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Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 28837 

TABLE 7.—MATERIAL INCORPORATED BY REFERENCE ON JULY 25, 2003—Continued 

Service Bulletin Revision level Date 

C&D Aerospace Service Bulletin B221001–52–03 .........................................................................
 3 ................................
 March 25, 2003. 

C&D Aerospace Service Bulletin B231001–52–02 .........................................................................
 4 ................................
 March 19, 2003. 

(3) Contact Boeing Commercial Airplanes, 

P.O. Box 3707, Seattle, Washington 98124– 

2207; Boeing Commercial Airplanes, Long 

Beach Division, 3855 Lakewood Boulevard, 

Long Beach, California 90846, Attention: 

Data and Service Management, Dept. C1–L5A 

(D800–0024); or C&D Aerospace, 5701 Bolsa 

Avenue, Huntington Beach, California 

92647–2063; for a copy of this service 

information. You may review copies at the 

FAA, Transport Airplane Directorate, 1601 

Lind Avenue, SW., Renton, Washington; or at 

the National Archives and Records 

Administration (NARA). For information on 

the availability of this material at NARA, call 

202–741–6030, or go to: http:// 

www.archives.gov/federal-register/cfr/ibrlocations.html. 

Issued in Renton, Washington, on May 7, 

2007. 

Stephen P. Boyd, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service. 

[FR Doc. E7–9842 Filed 5–22–07; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 158 

[Docket No. FAA–2006–23730; Amendment 

No. 158–4] 

RIN 2120–AI68 

Passenger Facility Charge Program, 

Debt Service, Air Carrier Bankruptcy, 

and Miscellaneous Changes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This final rule amends FAA 

regulations dealing with the Passenger 

Facility Charge (PFC) program to add 

more eligible uses for revenue, protect 

such revenue in bankruptcy 

proceedings, and eliminate charges to 

passengers on military charters. These 

changes respond to the Vision 100— 

Century of Aviation Reauthorization 

Act. This final rule also revises current 

reporting requirements to reflect 

technological improvements, and to 

clarify and update existing references 

and regulations. This final rule further 

streamlines the existing policies of the 

PFC program. 

DATES: This amendment becomes 

effective June 22, 2007. 

FOR FURTHER INFORMATION CONTACT: For 

technical questions concerning this final 

rule, contact Sheryl Scarborough, 

Airports Financial Analysis and 

Passenger Facility Charge Branch, APP– 

510, Federal Aviation Administration, 

800 Independence Avenue, SW., 

Washington, DC 20591; telephone: (202) 

267–8825; facsimile: (202) 267–5302; 

e-mail: sheryl.scarborough@faa.gov. For 

legal questions concerning this final 

rule, contact Beth Weir, Airports Law 

Branch, AGC–610, Federal Aviation 

Administration, 800 Independence 

Avenue, SW., Washington, DC 20591; 

telephone (202) 267–5880; facsimile: 

(202) 267–5769. 

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, Section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. 

This rulemaking is promulgated 

under the authority described in 

Subtitle VII, Part A, Subpart I, Section 

40117. Under that section, the FAA is 

charged with prescribing regulations to 

impose a passenger facility fee to 

finance eligible airport-related projects. 

This regulation is within the scope of 

that authority because Vision 100 

requires the FAA to change the PFC 

program. Many actions in this document 

are in response to Vision 100. 

Background 

On March 23, 2005, the FAA 

published a final rule establishing a 3-

year pilot program for non-hub airports 

to test new application and application 

approval procedures for the PFC 

program (70 FR 14928). The 2005 final 

rule contains several changes designed 

to streamline the PFC application and 

amendment procedures for all PFC 

applications and amendments, thereby 

improving the entire PFC program. 

The FAA published the 2005 final 

rule to address Congressional mandates 

in the Vision 100—Century of Aviation 

Reauthorization Act (Vision 100). The 

non-hub pilot program, with the PFC 

application streamlining procedures, 

however, was only one of six mandates 

specified in Vision 100. The FAA 

separated the non-hub program and 

related changes from the other mandates 

because Congress had required the FAA 

to publish proposed rules on the pilot 

program within 180 days of enactment 

of Vision 100. 

On February 1, 2006, the FAA 

published the notice of proposed 

rulemaking (NPRM), ‘‘Passenger Facility 

Charge Program, Debt Service, Air 

Carrier Bankruptcy, and Miscellaneous 

Changes’’ (71 FR 5188) to address the 

remaining mandates in Vision 100. 

These mandates include: 

(1) Making low-emission airport 

vehicles and ground support equipment 

eligible for PFC funding, 

(2) Using PFCs to pay debt service on 

projects that are ‘‘not an eligible airportrelated project’’ when there is a 

financial need at an airport, 

(3) Clarifying the PFC status of 

military charters, 

(4) Structuring PFC account 

requirements for carriers in bankruptcy, 

and 

(5) Making eligible the use of PFC 

revenue as local share for projects under 

the air traffic modernization costsharing program. 

In addition, the FAA is adopting other 

changes that streamline benefits beyond 

those contained in the 2005 final rule. 

