approve specific 
projects contained in a single or multi-phased project or development 
described in an airport capital plan separately. This includes projects 
acknowledged by the FAA under Sec.  158.32.
    Bond financing costs means the costs of financing a bond (or other 
indebtedness, except debt service) and includes such costs as those 
associated with issuance, underwriting discount, original issue 
discount, capitalized interest, debt service reserve funds, initial 
credit enhancement costs, and initial trustee and paying agent fees.
    Charge effective date means the first date on which carriers are 
required to start collecting a PFC.
    Charge expiration date means the date on which carriers are 
required to stop collecting a PFC.
* * * * *
    Debt service means payments for items such as principal and 
interest, sinking funds, call premiums, periodic credit enhancement 
fees, trustee and paying agent fees, coverage, and remarketing fees.
    Exclusive long-term lease or use agreement means an exclusive lease 
or use agreement between a public agency and an air carrier or foreign 
air carrier with a term of 5 years or more. This term also applies to 
exclusive leases of less than 5 years that have automatic renewal or 
carryover options, or to leases that have the effect of granting 
exclusive use rights.
    FAA Airports office means a regional, district or field office of 
the Federal Aviation Administration that administers Federal airport-
related matters.
    Financial need means that a public agency cannot meet its 
operational or debt service obligations and does not have at least a 2-
month capital reserve fund.
* * * * *
    Implementation of an approved project means: (1) With respect to 
construction, issuance to a contractor of notice to proceed or the 
start of physical construction; (2) with respect to non-construction 
projects other than property acquisition, commencement of work by a 
contractor or public agency to carry out the statement of work; or (3) 
with respect to property acquisition projects, commencement of title 
search, surveying, or appraisal for a significant portion of the 
property to be acquired.
* * * * *
    Notice of intent (to impose or use PFC revenue) means a notice 
under Sec.  158.30 from a public agency that the public agency intends 
to impose a PFC or use PFC revenue. Except for Sec. Sec.  158.25 and 
158.32, ``notice of intent'' can be used interchangeably with 
``application.''
* * * * *
0
4. Revise the section heading to Sec.  158.11 to read as follows:


Sec.  158.11  Requests for air carrier, foreign air carrier, or 
isolated community exclusion.

* * * * *
0
5. Amend Sec.  158.13 by revising paragraphs (e) and (f) to read as 
follows:


Sec.  158.13  Use of PFC revenue.

* * * * *
    (e) Exception providing for the use of PFC revenue to pay for debt 
service for non-eligible projects. The FAA may authorize a public 
agency to impose a PFC to make payments for debt service on 
indebtedness incurred to carry out at the airport a project that is not 
eligible if the FAA determines it is necessary because of the financial 
need of the airport.
    (1) A public agency may request authority to impose a PFC and use 
PFC revenue under this section using the PFC application procedures in 
Sec.  158.25. The public agency must document its financial position 
and explain its financial recovery plan that uses all available 
resources.
    (2) The FAA reviews the application using the procedures in Sec.  
158.27. The FAA will issue its decision on the public agency's request 
under Sec.  158.29.
    (f) Combination of PFC revenue and Federal grant funds. A public 
agency may combine PFC revenue and airport grant funds to carry out an 
approved project.
* * * * *
0
6. Amend Sec.  158.15 by revising the section heading and adding 
paragraph (d) to read as follows:


Sec.  158.15  Project eligibility.

* * * * *
    (d) A surface transportation or terminal project is eligible for 
PFC funding at a level above $3 if the public agency has made adequate 
provision for financing the airside needs of the airport, including 
runways, taxiways, aprons, and aircraft gates.


Sec.  158.17  [Removed]

0
7. Remove Sec.  158.17.


Sec.  158.19  [Redesignated as Sec.  158.17]

0
8. Redesignate Sec.  158.19 as Sec.  158.17.
0
9. Redesignate Sec.  158.20 as Sec.  158.19 and revise newly 
redesignated paragraphs (a) introductory text and (b) to read as 
follows:


Sec.  158.19  Submission of required documents.

    (a) Submittals and documents required by this part may be 
transmitted

[[Page 66332]]

to the appropriate recipient (the public agency, air carrier, the FAA, 
or any combination thereof) electronically or via email, courier, 
facsimile, or U.S. Postal Service.
* * * * *
    (b) Public agencies and air carriers may use the FAA's national PFC 
database to post their required quarterly reports, and, in that case, 
do not have to distribute the reports in any other way.


