13496 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 187

[Docket No. 28860; Amendment No. 187–

7]

RIN 2120–AG17

Fees for Air Traffic Services for Certain

Flights Through U.S.-Controlled

Airspace

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Interim final rule; notice of

public meeting.

SUMMARY: This document establishes

fees for FAA air traffic and related

services for certain aircraft that transit

U.S.-controlled airspace but neither take

off from, nor land in, the United States.

This document allows the FAA to

reasonably recover the costs it incurs in

performing these services. The

document also requests comments

concerning the fee schedule and the fee

collection process. In addition, the FAA

is announcing a public meeting on the

interim final rule to provide an

additional opportunity for public to

comment.

DATES: Effective date May 19, 1997.

Comments must be received by July 18,

1997.

The public meeting will be held on

May 1, 1997; Registration: 8:30 a.m.;

Meeting: 9:00 a.m.–5:00 p.m.

ADDRESSES: The public meeting will be

held at the Federal Aviation

Administration, 800 Independence

Ave., SW., Washington, DC, in the main

auditorium on the 3rd Floor. Comments

on this interim final rule should be

mailed or delivered in triplicate to:

Federal Aviation Administration, Office

of the Chief Counsel, Attention: Rules

Docket (AGC–200), Docket No. 28860,

800 Independence Avenue, SW.,

Washington, DC 20591. Comments may

also be submitted to the Rules Docket by

using the following Internet address: 9-

NPRM-CMTS@faa.dot.gov. Comments

must be marked Docket No. 28860.

Comments may be examined in the

Rules Docket, Room 915–G on weekdays

between 8:30 a.m. and 5:00 p.m., except

on Federal holidays. Written comments

to the docket will receive the same

consideration as statements made at the

public meeting.

FOR FURTHER INFORMATION CONTACT:

Jeffrey Wharff, Office of Aviation Policy

and Plans, Federal Aviation

Administration, 800 Independence

Avenue, SW., Washington, DC 20591;

telephone (202) 267–7035.

Requests to present a statement at the

public meeting on the Fees for Air

Traffic Services for Certain Flights

Through U.S.-Controlled Airspace

interim final rule and questions

regarding the logistics of the meeting

should be directed to Regina L. Jones,

Federal Aviation Administration, Office

of Rulemaking (ARM–104), 800

Independence Avenue, SW.,

Washington, DC 20591, telephone (202)

267–9822; fax (202) 267–5075.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in this rulemaking by

submitting written data, views, or

arguments, and by commenting on the

possible environmental, economic, and

federalism-or energy-related impact of

the adoption of this interim final rule.

Comments concerning the

implementation and effective date of the

rule are also specifically requested.

Comments should identify the

regulatory docket and should be

submitted in triplicate to the Rules

Docket address specified above. All

comments received and a report

summarizing any substantive public

contact with FAA personnel on this

rulemaking will be filed in the docket.

The docket is available for public

inspection both before and after the

closing date for receiving comments.

The closing date for comments on the

proposal [Insert date 120 after the date

of publication]. This 120 day comment

period is intended to allow the

international commenters sufficient

time to submit comments. In order to

give the public an additional

opportunity to comment on the interim

final rule, the FAA is planning a public

meeting. Because of this additional

opportunity to comment on the interim

final rule, the FAA will not intend to

extend the closing date for comments.

Requests from persons who wish to

present oral statements at the public

meeting on the Fees for Air Traffic

Services for Certain Flight Through

U.S.-Controlled Airspace interim final

rule should be received by the FAA no

later than April 25, 1997. Such requests

should be submitted to Regina L. Jones

as listed in the section titled FOR

FURTHER INFORMATION CONTACT. Requests

received after April 25 will be

scheduled if time is available during the

meeting; however, the name of those

individuals may not appear on the

written agenda. The FAA will prepare

an agenda of speakers that will be

available at the meeting. To

accommodate as many speakers as

possible, the amount of time allocated to

each speaker may be less than the

amount of time requested. Those

persons desiring to have available

audiovisual equipment should notify

the FAA when requesting to be placed

on the agenda.

Before taking any final action on this

interim final rule, the Administrator

will consider the comments made on or

before the closing date for comments,

and the interim final rule may be

changed in light of the comments

received.

The FAA will acknowledge receipt of

a comment if the commenter includes a

self-addressed, stamped postcard with

the comment. The postcard should be

marked ‘‘Comments to Docket No.

28860.’’ When the comment is received

by the FAA, the postcard will be dated,

time stamped, and returned to the

commenter.

Public Meeting Procedures

The public meeting will be held on

May 1, 1997, at the Federal Aviation

Administration, 800 Independence,

Ave. S.W., Washington, D.C., in the

main auditorium on the 3rd Floor;

Registration: 8:30 a.m.; Meeting: 9:00

a.m.—5:00 p.m.

The following procedures are

established to facilitate the public

meeting on the interim final rule:

1. There will be no admission fee or

other charge to attend or to participate

in the public meeting. The meeting will

be open to all persons who have

requested in advance to present

statements or who register on the day of

the meeting (between 8:30 a.m. and 9:00

a.m.) subject to availability of space in

the meeting room.

2. The public meeting may adjourn

early if scheduled speakers complete

their statements in less time than

currently is scheduled for the meeting.

3. The FAA will try to accommodate

all speakers; therefore, it may be

necessary to limit the time available for

an individual or group.

4. Participants should address their

comments to the panel. No individual

will be subject to cross-examination by

any other participant.

5. Sign and oral interpretation can be

made available at the meeting, as well

as an assistive listening device, if

requested 10 calendar days before the

meeting.

6. Representatives of the FAA will

conduct the public meeting. A panel of

FAA personnel involved in this issue

will be present.

7. The meeting will be recorded by a

court reporter. A transcript of the

meeting and any material accepted by

the panel during the meeting will be

included in the public docket (Docket
Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations 13497

No. 28860). Any person who is

interested in purchasing a copy of the

transcript should contact the court

reporter directly. This information will

be available at the meeting.