These changes will: 

(1) Provide for the electronic filing of 

notices and reports, 

(2) Provide a process for periodic 

review and change of the carrier 

compensation level, and 

(3) Modify the content and due date 

for some public agency reports and 

notices. 

Summary of Comments 

The FAA received 12 comments. All 

of the commenters generally support the 

proposed changes. These comments 

include suggested changes, as discussed 

below. 

Seven of the comments are from 

public agencies: Allegheny County 

Airport Authority, Pittsburgh, PA; 

Charlottesville-Albemarle Airport 

Authority, Charlottesville, VA; City and 

County of Denver, Denver, CO; Mahlon 

Sweet Field, Eugene, OR; Port Authority 

of New York and New Jersey, New York, 

NY; Norman Y. Mineta San Jose 

International Airport, San Jose, CA; and 

City of St. Louis, St. Louis, MO. Two 

comments are from aviation industry 

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28838 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 

groups: The Air Transport Association 

of America and the Airports Council 

International—North America. Two 

comments are from private citizens: 

Steven E. Myers and Kanisha K. Carty. 

One comment was submitted 

anonymously. 

In the discussion of comments below, 

the following applies: 

(1) Acronyms: The FAA uses the 

following acronyms or shortened names 

to identify the associated commenters: 

• Air Transport Association of 

America (ATA) 

• Airports Council International— 

North America (ACI) 

• Allegheny County Airport 

Authority (Pittsburgh) 

• Charlottesville-Albemarle Airport 

Authority (Charlottesville) 

• City of St. Louis (St. Louis) 

• City and County of Denver (Denver) 

• Mahlon Sweet Field (Eugene) 

• Norman Y. Mineta San Jose 

International Airport (San Jose) 

• Port Authority of New York and 

New Jersey (PANYNJ) 

General Comments 

The FAA received general comments 

about the PFC program from Pittsburgh, 

ACI, and Charlottesville. 

Pittsburgh believes the FAA has not 

gone far enough to make the PFC 

program a much more efficient and 

effective capital funding source for all 

domestic commercial service airports. 

Pittsburgh contends there should be an 

increase in the PFC level with the 

maximum level indexed on a yearly 

basis to inflation. Pittsburgh also claims 

the use of PFCs should be expanded to 

any airport-related capital project. 

ACI believes the PFC program should 

become an ‘‘impose and audit’’ program 

where an airport would make the local 

decision to impose a PFC and then 

certify to the FAA the airport used the 

PFC revenues on eligible capital projects 

or debt service. ACI would also like to 

see the non-hub pilot program (§ 158.30) 

expanded to more airports. 

ACI also expressed concern about 

potential administrative problems 

which could arise from the lengthy 

payout process for projects financed by 

debt instruments. ACI argued it is 

concerned about the potential for an 

‘‘administrative accident’’ that could 

impair the ability of an airport to 

continue to make its debt service 

payments for the full term of the 

indebtedness. 

Charlottesville is concerned about 

airlines requiring airports to accept PFC 

remittances by wire transfer. 

Charlottesville stated its bank charges 

the airport $0.26 per wire received. 

Charlottesville requested the FAA 

consider adding language to the 

proposed rulemaking to make the 

method of PFC remittance the airport’s 

choice, not the airline’s requirement. 

Pittsburgh’s and ACI’s comments 

regarding recasting the PFC program as 

an ‘‘impose and audit program’’ and 

expanding the non-hub pilot program to 

additional airports address areas outside 

the scope of this rulemaking. The 

proposals suggested by Pittsburgh and 

ACI would require changes to the PFC 

statute (49 U.S.C. 40117). 

ACI was unclear in its comments as 

to who, public agencies or the FAA, 

might have caused the ‘‘administrative 

accidents’’ during the closeout process. 

The FAA recently completed 

development and implementation of a 

program management system that 

should prevent the FAA from 

prematurely closing a PFC decision. The 

database requires the charge expiration 

date to be reached, and all projects to be 

physically and financially completed 

before the FAA can close a decision. 

Financial completion occurs after the 

approved amount of PFC revenue has 

been collected and the PFC portion of 

the project, including any debt 

instruments, paid. Public agencies may 

access and use the system to better 

monitor their PFC programs, thus 

minimizing administrative problems. 

Charlottesville’s comments regarding 

the method of PFC remittance are also 

outside the scope of this rulemaking and 

were not included in the economic 

analysis. The FAA may consider this 

issue in a future rulemaking. However, 

it is unlikely that the FAA would 

consider a $0.26 charge for each wire 

transfer as burdensome on the airport. 

Such a charge would cost the airport no 

more than $3.12 per air carrier each 

year. Weighed against the systematic 

convenience of a wire transfer which 

could reduce the chance of loss or 

delay, this cost appears reasonable. 

The FAA made no changes to part 158 

because of these general comments. 

Changes Mandated by Vision 100 

Low-Emission Airport Vehicles and 

Ground Support Equipment 

This provision makes low-emission 

airport vehicles and ground support 

equipment eligible for PFC funding if 

the airport is located in an air quality 

nonattainment or maintenance area. 

