Sandra Gutierrez

- Carver Airport Manager sandygutierrez@co.imperial.ca.us IMPERIAL COUNTY AIRPORT 1099 Airport Road Imperial, CA 92251 (760) 355

- 7944 Fax: (760) 355

- 248 5

December 8, 2015

Mr. James T. Brown Finance Management

Federal Aviation Administration 800 Independence Avenue SW Washington, DC 20591

Subject: Action Plan Submission Pursuant to FAA Policy and Procedures Concerning the Use of Airport Revenue (79 Red. Reg. 66282

- 01, November 7, 2014).

Dear Mr. Brown:

This letter is in response to the request for an action plan for the Imperial County to convey its intent to comply with the FAA ruling related to sales tax revenues derived from aviation fuel sales to the extent that ruling complies with federal law. This includes th e process likely necessary to amend any non

- compliant local ordinances to achieve compliance and the development of reporting requirements and tracking systems for specific information on aviation fuel tax revenues which in California means “jet fuel” as o ther types of aviation fuels are exempt from sales tax in this state. It is our understanding that the State of California will be submitting an Action Plan pertaining only to the state’s portion of the tax.

California’s state and local governments alread y provide extensive services to airports including infrastructure maintenance, fire protection, public safety, environmental protection and noise abatement. These services and improvements are funded with general sales taxes and other taxes and Imperial Co unty believes these local expenditures exceed the sales tax revenues derived

from the sale of aviation fuel.

Applicable Law that May Require Amendments for Compliance

 Measure D was re

- enacted in November 2008 for forty years, 1⁄2 cent sales tax. Originally passed by voters in 1989.

 Local Airports include: Imperial County Airport.

In addition to the locally imposed transaction and use tax rate, Imperial County receives revenues derived from the state sales and use tax rate for the purposes of health and hum an services, criminal justice and transportation. These statewide voter

- approved tax rates have been designated for specific purposes. It is our understanding that the state will provide an action plan response as it relates to necessary steps for assuring compliance related to these revenues.Reporting Requirement and Tracking System

Imperial County in conjunction with its advisors has begun to identify the required data and steps necessary to comply. The internal process to undertake this effort, includi ng developing a tracking system for discrete information on aviation fuel tax revenues, is complex and extensive. For example, the State Board of Equalization, the tax collection agency with which Imperial County has a contract for sales tax collections, d oes not require jet fuel sellers to segregate sales tax revenue derived from the sale of jet fuel from other types of taxable sales make by the same vendor. Therefore, it is presently impossible for Imperial County to determine the exact amount

of sales ta x derived from sales of jet fuel. Local agencies would need the state to change its tax reporting standards to require fuel sellers to quantify the amount of tax derived from the sale of aviation fuel to achieve compliance. Segregating and reporting the co rrect amount of tax revenue will further complicate California’s already complex sales tax system and increase administrative

costs.

Transition Period If, contrary to current expectations, Imperial County determines the its expenditures on airport capital and operating cost do not exceed sales tax revenues derived from aviation fuel, it will consider legislative solutions. It is the intent of Imperial County to attempt to comply with your requirements set forth by the FAA ruling to the extent it complies w ith federal law. Imperial County will notify the FAA of specific actions, if any, to be completed during the transition period and work with the state to ensure compliance before the December 8, 2017 deadline.

Sincerely,

Sandra Gutierrez

- Carver Imperial County Airport Manager

cc: Jay Chamberlain, Department of Finance