SAN MATEO COUNTY 

Trans portation Authority 

December 22,. 2015 

James T. Brown 

!Finance Management 

Federal Aviation Administration 

800 Independence Ave., SW 

Washington, DC 20591 

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BOARD OF DIRECTORS 20 1 5 

KARYL M ATSUMOTO, C HAIR 

DAVID CANEPA, V ICE CHAIR 

CAROLE GROOM 

DON HORSLEY 

CAMERON JOHNSON 

TFRRY NAGF.I 

MARY A NN NIHART 

JIM HARTNETT 

ExECUTIVE D IRECTOR 

Re: San Mateo County Transportation Authority's Action Plan Responding to FAA Policy 

Change 79 FR 66282-01; Docket FAA-2013-0988 

Dear Mr. Brown: 

The San Mateo County Transportation Authority ("Transportation Authority") writes to address 

the Federal Aviation Administration's ("FAA") request for an action plan in response to the FAA's 

amendment of its Policy and Procedures Concerning the Use of Airport Revenue; Proceeds 

From Taxes on Aviation Fuel ("Policy"). The Policy confirms the FAA's interpretation that, in 

accordance with 49 U.S.C. § 47107(b) and 49 U.S.C. § 47133(a), proceeds from taxes, 

including sales taxes, on aviation fuel may only be used for airport-related purposes. The Policy 

exempts from the restrictions any taxes in effect on December 30, 1987. We appreciate your 

grant of our request to submit this response after the December 8, 2015 deadline. 

The Transportation Authority only recently learned of this Policy and we have been trying to 

comprehend the legal authority and justification for this rule as well as assess its implication and 

potential financial affect on our agency. 

In 2004, the voters of San Mateo County, California adopted Measure A to reauthorize, for 25 

years, an existing .5% transactions and use tax to address traffic and transportation needs. 

Under California law, this tax is considered a "special tax" and requires a two-thirds voter 

approval. The Transportation Authority is the entity established to administer and appropriate 

revenues from Measure A in accordance with a Transportation Expenditure Plan ("TEP") which 

was presented to and approved by the voters with the Measure A tax. Under applicable state 

law, Measure A sales tax revenues cannot be used or appropriated to any program or project 

not specifically contained in the TEP without voter approval of an amendment to the TEP which 

would allow for such appropriation. 

It is our understanding that the Measure A sales tax applies to the sale of aviation fuel. 

However, the Transportation Authority does not have any data or any means to obtain data as 

to the amount of sales tax revenues its receives from the sale of aviation fuel. Measure A 

revenue derived from aviation fuel is not specifically identified or segregated from other sales 

tax revenues that the Transportation Authority receives from the State Board of Equalization. 

We understand that the State is evaluating its systems that account for and track sales tax 

revenues in this regard. 

SAN MATEO COUNTY TRANSPORTATION AUTHORITY 

1250 San Carlos Ave. - P.O. Box 3006 

San Carlos, CA 94070-1306 (650)508-6219 
James T. Brown 

December 22, 2015 

Page 2 

You may be aware of the unique geographic circumstances in San Mateo County related to 

airports. The County has three airports, the largest being San Francisco International Airport 

("SFO"). All revenues derived from SFO inure to the benefit of the City and County of San 

Francisco, our neighboring county to the north, as well as the people who use or are employed 

by SFO. The County of San Mateo and all the communities surrounding SFO are burdened 

with the externalities of the airport: traffic, noise, pollution, security risks, crime and odors. 

Local tax revenues and resources from San Mateo County and its communities are already 

devoted to addressing these externalities, which necessitate support of improvements/ 

maintenance of streets, roads and other infrastructure, all forms of public transportation, law 

enforcement, public safety, fire protection, environmental mitigations and noise abatement. This 

requisite local tax support occurs without the benefit of offsetting revenues from SFO or the City 

and County of San Francisco to defray these costs. 

Against this background, the Policy seems to require the reappropriation of additional local tax 

revenues to support SFO capital facilities and operations. We question the FAA's power to 

require and the inherent equity of the devotion of more San Mateo County local sales tax 

resources, and specifically revenues from our "self help" county's voter approved special sales 

tax, for the benefit of the San Francisco International Airport. Moreover, a federal government 

reappropriation of local Measure A revenues in this manner destabilizes the Transportation 

Authority's funding base and undermines its ability to engage in debt financing. 

As previously mentioned, the authority for and purpose of the Measure A sales tax have been 

approved by a super-majority vote of the San Mateo County electorate and cannot be changed 

without another super-majority vote. Nevertheless, the current TEP includes projects and 

programs that support the capital facilities and the operations of SFO in a number of significant 

ways, as described below. 

• The Transportation Authority sends to the Bay Area Rapid Transit ("BART") 

every year two percent (2%) of its annual sales tax receipts to pay the County's 

"buy in" share of the BART system extension into SFO. We note the FAA's 

Policy and Procedures Concerning the Use of Airport Revenue (64 FR 7696) 

specifically discussed the FAA's decision to approve the use of airport revenue 

for the structures and equipment related to the construction of the extension. In 

Fiscal Year 2014-15, the 2% payment from the annual sales tax receipts sent to 

BART for the SFO extension exceeded $1.620 million. 

• The Transportation Authority appropriates up to 24% of its sales tax revenues 

annually (approximately $19 million in Fiscal Year 2014-15) to support the 

Caltrain system which serves the Millbrae intermodal station that feeds 

passengers to SFO, as well as bus shuttles and paratransit services. These 

operations facilitate the transport of passengers to and from SFO. 

• A substantial amount of Measure A revenue is spent on improvements to the 

U.S. Highway 101 freeway which runs adjacent to SFO and provides the primary 

egress and ingress for airport passenger vehicle traffic. The 101 improvements, 

such as interchange upgrades/reconfigurations and auxiliary lanes, are financed 

heavily with Measure A funds and constitute multi-million dollar projects. 

11758114.2 
James T. Brown 

December 22, 2015 

Page 3 

• Each year, 22.5% of Measure A revenues are provided to local cities in the 

County for improvements of arterials and streets that feed, benefit and serve 

Highway 101 and the local airport system. 

Clearly, the San Francisco International Airport is a huge beneficiary of the transportation 

programs and projects supported with Measure A revenues every year. The Transportation 

Authority is confident that its expenditures under the existing TEP in support of SFO exceed any 

aviation fuel sales tax revenue that may be subject to the Policy. We intend to monitor 

information that the State Board of Equalization may make available to us in the months to 

come which may further clarify and confirm compliance with the Policy. 

cc: Seamus Murphy, Chief Communications Officer 

Gigi Harrington, Chief Administrative Officer 

April Chan, Chief Officer, Planning, Grants and Transportation Authority 

Joan Gassman, Hanson Bridgett 

117581 14.2