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[Federal Register Volume 65, Number 235 (Wednesday, December 6, 2000)]
[Notices]
[Pages 76340-76345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31091]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Pilot Program To Permit Cost-Sharing of Air Traffic Modernization 
Projects

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of final program guidance; request for sponsors' 
expressions of interest for air traffic modernization cost-sharing 
projects for fiscal years 2001, 2002, and 2003.

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SUMMARY: On August 14, 2000, the FAA issued proposed program guidance 
on Section 304 of the Wendell H. Ford Aviation and Investment Reform 
Act for the 21st Century (AIR-21), which authorizes a pilot program for 
cost-sharing of air traffic modernization projects. The FAA is now 
issuing final program guidance and is requesting sponsors' expressions 
of interest for cost-sharing projects for fiscal years 2001, 2002, and 
2003. The comments that the FAA received on the proposed guidelines and 
FAA's responses can be found below under the heading SUPPLEMENTARY 
INFORMATION. The purpose of Section 304 is to improve aviation safety 
and enhance mobility by encouraging non-Federal investment on a pilot 
program basis in critical air traffic control facilities and equipment. 
Under the pilot program, the Secretary of Transportation may make 
grants to eligible project sponsors for not more than ten eligible 
projects, with each project limited to Federal funding of $15,000,000 
and a 33 percent Federal cost share. A project sponsor may be a public-
use airport (or a group of public-use airports), or a joint venture 
between a public-use airport (and a group of public-use airports) and 
one or more U.S. air carriers.

DATES: Initial sponsors' expressions of interest should be received by 
the FAA's Air Traffic System Requirements Service on or before January 
19, 2001.

ADDRESSES: Sponsors' expressions of interest should be mailed or 
delivered, in duplicate, to the Federal Aviation Administration, Air 
Traffic System Requirements Service (ARS-1), Room 8206, 400 7th Street, 
SW, Washington, DC 20590. Electronic submissions of expressions of 
interests will not be accepted. Deliveries may be made between 8:30 
a.m. and 5 p.m. weekdays, except Federal holidays. An electronic copy 
of this notice may be downloaded using a modem and suitable 
communications software from the FAA regulations section of the 
FedWorld electronic bulletin board service (telephone: 703-321-3339) or 
the Government Printing Office's electronic bulletin board service 
(telephone: 202-512-1661).

FOR FURTHER INFORMATION CONTACT: Ward Keech (202-267-3312) or Charles 
Monico (202-267-9527), Office of Aviation Policy and Plans (APO), 
Federal Aviation Administration, 800 Independence Avenue, SW, 
Washington, DC 20590.

SUPPLEMENTARY INFORMATION

1. Background

    In performing its mission of providing a safe and efficient air 
transportation system, the FAA operates and maintains a complex air 
traffic control system infrastructure. Section 304 of the Wendell H. 
Ford Aviation and Investment Reform Act for the 21st Century (AIR-21) 
authorizes a pilot program to permit cost-sharing of air traffic 
modernization projects, under which airports and airport/airline joint 
ventures may procure and install facilities and equipment in 
cooperation with the FAA. The purpose of Section 304 is to improve 
aviation safety and enhance mobility in the air transportation by 
encouraging non-Federal investment on a pilot program basis in critical 
air traffic control facilities and equipment. The pilot program is 
intended to allow project sponsors to achieve accelerated deployment of 
eligible facilities or equipment, and to help expand aviation 
infrastructure.
    This notice responds to congressional direction that the FAA issue 
advisory guidelines on implementation of the pilot program.

2. Responses to Comments Requested in August 14, 2000 Federal 
Register Notice

    The August 14, 2000, notice requested comments on FAA's proposed 
program

[[Page 76341]]

