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rmen 's Association Mexico 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 reta i l 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.



### 2We 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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