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1 

I 

KAEl\IPFER 

CRO\VELL 

ATrORNEYS AT LAw 

CARSON CITY OFFICE 

STEVEN E. TACKES 

stackes@kcnvlaw.com 

775.884.8300 

Mike Williams 

FAA Airports 

February 19,2016 

Western-Pacific Region 

Phoenix Airports District Office 

3800 N. Central Ave., Suite 1025 

Phoenix, AZ 85012 

Re: Fuel tax revenue status and compliance plan 

Carson City Airport (KCXP) 

Dear Mr. Williams: 

LAS VEGAS OFFICE 

1980 Festival Plaza Dr 

Suite 650 

Las Vegas, NV 89135 

Tel: 702.792.7000 

Fax: 702.796.7181 

RENO OFFICE 

50 West Liberty Street 

Suite 700 

Reno, NV 89501 

Tel: 775.852.3900 

Fax: 775.327.2011 

CARSON CITY OFFICE 

510 West Fourth Street 

Carson City, NV 89703 

Tel: 775.884.8300 

Fax: 775.882.0257 

This letter is sent to both explain the fuel tax revenue process as it exists today, and, as 

our compliance plan regarding avgas fuel tax revenues for the Carson City Airport (KCXP). In 

Nevada, there are separate taxes on jet fuel and on avgas. Per NRS 365.170, those taxes are 1 

cent per gallon, and 2 cents per gallon1

, respectively.2 

1. Jet fuel tax. The Carson City Airport Authority has confirmed that the current tax of 

1 cent per gallon is being collected by the State Department of Taxation and remitted 

to the Carson City Airport monthly. Thus, we are in compliance with 49 U.S.C. 

47107 (b) and 47133, as well as NRS 365.545, which expressly requires that the jet 

fuel tax come back to the governmental entity (in our case, the Carson City Airport 

Authority): 

NRS 365.545 Proceeds of taxes on fuel for jet or turbine-powered aircraft. 

1. The proceeds of all taxes on fuel for jet or turbine-powered 

aircraft imposed pursuant to the provisions of NRS 365.170 or 365.203 

must be deposited in the Account for Taxes on Fuel for Jet or Turbine1 NRS 365.170 Rates of taxes on aviation fuel and fuel for jet or turbine-powered aircraft; duties of dealers. Every 

dealer shall: 

1. Not later than the last day of each calendar month, submit to the Department a statement of all aviation fuel and fuel 

for jet or turbine-powered aircraft sold, distributed or used by the dealer in this State, as well as all such fuel sold, distributed or used 

in this State by a purchaser thereof upon which sale, distribution or use the dealer has assumed liability for the tax thereon pursuant 

to NRS 365.020, during the preceding calendar month; and 

2. In accordance with the provisions of NRS 365.330, pay an excise tax on: 

(a) All fuel for jet or turbine-powered aircraft in the amount of 1 cent per gallon, plus any applicable amount imposed 

pursuant to NRS 365.203; and 

(b) Aviation fuel in the amount of 2 cents per gallon, plus any applicable amount imposed pursuant to NRS 365.203, 

so sold, distributed or used. 

2 There are also provisions for additional optional taxes, but none have been adopted in Carson City. 
KAEMPFER Compliance Letter to Mike Williams, FAA 

February 19, 2016 

CROWELL Page2 

Powered Aircraft in the State General Fund and must be allocated monthly 

by the Department to the: 

(a) Governmental entity which operates the airport at which the 

tax was collected, if the airport is operated by a governmental entity; ... 

Procedurally, the Airport manager receives the monthly checks for the jet fuel tax, 

and such funds are deposited into Airport Authority accounts and used for airport 

operating costs (per 47 USC 47133).3 These funds are also confirmed by our annual 

audits performed by an outside CPA. As such, we are in compliance on the jet fuel 

tax. If additional information is needed on this, we can provide it. 

2. Avgas tax. As noted above, the current tax is 2 cents per gallon. There is also an 

optional avgas tax, but that has not been adopted for Carson City. The Airport 

Authority has confirmed that the Avgas tax revenues do NOT come back to the 

Carson City Airport. Rather, NRS 365.565 states that Avgas tax revenues are 

transferred to the Civil Air Patrol.4 In discussions with the Nevada Department of 

Transportation, Aviation Department, they have initiated the process that will lead to 

legislative change of NRS 365.565 so that the tax revenues will instead go to each 

airport in the same way that the jet fuel tax is collected and distributed. Attached is a 

copy of the letter to your office. The Carson City Airport Authority will support the 

legislative change that corrects the direction of avgas tax revenues back to. the airport 

on which it was collected. 