guidance. The comments that the FAA received on the proposed guidelines 
and FAA's responses to those comments are summarized below:
    a. A commenter suggested that the guidance should clearly allow and 
explicitly acknowledge that project facilities, equipment and 
automation tools may or may not be transferred to the FAA for operation 
and maintenance. The commenter points out that the proposed guidance 
did not exclude the possibility that certain pilot projects will not be 
transferred to the FAA for operation and maintenance. The FAA agrees 
with this comment. It was not the intent of the stature or the FAA to 
require project transfer. The FAA has changed the guidance to clarify 
that the project sponsor may elect to transfer or not transfer the 
project to the FAA. The FAA has also clarified the requirement that, at 
the time of transfer, the project should be operable and maintainable 
by the FAA and should comply with FAA Order 6700.20, Non-Federal 
Navigational Aids and Air Traffic Control Facilities, or any successor 
Order then in effect. The FAA has also clarified the requirement that, 
if the project is not transferred to the FAA, the sponsor remains 
liable for all operations and maintenance costs, including the costs of 
capital sustainment.
    b. A commenter objected to the proposed criterion that the project 
be consistent with FAA's air traffic equipment/systems infrastructure 
and architecture. The FAA does not concur. It is essential that a pilot 
project be compatible and consistent with FAA's air traffic equipment/
systems infrastructure and architecture because FAA is statutorily 
liable for operating and maintaining the project if the sponsor elects 
to transfer it to the FAA.
    c. A commenter objected to the proposed criterion that the project 
be a validated project of an FAA program. The FAA does not concur. By 
statute, funding to carry out the Federal share of the program may be 
available from amounts authorized to be appropriated under 49 U.S.C. 
48101(a) (FAA's Facilities and Equipment authorization) for fiscal 
years 2001 through 2003. Given that there are no specifically 
appropriated funds for the pilot program, FAA has chosen to limit pilot 
program eligibility to validated projects of FAA programs. To do 
otherwise could result in Federal funding of pilot program projects at 
the expense and exclusion of non-pilot program projects which are 
generally expected to yield greater returns to the safety and 
efficiency of the air transportation system.
    d. A commenter expressed concern about the proposed criterion that 
project hardware have a useful and expected life of ten years or more. 
The commenter noted that the requirement is impractical as applied to 
commercial off-the-shelf computers which cannot be maintained cost-
effectively for more than 5 years or so after the purchase date. The 
FAA acknowledges the merit of this comment. The FAA has changed the 
criterion to ``the project should have a useful and expected life of 
ten years or more, notwithstanding the possible need to replace project 
components during its operating life.''

3. Final Program Guidance

    This section restates the statutory language of AIR-21 Section 304 
and outlines FAA's supplementary criteria for the pilot program. FAA's 
evaluation and screening criteria are outlined in Section 3.6 of this 
notice.

3.1  Eligible Project Sponsors

3.1.1  Statutory Provisions for Sponsor Eligibility
    The term ``project sponsor'' means a public-use airport or a joint 
venture between a public-use airport and one or more air carriers.
3.1.2  Supplementary FAA Criteria for Sponsor Eligibility
    An eligible project sponsor is a public-use airport (or group of 
airports), either publicly or privately owned, acting on its own or in 
a joint venture with one or more U.S. air carriers. All landing 
facilities meeting these criteria are eligible, including but not 
limited to commercial service airports, reliever airports, general 
aviation airports, heliports, etc. All eligible sponsors are encouraged 
to participate.

3.2  Eligible Projects

3.2.1  Statutory Provisions for Project Eligibility
    The term `eligible project' means a critical project relating to 
the Nation's air traffic control system that is certified or approved 
by the Administrator and that promotes safety, efficiency, or mobility. 
Such projects may include:
    a. airport-specific air traffic facilities and equipment, including 
local area augmentation systems, instrument landings systems, weather 
and wind shear detection equipment, lighting improvements, and control 
towers;
    b. automation tools to effect improvements in airport capacity, 
including passive final approach spacing tools and traffic management 
advisory equipment; and
    c. facilities and equipment that enhance airspace control 
procedures, including consolidation of terminal radar control 
facilities and equipment, or assist in en route surveillance, including 
oceanic and offshore flight tracking.
    The statute limits the pilot program to 10 eligible projects.
3.2.2  Supplementary FAA Criteria for Project Eligibility
    a. The project should be consistent with FAA's air traffic 
equipment/systems infrastructure and architecture and should be a 
validated project of an FAA program. The project should be initiated 
within two years of project approval and completed/commissioned within 
five years of project approval (allowing for an environmental impact 
study (if necessary), acquisition, supply support, training programs, 
etc.).
    b. Equipment and facilities should meet applicable FAA advisory 
circulars nad specifications. New or modified computer software is 
eligible if it meets all other criteria.
    c. The project should serve the general welfare of the flying 
public; it should not be used for the exclusive interest of a for-
profit entity.
    d. Any facility/equipment acquired under the project should be a 
new asset, not an asset that the sponsor has already acquired or 
committed to acquiring. Either the FAA or the sponsor may use its 
acquisition authority and acquisition vehicles to procure and install 
facilities and equipment under the pilot program. In the case where the 
FAA manages the procurement, existing FAA contracts will be used where 
possible. Unless otherwise stipulated in the agreement executed between 
the sponsor and the FAA, liability for cost over-runs will be shared 
between the FAA and the sponsor in accordance with their project cost 
shares (however, the FAA's total cost share is limited by statute to 
$15,000,000 per project). Equipment in FAA's inventory that has not 
been previously adopted qualifies as eligible equipment.
    e. The project should have a useful and expected life of ten years 
or more, notwithstanding the possible need to replace project 
components during its operating life.
    f. If a sponsor submits more than one project nomination, each 
project should form part or all of an integrated system.
    g. A project may not be co-mingled with other FAA cost-sharing 
programs (e.g., the provisions of AIR-21 Section 131 that authorize 
cost-sharing programs for airport traffic control tower operations and 
construction).