Sec.  158.20  [Reserved]

0
10. Reserve Sec.  158.20.
0
11. Revise the heading to subpart B to read as follows:

Subpart B--Applications and Notices of Intent

* * * * *
0
12. Revise Sec.  158.21 to read as follows:


Sec.  158.21  General.

    This subpart specifies the application and notice of intent 
requirements under which a public agency may obtain authorization to 
impose a PFC and use PFC revenue on a project. This subpart specifies 
the consultation, notice and public comment, application, and notice of 
intent requirements under which a public agency may obtain approval or 
acknowledgment to impose a PFC and use PFC revenue on a project. This 
subpart also establishes the procedures for the Administrator's review 
and approval of applications and amendments, procedures for FAA 
acknowledgment of notices of intent, and requirements for use of excess 
PFC revenue.
0
13. Amend Sec.  158.24 by revising paragraph (a)(2) to read as follows:


Sec.  158.24  Notice and opportunity for public comment.

    (a) * * *
    (2) The notice must allow the public to file comments for at least 
30 days, but no more than 45 days, after the date of publication of the 
notice or posting on the public agency's internet website, as 
applicable.
* * * * *
0
14. Amend Sec.  158.25 by revising paragraphs (b)(7) through (18), 
(c)(1)(i), (c)(1)(ii) introductory text, (c)(1)(iii), (c)(2)(iii)(C), 
(c)(2)(iv) introductory text, and (c)(2)(v) to read as follows:


Sec.  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 Sec.  
158.15(a) and (if a PFC level above $3 is requested) the requirements 
of Sec.  158.15.
    (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 Sec.  
158.17.
    (8) Detailed cost information, in a form and manner acceptable to 
the Administrator.
    (9) The charge to be imposed for each project.
    (10) The proposed charge effective date.
    (11) The estimated charge expiration date.
    (12) Information on the consultation with air carriers and foreign 
air carriers having a significant business interest at the airport and 
the public comment process, including:
    (i) A list of such carriers and those notified;
    (ii) A list of carriers that acknowledged receipt of the notice 
provided under Sec.  158.23(a);
    (iii) Lists of carriers that certified agreement and that certified 
disagreement with the project;
    (iv) Information on which method under Sec.  158.24(b) the public 
agency used to meet the public notice requirement; and
    (v) A summary of substantive comments by carriers contained in any 
certifications of disagreement with each project and disagreements with 
each project provided by the public, and the public agency's reasons 
for continuing despite such disagreements.
    (13) If the public agency is also filing a request under Sec.  
158.11--
    (i) The request;
    (ii) A copy of the information provided to the carriers under Sec.  
158.23(a)(3);
    (iii) A copy of the carriers' comments with respect to such 
information;
    (iv) A list of any class or classes of carriers that would not be 
required to collect a PFC if the request is approved; and
    (v) The public agency's reasons for submitting the request in the 
face of opposing comments.
    (14) A copy of information regarding the financing of the project 
presented to the carriers and foreign air carriers under Sec.  158.23 
of this part and as revised during the consultation.
    (15) A copy of all comments received as a result of the carrier 
consultation and public comment processes.
    (16) For an application not accompanied by a concurrent application 
for authority to use PFC revenue:
    (i) A description of any alternative methods being considered by 
the public agency to accomplish the objectives of the project;
    (ii) A description of alternative uses of the PFC revenue to ensure 
such revenue will be used only on eligible projects in the event the 
proposed project is not ultimately approved for use of PFC revenue;
    (iii) A timetable with projected dates for completion of project 
formulation activities and submission of an application to use PFC 
revenue; and
    (iv) A projected date of project implementation and completion.
    (17) A signed statement certifying that the public agency will 
comply with the assurances set forth in appendix A to this part.
    (18) Other information as required by the Administrator.
    (c) * * *
    (1) * * *
    (i) The information required under paragraphs (b)(1) through (18) 
of this section;
    (ii) An FAA Form 5500-1 and applicable attachments:
* * * * *
    (iii) The information required by Sec. Sec.  158.25(b)(17) and 
158.25(b)(18).
    (2) * * *
    (iii) * * *
    (C) For any project that has changed since receiving impose 
authority, the public agency must file updated project information for 
that project clearly describing the changes to the project.
    (iv) An FAA Form 5500-1 and applicable attachments:
* * * * *
    (v) The information required by Sec. Sec.  158.25(b)(17) and 
158.25(b)(18).
0
15. Amend Sec.  158.29 by:
0
a. Revising paragraphs (a)(1)(ii), (iii) and (viii);
0
b. Adding paragraph (a)(1)(ix); and
0
c. Revising paragraphs (a)(2), (b)(1)(ii) and (iii), (b)(1)(iv)(2), and 
(d).
    The revisions and addition read as follows:


Sec.  158.29  The Administrator's decision.