As you know, the FAA Policy and Procedures Concerning the Use of Airport Revenue; 

Proceeds from Taxes on Aviation Fuel, (79 Fed. Reg. 6628) (referred to as the "Amendment") is 

being applied by the FAA prospectively, and requires airports to adopt a strategic plan for 

3 47 US Code 47133 states: "(a)Prohibition.-Local taxes on aviation fuel (except taxes in effect on December 30, 1987) 

or the revenues generated by an airport that is the subject of Federal assistance may not be expended for any purpose other than 

the capital or operating costs of-

(1) the airport; 

(2) the local airport system; or 

(3) any other local facility that is owned or operated by the person or entity that owns or operates the airport that is directly 

and substantially related to the air transportation of passengers or property." 

4 NRS 365.565 Proceeds of tax derived from aviation fuel. 

1. The tax derived from aviation fuel must be distributed quarterly from the Account for Taxes on Aviation Fuel in the 

following manner: 

(a) The amount of any optional tax must be remitted to the: 

(1) Governmental entity which operates the airport at which the optional tax was collected, if the airport is operated by a 

governmental entity; 

(2) Governmental entity which owns the airport at which the optional tax was collected, if the airport is owned but not 

operated by a governmental entity; or 

(3) County in which is located the airport at which the optional tax was collected, if the airport is neither owned nor 

operated by a governmental entity. 

(b) After deducting the amount allocated pursuant to paragraph (a) [the optional tax if any], there must be transferred to 

the Civil Air Patrol Account, which is hereby created, for the ensuing fiscal year, the total amount remaining in the Account for Taxes 

on Aviation Fuel. 
MEMPFER 

CROWELL 

Compliance Letter to Mike Williams, FAA 

February 19, 2016 

Page3 

compliance within 3 years of December 8, 2014, i.e. by December 8 of 2017. The Nevada 

Constitution only allows for Legislative Sessions every 2 years and only for a 6 month period. 

The next Legislative Session begins on February 3, 2017 and will be completed by June of that 

year. As such, our timing should meet the 3 year deadline. 

This strategic plan has been adopted, after public notice and vote, by the Carson City 

Airport Authority for the benefit of the Carson City Airport (KCXP) on February 17, 2016. 

We respectfully request that you treat this as our compliance plan. We will keep you 

posted on the correction to the statute when it occurs. 

If you have any questions, do not hesitate to contact the undersigned. 

Cc: Karl Hutter, Chairman, Carson City Airport Authority 

Members, Carson City Airport Authority 

Tim Rowe, Airport Manager 

Kurt Haulkohl, NDOT, Aviation 

-, 
BRIAN SANDOVAl 

Governor 

STATE OF NEVADA 

DEPARTMENT OF TRANSPORTATION 

1263 S. Stewart Street 

Carson City, Nevada 89712 , 

January 6, 2015 

RUDY MALFABON, P.E., ~ 

Mr. Byron K Huffman 

Acting Director 

Office of Airport Compliance and Management Analysis 

Federal Aviation Administration 

800 Independence Avenue, SW 

Washington, DC 20591 

RE: FAA's Policy and Procedures Concerning the Use of Airport Revenue, letter dated 

November 24, 2015 

Dear Mr. Huffman; 

In response to your letter to the Governor of Nevada, Brian Sandoval dated 

November 24, 2015, and to further clarify our request for an extension of time on 

December Sth, 2015 from Rudy Malfabon, Director of the Nevada Department of 

Transportation (NDOT) we offer the following response to each point the FAA 

identified in the original letter. 

NDOT Aviation Action Plan 

(1) "the process to amend any non-complinnt laws, and restructure general revenues 

to adapt to tlze dedication of aviation fuel tax tevenue to airports and or State 

aviation programs"; 

NDOT will initiate the legislative process to revise State Statues within the 

NRS and Nevada Administrative Code (NAC). Oarification of existing or 

the adoption of new legislation imposing a redirection of fuel taxes 

directly to the facilities where the revenue is collected is feasible. 

(2) A commitment to undertake tlze legislative process; 

The NDOT is willing to begin the legislative process at the next session 

(Bill Draft Requests due in May 2016). 
January 6, 2016 Federal Aviation Administration Fuel Taxes 

Our need to redraft existing NRS and NAC coupled with the redirection 

of revenue streams to remit those funds directly back to the facilities is 

accepted. 

(3) The time frame for action within the three year transition period for completion by 

December 8, 2017. 