Kanisha Carty recommended, for a 

future rulemaking, that airport projects 

to reduce emissions from vehicles and 

ground support equipment be made 

mandatory. 

PANYNJ does not agree with the low 

emission standards contained in the 

Voluntary Airport Low Emission 

(VALE) Technical Guidance document. 

PANYNJ argued the current VALE 

criteria are inflexible and unrealistic. 

PANYNJ believes there is a gap between 

the equipment the FAA has determined 

is eligible for VALE funding and the 

equipment actually available for 

purchase. 

ACI requested clarification of the 

eligibility for PFC funding of safety and 

security vehicles. ACI believes these 

types of vehicles were already eligible 

for full PFC funding and this preexisting 

eligibility is not clearly discussed in the 

NPRM. ACI also believes it would be 

beneficial to extend the eligibility to 

areas covered by Early Action 

Compacts. (Early Action Compacts are 

areas for which the effective date of the 

nonattainment designation has been 

deferred because the area is expected to 

reach or maintain attainment status by 

December 31, 2006. Note 6, List of U.S. 

Commercial Service Airports and Their 

Nonattainment and Maintenance 

Status.) ACI also pointed out a 

typographic error in § 158.15(b)(8). 

Ms. Carty’s recommendation would 

be a fundamental change in the PFC 

program that could require a statutory 

change, as the PFC program does not 

enforce Federal priorities for project 

selection. Even if the proposal does not 

require statutory changes, public 

comment would be required before the 

FAA could adopt such a change. 

Therefore, the proposal to make the 

VALE Program mandatory is not 

included in this rulemaking. 

The FAA’s Airports Planning and 

Environmental Division and the 

Environmental Protection Agency, as 

directed by Vision 100, determined the 

types of equipment eligible under the 

VALE Program jointly. This guidance, 

found in the VALE Technical Report at 

http://www.faa.gov/airports_airtraffic/ 

airports/environmental/vale/media/ 

VALE_TR_v3_092206.pdf, was 

developed outside the parameters of this 

rulemaking. PANYNJ’s comments have 

been forwarded to FAA’s Airports 

Planning and Environmental Division 

for its consideration. 

This final rule adds a definition of 

‘‘Ground Support Equipment’’ to § 158.3 

to cover those vehicles that are eligible 

for the VALE Program but are not 

otherwise eligible for PFC funding. 

Aircraft rescue and firefighting, security, 

and snow removal vehicles are not 

included in this definition because 

these vehicles are already PFC-eligible 

under § 158.15(b)(1). To ease confusion 

over which vehicles are eligible for the 

VALE Program, the FAA is revising 

proposed § 158.15(b)(8) to clarify that 

the references to ‘‘vehicles’’ mean 

vehicles eligible under § 158.15(b)(1). 

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The FAA is also correcting the 

typographic error identified by ACI in 

paragraph § 158.15(b)(8). 

Vision 100 specifically limits VALE 

projects to airports located in air quality 

nonattainment areas or maintenance 

areas as defined by sections 171(2) and 

175A of the Clean Air Act, respectively. 

A statutory change is required to add 

areas covered by Early Action Compacts 

to this eligibility. 

Use of PFC Revenue To Pay for Debt 

Service for Non-Eligible Projects 

This provision allows the use of PFC 

revenue to pay debt service on projects 

that are not eligible airport-related 

projects when there is a financial need 

at the airport. 

Eugene argued, in the case of an 

airline bankruptcy which results in the 

rejection of a significant portion of air 

carrier gate leases, ‘‘significant’’ should 

be defined as rejection of 20 percent or 

more of the airport’s leased gates. 

Eugene further holds that a significant 

reduction in air service should be 

defined as anything greater than a 10 

percent reduction in enplanements at 

the airport. 

Eugene also believes that this 

provision should be geared towards 

something less than catastrophic 

changes in the airport’s financial 

position. Eugene maintained the 

triggering events should include an 

airport having difficulty meeting 

industry standards for financial 

stability. Eugene suggested indicators of 

financial instability should include high 

airline rates and charges, a high 

percentage of reliance on airline 

revenue, reductions in force, deferred 

maintenance, negative equity, 

insufficient capital reserves, and other 

negative impacts created by a significant 

change. 

Finally, Eugene suggested that 

requests for use of PFCs to pay debt 

service for otherwise ineligible projects 

be treated differently than other requests 

for PFC collection authority. Eugene 

suggested, under circumstances in 

which the airport asserts that a financial 

need has been demonstrated and the 

incumbent carriers unanimously agree 

the existing part 158 criteria have been 

met, the FAA should grant 

extraordinary flexibility in the 

application of this rule. Eugene 

requested that, if the application is 

denied under this process, the FAA’s 

decision include an explanation of the 

denial. 

PANYNJ believes airports should be 

given the flexibility to use PFCs for any 

airport project that is connected to the 

movement of people and cargo for the 

purposes of commerce, trade, travel, and 

tourism. PANYNJ also argued airports 

should be given the flexibility to use 

PFCs to pay debt service on non-eligible 

projects if the airport determines this 

use would be good fiscal management 

and would enable airport management 

to effectively maintain and operate the 

airport. 

