Santa Maria CITY OF SANTA MARIA ltxOd DEPARTMENT OF ADMINISTRATIVE SERVICES 

AII·America City 

1

1111! 

Admin/Finance, Room 6, Ext. 215 

Utility Billing, Room 9, Ext. 217/218 

Information Technology, Room 7, Ext. 236 

Special Projects, Room 2, Ext. 118 

Business License, Room 5, Ext. 422 

Purchasing, Room 6, Ext. 215 

110 EAST COOK STREET • SANTA MARIA, CALIFORNIA 93454-5190 • (805) 925-0951 • FAX (805) 925-2243 

December 4, 2015 

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

Finance Management 

Federal Aviation Administration 

800 Independence Avenue SW 

Washington, DC 20591 

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. Brown: 

This letter is in response to the request for an action plan for the City of Santa Maria 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 includes the process likely necessary to amend any noncompliant 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 means "jet 

fuel", as othe r types of aviation fuels are exempt from sales tax in this state. It is our understanding that 

the State of California will be submitting an action 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 and police protection, environmental protection and noise abatement. 

These services and improvements are funded with general sales taxes and other taxes. The City of Santa 

Maria believes these local expenditures exceed the sales tax revenues derived from the sale of aviation 

fuel. 

Applicable l aw that May Require Amendments for Compliance 

• City of Santa Maria Measure U Quarter Cent General Purpose. Transaction and Use Tax passed by 

the voters in 2012. The tax is for nine years and the revenues and expenditures are maintained 

in a separate fund . 

• Santa Maria Public Airport District 

In addition to the locally imposed transaction and use tax rate, the City of Santa Maria receives revenues 

derived from the state sales and use tax rate for the purposes of (health and human services, criminal 

justice and 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 

The City of Santa Maria, 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 the City of Santa Maria 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 oftaxable sales made by the same veridor. Therefore, it is presently impossible for 

the City of Santa Maria 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 ta x 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. 

Transition Period 

If, contrary to current expectations, the City of Santa Maria determines that its 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 the City of Santa Maria to attempt to comply with the requirements 

set forth by the FAA ruling, to the extent it complies with federal law. The City of Santa Maria 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. 

Sincerely, 

Rene M. Vise 

Director of Administrative Services 

cc: City of Santa Maria City Council 

Rick Haydon, City Manager 

Jay Chamberlain, Department of Finance (Jay.Chamberlain@dof.ca.gov)