[[Page 76342]]

    h. All equipment and structures should meet OSHA standards for 
employee safety and fire protection. Where land is involved, the 
property should meet all environmental compliance requirements, 
including noise, hazardous material, property access, and zoning 
rights.
    i. A project may not create an increase in the controller or 
airways facility workforces during the pre-transfer period (see section 
below titled ``Transfer of Facility or Equipment to FAA'').

3.3  Funding

3.3.1  Statutory Provisions for Funding
    The Federal share of the cost of an eligible project carried out 
under the pilot program shall not exceed 33 percent. No project may 
receive more than $15,000,000 in Federal funding under Section 4810(a) 
of Title 49, United States Code (FAA's Facilities and Equipment 
appropriation). The Secretary shall use amounts appropriated under 
Section 48101(a) for fiscal years 2001 through 2003 to carry out the 
program.
    The sponsor's share of the cost of an eligible project shall be 
provided from non-Federal sources, including revenues collected 
pursuant to Section 40117 of Title 49, United States Code (passenger 
facility charges).
3.3.2  Supplementary FAA Criteria for Funding
    FAA is not obligated to fund one-third of the total projects costs; 
rather, FAA's share may not exceed this threshold. The project sponsor 
must provide two-thirds or more of the total project cost. The Federal 
and non-Federal shares of project cost may take the form of in-kind 
contributions. If selected for the pilot program, a sponsor may use 
passenger facility charge (PFC) revenues to acquire and install 
eligible facilities and equipment, but not to fund their operation or 
maintenance. Normal PFC processing procedures under Federal Aviation 
Regulation 14 CFR Part 158 will be used to approve the imposition of a 
PFC or the use of PFC revenue as the non-Federal share of a pilot 
program project.
    Project funding may be effected through a grant, a cooperative 
agreement, or other applicable instrument. Non-Federal matching 
contributions applied to any other Federal project or grant may not be 
used to satisfy the sponsor's cost share under this pilot program. FAA 
may utilize equipment in its inventory that has not been previously 
deployed.
    The following criteria apply to the calculation of the cost-sharing 
ratio:
    a. Project costs are limited to those costs that the FAA would 
normally incur in conventional facilities and equipment funding (e.g., 
if land/right-of-way must be acquired or leased for a project, its cost 
can be included in the cost-sharing ratio only if FAA would otherwise 
incur it in conventional program funding).
    b. Operations and maintenance costs of the project, both before and 
after any sponsor-elected project transfer to the FAA, will not be 
considered as part of the cost-share contribution.
    c. Non-federal funding may include cash, substantial equipment 
contributions that are wholly utilized as an integral part of the 
project, and personnel services dedicated to the proposed project prior 
to commissioning, as long as such personnel are not otherwise supported 
with Federal funds. The non-federal cost may include in-kind 
contributions (e.g., buildings). In-kind contributions will be 
evaluated as to whether they present a cost that FAA would otherwise 
incur in conventional facilities and equipment funding.
    d. Aside from in-kind contributions, only funds expended by the 
sponsor after the project approval date will be eligible for inclusion 
in the cost-sharing ratio.
    e. Unless otherwise specified by these criteria, the principles and 
standards for determining costs should be conducted in accordance with 
OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal 
Governments.
    f. As with other U.S. DOT cost-sharing grants, it is inappropriate 
for a management/administrative fee to be included as part of the 
sponsor's contribution. This does not prohibit appropriate fee payments 
to vendors or others that may provide goods or services to support the 
project.
    By statute, funding to carry out the Federal share of the program 
may be available from amounts authorized to be appropriated under 49 
U.S.C. 48101(a) (FAA's Facilities and Equipment authorization) for 
fiscal years 2001 through 2003. FAA funding decisions will be made in 
concert with the project evaluation and project selection processes 
discussed later in this notice. FAA may choose to use specifically 
appropriated funds, to re-program funds from within existing facilities 
and equipment project appropriations, or to fund from within existing 
budget line items.
    The U.S. Department of Transportation and the Comptroller General 
of the United States have the right to access all documents pertaining 
to the use of Federal and non-Federal contributions for selected 
projects. Sponsors should maintain sufficient documentation during 
negotiations and during the life of the project to substantiate costs.