ATA pointed out three 

inconsistencies between the statute and 

the proposed regulatory language. ATA 

noted that 49 U.S.C. 40117(b)(6) refers 

to ‘‘debt service on indebtedness’’ but 

§§ 158.13(e) and 158.18 refer to ‘‘debt 

service or indebtedness.’’ ATA 

expressed concern that the proposed 

language in §§ 158.13(e) and 158.18 

referring to ‘‘indebtedness incurred to 

carry out an airport project’’ could be 

interpreted to permit the use of PFC 

funds for projects located off airport 

property. Finally, ATA noted that 49 

U.S.C. 40117(b)(6) refers to ‘‘the 

financial need of the airport’’ but 

proposed §§ 158.13(e) and 158.18 refer 

to ‘‘the financial need of the public 

agency.’’ ATA is concerned this change 

from the statutory language could result 

in approval of debt service even if the 

financial need is not related to the 

airport. 

ACI requested clarification of the term 

‘‘reserve fund’’ as it is used within the 

definition of ‘‘financial need.’’ ACI also 

requested clarification of the statement 

‘‘cannot meet its operational or debt 

service obligations.’’ ACI is concerned 

the FAA meant an airport had to miss 

a required payment in order to qualify. 

ACI asked that several events be 

added to the list of events, provided in 

the NPRM preamble, which might 

contribute to a financial crisis at an 

airport. The first of ACI’s suggested 

events is an airport being found in 

violation (including technical violation) 

of its bond covenant, trust indenture, or 

other financing requirements. ACI also 

would like to add the failure of an air 

carrier, whether or not in bankruptcy, to 

use the facilities at the airport for a 

significant period of time to the list of 

events contributing to a financial crisis 

at the airport. Two final triggering 

events suggested by ACI are the failure 

of a carrier to make timely payments to 

the airport and the failure of a carrier to 

collect or remit PFCs. ACI would also 

like the FAA to clarify when discussing 

air carriers in this context that the FAA 

means both domestic and foreign air 

carriers. 

ACI would also like to alter the 

proposed procedures airports must use 

to gain approval to use PFCs under this 

provision. ACI argued an airport should 

be allowed to use PFCs under this 

provision if the airport could 

demonstrate it otherwise would not be 

able to pay its debt service, meet 

coverage requirements, or otherwise be 

in violation of bond covenants based on 

prospective calculations. ACI argued if 

airports cannot rely on prospective 

calculations, PFCs would not be 

available for debt service until after a 

financial crisis. ACI also recommended 

airports not be required to go through 

the normal application process. Rather 

ACI recommended the following fourstep process: 

(1) The airport declares that it is 

experiencing a financial crisis; 

(2) The airport notifies the FAA of the 

basis of the crisis; 

(3) The airport applies (existing) PFCs 

to the immediate need; and 

(4) The FAA reviews the application 

within 60 days of submission and either 

‘‘ratifies’’ the airport’s use of PFCs or 

requires some modification of the 

airport’s use of PFCs. 

ACI concluded its comments on this 

provision by requesting that the 

proposed prohibition on an airport 

issuing new debt be revised. The first 

suggested revision would allow an 

airport to issue new debt to refund 

outstanding debt. The second revision 

would allow an airport to issue new 

debt if it can be shown that failure to do 

so would have greater financial 

repercussions. 

The comments submitted 

anonymously argued the proposed rule 

unnecessarily limits the use of PFCs to 

pay debt service on ineligible projects. 

The commenter also argued the FAA 

has not undertaken a substantive 

alternatives analysis on this provision. 

The commenter believes the FAA 

should provide ‘‘significant 

justifications’’ beyond the statutory 

mandate for the proposed rulemaking. 

In order to provide the maximum 

flexibility to each airport, the FAA has 

elected not to specify percentages with 

respect to a significant number of gates 

or reduction in air service since the 

appropriate percentage could vary from 

airport to airport. The FAA suggests an 

airport applying to collect and use PFCs 

under this provision determine what 

percentage of gates or air service is 

significant for its operations and defend 

that choice in its application. 

The FAA suggested several events in 

the preamble of the NPRM that might 

result in an airport finding itself in 

financial need. The FAA did not 

consider this listing to be 

comprehensive. An airport seeking to 

demonstrate its financial need is 

welcome to discuss any triggering 

events applicable to its unique situation. 

The FAA does not agree that all of the 

proposed indicators of financial 

instability provided by Eugene and ACI 

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are, in fact, indicators of instability. 

Some of these indicators, including 

reductions in force and deferred 

maintenance, could be indicators of 

prudent financial management and/or 

changing priorities. Furthermore, terms 

such as ‘‘high airline rates and charges,’’ 

‘‘a high percentage of reliance on airline 

revenue,’’ ‘‘the failure of an air carrier 

to use airport facilities for a significant 

period of time,’’ and ‘‘failure of a carrier 

to make timely payments to the airport’’ 

are vague and subjective and must be 

considered on an airport-by-airport 

basis. The FAA encourages each airport 

applying to use PFC revenue under this 

provision to thoroughly discuss in its 

application those factors it believes 

most clearly indicate its financial need. 