8. The FAA will review and consider

all material presented by participants at

the public meeting. Position papers or

material presenting views or

information related to the interim final

rule may be accepted at the discretion

of the presiding officer and

subsequently placed in the public

docket. The FAA requests that persons

participating in the meeting provide 10

copies of all materials to be presented

for distribution to the panel members;

other copies may be provided to the

audience at the discretion of the

participant.

9. Statements made by members of the

public meeting panel are intended to

facilitate discussion of the issues or to

clarify issues. Because the meeting

concerning the Fees for Air Traffic

Services for Certain Flights Through

U.S.-Controlled Airspace is being held

during the comment period, final

decisions concerning issues that the

public may raise cannot be made at the

meeting. The FAA may, however, ask

questions to clarify statements made by

the public and to ensure a complete and

accurate record. Comments made at this

public meeting will be considered by

the FAA.

10. The meeting is designed to solicit

public views on the interim final rule.

Therefore, the meeting will be

conducted in an informal and

nonadversarial manner.

Availability of the Interim Final Rule

An electronic copy of this document

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 Federal Register’s electronic

bulletin board service (telephone: 202–

512–1661).

Internet users may reach the FAA’s

webpage at http://www.faa.gov or the

Federal Register’s webpage at http://

www.access.gpo.gov/suldocs for

access to recently published rulemaking

documents.

Any person may obtain a copy of this

document by mail by submitting a

request to the Federal Aviation

Administration, Office of Rulemaking,

800 Independence Avenue, SW.,

Washington, DC 20591, or by calling

(202) 267–9677. Communications must

identify the docket number of the

document.

Background

Authority to Establish Fees

The Federal Aviation Authorization

Act of 1996 (the Act) directs the Federal

Aviation Administration to establish by

interim final rule a fee schedule and

collection process for air traffic control

and related services provided to aircraft

other than military and civilian aircraft

to the United States government or of a

foreign government that neither take off

from, nor land in, the United States (49

U.S.C. 45301, as amended by Pub. L.

104–264), The Act states that the FAA

may recover up to $100,000,000 in FY

1997. Also, the Act directs the FAA to

ensure that the fees allowed by the Act

are directly related to the FAA’s costs of

providing the service rendered. Services

for which costs may be recovered

include the costs of air traffic control,

navigation, weather services, training

and emergency services that are

available to facilitate safe transportation

over the United States, and other

services provided by the Administrator

or by programs financed by the

Administrator to flights that neither take

off nor land in the United States.

In addition, under Title V of the

Independent Offices Appropriation Act

of 1952 (31 U.S.C. 9701), the FAA has

the authority to establish a fair and

equitable system for recovering full

costs expended for any service that

provides a special benefit to an

individual beyond those that accrue to

the general public. The Independent

Offices Appropriation Act (IOAA)

provides, in pertinent part:

(a) It is the sense of Congress that each

service or thing of value provided by an

agency * * * to a person * * * is to be

self sustaining to the extent possible.

(b) The head of each agency * * *

may prescribe regulations establishing

the charge for a service or thing of value

provided by the agency. * * * Each

charge shall be—

(1) fair; and

(2) based on—

(A) the costs to the Government;

(B) the value of the service or thing to

the recipient;

(C) public policy or interest served;

and

(D) other relevant facts.

This statute has been reviewed several

times by the Supreme Court and what

is permissible under it is well defined.

This statute must be followed in

establishing fees unless another statute

specifically authorizes fees in lieu of

what is generally authorized under 31

U.S.C. 9701. The fees in this interim

final rule are established under 49

U.S.C. 45301 in conjunction with 31

U.S.C. 9701.

Office of Management and Budget

(OMB) Guidance

Office of Management and Budget

(OMB) Circular No. A–25, User Charges,

revised July 8, 1993, establishes

guidelines for Federal agencies to

establish fees for Government services.

The Circular covers all Federal activities

that convey special benefits to

recipients beyond those accruing to the

general public. The objectives of OMB

Circular A–25 are to ensure that the

Government provision of special goods

or services to specific recipients be selfsustaining. The FAA has followed the

OMB guidelines in developing this

interim final rule as it applies to these

fees.

The Interim Final Rule

Beginning sixty days after the

publication of the interim final rule, the

FAA will assess a fee for air traffic and

related services provided to users of

aircraft (both commercial and general

aviation) that transit U.S.-controlled

airspace but do not take off or land in

the United States. The rule does not

apply to military and civil aircraft

operated by the United States

government or by a foreign government.

For the purpose of this rulemaking the

U.S.-controlled airspace includes both

U.S. sovereign airspace (hereafter

‘‘domestic airspace’’) and airspace

allocated to the United States by the

International Civil Aviation

Organization (hereafter ‘‘oceanic

airspace’’). Canada-to-Canada overflight

operations are defined (hereafter

‘‘Canada-to-Canada’’) as flights,

conducted by aircraft, that take off and

land in Canada without intermediate

stops outside Canada that operate in

U.S.-controlled airspace. Commercial

users are defined as those operators

whose primary purpose is to provide

passenger and/or cargo air

transportation for compensation or hire.

General aviation users are defined as

those operators who do not provide

passenger and/or cargo transportation

for compensation or hire. Furthermore,

in this rule general aviation users are

divided into two groups: General

aviation users operating piston-powered

aircraft and general aviation users

operating turbine-powered aircraft.

General aviation turbine-powered

aircraft include both turboprop and

turbojet aircraft.

Operators of aircraft that transit U.S.-

controlled airspace but do not land in or

depart from the United States currently

contribute nothing financially to the

provision of air traffic services (ATS).

This is despite the fact that they use

ATS and other services that impose
13498 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations

costs on the U.S. air traffic control

(ATC) system. Congress has determined

that these users should bear a portion of

the cost of those services.

The air transportation environment

has changed over the past decades with

the advent of increasing numbers of

long range aircraft that fly at high

altitudes far above areas of high density

air traffic. The use of these aircraft and

the routes they are able to fly have

greatly increased the efficiency of air

transportation. Although these

overflight operations do not generally

enter areas of high density air traffic,

they do use FAA air traffic and related

services.