3.4  Transfer of Facility or Equipment to FAA

3.4.1  Statutory Provisions for Facility or Equipment Transfer
    Notwithstanding any other provision of law, project sponsors may 
transfer, without consideration, to the FAA, facilities, equipment, and 
automation tools, the purchase of which was assisted by a grant made 
under this section. The FAA shall accept such facilities, equipment, 
and automation tools, which shall thereafter be operated and maintained 
by the FAA in accordance with criteria of the FAA.
3.4.2  Supplementary FAA Criteria for Facility or Equipment Transfer
    Project transfer to the FAA will be at the sponsor's election. At 
the time of transfer, the project should be operable and maintainable 
by the FAA and should comply with FAA Order 6700.20, Non-Federal 
Navigational Aids and Air Traffic Control Facilities, or any successor 
Order then in effect. If the project is not transferred to the FAA, the 
sponsor remains liable for all operations and maintenance costs, 
including the costs of capital sustainment.
    In the event of transfer, software code, data rights, and support 
tools should be provided to the FAA at no cost to the FAA.

3.5  Application Procedures

    Application to the pilot program consists of two phases, as 
described below. The purpose of Phase 1 is to allow the FAA to gauge 
the level of interest, to provide preliminary responses to potential 
sponsors without causing applicant sponsors to expend excessive 
resources on project applications that have very limited chances of 
acceptance because of need or cost, and to plan for subsequent program 
implementation. In Phase 2, sponsors will provide more detailed 
applications, and final FAA evaluations/project selections will be 
completed.
3.5.1  Phase 1: Sponsor's Expression of Interest
    A Phase 1 expression of interest should reflect a meaningful 
proposal and should not be submitted by a potential sponsor as a 
placeholder. The Phase 1 submission is not binding but it should 
reflect accurate estimates of project cost and sponsor contributions. 
Sponsors should submit written

[[Page 76343]]