After reviewing ATA’s comments on 

§§ 158.13(e) and 158.18(a), the FAA has 

concluded that an unintended 

consequence of the wording 

‘‘indebtedness incurred to carry out an 

airport project’’ could be airports 

applying to use PFC revenue to pay the 

debt services costs for projects located 

off airport property if those projects 

were labeled as ‘‘airport projects.’’ The 

FAA does not believe that Congress 

intended for this provision to be used 

on off-airport projects. Therefore, the 

FAA has returned to the statutory 

language, ‘‘indebtedness incurred to 

carry out at the airport a project,’’ in this 

final rule. The FAA also acknowledges 

the typographic error, ‘‘debt service or 

indebtedness,’’ and has returned this 

rule language to ‘‘debt service on 

indebtedness.’’ Finally, the FAA 

acknowledges that the term ‘‘financial 

need of the public agency’’ could lead 

to requests to use PFCs to pay debt 

service on an otherwise ineligible 

project due to a financial crisis 

unrelated to the airport. The FAA does 

not believe Congress intended for this 

provision to be on a non-airport related 

financial need. Therefore, the FAA has 

returned to the statutory language 

‘‘financial need of the airport,’’ in this 

final rule. 

The term ‘‘reserve fund’’ used within 

the new definition of ‘‘financial need’’ 

refers only to the operational or capital 

reserve fund and not any reserve funds 

required under financing documents. 

The FAA’s definition of financial need 

as it concerns this provision 

concentrates on the ability of an airport 

to maintain airport/flight operations. 

However, the FAA does not intend that 

an airport miss required payments in 

order to demonstrate that it ‘‘cannot 

meet its operational or debt service 

obligations.’’ Rather, the FAA expects 

an airport attempting to demonstrate 

that it faces a financial crisis to discuss 

factors likely to affect its ability to make 

required payments in the future. 

Projections of revenue streams and cash 

flow would be relevant to that 

demonstration. 

The discussion in the preamble to the 

NPRM regarding the issuance of new 

debt does not prohibit the issuance of 

new debt. Rather, the FAA believes any 

airport that is granted authority to 

collect and use PFC revenue under this 

provision should use this revenue to 

help it return to a position of financial 

stability as quickly as possible. 

Therefore, as a part of its deliberations 

on the application, FAA will consider 

the airport’s plans to return to financial 

stability. If an airport believes incurring 

new debt (for any purpose) will help it 

return to financial stability as soon as 

possible, it should discuss this factor in 

the application. 

The various proposals submitted by 

Eugene, PANYNJ, and ACI for the FAA 

on processing requests to collect and 

use PFC revenue to pay debt service for 

otherwise ineligible projects and 

defining eligibility are not being 

adopted in this final rule. Vision 100 

clearly requires the FAA (representing 

the Secretary of Transportation) rather 

than the airport itself to determine that 

an airport is in financial need. 

Furthermore, Vision 100 does not 

provide any special processing language 

for this provision. Therefore, the 

processing provided for in 49 U.S.C. 

40117, which requires the FAA make its 

decision prior to an airport collecting or 

using PFC revenue, must be applied to 

this provision. Similarly, proposals for 

defining eligibility go beyond the scope 

of the statute and cannot be 

implemented by rulemaking. The FAA 

has, since the beginning of the PFC 

program, included its reasons for every 

partial approval and disapproval of a 

project in its decisions. The FAA will 

continue this practice for any requests 

submitted under this provision that are 

denied. 

The anonymous commenter’s 

argument appears to be based on the 

assumption that the FAA would not 

consider alternatives in its financial 

needs analysis of an airport’s proposal. 

The FAA stated in the preamble to the 

NPRM that we will analyze each 

proposal on a case-by-case basis. This 

provision responds to a statutory 

mandate that is based on an airport’s 

financial need. A structured model has 

the potential to be overly restrictive in 

a financial needs analysis. The FAA has 

chosen to make this provision flexible 

in order to allow each airport to tailor 

its application to its particular 

circumstances. 

Clarification of Applicability of PFCs to 

Military Charters 

This provision clarifies the PFC status 

of military charters. 

ACI expressed concern that 

§ 158.9(a)(6), as written, would allow 

individual passengers flying on 

scheduled commercial air carrier flights 

to be exempt from paying PFCs. 

The FAA reviewed the proposed 

language in § 158.9(a)(6) and does not 

agree with this comment. Section 

158.9(a)(6) reads as follows: ‘‘Enplaning 

at an airport if the passenger did not pay 

for the air transportation that resulted in 

the enplanements because of 

Department of Defense (DOD) charter 

arrangements and payment.’’ By the use 

of the word ‘‘and,’’ the language, as 

written, imposes two conditions for the 

exemption—the passenger is on a flight 

chartered by DOD and the flight is paid 

for by DOD. This language does not 

apply to individuals who pay for their 

own transportation nor does it apply to 

individuals who are not traveling under 

DOD charter arrangements. 

Accordingly, the FAA made no 

changes to § 158.9(a)(6). 

Financial Management of Passenger 

Facility Fees 

This provision structures PFC account 

requirements for air carriers in 

bankruptcy. 