Operators of overflight aircraft benefit

from the FAA’s provision of ATS in

several ways. First, and most

importantly, FAA’s ATS enhance safety

through air traffic control, navigation,

and communications services. Second,

flight through U.S.-controlled airspace

provides optimized routing for long

distance aircraft that is of great value to

the users of these aircraft.

The level of ATS and other services

that is actually provided to operators of

overflights depends, in part, on the

portions of U.S.-controlled airspace

such flights transit. These services can

include communications, navigation,

radar surveillance, emergency services,

and flight information services (flight

plan filing, weather briefing, and

others). For aircraft transiting U.S.-

domestic airspace, Air Route Traffic

Control Centers (ARTCCs) provide

separation by means of radar

surveillance (if they are operating under

instrument flight rules or in airspace

above 18,000 feet). Also, these flights

generally use navigational aids and

radio communication with ARTCCs.

For aircraft transiting oceanic

airspace, where radar surveillance and

navigational aids are not available,

navigation is generally conducted by onboard systems. Aircraft separation,

however, is provided under procedural

control, under which flights report their

position to an air traffic controller each

time they fly over a specified reporting

point.

The FAA estimates that

approximately 213,000 non-public

flights transit U.S.-controlled airspace

without landing or taking off annually

(See the Analysis of Overflights Costs

and Pricing that has been placed in the

public docket). Air carriers comprise

over 210,000 of these flights and general

aviation about 3,000.

The total cost to the FAA associated

with all overflights is projected to be

approximately $97 million for FY 1997,

including the cost of collecting the fees.

This amount represents the sum of the

separate costs for providing air traffic

control services to aircraft flying

through domestic and oceanic airspace.

Charging overflights for ATS is

accepted in the international arena. The

International Civil Aviation

Organization (ICAO) states that ‘‘where

air navigation services are provided for

international use, the providers may

require the users to pay their share of

the costs. * * * (Statements by the

Council to Contracting States on

Charges for Airports and Air Navigation

Services, Paragraph 32 (Doc. 9082/4)).

Further, paragraph 42 of Doc. 9082/4

notes that ‘‘providers * * * may require

all users to pay their share of the costs

regardless of whether or not utilization

takes place over the territory of the

provider state.’’ (Document 9082/4 has

been placed in the docket.)

An important factor to consider when

constructing an overflight fee is the

extent that it will alter user behavior.

The FAA believes an inappropriately

constructed fee could encourage some

users to reroute or otherwise avoid ATS.

Excessive avoidance of air traffic control

services could potentially reduce air

traffic safety. ATS reduces hazards

associated with adverse weather

conditions and mid-air collisions and

enhances the ability to rapidly provide

search and rescue services. The FAA

believes that some users are more likely

to change their behavior in a manner

that diminishes safety. Commercial

users arguably are less likely to cease

use of ATS and other services than

general aviation users. Most commercial

aircraft are designed to operate more

efficiently at altitudes in excess of

18,000 feet. All operations at altitudes at

or above 18,000 feet within the United

States and its territories must be under

air traffic control. Also, to some extent,

commercial users are able to pass the

overflight fee on to their passengers or

cargo customers. Many general aviation

users, on the other hands usually

operate at altitudes less than 18,000 feet

and bear the entire burden of the fee.

Consequently, general aviation users are

more likely to avoid ATS and other

related services if the cost of these

services are high relative to the aircraft’s

operating costs. This may be

particularly true for general aviation

aircraft users that transit domestic

airspace or are involved in inter-island

flights in the Caribbean or Pacific

airspace. These user may elect to avoid

using ATS.

In fact, using U.S. estimates of hourly

variable operating costs for general

aviation piston-powered and turbinepowered aircraft and assuming average

cruising speeds of 130 kts and 300 kts,

a fee consistent with full-cost recovery

(as derived below) could represent a

significant cost to these users.

(Estimates of U.S. variable operating

costs were derived from the ‘‘all other

category’’ reported in Tables 23 and 25–

B of the ‘‘Economic Values for

Evaluation of Federal Aviation

Administration Investment and

Regulatory Program’’, which can be

found in the docket. Cost figures were

adjusted to reflect 1997 dollars.) On a

per-mile base, the full-cost overflight fee

is approximately 144% of the variable

operating cost for piston-powered

aircraft and approximately 48% of the

variable operating cost for turbinepowered aircraft.

In addition, an examination of the

cost elasticity estimates for air traffic

services suggests that general aviation

users are much more responsive than

commercial users to a change in the cost

of receiving ATS. The ATS cost

elasticities are discussed as part of the

Analysis of Overflights Costs and

Pricing, which can be found in the

docket. These elasticity estimates

measure the demand responsiveness

(i.e., the propensity to change the

amount consumed of ATS) of the user

to a change in the cost of receiving ATS.

In particular, the general aviation

piston-powered aircraft cost elasticity is

approximately 18 times larger than the

cost elasticity estimate for commercial

aircraft. Similarly, the general aviation

turbine-powered aircraft cost elasticity

is approximately 5 times larger than the

cost elasticity estimate for commercial

aircraft.

Because of the concern that users may

change their behavior in a manner

inconsistent with safety, the FAA has

established fees for certain users of ATS

services based on the statutory

requirements of cost recovery balanced

against its primary responsibility of

promoting air traffic safety.

Defer Charging Canada-to-Canada

Overflight Operations

Currently, it is cost effective for many

Canada-to-Canada operations to transit

U.S.-controlled airspace. Routing

through U.S.-controlled airspace occurs

because it is either the shortest route or

it offers the most favorable flight

conditions; both reduce operator costs.

Canada currently has an overflight

charge for aircraft that transit Canadiancontrolled airspace. With the exception

by flights of aircraft that weigh more

than 200 tons and that land or take off

in Alaska, domestic U.S. aircraft

operations have been temporarily

exempted from this charge in order to

allow time for U.S. and Canadian

consultation. NAV CANADA, a nonshare capital corporation which owns,
Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations 13499

manages, and operates Canada’s civil air

navigation system, is expected to

implement a Canadian enroute charge

by November 1, 1997.