    (a) * * *
    (ii) The project will achieve the objectives and criteria set forth 
in Sec.  158.15 except for those projects approved under Sec.  
158.13(e).
    (iii) If a PFC level above $3 is being approved, the project meets 
the criteria set forth in Sec.  158.15(d);
* * * * *

[[Page 66333]]

    (viii) If applicable, the public agency has submitted a competition 
plan in accordance with Sec.  158.17.
    (ix) The public agency has demonstrated compliance with the 
Reporting, Recordkeeping and Audit requirements of subpart D of this 
part in a form and manner acceptable to the Administrator.
    (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 Sec.  
158.15, and (if a PFC level above $3 is being approved) Sec.  
158.15(d), PFC level, total approved PFC revenue including the amounts 
approved at $3 and less, $4, $4.50, or any combination thereof, 
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 Sec.  158.15 except for those projects approved under Sec.  
158.13(e).
    (iii) If a PFC level above $3 is being approved, the project meets 
the criteria set forth in Sec.  158.15(d); and
    (iv) * * *
    (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, or 
$4.50, or any combination thereof and any limit on the duration of 
authority to impose a PFC as prescribed under Sec.  158.34.
* * * * *
    (d) The FAA provides notice of PFC approvals and disapprovals on 
the FAA internet website.
0
16. Amend Sec.  158.30 by:
0
a. Revising the section heading;
0
b. Revising paragraphs (a), (b) introductory text, (b)(1) and (2), and 
(b)(3)(ii) and (iii);
0
c. Adding paragraph (b)(3)(iv);
0
d. Revising paragraphs (b)(7), (c) introductory text, (c)(1)(ii), and 
(c)(2)(i); and
0
e. Removing paragraphs (d) through (h).
    The revisions and addition read as follows:


Sec.  158.30  Notices of intent.

    (a) General. A public agency may notify the FAA of its intent to 
impose a PFC prior to or concurrently with a notice of intent to use 
PFC revenue. A public agency must file a notice of intent in the manner 
and form prescribed by the Administrator and must include the 
information required under paragraphs (b), (c), or both, of this 
section.
    (b) Notice of intent to impose a PFC. The public agency must file a 
separate notice of intent for each airport at which the public agency 
plans on imposing a PFC. An authorized official of the public agency 
must sign the notice of intent. Unless otherwise directed by the 
Administrator, the notice of intent must include:
    (1) A completed FAA Form 5500-1, PFC Application (current version) 
without attachments except as required below;
    (2) Project information including the project title, amount of PFC 
funds sought, PFC level sought, and the grant agreement number if an 
existing FAA awarded airport grant already covers this project.
    (3) If the project is not funded by an existing FAA awarded airport 
grant, the notice of intent must include the information in paragraph 
(b)(2) of this section in addition to the following:
* * * * *
    (ii) A description of how the project meets one of the PFC 
objectives in Sec.  158.15(a),
    (iii) A description of how the project meets the adequate 
justification requirement in Sec.  158.15(c), and
    (iv) Detailed cost information, in a form and manner acceptable to 
the Administrator.
* * * * *
    (7) Other information as required by the Administrator.
    (c) Notice of intent to use PFC revenue. A public agency must file:
    (1) * * *
* * * * *
    (ii) All applicable requirements pertaining to the Airport Layout 
Plan (ALP) for the airport, airspace studies for the project, and the 
National Environmental Policy Act of 1969 (NEPA), have been satisfied 
for all projects not included in an existing Federal airport program 
grant.
    (2) * * *
    (i) Follow further consultation with air carriers and the 
opportunity for public comment under Sec. Sec.  158.23 and 158.24 of 
this part. A meeting with the air carriers is optional if all 
information is the same as that provided with the impose authority 
notice;
* * * * *
0
17. Revise Sec.  158.31 to read as follows:


Sec.  158.31  Review of notices of intent.