Denver expressed concern that the 

changes to the regulation proposed in 

the NPRM do not address who enforces 

compliance with the PFC statute and 

regulation when an air carrier files for 

bankruptcy protection. 

Denver requested that the regulations 

be modified to state that an airport has 

the legal standing to protect its PFCs. 

Denver requested the regulation 

specifically state an airport has a 

sufficient stake in the PFC program such 

that it is entitled to seek legal protection 

from a court with appropriate 

jurisdiction to compel an air carrier’s 

compliance with the PFC regulation. In 

support of this request, Denver cited a 

recent bankruptcy case in which the 

bankrupt air carrier argued public 

agencies had no standing to enforce this 

provision of Vision 100. 

Denver also requested § 158.49 be 

modified to state that any party that 

holds PFCs for a public agency holds 

such PFCs in trust for the benefit of the 

public agency. Denver contended this 

relationship should extend to third 

parties, including credit card 

companies. Denver would also like the 

regulation to describe which parties 

beyond the covered air carrier shall be 

subject to the PFC regulations. Denver 

contended that § 158.49(b) recognizes 

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the concept of an agent of the air carrier 

but does not define which third parties 

would be considered agents. 

Denver is concerned the proposed 

§ 158.49(c) does not require a separate 

trust account for PFCs but leaves open 

the possibility that an air carrier could 

simply create a sub-account within an 

existing trust account and claim 

compliance with the ‘‘designate separate 

PFC account’’ requirement. Denver is 

concerned sub-accounts in existing trust 

fund accounts are typically controlled 

by the secured creditors and are subject 

to provisions in complex agreements not 

made available to the public agencies. 

Denver claimed the regulation should 

clarify post-petition accounting 

requirements and require covered air 

carriers to demonstrate how the ‘‘PFC 

reserve’’ for each affected airport was 

calculated. Denver also requested that 

the regulation make clear that any funds 

in the PFC reserve are in the nature of 

trust funds. Denver holds that these PFC 

reserve funds should be available to pay 

PFCs in the event a covered air carrier 

fails to make its PFC payments. Denver 

contended funds in the PFC reserve 

should only be released for non-PFC 

purposes after all affected airports have 

received the appropriate PFC 

remittances. Denver also argued the 

funds in the PFC reserve should be 

equitably allocated to all affected 

airports if a covered air carrier ceases 

operations. 

In addition, Denver requested the 

regulation provide the procedure to 

allow an airport to recover its costs 

when an airport is forced to protect its 

PFCs. Denver claimed it has expended 

funds to hire outside and local counsel, 

file motions, appear in court, and 

otherwise incur costs to protect its PFC 

revenues in four bankruptcy cases since 

Vision 100 was enacted. Denver believes 

it is unclear from the proposed 

regulation whether it should invoice a 

non-compliant air carrier, seek recovery 

through the FAA, or file a motion or 

complaint in the appropriate court. 

Denver suggests the regulation clarify 

that the right to compensation is a postpetition claim which should be treated 

as an administrative expense entitled to 

priority under 11 U.S.C. 503(b). Denver 

further suggests that the regulation 

provide that the claim should be 

allowed irrespective of any requirement 

in the Bankruptcy Code that the airport 

prove a ‘‘benefit to the estate.’’ Denver 

also suggests that the claim should be 

allowed in the event the bankruptcy 

case converts from Chapter 11 to 

Chapter 7. Denver would also like 

clarification regarding which costs are 

eligible for reimbursement. 

ACI recommended the definition of 

‘‘covered air carrier’’ be expanded 

beyond the category specified by Vision 

100 to include air carriers in financial 

distress, even if they have not yet 

declared or been forced into bankruptcy. 

ACI goes on to recommend that an air 

carrier which fails to remit PFCs in a 

timely manner or fails to properly report 

PFC collections to any airport be 

required, from that point forward, to 

place its PFC collections daily into a 

segregated escrow account or trust fund 

absolutely dedicated to the airports for 

which the air carrier collected them. 

ACI also argued that an air carrier that 

‘‘cannot prove it can provide accurate 

accounting, on an airport-by-airport 

basis’’ should be required to establish 

separate PFC trust accounts for each 

airport. 

ACI also requested clarification of 

§ 158.49(c)(1)(v), regarding 

reconciliation of an estimated PFC 

monthly balance. ACI is concerned this 

paragraph does not cover air carriers to 

reconcile the amounts in the PFC 

account if they deposit PFC revenues 

directly into the segregated PFC 

account. 

ACI also argued the word 

‘‘unnecessarily’’ should be deleted from 

§ 158.49(c)(4). ACI believes Vision 100 

clearly states that any failure by a carrier 

to comply with any provision of 

subsection (m) of Vision 100 that causes 

an airport to spend money to recover or 

retain its PFCs imposes an obligation on 

that carrier to compensate the airport for 

such costs. 

St. Louis is concerned with the 

language in § 158.49(c)(3) regarding the 

prohibition on covered air carriers 

granting security or other interests in 

PFC revenues to third parties. St. Louis 

claimed it has been told by air carriers 

that this language would prevent the 

carrier from granting a security interest 

in the PFCs to the airports on whose 

behalf the charges are collected. St. 