If the FAA were to impose the

overflight charge on these Canada-toCanada operations, it is likely that a

significant number of Canada overflights

would divert to movement through

Canadian-controlled airspace. NAV

CANADA through informal, high-level,

correspondence and meetings with the

FAA regarding general principles of

overflight charges and cross-border ATC

operational issues, has expressed

concern that charging Canada-to-Canada

overflights prior to the implementation

of the Canadian enroute charge would

temporarily increase the workload at

Canadian air control centers and could

adversely impact existing bilateral

agreements regarding U.S. air traffic

control of certain Canadian airspace.

Meeting records and correspondence

have been placed in the docket.

Contined maintenance of U.S. control

of this airspace is important for the

optimized routing for a significant

number of U.S. domestic aircraft

operations. To allow time for U.S.

Canadian consultation, the FAA has

chosen to offer charging Canada-toCanada overflights until October 1,

1997.

The Overflight Fee

As noted above, the Federal Aviation

Authorization Act of 1996 directs the

Federal Aviation Administration to

establish a fee schedule and collection

process for air traffic control and related

services provided to aircraft other than

military and civil aircraft operated by

the United States government or by a

foreign government that neither take off

from, nor land in, the United States. The

Act further directs the FAA to issue the

initial fee schedule and associated

collection process as an interim final

rule, to ask for public comment, and to

issue a subsequent final rule.

The Act requires that fees be directly

related to the FAA’s cost of providing

the services rendered. Furthermore, the

Conference Report for the Act states

‘‘* * * assuming similar costs of

serving different carrier and aircraft

types, the fee may not vary based on

factors such as aircraft seating capacity

or revenue derived from passenger

fares’’ (Congressional Record,

September 26, 1996, H11316).

Consistent with statutory direction, the

sense of Congress as documented in the

Conference Report, and FAA’s aviation

safety mission, the FAA has adopted a

tiered charging system.

Commercial users will be charged fees

consistent with the principle of full cost

recovery; general aviation users will be

charged fees less than the recovery of

full cost in order to minimize any

potential safety risks. This method of

charging will not result in the crosssubsidization of one user group by

another. This charging system is also

consistent with ICAO principles. ICAO

notes that in determining the costs to be

recovered from users ‘‘Governments

may choose to recover less than full

costs in recognition of local, regional, or

national benefits’’ (Doc. 9082/4,

paragraph 35). The FAA believes that

the fees for general aviation should be

set so that general aviation users will

continue to use air traffic control

services when such services enhance

safe and efficient travel. Consequently,

the fee for general aviation pistonpowered aircraft users is 1/18th that of

the full cost of service; and the fee for

general aviation turbine-powered

aircraft is 1/5th that of the full cost of

service.

The overflight fee is computed based

on distance flown through U.S.-

controlled airspace. Separate

computations are made for services

provided in domestic airspace and in

oceanic airspace in order to reflect the

different costs of providing services in

each of these environments. For any

city-pair route, the distance within

domestic airspace and within oceanic

airspace is used, based on calculation of

the great circle route (GCR) between the

actual point of entry and the actual

point of exit from each category of

airspace. The use of this procedure for

computing distance protects users

within U.S.-controlled airspace from

routing patterns created by unusual

events, such as traffic congestion,

weather situations, and other

circumstances. Total fees assessed for

using each type of airspace (domestic

and oceanic) do not exceed the costs of

providing services within that type of

airspace.

To calculate the fee in a manner

consistent with full-cost recovery two

factors are taken into account: (1) the

cost of providing air traffic control

services for overflights in oceanic and

domestic airspace, and (2) the distances

flown in U.S.- controlled airspace. Cost

pools were estimated for oceanic and

domestic airspace as described and

documented in the Analysis of

Overflights Costs and Pricing, which has

been placed in the docket. Each cost

pool consists of incremental ATS and

allocated fixed and common costs

associated with providing air traffic

control services in each airspace.

Incremental ATS costs, which

include, but are not limited to,

controller staffing requirements and

training, were determined by

multiplying the number of aircraft flying

through a particular airspace by the

incremental rate. The allocated fixed

and common costs were assigned to

each cost pool based on the pool’s

proportion of incremental cost. The

allocated fixed and common costs

associated with ATS and applied to

overflights represent the ‘‘Ramsey

allocation’’ of FAA’s total fixed and

common costs to the ATS line of

business. Radio navigation is an

example of a fixed cost. Program

support, administration, and capital

costs are examples of common costs. A

detailed discussion of the cost

allocation procedure is outlined in the

Analysis of Overflights Costs and

Pricing. For FY 1995 the estimated cost

pools for overflights of U.S.-controlled

oceanic and domestic airspace were

$42.2 million and $47.5 million,

respectively.

A charge is assessed for each 100

nautical miles flown in oceanic and

domestic airspace. The oceanic and

domestic charges per one hundred

nautical miles are $69.50 and $78.90,

respectively (expressed in 1997 dollars).

These figures were derived in two steps.

First, each FY 1995 cost pool was

divided by the total number of

overflight miles associated with the pool

as calculated according to the

origination/destination great circle route

(OD–GCR). Currently, the OD–GCR

mileage represents the best available

flight data associated with these cost

pools. Reliable GCR entry and exit data

will become available; at which time,

the unit charges will be adjusted to

reflect historical GCR entry and exit

data. OD–GCR and GCR entry and exit

mileage are not expected to differ

significantly in total for the year.

Second, each fee was adjusted to

capture the cost of collection and to

reflect projected cost increases between

1995 and 1997. Unit charges derived in

this manner are free from crosssubsidization. The collection assumes a

one-time development cost of $2.1

million amortized over a two year

period and an annual operating cost of

$1.0 million. Projected cost increases

are based on the ‘‘all other’’ deflation

estimates published in the 1997 Budget

of the United States Government (page

160, Table 10.1).

The fee for users of a commercial

aircraft overflight is calculated as

follows:

Rij=$69.50*DOij+$78.90*DDij,

where

Rij=the fee charged to commercial

aircraft flying between city i and

city j,
13500 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations

DOij=distance traveled in U.S.-

controlled oceanic airspace

expressed in hundreds of nautical

miles for aircraft flying between city

i and city j,

DDij=distance traveled in domestic U.S.

airspace expressed in hundreds of

nautical miles for aircraft flying

between city i and city j.