    (a) The FAA will review the notice of intent to identify projects 
ineligible for notice of intent consideration. The FAA will notify the 
public agency in writing within 30 days if the FAA determines that 
projects involving the following are ineligible for notice of intent 
procedures as a result of:
    (1) Significant policy precedent.
    (2) Significant legal issues.
    (3) Significant controversy, as evidenced by significant opposition 
to the FAA's proposed action by the applicant or other airport 
authorities, airport users, Federal, State or local agencies, elected 
officials, or communities.
    (4) Multimodal projects.
    (5) Significant airport noise, access, or revenue diversion issues, 
including compliance with 49 U.S.C. 47521 and 49 U.S.C. 47111(e).
    (6) Debt Service on otherwise ineligible projects.
    (7) Blending of two or more PFC decisions to obtain a uniform 
collection level.
    (8) Terminal building projects in excess of $25 million, except 
stand-alone passenger boarding bridges.
    (b) The FAA will review the notice of intent to determine that:
    (1) The amount and duration of the PFC will not result in revenue 
that exceeds the amount necessary to finance the project(s);
    (2) Each proposed project meets the requirements of Sec.  158.15;
    (3) Each project proposed at a PFC level above $3.00 meets the 
requirements of Sec.  158.15(d);
    (4) All applicable airport layout plan, airspace, and environmental 
requirements have been met for each project;
    (5) Any request by the public agency to exclude a class of carriers 
from the requirement to collect the PFC is reasonable, not arbitrary, 
nondiscriminatory, and otherwise complies with the law; and
    (6) The consultation and public comment processes complied with 
Sec. Sec.  158.23 and 158.24.
    (7) The public agency has complied with the Reporting, 
Recordkeeping and Audit requirements of subpart D of this part.
    (c) The FAA will also make a determination regarding the public 
agency's compliance with 49 U.S.C. 47524 and 47526 governing airport 
noise and access restrictions and 49 U.S.C. 47107(b) governing the use 
of airport revenue. Finally, the FAA will review all comments filed 
during the air carrier consultation and public comment processes.
0
18. Add Sec.  158.32 to read as follows:


Sec.  158.32  FAA acknowledgment of notices of intent.

    (a) Within 30 days of receipt of the public agency's notice of 
intent about its

[[Page 66334]]

PFC program, the FAA will issue a written acknowledgment of the public 
agency's notice. The FAA's acknowledgment may concur with all proposed 
projects, may object to some or all proposed projects, or may object to 
the notice of intent in its entirety. The FAA's acknowledgment will 
include the reason(s) for any objection.
    (b) If the FAA does not object to a project or the notice of intent 
in its entirety, the public agency may implement its PFC program. The 
public agency's implementation must be consistent with the information 
specified in its notice of intent. If the FAA objects to a project, the 
public agency may not collect or use PFC revenue on that project. If 
the FAA objects to the notice of intent in its entirety, the public 
agency may not implement the PFCs proposed in that notice. When 
implementing a PFC under this section, a public agency must comply with 
all sections of part 158, except for Sec.  158.25.
    (c) An FAA acknowledgment issued under this section is not 
considered an order issued by the Secretary for purposes of 49 U.S.C. 
46110 (Judicial Review).
0
19. Revise Sec.  158.33 to read as follows:


Sec.  158.33  Duration of authority to impose a PFC after project 
implementation.

    A public agency that has begun implementing an approved project may 
impose a PFC until--
    (a) The charge expiration date is reached;
    (b) The total PFC revenue collected plus interest earned thereon 
equals the allowable cost of the approved project;
    (c) The authority to collect the PFC is terminated by the 
Administrator under subpart E of this part; or
    (d) The public agency is determined by the Administrator to be in 
violation of 49 U.S.C. 47524 and 47526, and the authority to collect 
the PFC is terminated under that statute's implementing regulations 
under this title.
0
20. Add Sec.  158.34 to read as follows:


Sec.  158.34  Duration of authority to impose a PFC before 
implementation.