expressions of interest in accordance with the sections captioned 
ADDRESSES and DATES earlier in this notice. Electronic submissions will 
not be accepted. A sponsor's initial expression of interest should 
include the following:
    a. Identity of sponsor (including point-of-contact's name, mailing 
address, telephone number, fax number, and e-mail address) and all 
participating authorities or entities in the case of joint ventures.
    b. Description and location of the proposed project.
    c. Statement of need for the project, including a brief assessment 
of the projected benefits--site-specific, regional, and the national 
airspace system.
    d. Preferred project schedule, including start date, completion 
date, and any significant interim milestone dates.
    e. Statement of intent to transfer the project to the FAA, 
including envisioned date, or intent not to transfer the project to the 
FAA.
    f. Schedule of estimated project costs, including, (1) Up-front 
costs divided into proposed shares between the sponsor and the FAA, and 
(2) annual life-cycle operations and maintenance costs (both before and 
after transfer if the sponsor elects to transfer the project to the 
FAA).
    g. Self-assessment of the ability to acquire and commit the non-
Federal share of funding.
    The FAA will review and evaluate the expressions of interest 
submitted during Phase 1, using a panel of technical program experts. 
The FAA will contact the sponsor if it has questions or has suggestions 
on how the sponsor may improve its proposal. Following its evaluations 
and preliminary selections, the review panel will recommend to the 
Director of FAA's Airway Facilities Service and the Director of FAA's 
Office of System Architecture and Investment Analysis those applicant 
sponsors who should be invited to participate in Phase 2, as described 
below. These officials will notify and invite selected sponsors to 
participate in Phase 2.
3.5.2  Phase 2: Formal Application and Selection of Projects
    During Phase 2 each sponsor that has been invited to participate 
should submit an expanded application with the following elements: 
Project Description, Economic Analysis, Schedule, Financial Plan, 
Letter of Commitment, and a Letter of Acknowledgment/Support from the 
applicable State Department of Transportation and/or other appropriate 
jurisdiction. The following subsections describe the information needed 
by the FAA to evaluate the merits of each application.
    a. Project Description: The project description should contain: (1) 
The identity of the submitting sponsor (including point-of-contact's 
name, mailing address, telephone number, fax number, and e-mail 
address) and all participating authorities or entities in the case of 
joint ventures; (2) project name and location; and (3) a detailed 
project description.
    b. Economic Analysis: All applications should describe the need for 
the project and demonstrate its safety, efficiency, capacity, 
productivity, and other benefits, as applicable, at the airport, 
regional, and system-wide levels. The sponsor may conduct its own 
analysis, may opt to summarize existing analyses from FAA's acquisition 
management system, and/or may use the investment criteria in FAA Order 
7031.2C, Airway Planning Standard Number One. The analysis should 
include a schedule of project costs, including: (1) Up-front costs 
broken down into proposed shares between the sponsor and the FAA; and 
(2) annual and life-cycle operations and maintenance costs before and 
after transfer to the FAA (if the sponsor elects to transfer). The 
level of effort devoted to the analyses should be tailored to the scope 
and cost of the project. The economic analyses should be consistent 
with FAA guidance contained in Report FAA-APO-98-4, Economic Analysis 
of Investment and Regulatory Programs--Revised Guide, and Report FAA-
APO-98-8, Economic Values for Evaluation of Federal Aviation 
Administration Investment and Regulatory Programs.
    c. Schedule: the Schedule should list all significant proposed 
project dates, including the start date, completion date, date of 
project transfer to the FAA (if applicable), and key interim milestone 
dates. Sponsors are reminded that, at the time of transfer, the project 
should be operable and maintainable by the FAA and should comply with 
FAA Order 6700.20, Non-Federal Navigational Aids and Air Traffic 
Control Facilities, or any successor Order then in effect.
    d. Financial Plan: The Financial Plan should contain: (1) The 
proposed local and Federal cost shares, (2) evidence of the sponsor's 
ability to provide funds for its cost share (e.g., approved local 
appropriation or Memorandum of Agreement); and (3) any commitment the 
sponsor might choose to offer for the assumption and liability of cost 
overruns aside from the liability criterion provided earlier in this 
notice.
    e. Letter of Commitment: Sponsors should demonstrate a commitment 
to the project, as evidenced by a Letter of Commitment signed by all 
project participants (including any participating air carriers). The 
letter should, at a minimum, include a list of the participating 
agencies and organizations in the proposed project; the roles, 
responsibilities and relationship of each participant; and the name, 
address, and telephone number of the individual representing the 
sponsor.
    f. Letter of Acknowledgement/Support: The application should 
include a letter of acknowledgment/support from the applicable State 
Department of Transportation and/or other appropriate jurisdiction (to 
avoid circumventing State and metropolitan planning processes).
    The FAA will review and evaluate the Phase 2 applications using a 
panel of technical program experts, based on the criteria outlined 
below in Section 3.6. Following its evaluations, the review panel will 
prioritize and recommend to the FAA's Associate Administrator for Air 
Traffic Services and the Associate Administrator for Research and 
Acquisition those applications that it believes should be accepted. If 
the FAA selects a project for inclusion in the pilot program, an 
agreement will be executed between the sponsor and the FAA.
3.5.3  Subsequent Application and Selection Cycles (if any)
    If fewer than the statutorily-limited ten projects have been 
approved following the initial round of Phase 1 and 2 applications, FAA 
will repeat the Phase 1 and 2 application processes on an annual basis, 
until the earlier of: May 15, 2003, or that point in time when the ten 
project limit is reached (see Schedule Summary in Section 3.7 below). 
The May 15, 2003, cutoff date is based on an allowance of time for FAA 
to process Phase 2 applications and make selections prior to the 
statutory authorization expiring at the end of fiscal year 2003. FAA 
cannot and does not extend any assurance or implication that any 
residual authority will remain following the first round of Phase 1 and 
2 applications.