Louis requested the FAA clarify 

§ 158.49(c)(3) since this section does not 

apply to public agencies but rather 

applies to banks and other airline 

creditors. 

ATA is concerned the definition of 

‘‘covered air carrier’’ is overly broad 

because it does not protect air carriers 

from frivolous involuntary bankruptcy 

filings. ATA asserts that contracts which 

contain involuntary bankruptcy 

provisions typically include a grace 

period (usually 30 to 90 days) to obtain 

dismissal of any involuntary petition. 

ATA believes this grace period gives an 

air carrier time to resolve ‘‘illegitimate 

bankruptcy petitions and petty 

disputes.’’ ATA requested the definition 

of ‘‘covered air carrier’’ be modified to 

state an air carrier ceases to be a covered 

air carrier upon its exit from bankruptcy 

protection. ATA also requested the FAA 

allow for some flexibility in § 158.49(c) 

to reflect the complex nature of airline 

financial management. 

Neither 49 U.S.C. 40117 nor 14 CFR 

part 158 restricts the legal remedies 

available to public agencies. Since the 

beginning of the PFC program, public 

agencies have had legal rights with 

respect to PFC revenue. Public agencies 

are entitled to avail themselves of all 

legal remedies to ensure they receive the 

PFC revenue to which they are entitled. 

Specific enforcement responsibilities 

are not described in the existing PFC 

statute, 49 U.S.C. 40117, and further 

clarification to assist public agencies 

would require legislative action. The 

FAA believes the air carriers’ assertion 

that airports have no standing with 

regard to PFC revenue in bankruptcy 

cases is ill-founded. However, in the 

case of PFC collection issues, the FAA 

works with all air carriers to bring them 

into compliance with PFC collection, 

handling, and remittance requirements 

so that the public agencies need not 

resort to legal challenges. On those 

occasions where, for whatever reason, 

the air carrier has insufficient PFC 

revenue in its accounts to meet all of its 

PFC obligations, the FAA works with 

the affected public agencies to ensure 

they are treated equally and receives 

their proportionate share of the 

available revenue. 

In the context of the PFC regulation, 

an ‘‘agent’’ of an air carrier is a third 

party who is authorized to issue airline 

tickets for the air carrier. Credit card 

companies, banks, and other secured 

creditors that are not authorized to issue 

airline tickets are not agents of the air 

carrier. Collecting air carriers are 

statutorily prohibited (49 U.S.C. 

40117(m)(3)) from granting any third 

party an interest in trust moneys such 

as PFCs. If, through an agreement with 

an air carrier, a third party holds 100 

percent of ticket revenue (which would 

include applicable PFCs), it would 

appear that the air carrier is violating 

this statutory prohibition. The only 

authorized holders of PFC revenue are 

air carriers and public agencies. 

Section 158.49(c)(1) specifies that a 

covered air carrier must segregate its 

PFC revenue in a designated separate 

PFC account. This PFC account is 

intended to hold all PFC revenue 

separate from any other air carrier 

revenue so that it is easier to identify in 

bankruptcy proceedings. A subaccount 

within an existing account would not 

meet this requirement for a separate PFC 

account. 

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The ‘‘PFC reserve fund’’ is not 

calculated on an airport-by-airport basis. 

Rather, the reserve is equal to the onemonth average of the air carrier’s total 

PFC collections for the 12 months 

preceding its filing for bankruptcy 

protection. The FAA is adding language 

to § 158.49(c)(1)(ii) to indicate that, in 

the event a covered air carrier ceases 

operations while still owing PFC 

remittances, the PFC reserve fund could 

be used to make those remittances. The 

FAA is also adding language that the 

remaining balance, after all PFC 

obligations are met, will be returned to 

the air carrier’s general account after the 

carrier emerges from bankruptcy and 

ceases to be a covered air carrier. 

The FAA is removing the word 

‘‘unnecessarily’’ from § 158.49(c)(4). As 

mentioned above, this provision applies 

only to the reasonable and necessary 

costs incurred by a public agency 

seeking to recover or retain payment of 

PFCs when a covered air carrier refuses 

to remit the PFCs. 

Vision 100 does not contain formal 

instructions for public agencies on how 

to recover funds expended to recover or 

retain PFCs from a covered air carrier. 

Federal oversight has served to assist 

public agencies in the initial recovery of 

PFCs. However, public agencies are 

entitled to avail themselves of all legal 

remedies, to include filing of a postpetition administrative claim to recoup 

funds used for recovery or retaining 

PFCs with the appropriate Bankruptcy 

Court. The FAA takes this opportunity 

to clarify that the public agency’s 

expenses discussed in § 158.49(c)(4) 

apply to those expenses that a public 

agency may incur when a covered air 

carrier refuses to remit PFCs. 

Bankruptcy law makes participation in 

a bankruptcy proceeding unavoidable 

for public agencies seeking to assure a 

carrier implements the PFC financial 

management requirements of Vision 

100. Participation may be necessary 

even when the air carrier is willing to 

implement the provision. Expenses a 

public agency may choose to incur to 

generally represent its claims in a 

bankruptcy proceeding are not included 

in this provision. 