    (a) A public agency shall not impose a PFC beyond the lesser of the 
following--
    (1) 2 years after approval to use PFC revenue on an approved 
project if the project has not been implemented;
    (2) 5 years after the charge effective date; or
    (3) 5 years after the FAA's decision on the application (if the 
charge effective date is more than 60 days after the decision date) if 
an approved project is not implemented.
    (b) If, in the Administrator's judgment, the public agency has not 
made sufficient progress toward implementation of an approved project 
within the times specified in paragraph (a) of this section, the 
Administrator begins termination proceedings under subpart E of this 
part.
    (c) The authority to impose a PFC following approval shall 
automatically expire without further action by the Administrator on the 
following dates:
    (1) 3 years after the charge effective date; or 3 years after the 
FAA's decision on the application if the charge effective date is more 
than 60 days after the decision date unless--
    (i) The public agency has filed an application for approval to use 
PFC revenue for an eligible project that is pending before the FAA;
    (ii) An application to use PFC revenue has been approved; or
    (iii) A request for extension (not to exceed 2 years) to submit an 
application for project approval, under Sec.  158.35, has been granted; 
or
    (2) 5 years after the charge effective date; or 5 years after the 
FAA's decision on the application (if the charge effective date is more 
than 60 days after the decision date) unless the public agency has 
obtained project approval.
    (d) If the authority to impose a PFC expires under paragraph (c) of 
this section, the public agency must provide the FAA with a list of the 
air carriers and foreign air carriers operating at the airport and all 
other collecting carriers that have remitted PFC revenue to the public 
agency in the preceding 12 months. The FAA notifies each of the listed 
carriers to terminate PFC collection no later than 30 days after the 
date of notification by the FAA.
    (e) Restriction on reauthorization to impose a PFC. Whenever the 
authority to impose a PFC has expired or been terminated under this 
section, the Administrator will not grant new approval to impose a PFC 
in advance of implementation of an approved project.


 Sec.  158.35  [Amended]

0
21. Amend Sec.  158.35, in paragraph (d), by removing the citation 
``Sec.  158.33'' and adding in its place the citation ``Sec.  158.34''.
0
22. Amend Sec.  158.37 by revising paragraphs (b)(1) introductory text, 
(b)(1)(i), (b)(6) and (7), and (c) to read as follows:


Sec.  158.37  Amendment of approved PFC.

* * * * *
    (b) * * *
    (1) The public agency has demonstrated compliance with the 
Reporting, Recordkeeping and Audit requirements of subpart D of this 
part in a form and manner acceptable to the Administrator.
    (i) Further consultation with the air carriers and foreign air 
carriers and seek public comment in accordance with Sec. Sec.  158.23 
and 158.24 when applying for those requests to:
* * * * *
    (6) A description of how each project meets the requirements of 
Sec.  158.15(d), for each project proposed for an increase of the PFC 
level above $3.00 at a medium or large hub airport;
    (7) A signed statement certifying that the public agency has met 
the requirements of Sec.  158.15(d), if applicable, for any amendment 
proposing to increase the PFC level above $3.00 at a medium or large 
hub airport; and
* * * * *
    (c) The Administrator will approve, partially approve or disapprove 
the amendment request and notify the public agency of the decision 
within 30 days of receipt of the request. If a PFC level of more than 
$3.00 is approved, the Administrator must find the project meets the 
requirements of Sec. Sec.  158.15(d) and 158.17, if applicable, before 
the public agency can implement the new PFC level.
* * * * *
0
23. Amend Sec.  158.43 by revising paragraph (c) and adding paragraph 
(e) to read as follows:


Sec.  158.43  Public agency notification to collect PFCs.

* * * * *
    (c) The public agency must notify air carriers required to collect 
PFCs at its airport and the FAA of changes in the charge expiration 
date at least 30 days before the existing charge expiration date or new 
charge expiration date, whichever comes first.
* * * * *
    (e) Each notified air carrier must notify its agents, including 
other issuing carriers, of such changes.
0
24. Amend Sec.  158.45 by revising paragraph (c) to read as follows:


Sec.  158.45  Collection of PFCs on tickets issued in the U.S.

* * * * *
    (c) For each one-way trip shown on the complete itinerary of an air 
travel ticket, issuing air carriers and their agents shall collect a 
PFC from a passenger only for the first two airports where PFCs are 
imposed. For each round trip, a PFC shall be collected only for 
enplanements at the first two enplaning airports and the last two

[[Page 66335]]

enplaning airports on the return where PFCs are imposed.
* * * * *
0
25. Amend subpart D by revising the subpart heading to read as follows:

Subpart D--Reporting, Accounting, and Audits

0
26. Amend Sec.  158.63 by revising paragraph (a)(2) to read as follows:


Sec.  158.63  Reporting requirements: Public agency.