The fee for users of a general aviation

turbine-powered aircraft overflight is

calculated as

GATRij=($69.50/5)*DOij+($78.90/

5)*DDij

or

GATRij=$13.90*DOij+$15.78*DDij,

where

GATRij=the fee charged to general

aviation turbine-powered aircraft

flying between city i and city j,

DOij=distance traveled in U.S.-

controlled oceanic airspace

expressed in hundreds of nautical

miles for aircraft flying between city

i and city j,

DDij=distance traveled in domestic U.S.

airspace expressed in hundreds of

nautical miles for aircraft flying

between city i and city j.

The fee for users of a general aviation

piston-powered aircraft overflight is

calculated as

GAPRij = ($69.50/18) *DOij + ($78.90/

18)*DDij

or

GAPRij=$3.86*DOij+$4.38*DDij,

where

GAPRij=the fee charged to general

aviation piston-powered aircraft

flying between city i and city j,

DOij=distance traveled in U.S.-

controlled oceanic airspace

expressed in hundreds of nautical

miles for aircraft flying between city

i and city j,

DDij=distance traveled in domestic U.S.

airspace expressed in hundreds of

nautical miles for aircraft flying

between city i and city j.

These formulas assume that actual entry

and exit data are available for individual

flights in U.S.-controlled airspace. If

not, best available flight data will be

used.

All fees are designed to charge both

direct and indirect costs to users in a

logical and fair manner as required by

IOAA. Because users of general aviation

piston-powered aircraft are likely to be

extremely price sensitive with potential

impacts on the consumption of safety

related services, and because their use

of ATS appears minimal, general

aviation users are charged a discounted

fee (less than full-cost recovery). Also,

general aviation piston-powered aircraft

users transiting less than 250 nautical

miles of U.S.-controlled airspace will

not be charged a fee. The distance based

exemption reflects a concern for

administrative efficiency. The cost of

collecting from this user group for

distances less than 250 miles is likely to

exceed any fee incurred.

The fees in this interim final rule will

be reviewed at least once every 2 years,

in accordance with OMB Circular A–25,

and adjusted to reflect changes in costs.

The first review is scheduled one year

after the date of publication of the

interim final rule. Fees will be adjusted

to reflect historical GCR entry and exit

mileage within U.S.-controlled airspace.

Based on the OD–GCR, the following

table illustrates the tiered fee schedule.

REPRESENTATIVE FEE SCHEDULE FOR INTERNATIONAL OVERFLIGHTS

Origination Destination Aircraft type

Domestic airspace Oceanic airspace Total

miles 2

Total

fee 3

Rate 1 Miles 2 Charge 3 Rate 1 Miles 2 Charge 3

Canada: Canada:

YUL Dorval Int’l. Airport, Montreal ......... YHZ Halifax, Nova Scotia ...................... Commercial ......... $78.90 149 $118 $69.50 ............ ............. 149 $118

YYZ Pearson Airport, Toronto, Ontario .. YYC Calgary, Alberta ............................ Commercial ......... 78.90 644 508 69.50 ............ ............. 644 508

Canada: Canada:

YUL Dorval Int’l. Airport, Montreal ......... YHZ Halifax, Nova Scotia ...................... GA Piston ............ 4.38 149 7 3.86 ............ ............. 149 None

YYZ Pearson Airport Toronto, Ontario ... YYC Calgary, Alberta ............................ GA Piston ............ 4.38 644 28 3.86 ............ ............. 644 28

Canada: Canada:

YUL Dorval Int’l. Airport, Montreal ......... YHZ Halifax, Nova Scotia ...................... GA Turbine .......... 15.78 149 24 13.90 ............ ............. 149 24

YYZ Pearson Airport Toronto, Ontario ... YYC Calgary, Alberta ............................ GA Turbine .......... 15.78 644 102 13.90 ............ ............. 644 102

Canada: Mexico:

YVR International Airport, Vancouver .... SJD San Jose Del Cabo ....................... Commercial ......... 78.90 1,084 855 69.50 ............ ............. 1,084 855

Asia: Canada:

NRT Narita Airport, Tokyo, Japan .......... YYC Calgary, Alberta ............................ Commercial ......... 78.90 1,938 1,590 69.50 470 $327 2,408 1,917

Europe: Caribbean:

AMS Amsterdam, Netherlands ............... MBJ Montego Bay, Jamaica .................. Commercial ......... 78.90 ............ ............. 69.50 2,118 1,472 2,118 1,472

Europe: Mexico:

LHR Heathrow Airport London, Eng ...... Mexico City ............................................ Commercial ......... 78.90 1,515 1,195 69.50 256 178 1,771 1,373

Asia: Pacific:

SEL Seoul, South Korea ........................ Sydney, Australia ................................... Commercial ......... 78.90 ............ ............. 69.50 1,111 772 1,111 772

1 Rates are expressed per 100 nautical miles.

2 Miles are nautical miles.

3 Charges and total fee are rounded to the nearest dollar.

Fee Collection Process

The FAA has established and

maintains data from several sources,

including but not limited to, flight plans

and radar/radio data, that identifies the

point of entry and exit, aircraft

registration number and the type of

aircraft for all aircraft entering U.S.-

controlled airspace. Information will be

extracted from the database and used,

along with the fee formula, to compute

each fee.

The FAA will bill users by sending a

monthly invoice. Affected air carrier

users are requested to designate and

submit to the FAA the name and

address of a U.S. agent for billing. All

other users are requested to submit a

billing address to the FAA. Users not

providing a billing address will be

billed at the address of record of the

aircraft owner as maintained in the

country where the aircraft is registered.

As provided in § 187.15(d), monthly

remittance of fees of $1,000 or more are

to be paid by electronic funds transfer.

Monthly remittances below $1,000 may

be paid by electronic funds transfer,

check, money order, credit card, or

draft. All payments must be in U.S.

currency.

