January 8, 2016 Byron K . Huffman Acting Director Office ofAirport Compliance and Management Analysis Federal Aviation Administration 800 Independence Avenue, SW Washington, D.C. 20591 Dear Mr. Huffman: EDDlE BAZA CALVO Go1•ernor RAY TENORIO Lieutenam Gol'l!mor

Thank you for giving the Government of Guam the additional time to respond to your letter of November 24, 2015, regarding its compliance with the Federal Aviation Administration's Policy and Procedures Concerning the Use of Airport Revenue,· Proceeds from Taxes on Aviation Fuel (79 Fed.Reg. 6628) (Amendment). In Guam, local laws mandating the levy of excise taxes on aviation fuel have been in effect since before December 30, 1987. Accordingly, as provided for in the FAA's policy, the taxes qualify for grandfather status and may used for other than airport purposes because they are not subject to the policy's revenue-use requirements. Specifically, aviation fuel has been continually taxed since 1953 when the Business Privilege Tax Law was enacted by Guam Public Law Z:-43. Under Subchapter D of Public Law 2-43, an excise tax was broadly assessed against 

### "all liquid fuel manufactured or produced and sold, stpred or used by him in Guam, or imported or acquired from persons not taxable hereunder and sold, stored, or used by him in Guam .. ." 1 The 1953 levy expressly contemplated that assessments would be made on aviation and marine fuel. 2

. II II
1 PUB.L. 2-43 at §19,5 70 (emphasis added). 2 S ee e.g., PUB.L. 2-43 at § 19, 572.02 providing for refund or drawback of 2 cents per gallon on rates assessed for "liquid fuel purchased solely for marine or aviation purposes and not-. used on the public roads on Guam ... " (emphasis added). P.O. Box 2950 • 1-la gatna, Guam 96932 Tel: (671) 472-8931 • fa'<: (671) 477-4826 • gO\cmor.guam.gO\ • calcndar.guam.gO\ Eddie Baza Ca lvo Oeddlebazacalvo @governorcalvo**~** governorofguamOver the years, the Guam liquid fuel tax laws have been amended in order to clarify the inclusion of particular type s of fuels and to provide for certain user exemptions. None of the amendments, however, did anything to repeal or otherwi se substantivel y change the requirement oftaxation on liquid fuel used for commercial aviation purposes . Thank you again for the opportunity to address the FAA's policy on this subject. If you have any questions or concerns, please contact John P. Camacho, Director of Revenue and Taxation at (671) 635 -1 817. 

### Senseramente,

cc: Bernadette F. Artero , ChiefFiscal Advisor John P. Camacho , Director
- Dept. of Revenue and Taxation Charles H. Ada II, Executive Manager
- Guam International Airport Authority

P

.O. Box 2950 • l lagatna, Guam 969 1 1 Tel: (6 7 1) 472-8931 • Fax: (671) 477 -4826 • gmcmor.guam.go\ • calcndar.guam.gov Edd•e Baza Cal vo tledd•ebazacalvo Ogovernorcalvo

**~** governor ofgu am

### u.s. Department ofTransportation Federal Aviation Administration 

### November 24,2015 The Honorable Eddie Baza Calvo Governor ofGuam Executive Chamber P.O. Box 

### 2950 Agana, Guam 

### 96932 Dear Governor: Office ofAirport Compliance and Management Analysis 800 lndependenoe Ave
.• SW
. Washington , DC 20591 

### -A.B. WON PAT

**~** INTffiAATIONALA!RPMTAuntORITYGUAU



# C 10 

## 2015 TIME 

# llM

**REC;DBY~ ~**  

# r 7£?'

On November 7, 2014, Federal Aviation Administration (FAA) adopted FAA Policy and Procedures Concerning the Use ofAirport Revenue; Proceeds from Taxes on Aviation Fuel, (79 Fed. Reg. 6628) (Amendment). The Amendment clarifies FAA's Policy and Procedures Concerning the Use ofAirport Revenue (64 Fed. Reg. 7696, February 16, 1999) (Revenue Use Policy) requirement that state or local taxes on aviation fuel (except taxes in effect on December 30, 1987) are considered to be airport revenue subject to the revenue-use requirement. State and local taxes 

### in effect on December 30, 1987 may qualify for grandfather status and be used for other than airport pwposes. This Amendment is being applied prospectively. Any states and local governments not currently 

### in compliance 

## "Win be provtded Wlth' a reasonable transition time (not to exceed 3 years from the effective date ofDecember 8, 2014) to 

### come into compliance With the FAA's Policy and Procedures Concermng the Use of Auport Revenue (64 FR 7696, February 16, 1999) (Revenue Use Policy). The FAA understood that changes to bring state and local taxes into compliance may

**r~uire** 

### state and local legislation, and thus afford state and local governments the opportunity to develop an Action Plan to detail the methodology for administering aviation fuel taxes in 

### accordance with the Amendment. State and local govenunents will be 

### expected to submit an

**A2ti:Q!l~ta-EAA-outlining-a** 

### strategic plan to come into compliance with the amendment by December 8. 

### 2015. The Action Plan should identify (1) the process to

**am~nd** 

### any non-compliant laws, and restructure general revenues to adapt to the dedication ofaviation fuel tax 

### revenue to airports and or State aviation programs; (2) a commitment to undertake the legislative process; and (3) the timeframe for action within the three year transition period for completion by December 8, 2017. The 

### first deadline ofsubmitting an Action Plan by December 8 is 

### approaching rapidly. Many state and localjurisdictions feel they are compliant with the Amendment. It would be prudent for the state and local governments to

**contac~** 

### FAA Office ofAirport Compliance and Managelllent Analysis with 

### any questions or concerns. The FAA has posted the 

# -.

**~** 

### Amendment and other guidance on several issues to the Aviation Fuel Tax Docket (Docket 10: 

### FAA-2013-0988). [See http://www.regulations .gov/#! docketBrowser;rpp=25 ;po=25;D= FAA-20 13-0988] The 

### Action Plan should be submitted to : 

### Federal Aviation Administration Attention: Director: Oft1ce ofAirport Compliance



### and Management 

### Analysis 800 Independence A

### venue, SW Washington. DC 20591 2



### The FAA 

### is available to answer questions and to provide assistance to state and local governments working to 

### become compliant with the Amendment to the Revenue Use Policy. If

### you or your staffhave any questions , please contact Jim Brovm at (202) 267-5879. 

### Sincerely, .' .' I I : I
. 

# :;;:

**·~ ~..)**  

# ... 

# ,

**~~~ft; n**  **~-.:**
**.** lltrfti \Hfnt ,\-.: l ir:; 

### Director



### · office ofAirport 

### Ccm1pliance

and Management Analysis