    (a) * * *
    (2) Cumulative actual PFC revenue received, interest earned, 
project expenditures, reimbursements, and the amount committed for use 
on currently approved projects, including the quarter;
* * * * *
0
27. AmendSec.  158.67 by:
0
a. Revising the section heading;
0
b. Revising paragraphs (c)(1) through (3); and
0
c. Adding paragraphs (c)(4) through (6) and (d) through (g).
    The revisions and additions read as follows:


Sec.  158.67  Accounting and auditing: Public agency.

* * * * *
    (c) Each public agency shall provide for an audit of its PFC 
account for the period the PFC is collected, held or used, as follows:
    (1) The public agency must conduct an audit of its PFC account 
annually;
    (2) The annual audit must be performed by an accredited independent 
public accountant and may be of limited scope;
    (3) The accountant shall express an opinion of the fairness and 
reasonableness of the public agency's procedures for receiving, 
holding, and using PFC revenue;
    (4) The accountant shall also express an opinion on whether the 
quarterly report required under Sec.  158.63 fairly represents the net 
transactions within the PFC account;
    (5) The public agency must provide a schedule of revenue and 
expenditures of the PFC account including: balance in the account on 
the first day of the fiscal year, PFC Collections for each Quarter, PFC 
Interest Earned for each Quarter, disbursements on projects by 
application for each quarter, closing balance; and
    (6) The audit must be performed on actual basis, unless the audit 
is accompanied by reconciliation documentation in a manner and form 
acceptable to the Administrator.
    (d) The audit may be--
    (1) Performed specifically for the PFC account; or
    (2) Conducted as part of an audit under the Single Audit Act, 31 
U.S.C. 75, provided the auditor specifically addresses the PFC.
    (e) Upon request, a copy of the audit shall be provided to each 
collecting carrier that remitted PFC revenue to the public agency in 
the period covered by the audit.
    (f) A copy of the audit shall be provided to the Administrator 
within 30 calendar days after receipt of the audit or 9 months after 
the end of the audit period, whichever is less.
    (g) Each public agency that combines PFC revenue and Federal grant 
funds to carry out an approved project is subject to the recordkeeping 
and auditing requirements of this part, as well as the reporting, 
recordkeeping, and auditing requirements imposed by 49 U.S.C. 47107 
Airport and Airway Improvement Act of 1982 (AAIA).
0
28. Revise the section heading to Sec.  158.69 to read as follows:


Sec.  158.69  Accounting and auditing: Collecting carriers.

* * * * *


Sec.  158.71  [Removed and Reserved]

0
29. Remove and reserve Sec.  158.71.
0
30. Revise the subpart heading to subpart E to read as follows:

Subpart E--Federal Oversight of Compliance, Informal Resolution, 
and Termination

0
31. Revise Sec.  158.81 to read as follows:


Sec.  158.81  General.

    This subpart contains the procedures for Federal oversight of 
compliance, informal resolution, and termination of PFCs, and loss of 
Federal airport grant funds for violations of this part or 49 U.S.C. 
40117. This subpart does not address the circumstances under which the 
authority to collect PFCs may be terminated for violations of 49 U.S.C. 
47523 through 47528.
0
32. Revise Sec.  158.83 to read as follows:


Sec.  158.83  Federal oversight of compliance.

    (a) The Administrator may periodically audit, review, or both audit 
and review, the receipt and use of PFC revenue by a public agency. The 
purpose of the audit or review is to ensure that the public agency is 
in compliance with the requirements of this part and 49 U.S.C. 40117. 
The Administrator may take further action including, but not limited 
to, informal resolution, termination, or other action, as appropriate.
    (b) The Administrator may periodically audit, review, or both audit 
and review the collection and remittance by the collecting carriers of 
PFC revenue. The purpose of the audit or review is to ensure collecting 
carriers are in compliance with the requirements of this part and 49 
U.S.C. 40117. The Administrator may take further, as appropriate.
    (c) Public agencies and carriers shall allow any authorized 
representative of the Administrator, the Secretary of Transportation, 
or the Comptroller General of the U.S., access to any of its books, 
documents, papers, and records pertinent to PFCs.
0
33. Revise Sec.  158.85 to read as follows:


Sec.  158.85  Informal resolution.