Invoices that become delinquent will

be processed according to 49 CFR part

89.

Comments Requested

As noted above, the FAA seeks

comments on the interim final rule,

specifically, the fee schedule, formulas

used to determine the cost per unit, the

associated collection process, and the

scope of services for which costs will be

recovered. Commenters should be

aware, however, that the FAA does not

have discretion to make changes to

some aspects of the fee that were

specifically mandated by Congress.
Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations 13501

The FAA is aware of several different

approaches used throughout the world

by civil aviation authorities in

constructing overflight fees. ICAO

identifies several parameters that, in

principle, can be used to construct an

ATS fee. These parameters include

distance flown, aircraft weight, and

time-in-system. (Doc. 9161/2,

paragraphs 73, 74, and 78). A fee system

can be designed to recover some or all

of the costs of providing air traffic

control services. For practical reasons,

such as billing efficiency, managing

traffic patterns, equity, or issues related

to safety, a civil aviation authority may

prefer one changing method over

another. A civil aviation authority may

also decide to recover only a portion of

the total cost of providing ATS from

particular user groups. Below are two

different approaches to the fee system

that the FAA has adopted in this interim

final rule.

Alternative Approaches

One approach that was not adopted

by the FAA is to base the fee on distance

flown and aircraft weight, though the

use of weight when viewed as a measure

of value of the service to the user is not

consistent with the FAA’s current

authority. In general, the following

formula could be used to establish an

ATS charge under this approach:

R=T*D*P,

where

R=fee,

T=unit rate,

D=great circle distance flown expressed

in hundreds of nautical miles,

P=a proportional measure of aircraft

weight (e.g., the square root of

weight).

As with the fee structure adopted by

the FAA, two separate unit rates could

be developed to reflect the cost of

providing ATS and other services in

both domestic and oceanic airspace.

Given the appropriate choice of unit

rates, this approach is also consistent

with full-cost recovery. This approach

not only reflects the cost of providing

ATS but also incorporates users’ ability/

willingness to pay. That is, civil

aviation authorities are able to charge

for ATS based on the value of service

received. Heavier (lighter) aircraft users

pay more (less) for the use of ATS.

Proponents of this approach suggest that

a distance- and weight-based fee will

encourage the additional use of ATS

and other safety related services while

permitting full cost recovery by the

provider. Consequently, the air

transportation community will benefit,

as a whole, from a safer and more

efficient use of airspace without the

provider subsidizing any user (in

contrast, the fee described in the interim

final rule results in subsidization of

general aviation users by the provider).

Internationally, this option has had

some acceptance. Eurocontrol (The

European Organization for the Safety of

Air Navigation) uses this formula to

charge civil aircraft flying either for a

part of or for the whole flight under

Instrument Flight Rules and to military

aircraft flying as General Air Traffic.

The weight component is taken to be the

square root of the maximum take-off

weight of an aircraft expressed in metric

tons divided by 50. This approach could

not be adopted by the FAA unless

Congress specifically authorized its use.

Another approach which was not

adopted by the FAA is to base the fee

on an aircraft’s time-in-system. In

principle, a time-in-system approach

would provide a highly accurate

measure of the amount of ATC services

used. Higher speeds mean less time

spent in a given airspace and therefore

a reduction in the service provided. A

charging mechanism based on this

approach could take the following form:

R=T*Z,

where

R=fee,

T=unit rate,

Z=time in system.

A time-in-system approach, however,

favors faster aircraft and may impose a

heavier fee burden on slower users.

Although this approach could be used

to recover the full cost of ATS, it

appears to have several shortcomings

that must first be resolved. First, it

requires actual flight data for an aircraft

transiting controlled airspace or some

estimated time based on an aircraft’s

speed and distance flown in controlled

airspace. Second, it can be argued that

ATC systems were primarily developed

to serve the faster commercial users and

not slower general aviation users.

Slower aircraft should therefore not be

required to pay proportionally more for

ATS. Third, rerouting due to weather

conditions or excessive air traffic can

significantly impact a time-in-system

fee. To date, there is no universally

accepted standard for measuring timein-system.

Commenters are welcome to address

any different approaches that they

believe would be consistent with the

purposes and limitations of the Act and

the IOAA.

Comments Concerning Emergency

Services

Under the current fee formula, the

only emergency service costs recovered

are those costs associated with enroute

center coordination of these services.

Costs associated with the provision of

alternative landing sites, search and

rescue services, and crash fire rescue are

not recovered. Such costs are borne by

the FAA through the AIP program, by

the U.S. Coast Guard, by other military

services, and by the airports themselves.

At the finalization of the rule,

commenters should be advised that the

FAA is considering an adjustment to the

fee formula to include such costs.

Commenters are encouraged to submit

comment on this adjustment and to

provide suggestions regarding the means

by which the fee should be adjusted.

Comments From U.S. Entities

Additionally, the FAA is requesting

comment from any small U.S. entity

who believes that this rule will create a

significant economic impact on their

operations. As detailed below, the FAA

does not believe there will be any such

impact.

Regulatory Evaluation Summary

Changes to Federal regulations must

undergo several economic analyses.

First, Executive Order 12866 directs that

each Federal agency shall propose or

adopt a regulation only upon a reasoned

determination that the benefits of the

intended regulation justify its costs.

Second, the Regulatory Flexibility Act

requires agencies to analyze the

economic effect of regulatory changes

on small entities. Third, the Office of

Management and Budget directs

agencies to assess the effect of

regulatory changes on international

trade.

This section summarizes the FAA’s

economic and trade analyses, findings,

and determinations in response to these

requirements. The complete economic

and trade analyses are contained in the

docket.

Analysis of Benefits

The fees would reimburse the FAA for

the actual cost of services provided to

commercial users and a portion of the

cost of services provided to general

aviation users in the manner authorized

by Congress, so that the beneficiaries of

this service, rather than the taxpayer,

would pay for the service provided by

the FAA. Moreover, the fees being

imposed by the FAA cover no more than

the costs of providing these service. The

FAA believes that the fees are equitable.