3.6  Application Evaluation and Screening Criteria

    The FAA will consider the following elements in evaluating 
applications:
    a. Compliance with statutory criteria, FAA's supplemental criteria, 
and application procedures
    b. Degree to which the project relates to FAA's strategic goals for 
safety,

[[Page 76344]]

efficiency and mobility, as well as the national airspace system 
architecture
    c. Impact on the airport, region, and national airspace system
    d. Likelihood of project success
    e. Availability of FAA resources
    f. Ease of administration (acquisition, installation, etc.)
    g. Ability of sponsor to provide its cost share
    h. Evidence that the project can be implemented in a timely manner
    i. Equity and diversity with respect to project type, geography, 
and population served
    j. Degree of Federal leveraging (degree to which the proposal 
minimizes the ratio of Federal costs to total project costs)
    k. Cost to the FAA: (1) up-front cost-share; and, if applicable, 
(2) post-transfer life-cycle operating and maintenance costs

3.7  Schedule Summary

------------------------------------------------------------------------
                         Milestone                               Date
------------------------------------------------------------------------
First-Round of Applications:
    Phase 1 Applications due to FAA........................    1/19/2001
    FAA Responses to Sponsors' Phase 1 Applications........    3/16/2001
    Phase 2 Applications due to FAA........................     6/1/2001
    FAA Announcement of First-Round Approvals..............    7/13/2001
Second-Round of Applications (if needed):
    Phase 1 Applications due to FAA........................   12/14/2001
    FAA Responses to Sponsors' Phase 1 Applications........    2/15/2002
    Phase 2 Applications due to FAA........................    5/15/2002
    FAA Announcement of Second-Round Approvals.............    7/15/2002
Third-Round of Applications (if needed):
    Phase 1 Applications due to FAA........................   12/13/2002
    FAA Responses to Sponsors' Phase 1 Applications........    2/14/2003
    Phase 2 Applications due to FAA........................    5/15/2003
    FAA Announcement of Third-Round Approvals..............    7/15/2003
------------------------------------------------------------------------

3.8  Project Implementation Information

    During the life of the project, the FAA may collect data from the 
sponsor and conduct (with non-project funds) independent evaluations of 
the project's impact on safety, efficiency, and mobility objectives. 
This will allow the FAA to ascertain the success of the pilot program. 
The life of the program is currently limited by AIR-21 to the end of 
fiscal year 2003.