    The Administrator may undertake informal resolution with the public 
agency or any other affected party if the Administrator cannot 
determine that PFC revenue is being collected, used, or both collected 
and used on an approved application for the approved projects in 
accordance with the terms of the Administrator's approval to impose a 
PFC for those projects or in compliance with the requirements of this 
part and with 49 U.S.C. 40117.
0
34. Revise Sec.  158.87 to read as follows:


Sec.  158.87  Termination of authority to impose PFCs.

    (a) The FAA begins proceedings to terminate the public agency's 
authority to impose a PFC only if the Administrator determines that 
informal resolution is not successful.
    (b) The Administrator publishes a notice of proposed termination in 
the Federal Register and supplies a copy to the public agency. This 
notice will state the scope of the proposed termination, the basis for 
the proposed action and the date for filing written comments or 
objections by all interested parties. This notice will also identify 
any corrective actions the public agency can take to avoid further 
proceedings. The due date for comments and corrective action shall be 
no less than 60 days after publication of the notice.
    (c) If corrective action has not been taken as prescribed by the 
Administrator, the FAA holds a public hearing, and notice is given to 
the public agency and published in the Federal Register at least 30 
days prior to the hearing. The hearing will be in a form determined by 
the Administrator to be appropriate to the circumstances and to the 
matters in dispute.
    (d) The Administrator publishes the final decision in the Federal 
Register. Where appropriate, the Administrator may prescribe corrective 
action, including any corrective action the public agency may yet take. 
A copy of

[[Page 66336]]

the notice is also provided to the public agency.
    (e) Within 10 days of the date of publication of the notice of the 
Administrator's decision, the public agency shall--
    (1) Advise the FAA in writing that it will complete any corrective 
action prescribed in the decision within 30 days; or
    (2) Provide the FAA with a listing of the air carriers and foreign 
air carriers operating at the airport and all other issuing carriers 
that have remitted PFC revenue to the public agency in the preceding 12 
months.
    (f) When the Administrator's decision does not provide for 
corrective action or the public agency fails to complete such action, 
the FAA provides a copy of the Federal Register notice to each air 
carrier and foreign air carrier identified in paragraph (e) of this 
section. Such carriers are responsible for terminating or modifying PFC 
collection no later than 30 days after the date of notification by the 
FAA.
0
35. Add Sec.  158.89 to read as follows:


Sec.  158.89  Loss of Federal airport grant funds.

    (a) If the Administrator determines that revenue derived from a PFC 
is excessive or is not being used as approved, the Administrator may 
reduce the amount of funds otherwise payable to the public agency under 
49 U.S.C. 47114. Such a reduction may be made as a corrective action 
under Sec.  158.85 or Sec.  158.87.
    (b) The amount of the reduction under paragraph (a) of this section 
shall equal the excess collected, or the amount not used in accordance 
with this part.
    (c) A reduction under paragraph (a) of this section shall not 
constitute a withholding of approval of a grant application or the 
payment of funds under an approved grant within the meaning of 49 
U.S.C. 47111(d).
0
36. Amend Sec.  158.95 by revising paragraph (c) to read as follows:


Sec.  158.95  Implementation of reduction.

* * * * *
    (c) If the projection of PFC revenue in a fiscal year is 
inaccurate, the reduction in apportioned funds may be increased or 
decreased in the following fiscal year, except that any further 
reduction shall not cause the total reduction to exceed either 50 
percent or 75 percent of such apportioned amount as would otherwise be 
apportioned in any fiscal year.
0
37. Amend appendix A to part 158 by revising paragraphs (A)(2) and (3), 
and (B)(5) to read as follows:

Appendix A to Part 158 Assurances

    A. * * *
    2. These assurances are required to be submitted as part of the 
application for approval or acknowledgment of authority to impose a PFC 
under the provisions of 49 U.S.C. 40117.
    3. Upon approval of an application or acknowledgment of a notice of 
intent by the Administrator, the public agency is responsible for 
compliance with these assurances.
    B. * * *
    5. Non-exclusivity of contractual agreements. It will not enter 
into an exclusive long-term lease or use agreement with an air carrier 
or foreign air carrier for projects funded by PFC revenue. Such leases 
or use agreements will not preclude the public agency from funding, 
developing, or assigning new capacity at the airport with PFC revenue.
* * * * *

    Issued under authority provided by 49 U.S.C. 106(f) and 40117 in 
Washington, DC.
Shannetta R. Griffin,
Associate Administrator for Airports.
[FR Doc. 2023-20559 Filed 9-26-23; 8:45 am]
BILLING CODE 4910-13-P


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