A fee will establish a mechanism

through which those who use a service

provide the majority of resources

necessary to fund the service that is

provided. This will result in a more

efficient allocation of scarce societal and

FAA resources. The efficient allocation
13502 Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations

of resources will benefit society at large,

because more resources will become

available for other service demanded by

the public.

On an annualized basis for 1997, the

overflight fee is expected to generate

approximately $60 million in fee

revenue.

Cost of Collection of User Fees to the

FAA

The FAA estimates a one-time

development cost of $2.1 million

amortized over a two-year period and an

annual operating cost of $1.0 million.

The costs of collection of the fee is

relatively small compared to the

revenue that can be generated. The cost

of collection along with the fee charges

will be reviewed at least once every 2

years and adjusted either upward or

downward in order to reflect the current

costs of performing the services covered.

The first review is scheduled one year

after the date of publication of the

interim final rule. Fees will be adjusted

to reflect historical GCR entry and exit

mileage within U.S.-controlled airspace.

Regulatory Flexibility Determination

The Regulatory Flexibility Act of 1980

(RFA), as amended, was enacted by

Congress to ensure that small entities

are not unnecessarily and

disproportionately burdened by

Government regulations. The RFA

requires agencies to specifically review

rules that may have a ‘‘significant

economic impact on a substantial

number of small entities.’’

The FAA’s criteria for ‘‘a substantial

number’’ are a number which is not less

that 11 and which is more than one

third of the small entities subject to this

rule. For all carriers, a small entity has

been defined as one which owns, but

does not necessarily operate, nine or

fewer aircraft. The FAA’s criteria for ‘‘a

significant impact’’ are as follows: At

least $4,900 per year for an unscheduled

air carrier, $70,100 per year for a

scheduled carrier having airplanes with

only 60 or fewer seats, and $125,500 per

year for a scheduled carrier having an

airplane with 61 or more seats.

Using these criteria and the data

available at this time, the FAA has

determined that the interim final rule

will not have a significant economic

impact on a substantial number of small

U.S. entities. However, since this is a

rule issued without notice, the FAA is

seeking comment on this issue in the

comment section of the preamble. If

comments are received that indicate a

significant economic impact on a

substantial number of small U.S.

entities, the final rule will be revised.

International Trade Impact

The overflight provisions would

primarily affect foreign airlines. The

rule may have a favorable competitive

impact on U.S. air carriers. Currently

U.S. airlines are at a comparative

disadvantage with foreign airlines

because all airlines (U.S. and foreign)

must pay user fees to transverse other

countries’ airspace while foreign

airlines do not have to pay a fee to

transverse U.S. controlled airspace. The

interim final rule would enhance the

competitiveness of domestic firms.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (the Reform Act),

enacted as Pub. L. 104–4 on March 22,

1995, requires each Federal agency, to

the extent permitted by law, to prepare

a written assessment of the effects of

any Federal mandate in a proposed or

final agency rule that may result in the

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million or more

(adjusted annually for inflation) in any

one year. Section 204(a) of the Reform

Act, 2 U.S.C. 1534(a), requires the

Federal agency to develop an effective

process to permit timely input by

elected officers (or their designees) of

State, local, and tribal governments on

a proposed ‘‘significant

intergovernmental mandate.’’ A

‘‘significant intergovernmental

mandate’’ under the Reform Act is any

provision in a Federal agency regulation

that will impose an enforceable duty

upon State, local, and tribal

governments, in the aggregate, of $100

million (adjusted annually for inflation)

in any one year. Section 203 of the

Reform Act, 2 U.S.C. 1533, which

supplements section 204(a), provides

that before establishing any regulatory

requirements that might significantly or

uniquely affect small governments, the

agency shall have developed a plan that,

among other things, provides for notice

to potentially affected small

governments, if any, and for a

meaningful and timely opportunity to

provide input in the development of

regulatory proposals.

This rule does not contain any

Federal intergovernmental mandates,

but does contain a private sector

mandate. However, because

expenditures by the private sector will

not exceed $100 million annually, the

requirements of Title II of the Unfunded

Mandates Reform Act of 1995 do not

apply.

Federalism Implications

The regulations do not have

substantial direct effects on the states,

on the relationship between national

government and the states, or on the

distribution of power and

responsibilities among various levels of

government. Thus, in accordance with

Executive Order 12612, it is determined

that such a regulation does not have

federalism implications warranting the

preparation of a Federalism Assessment.

International Civil Aviation

Organization and Joint Aviation

Regulations

In keeping with U.S. obligations

under the Convention on International

Civil Aviation, it is FAA policy to

comply with ICAO Standards and

Recommended Practices (SARP) to the

maximum extent practicable. For this

document, the FAA has reviewed the

SARP of Annex 6, Parts I and II,

applicable to foreign commercial air

transportation operations and foreign

general aviation operations respectively.

The FAA has determined that this

interim final rule will not present any

differences with ICAO guidance.

Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C.

3507(d)), there are no requirements for

information collection associated with

this rule.

Justification For No Public Notice and

Comment

The Administrative Procedure’s Act, 5

U.S.C. 553 et. seq., requires that prior to

the issuance of a final rule, an agency

will give notice to the public and seek

comment on a proposed rule. This

interim final rule is issued without

public notice and comment pursuant to

subsequent and specific authority. This

authority is found at 49 U.S.C.

45301(b)(2), which requires that this

interim final rule be issued before

public comment is sought. A final rule

will be issued subsequent to this public

comment.

Conclusion

The FAA has determined that this

regulation: (1) is a significant rule under

Executive Order 12866; and (2) is a

significant rule under Department of

Transportation Regulatory Policies and

Procedures (44 FR 11034; February 26,

1979). Also, for the reasons stated under

the headings ‘‘Trade Impact Statement’’

and ‘‘Regulatory Flexibility

Determination,’’ the FAA certifies that

the interim final rule will not have a

significant economic impact on a

substantial number of small entities. A
Federal Register / Vol. 62, No. 54 / Thursday, March 20, 1997 / Rules and Regulations 13503

copy of the full regulatory evaluation is

filed in the docket and may also be

obtained by contacting the person listed

in FOR FURTHER INFORMATION CONTACT.

