Striving to h th1 But 

December 8, 2015 

Mr. Randall S. Fiertz 

Director, Airport Compliance and Management Analysis 

Federal Aviation Administration 

800 Independence Avenue SW 

Washington, DC 20591 

CHIEF EXECUTfVE OFFICE 

Stan Risen 

Chief Executive Officer 

Patricia· Hill Thomas 

Chief Operations Officer! 

Assistant Executive Officer 

Keith D. Boggs 

Assistant Executive Officer 

JodyHayes 

Assistant Executive Officer 

1010 1d~ Street, Suite 6800, Modesto, CA 

95354 

Post Office Box 3404, Modesto, CA 95353-3404 

Phone: 209.525.6333 Fax 209.544.6226 

Subject: Action Plan Submission Pursuant to FAA Policy and Procedures 

Concerning the Use of Airport Revenue (79 Fed. Reg. 66282-01, November 7, 

2014). 

Dear Mr. Fiertz: 

This letter serves as the action plan for Stanislaus County to convey its intent to 

comply with the FAA ruling related to sales tax revenues derived from aviation 

fuel sales to the extent that ruling complies with federal law. This information is 

pr-ovided based on our understanding of the required components. This includes 

the process likely necessary to amend any non-compliant local ordinances to 

achieve compliance and the development of reporting requirements and tracking 

systems for specific information on aviation fuel tax revenues which in California 

f'l1eqns "jet fuel" as other types of aviation fuels are exempt from sales tax in this 

-s-tate. 'lt. is our understanding that the State of California will be subrr.itting an 

·a-ction plan pertaining only to the state's portion of the tax. 

California's state and local governments already provide extensive services to 

airports including infrastructure maintenance, fire protection, public safety, 

environmental protection and noise abatement. These services and 

improvements are funded with general sales taxes and other taxes and 

Stanislaus County believes these local expenditures and specific dedicated 

support we provide to the local airport, exceed the sales tax revenues derived 

from the sale of aviation fuel. 

Applicable Law that May Require Amendments for Compliance 

Stanislaus County electorate passed by two-thirds majority, a 1/8 cent sales tax 

measure in 1995 and again in 1999, 2004 and 2012 to support local libraries. 

The operative date of the latest tax measure passed in 2012 commenced on July 

1, 2013. This measure is codified in Chapter 4.18 of the Stanislaus County Code 

and is known as the Stanislaus County Library Transactions and Use Tax 
Action Plan Submission Pursuant to FAA Policy and Procedures Concerning the 

Use of Airport Revenue (79 Fed. Reg. 66282-01 , November 7, 2014). 

December 8, 2015 

Ordinance. The library tax is applicable in the incorporated and unincorporated 

territory of the County of Stanislaus. It is important to note that the authorizing 

statute requires revenue from a library use tax to be spent only on library 

services and needs. The electorate cannot approve· another use for revenue 

from a special library tax. California Revenue and Taxation Code, section 

7286.59 mandates that revenue from a special library tax be used only for 

funding public library operation. As such, revenue collected from the Stanislaus 

County library tax is used only to fund county-wide library programs and 

operations, including, but not limited to, providing purchases of new materials, 

technology, story-times, programs for children and teens, and other programs 

and services. 

The only airport in Stanislaus County where this FAA ruling may have relevance 

is the Modesto City-County Airport at 617 Airport Way, Modesto, California 

95354. Our best estimate of annual revenue generated from the library tax as 

applied to jet fuel sales is approximately $3,000. Stanislaus County's approach 

is to use library tax revenue for only library purposes as required by statute. The 

estimated $3,000 in taxes derived from jet fuel is offset by other annual 

contributions to airport operations from the County General Fund for the 

operations and management of the airport that far exceeds this amount. 

In addition to the locally imposed transaction and use tax rate, Stanislaus County 

receives revenues derived from the state sales and use tax rate for the purposes 

of health and human services, criminal justice arnd transportation. These 

statewide voter-approved tax rates have been designated for specific purposes. 

It is our understanding that the state will provide an action plan response as it 

relates to necessary steps for assuring compliance related to these revenues. 

Reporting Requirement and Tracking System 

Stanislaus County in conjunction with its advisors has begun to identify the 

required data and steps necessary to comply. The internal process to undertake 

this effort, including developing a tracking system for discrete information on 

aviation fuel tax revenues, is complex and extensive. For example, the State 

Board of Equalization, the tax collection agency with which Stanislaus County 

has a contract for sales tax collections, does not require jet fuel sellers to 

segregate sales tax revenue derived from the sale of jet fuel from other types of 

taxable sales made by the same vendor. Therefore, it is presently impossible for 

Stanislaus County to determine the exact amount of sales tax derived from sales 

of jet fuel. Local agencies would need the state to change its tax reporting 

standards to require fuel sellers to quantify the amount of tax derived from the 

sale of aviation fuel to achieve compliance. Segregating and reporting the 

correct amount of tax revenue will further complicate California's already complex 

sales tax system and increase administrative costs. 

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Action Plan Submission Pursuant to FAA Policy and Procedures Concerning the 

Use of Airport Revenue (79 Fed. Reg. 66282-01 , November 7, 2014). 

December 8, 2015 

Transition Period 

If, contrary to current expectations, Stanislaus County determines our library tax 

is relevant to the FAA ruling and that County expenditures on airport capital and 

operating costs do not exceed sales tax revenues derived from aviation fuel, it 

will consider legislative solutions. It is the intent of Stanislaus County to attempt 

to comply with the requirements set forth by the FAA ruling, to the extent it 

complies with federal law. Stanislaus County will notify the FAA of specific 

actions, if any, to be completed during the transition period and work with the 

state to ensure compliance before the December 8, 2017 deadline. 

Sin --'""" .::. 

Stan Risen 

Chief Executive Officer 

cc: Stanislaus County Board of Supervisors 

Jim Holgersson, Modesto City Manager 

Keith Boggs, Stanislaus County Assistant Executive Officer 

Jody Hayes, Stanislaus County Assistant Executive Officer 

Jay Chamberlain, Department of Finance 

(Email: Jay.Chamberlain@dof.ca.gov) 

James T. Brown, Federal Aviation Administration Finance 

(Email: James.T.Brown@faa.gov) 

Dorothy Holzem, Legislative Representative, CSAC 

(Email: dholzem@counties.org) 

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