4. Impact of Final Guidelines

    Potential costs and benefits of the final guidelines have been 
reviewed consistent with the intent of Executive Order 12866 
(Regulatory Planning and Review), the Regulatory Flexibility Act of 
1980, Executive Order 13132 (Federalism), Office of the Secretary of 
Transportation direction on evaluation of international trade impacts, 
and the Unfunded Mandates Reform Act of 1995.
    With respect to the focus of Executive Order 12866, there are no 
significant costs imposed by the guidelines. The benefit of the 
guidelines is efficient communication between the FAA and potential 
project sponsors about the basis and timing which the FAA will employ 
in selecting pilot program projects and the type of information needed 
by the FAA to evaluate proposed projects. Potential pilot program 
project sponsors will only apply for consideration if they believe that 
they will benefit from consideration. To minimize the costs of 
application, the guidelines encourage sponsors to provide information 
wherever possible from existing studies, plans, and other documents. 
Further, the guidelines request that initial project proposals provide 
limited detail about the project. Potential sponsors will be asked for 
additional information only if the FAA believes that the proposal meets 
the objective of the pilot program based on the limited initial 
information submission. Facilities and equipment currently incorporated 
in the federal airport and airway system architecture and approved for 
acquisition will be implemented, regardless of whether they are 
selected as a pilot project. Further, in implementing the pilot 
program, the FAA will not alter the sequence of implementation of 
system architecture in a manner that would delay achieving overall 
safety or efficiency benefits. Therefore, the FAA believes that the 
benefits of the final guidelines exceed their costs.
    Airports that are considered small entities may apply to sponsor or 
participate in pilot projects. Small airports are defined by the Small 
Business Administration as airports owned by local governments for 
areas with populations of 200,000 or less. Program participation is 
voluntary and, as explained above, the cost of application is not 
considered significant. Because, by statute, the majority of project 
funding must be provided by the sponsor, few small airports or airlines 
are likely to elect to participate in the pilot program. Therefore, the 
FAA certifies that the final guidelines will not have a significant 
economic impact on a substantial number of small entities.
    The FAA has analyzed the final guidelines under the principles and 
criteria of Executive Order 13132, Federalism. With few exceptions, 
States do not directly own or operate airports, but public airports are 
frequently owned and operated by either regional transportation 
authorities or local governments. The pilot program authorized by 
Congress which is the subject of these guidelines does not require 
participation by States, regional transportation authorities, or local 
governments, but rather permits the formation of a voluntary 
partnership between the FAA, airports, and airlines on projects 
considered to be of mutual benefit. These projects will ultimately be 
paid for by air passengers and shippers, either through fares or 
freight tariffs, airport charges, or aviation user taxes. FAA 
facilities and equipment are currently financed by passenger and 
shippers through aviation user taxes. Program guidelines described in 
this notice are intended to facilitate communication necessary to 
implement the pilot projects. By entering into these cooperative 
relationships, the FAA will not abrogate its responsibilities for the 
provision and maintenance of air traffic control and airway facilities 
and equipment, but rather may expedite the implementation of such 
facilities and equipment. In the absence of the pilot program, the 
facilities and equipment would ultimately be provided by the federal 
government and paid for by airline passengers and shippers. Once 
completed, the projects will be operated and maintained as a part of 
the federal airway system, if the sponsor elects to transfer the 
project to the FAA. The FAA has determined that this action does not 
have a substantial direct effect on the States, on the relationship 
between the national Government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
Therefore, the FAA has determined that these guidelines do not have 
federalism implications.
    The final guidelines will not impose a competitive advantage or 
disadvantage on either U.S. air carriers operating abroad or on foreign 
carriers operating to and from the United States. Further, these 
guidelines, per se, will have no effect on the sale of foreign aviation 
products or services in the United States, nor will they have any 
effect on the sales of U.S. aviation products in foreign countries. To 
the extent that

[[Page 76345]]

pilot program projects improve aviation safety and airport and airway 
system efficiency, both domestic and foreign commerce will generally be 
enhanced.
    The final guidelines do not create a federal mandate. Therefore, 
the requirements of Title II of the Unfunded Mandates Reform Act of 
1995 do not apply.

5. References

    The following list outlines references cited above:
    OMB Circular A-87, Cost Principles for State, Local, and Indian 
Tribal Governments, revised August 29, 1997.
    Report FAA-APO-98-4, Economic Analysis of Investment and 
Regulatory Programs--Revised Guide. Available upon request from the 
FAA's Office of Aviation Policy and Plans, telephone 202-267-3308. 
It may also be found on the Internet at: http://api.hq.faa.gov/apo_pubs.htm.
    Report FAA-APO-98-8, Economic Values for Evaluation of Federal 
Aviation Administration Investment and Regulatory Programs. 
Available upon request from the FAA's Office of Aviation Policy and 
Plans, telephone 202-267-3308. It may also be found on the Internet 
at: http//api.hq.faa.gov/apo_pubs.htm.
    FAA Order 7031.2C, Airway Planning Standard Number One, through 
Change 12. Available upon request from the FAA's Office of Aviation 
Policy and Plans, telephone 202-267-3308.
    FAA Order 6700.20, Non-Federal Navigational Aids and Air Traffic 
Control Facilities. Available upon request from the FAA's NAS 
Operations Program Office, telephone 202-267-3034.

    Issued in Washington, DC on November 30, 2000.
Nan Shellabarger,
Deputy Director, Office of Aviation Policy and Plans.
[FR Doc. 00-31091 Filed 12-5-00; 8:45 am]
BILLING CODE 4910-13-M
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