List of Subjects in 14 CFR Part 187

Administrative practice and

procedure and Air transportation.

The Amendment

The Federal Aviation Administration

amends part 187 of the Federal Aviation

Regulations [14 CFR part 187] as

follows:

PART 187—FEES

1. The authority citation for part 187

continues to read as follows:

Authority: 31 U.S.C. 9701; 49 U.S.C.

106(g), 40104–40105, 40109, 40113–40114,

44702, 45301–45303.

2. Section 187.1 is amended by

adding the following sentences to the

end of the section to read as follows:

§ 187.1 Scope.

* * * Appendix A to this part

prescribes the methodology for

computation of fees for certification

services performed outside the United

States. Appendix B to this part

prescribes the fees for certain aircraft

flights that transit U.S.-controlled

airspace.

3. Section 187.15 is amended by

adding new paragraph (d) to read as

follows:

§ 187.15 Payment of fees.

* * * * *

(d) The fees described in appendix B

of this party are payable to the Federal

Aviation Administration in U.S.

currency. Remittance of fees of $1,000

or more are to be paid by electronic

funds transfer. Remittances below

$1,000 may be paid by electronic funds

transfer, check, money order, credit

card, or draft.

4. Part 187 is amended by adding new

appendix B to read as follows:

Appendix B to Part 187—Fees for Air

Traffic Services for Certain Flights

Through U.S-Controlled Airspace

(a) Applicability. Except as provided in

paragraph (b) and (c) of this appendix, this

appendix applies to any person who

conducts a flight through U.S.-controlled

airspace that does not include a landing or

takeoff in the United States. U.S.-controlled

airspace includes both U.S. sovereign

airspace (hereafter ‘‘domestic airspace’’) and

airspace allocated to the United States by the

International Civil Aviation Organization

(hereafter ‘‘oceanic airspace’’).

(b) Government flights. This appendix does

not apply to any military or civil aircraft

operated by the United States government or

by any foreign government.

(c) Deferral of Overflight Charges. This

appendix will not apply to aircraft that take

off and land in Canada without intermediate

stops outside Canada that operate in U.S.-

controlled airspace prior to October 1, 1997.

(d) Services. Persons covered by paragraph

(a) of this appendix shall pay a fee for the use

of air traffic control services and associated

services including but not limited to the

following:

(1) Air traffic management.

(2) Communications.

(3) Navigation.

(4) Radar surveillance, including

separation services.

(5) Flight information services, such as

flight plan filing, and weather briefings.

(6) Procedural control.

(7) Emergency services and training.

(e) Methodology for the Computation of

fees.

(1) For the use of any of the services listed

in paragraph (d) of this appendix, the fee is

computed based on user type and distance

flown. Distance flown is based on the great

circle route (GCR) for the actual point of

entry and the actual point of exit of U.S.-

controlled airspace. Fees are assessed using

the methodology presented in paragraph (d)

(2), (3), and (4) of this appendix. Where

actual entry and exit points are not available,

the best available flight data will be used.

(2) For commercial users a fee is assessed

for each 100 nautical miles flown in U.Scontrolled airspace. Commercial users are

defined as those operators whose primary

purpose is to provide passenger and/or cargo

air transportation for compensation or hire.

Separate calculations are made for transiting

domestic and oceanic airspace. The total fee

charged for an overflight between any two

cities is equal to the sum of these two

charges. Expressed in 1997 dollars, this

relationship is summarized as

Rij=$69.50*DOij+$78.90*DDij,

where

Rij=the fee charged to commercial aircraft

flying between city i and city j,

DOij=distance traveled in U.S.-controlled

oceanic airspace expressed in hundreds

of nautical miles for aircraft flying

between city i and city j,

DDij=distance traveled in domestic U.S.

airspace expressed in hundreds of

nautical miles for aircraft flying between

city i and city j.

(3) for a general aviation user of turbinepowered aircraft, the total fee charged

between any two cities (expressed in 1997

dollars) is calculated as

GATRij=$13.90*DOij+$15.78*DDij,

where

GATRij=the fee charged to general aviation

turbine-powered aircraft flying between

city i and city j,

DOij=distance traveled in U.S.-controlled

oceanic airspace expressed in hundreds

of nautical miles for aircraft flying

between city i and city j,

DDij=distance traveled in U.S.-controlled

domestic airspace expressed in hundreds

of nautical miles for aircraft flying

between city i and city j.

A general aviation user of turbine-powered

aircraft is defined as those operators who do

not provide passenger and/or cargo

transportation for compensation or hire.

(4) For a general aviation user of pistonpowered aircraft, the total fee charged

between any two cities (expressed in 1997

dollars) is calculated as

GAPRij=$3.86*DOij+$4.38*DDij

where

GATRij=the fee charged to general aviation

piston-powered aircraft flying between

city i and city j,

DOij=distance traveled in U.S.-controlled

oceanic airspace expressed in hundreds

of nautical miles for aircraft flying

between city i and city j,

DDij=distance traveled in U.S.-controlled

domestic airspace expressed in hundreds

of nautical miles for aircraft flying

between city i and city j.

A general aviation user of piston-powered

aircraft is defined as those operators who do

not provide passenger and/or cargo

transportation for compensation or hire.

(5) General aviation users of pistonpowered aircraft traversing less than 250

nautical miles of U.S.-controlled airspace

will not be charged a fee under this

appendix.

(f) Billing and payment procedures.

(1) Billing. The FAA will send an invoice

to each user that is covered by this appendix.

Users will be billed at the address of record

in the country where the aircraft its

registered, unless a billing address is

otherwise provided.

(2) Payment. Payment shall be made by one

of the methods described in § 187.15.

(g) Review of fees. The fees prescribed in

this appendix will be reviewed at least once

every 2 years, at the beginning of the fiscal

year, and adjusted either upward or

downward in order to reflect the current

costs of performing the services covered by

this appendix.

Issued in Washington, DC, on March 14,

1997.

Barry L. Valentine,

Acting Administrator.

[FR Doc. 97–6980 Filed 3–17–97; 11:23 am]

BILLING CODE 4910–13–M