San Francisco County Transportation Authority 1455 Market Street, 22nd Floor San Francisco

,California 94103 415.522.4800
FAX 415

.522

.4829 December

8, 2015

info@sftta.org www

.sfcta

.org James Brown Office of Finance and Management Federal Aviation Administration 800 Independence Avenue, SW Washington, DC 20591 Subject: Federal Aviation Administration Policy onProceeds from Aviation Fuel Taxes Dear Mr. Brown: I am writing in response
tothe Federal Aviation Administration's (FAA's) Policy and Procedures Concerning the Use of Airport Revenue, (79 Fed. Reg. 66282, November

7, 2014). The San Francisco County Transportation Authority administers the Prop K transportation half-cent sales tax.San Francisco voters approved Prop K, the "San Francisco County Transportation Authority Reauthorization Ordinance,"

in 2003. In accordance with State law, Prop K continues
in effect the existing local transactions and usetax (commonly referred
toasthe "sales and usetax") of one-half of one percent approved by the votersas Prop B in 1989 and authorizes implementation

of anew 30-year Expenditure Plan identifying projects and programs
tobe funded by the sales and usetax. (See City and County of San Francisco Municipal Code section 1401; California Government Code sections 6001 et seq.[Sales and Use Tax Law] 7251 et seq.; [Transactions and Use Tax Law]; Public Util. Code sections 1331000
et seq. [Bay Area County Traffic and Transportation Funding Act].) The San Francisco transportation half-cent local sales and usetaxfor transportation

is considered
anadd-on taxand is levied in a taxing district that corresponds

toand is limited by the boundaries
of San Francisco County (the "District"). The taxis imposed onall retailers
in the District for the sale, storage,useorother consumption

of all tangible personal propertythe in the District (Municipal Code section 1406, 1408). We have determined that the San Francisco transportation half-cent local sales and usetaxfor transportation

is notlevied atSFO because SFO is notwithin the taxing District. Furthermore,
the Municipal Code exemptsfrom the taxsales toand use by operators
of aircraft tobe used orconsumed principally and directly and exclusively

ascommoncarriers both within and outside the District (Municipal Code sections 1412(b)(1), (c)(2)). For these reasons,the San Francisco transportation half-cent local sales and usetaxfor transportation

is not impacted by the FAA's Policy and Procedures Concerning the Use of Airport Revenue. We have also confirmed that no portion of Bradley-Burns
tax revenue,or anyother tax revenuethat is levied atSFO by San Mateo County and apportioned

tothe County of San Mateo and the City and County of San Francisco by the California Board of Equalization, is received by the San Francisco County Transportation Authority. Finally,

I would like tonotethat the San Francisco County Transportation Authority did notreceive anyinformation directly from the FAA about this policy

.We heard about it though the San Francisco Airport Director about onemonth ago.We subsequently notified other local transportation sales taxauthorities acrossthe State of California, most Plan

,Fund, Deliver COMMISSIONERS Scott Wiener CHAIR Malia Cohen VICE CHMR John Avalos London Breed David Campos Julie Christensen Mark Farrell Jane K

i m Eric Mar Katy Tang Norman Yee Tilly Chang EXE<-UTIVE OIREUORBrown, 12.08.15 Page
2 of 2 of whom were unaware of this regulation which could have significant impacts on voterapproved local sales tax measures around the country. The FAA may wish to review its outreach policies, and adopt

a more comprehensive approach
to outreach
to government bodies potentially impacted by the Policy and Procedures Concerning the Use of Airport Revenue or similar matters going forward. Please do not hesitate to contact Deputy Director for Finance and Administration Cynthia Fong

( cynthia

. fong@sfcta

.org or 41.5522

.828) should you have any questions related to the Prop K half-cent local sales tax for transportation

in this matter. Sincerely, **~** Executive Director cc: Chair Wiener S. L. Bregman,

J. Martin,

J. Potter

-SFO B. Rosenfeld, City & County of San Francisco Office of the Controller CF,AL,MEL