The time needed to amend NRS and NAC as required to meet federal 

requirements is feasible to comply with our existing legislative process. 

As previously mentioned the 2017 Legislative Session begins in February 

o£2017. 

Background of Nevada's Aviation Fuel Tax System 

There are currently 31 airports in the State of Nevada in the National Plan of 

Integrated Airport Systems (NPIAS) that are obligated under Federal Aviation 

Administration (FAA) Airport Improvement Program (AlP) Grant Assurances, in 

particular FAA Grant Assurance #25. The State of Nevada does not directly assess 

any Aviation Gas (AvGas) or Jet Fuel Taxes by itself, however Nevada does enable 

a uniform imposition of the assessments and collections of fuel taxes at a local level 

through Nevada Revised Statues (NRS). 

Specific State Statues primarily NRS 365.170 and NRS 365.203 may be used to 

impose a 2c/gallon on A vGas and lc/gallon on Jet Fuel. Alternatively the option to 

impose fuel taxes under NRS 365.203 at any airport may be selected to use as a 

means to impose a fuel tax at a maximum rate of 4c/gallon on Jet Fuel, and 

Be/gallon on AvGas. Tax revenues are rendered from fuel dealers I distributors 

directly back to the State and are credited to the county or airport sponsor where 

the fuel was delivered. As such The State of Nevada participates in the obligations 

under FAA Grant Assurance 1125 by transferring the revenue, becomes responsible 

under Federal Amendment (79 Fed. Reg. 6628) revised FAA Policy noted above 

based on those Dealer fuel collections at airports. Most of the 31 obligated airport 

sponsors acting under local governing bodies such as cities and/or county boards of 

commissioners in Nevada are imposing AvGas or Jet Fuel taxes and other related 

airport fees that the existing NRS enable. 

Local governments of individual counties and/or their cities' ordinances are used to 

select, assess, and receive those tax revenues back from the State. Again, the 

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January 6, 2016 Federal Aviation Administration Fuel Taxes 

enabling legislation is provided for within the State's NRS. One noted deviation 

from this revenue flow is that the State renders revenue directly to the Civil Air 

Patrol from those taxes collected at each facility that was imposed under NRS 

365.565. 

The following table lists each known obligated civil airport sponsors and 

governance entities in Nevada to focus further on each of the 31 FAA obligated 

NPIAS airports: 

· HND CLARK LAS VEGAS HENDERSON EXECUTIVE CLARI<COUNn' 

LAS CLARK . LAS VEGAS MC CARRANINTL CLARK COUNTY 

U08 .. : CLARK OVERTON PERKINS FIElD CLARK COUNTY .. 

yc:;r "-CLARK LASVEGAS NORTHLASVEGAS CLARKCOUNTY 

06U ELKO JACKPOT JACKPOT/HAYDEN FIElD EtXOCOUNTY 

EI<O ELKO ELKO EU<O RGNL CllYOF ELKO 

LWL ELKO WELlS WELts MUNJJHAR1UBT FIELD err OF WELLS 

;r~,r; LANDBR"- ·AUSTIN'::::···;·· ~-.:~AUSTIN:'<: '• ' .. ·;•{<t, .··•· LANDERCOUNTY ____ :) -·- ";; .:.v 

lLl<' liNCOLN PANACA UNCOlNCOUNTY .;';···· LINCOLNCOUNTY .··· .•••... ·,· ·,·· 

:;1.92 -,LINCOLN ·... ALAMO ::: . ALAMO LANDING FIELD. :•:-, LINCOLN COUNTY.,.·. •'• . 

043 i LYON>' •. ;:;: YERINGTON ' · : -;; YERINGTON MUNL--.: ·•·;:·; >:) CllY,OF.'YERINGTON > /'':''' ;•:.::> · .. , > ::·•• 

_,:spz:;. LYON •• ~<'.· +t. SD.VER.SPRINGSJ' ''. sn.VERSPRINGS' .·•· ··: .•. ' LYON COUNTY .. , ';,: , : < 

BTY-: NYE;<•-:- ' i/ BEA'ITY.''i-''E '•. BRATl'Y .. :: . ... '-- ·,; N'iECOUNlY}; -- ·• •; '/:.:> •- ;.;: . · · /,"':·. 

