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SENT VIA EMAIL: James.T.Brown@faa.gov 

December 8, 2015 

Mr. James T. Brown 

Finance Management 

Federal Aviation Administration 

800 Independence Avenue SW 

Washington, DC 20591 

Dear Mr. Brown: 

File Number 1500100 

SUBJECT: Compliance with a Federal Aviation Administration Requirement 

for a Submitted "Action Plan" Due by December 8, 2015: Federal 

Aviation Administration Policy and Procedures Concerning the Use 

of Airport Revenue; Proceeds from Taxes on Aviation Fuel 79, Fed. 

Reg 66282, November 7, 2014). Revenue Implications, Concerns 

with Implementation Requirements, and Other Issues. Suggested 

Action Consideration 

The San Diego County Regional Transportation Commission (Commission) was 

notified on the above-referenced rule after its final adoption and via a private 

party. Neither the Commission nor its advocates or industry representatives 

were aware of the rulemaking process surrounding this policy change. 

The Commission is concerned and impacted by this rul ing because TransNet 

sales tax, a local half-cent tax dedicated to transportation, is collected at San 

Diego International Airport, McClellan-Palomar Airport and other applicable 

San Diego County airports. State and local governments provide many services 

to the airports that are funded from general sales taxes, including 

infrastructure, transportation, fire and public safety. Other services include: 

lighting, security, roadways, buildings and terminals, and noise controls, etc., 

and these far exceed aviation fuel revenues. The funding makes sure that 

airports remain viable and meet the needs of local businesses and 

communities. Specifically in San Diego County, the TransNet sales tax funds 

regional transportation projects, including highways, express lanes and light 

and commuter rail infrastructure that support the efficient access to and the 

financial viability of San Diego International Airport, McClellan-Palomar 

Airport and other regional airports. TransNet also provides funding to local 

agencies to provide congestion rel ief and maintenance to the local street and 

arterial network that directly connects to airports. In some cases, state and 

local governments or airport authorities use tax-exempt bonds to fund major 

capital improvements. The redirecting of these revenues creates an unfair 

burden for jurisdictions that must pay for the services for the entities 

benefiting from the ruling shift. 
Also note that California's Proposition 172 (Public Safety Augmentation Fund) is a permanent statewide half cent (0.5% tax rate) sales tax that is collected by the State Board of Equalization and 

allocated back to all the counties based upon their proportionate share of sales tax. Within each 

county, those funds are distributed based upon proportion of educational revenue augmentation 

funds (ERAF) loss. (Please refer to www.californiacityfinance.com/ERAFfacts.pdf for additional 

information.) There is not an easy nexus between the 1 percent and Proposition 172. These funds have 

already been earmarked for local public safety purposes. 

We are also concerned with the Federal Aviation Administration's (FAA's) position/belief that 

"Federalism implications (if any) are substantially mitigated because of the prior legislative intent." 

The final policy amendment does impose substantial direct requirement costs on state and local 

governments, and should have been subjected to Federalism implications. Local jurisdictions rely on 

state and national organizations for policy direction on those issues impacting our interests. These 

include, for example, the National League of Cities, California State Association of Counties, United 

States Conference of Mayors, Governance Finance Officers Association. The FAA adoption of the 

ruling has caught our own local community off guard. The cost, loss of revenues, and current and 

future workload involved as a result of this unforeseen ruling is substantial. 

In consideration of the broader concerns outlined above, we request that the FAA consider a reevaluation or immediate sunset of the ruling and commence an open and full public process 

discussion with all stakeholders to ensure full participation by impacted parties. 

While the Commission believes that an "action plan" is not required by the terms of the abovereferenced policy, it submits the following without waiver of any claim, right or action: 

Action Plan: Applicable Law 

• Local: TransNet local retail transactions and use tax . 

• State: California's Department of Finance (DOF) will provide guidance on any laws, regulations, 

and procedures that may need amending. 

Action Plan Requirement: Tracking Svstem 

• The Commission, in conjunction with its sales tax consultant, has commenced trying to identify 

sales and use tax revenue to comply with the requirement. For implementation purposes, there 

is going to be an issue with some of the taxpayers that comingle sales tax reporting of their 

retail gas station locations not at an airport and/or non-fuel related sales and their jet fuel sales. 

The internal process to undertake this effort - which is to identify, track, and segregate the 

revenue - is extensive; a process is being develop for the reporting requirements and tracking 

systems for discrete information on aviation fuel tax revenues. We would appreciate it if the 

FAA provided a descriptive definition of the requirements for the mandated "tracking system." 

Acton Plan Requirement: Transition Period 

• It is the Commission's intent to comply with the requirements set forth and will notify the FAA 

if a reasonable transition period (not to exceed three years) is needed to become compliant 

with the rule. 

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We appreciate the FAA's consideration of this request and look forward to working with your team 

and others impacted by this ruling. 

GGA/ADO/asa 

cc: Senator Dianne Feinstein 

Senator Barbara Boxer 

Congressman Juan Vargas 

Congressman Duncan Hunter 

Congresswoman Susan Davis 

Congressman Darrelllssa 

Congressman Scott Peters 

Jay Chamberlain, California Department of Finance 

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