GAB: Nni 'Y/1' GABBS'1 - _:_;;-j:j; • GABBS::·;; . - · NYECOUN1i:--.~·· · Y/ ' > ,. __ TPH: NYE : ·:->•- TONOPAH' ---·- TONOPAH:•·::··-c · ; .• NYECOUNlY' _:•_ • •;:; · - ;:< 

RNO: WASHOE RENO RENQffAHOE.INTL RENO-TAHOE .AIRPORT AU'IHORITY 

RTS WASHOE RENO RENO/STEAD RENOTAHOEARPT AtrrH 

CXP CARSON CITY CARSON CITY CARSON CARSON CITY AIRPORT AUTHORITY 

FLX CHURCHILL FALLON FALLONMUNI CITYOFFALLON 

OL9 CLARK OVERTON EGIOBAY lAKE MEAD NATL REC AREA 

67L CLARK MESQUITE MESQUITE CITY OF MESQUITE 

BVU CLARK BOULDEROTY BOULDER CITYMUNI BOULDER CITY MUNICIPALITY 

MEV DOUGLAS MINDEN MINDEN-TAHOE DOUGLAS COUNTY 

IOU ELKO OWYHEE OWYHEE SHOSHONE PAIUTE TRIBES 

osu EUREKA EUREKA EUREKA COUNTY OF EUREKA 

WMC HUMBOLDT WINNEMUCCA WINNEMUCCA MUNI CITY/COUNTY OF WINNEMUCCA 

HTH MINERAL HAWTHORNE HAlVTHORNE INDUSTRIAL MINERAL COUNTY 

LOL PERSHING LOVELOCK DERBY FIELD PERSHING COUNTY 

ELY WHITE PINE ELY ELY ARPT /YELLAND FLO/ WHITE PINE COUNTY 

r 

I 
January 6, 2016 Federal Aviation Administration Fuel Taxes 

Airport Sponsor Summaries: 

A. The preceding table illustrates, 5 facilities are owned and operated by Oark 

County, 3 facilities each by Elko & Nye Connties, and 2 facilities are 

sponsored by Lander, Lincoln, Lyon, and Washoe Connties respectively. 

B. Oark County has elected to impose AvGas & Jet Fuel taxes at all of their 

owned and operated facilities. Elko County does assess and collect Avgas & 

Jet Fuel taxes at all of their facilities dispensing fuel, as does Nye County. 

C. Individually, Lander, Lincoln, Lyon and Washoe Counties also assess and 

collect AvGas & Jet Fuel Taxes at their 2 sponsored facilities each. 

D. Washoe Connty has assessed an aircraft registration fee to aircraft owners 

who base aircraft at their sponsored airports. 

E. The City and County of Carson Oty has elected to impose an A vGas & Jet 

Fuel taxes at the Carson City Airport. 

F. The City of Fallon does assess and collect AvGas & Jet Fuel taxes at Fallon 

Municipal Airport. 

G. Boulder City Airport does assess and collect AvGas & Jet Fuel Taxes and 

uses those revenues as income directed to the Boulder Oty Municipal 

Airport. As the airport also resides in Oark County additional investigation 

is needed to verify the direction of any possible revenue or assessment of 

those funds. 

H. Douglas County does assess and collect AvGas & Jet Fuel Taxes at the 

Minden-Tahoe Airport and those revenues are directed to the Minden-Tahoe 

Airport as income. 

I. The City of Mesquite does assess and collect AvGas & Jet Fuel taxes at the 

Mesquite Airport, as they are also in Clark County and additional 

investigation is needed to verify the possible collection of county funds also. 

4 
January 6, 2016 Federal Aviation Administration Fuel Taxes 

J. Echo Bay Airport in Oark County has never sold fuel to the best of our 

knowledge. Listed in the NPIAS, the facility is owned and operated by the 

Lake Mead Recreational Area. 

K. Owyhee Airport, owned and operated by the Shoshone Paiute Tribes and 

has never sold fuel to our knowledge. The Owyhee Airport is in Elko 

County. 

L. The County of Eureka does assess and collect AvGas & Jet Fuel Taxes at the 

Eureka Airport. 

M. Humboldt County does assess and collect AvGas & Jet Fuel Taxes at 

Winnemucca Municipal Airport. 

N. Mineral County does assess and collect AvGas & Jet Fuel taxes at the 

Hawthome Industrial Airport. 

0. Pershing County does assess and collect AvGas & Jet Fuel taxes at the 

Lovelock/Derby Field Airport. 

P. White Pine County does assess and collect AvGas & Jet Fuel taxes at the Ely 

Airport I Yell and Field. 

Thank you for your kind consideration of this action plan. 

Sincerely, 

Rudy Malfabon, P.E. 

Director 

Cc: Joe Reynolds, Governor Sandoval's Office 

5