The FAA is not granting ACI’s request 

to expand the definition of covered air 

carrier beyond those carriers filing for 

bankruptcy protection. ACI’s request to 

include carriers in financial distress 

within the covered air carrier definition 

would require a statutory change. In 

addition, the FAA is not modifying part 

158 to require an air carrier (not just a 

covered air carrier) that fails to remit 

PFCs or report PFC collections in a 

timely manner to place all PFC revenue 

daily in a segregated escrow account or 

a dedicated trust fund. This proposal 

goes beyond the scope of the NPRM and 

would require the opportunity for 

public comment before it could be 

adopted. 

The FAA did not include a 

requirement in § 158.49(c)(1)(iv) that a 

covered air carrier undertake a monthly 

reconciliation of actual monthly PFC 

amount for those carriers that are 

depositing the daily PFC amount in the 

segregated PFC account. Covered air 

carriers that deposit the daily PFC 

amount are depositing the actual 

amount collected less the air carrier 

compensation fee. The FAA is requiring 

covered air carriers that opt for the 

estimated monthly collection amount in 

§ 158.49(c)(1)(v) to undertake a monthly 

reconciliation. We are adopting this 

requirement because the actual amount 

could be different from the estimated 

amount and we want to ensure the PFC 

account contains the funds necessary for 

the covered air carrier to meet its PFC 

obligations. 

The FAA is partially granting the 

relief sought by ATA with regard to 

frivolous involuntary bankruptcy 

filings. The FAA is modifying the 

definition of covered air carrier to 

provide a 90-day grace period to allow 

an air carrier to seek dismissal of an 

involuntary bankruptcy filing before the 

air carrier becomes a covered air carrier. 

However, this grace period will be 

limited to those air carriers that are 

current on their PFC remittances. The 

FAA is also revising the definition of 

‘‘covered air carrier’’ to indicate that an 

air carrier ceases to be a covered air 

carrier when it emerges from 

bankruptcy protection. 

Changes Associated With Technological 

Improvements 

This provision updates various PFC 

procedures to take advantage of 

technological improvements since the 

PFC program’s inception in 1990 

including the use of electronic or 

paperless airline ticketing, the use of 

electronic mail to send documents, and 

Web sites to post information. 

ATA argued that the proposed 

definition of the point of issuance of 

airline tickets would result in negative 

unintended consequences including 

extensive airline ticketing programming 

changes and unequal tax treatment for 

international passengers depending on 

the form of payment. 

ATA also supported the database 

development discussed in the NPRM. 

ATA recommended that the FAA work 

with a committee of airport and airline 

representatives to design airport and 

airline modules. ATA suggested that 

having the airports and airlines 

participate in the design of the modules 

they will use would help to achieve 

widespread buy-in to this new database. 

ATA also recommended the FAA 

develop standards and procedures for 

airports, airlines, and other reporting 

entities that need access to reports, 

summaries, and other information 

necessary to ensure accurate 

information is being input in the 

database. 

The FAA proposed the definition of 

point of issuance of airline tickets as 

part of a strategy to ensure PFCs 

collected for tickets with wholly U.S. 

itineraries are collected using the 

procedures in § 158.45 rather than the 

procedures in § 158.47. A second part of 

this strategy was a proposal to insert 

language in § 158.47 regarding tickets 

for wholly U.S. travel. Based on the 

concerns raised by ATA, the FAA has 

decided to drop the proposed definition 

of point of issuance of airline tickets in 

§ 158.3. The FAA believes that the 

proposed revisions to § 158.47 are 

sufficient to ensure that all applicable 

PFCs will be collected. 

Since the NPRM was published, the 

FAA has completed development of the 

public agency module of the PFC 

database. The module was deployed in 

June 2006. The FAA plans to work 

closely with air carriers regarding 

design and development of the air 

carrier module, and welcomes ATA’s 

participation. 

As each module of the database is 

developed and deployed, the FAA is 

gathering business rules and data 

standards applicable to that module. 

The FAA will work with all system 

users to determine the most effective 

method of publication for these rules 

and standards. 

Changes To Streamline PFC 

Procedures, Codify PFC Policies, or 

Address Issues or Questions About the 

PFC Program 

PFC Administrative Costs 

This provision directs public agencies 

wishing to use PFC revenue to pay for 

allowable PFC administrative support 

costs to treat those costs as a separate 

and distinct PFC project in a PFC 

application or notice of intent. 

San Jose believes that PFC 

administrative support costs should be 

a part of the project costs. San Jose 

suggests that its administrative costs are 

minimal compared to its overall PFC 

program. San Jose also argued that it 

would not be cost effective to submit 

and maintain a separate application for 

PFC administrative support costs. 

ACI requested that the FAA clarify 

that the costs of administering a PFC 

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project; i.e., managing a construction 

project, remain eligible and should 

continue to be included in the general 

projects. 

The FAA agrees with San Jose that it 

would not be cost effective for a public 

agency to submit and maintain a 

separate application for PFC 

administrative support costs. However, 

the proposal in the NPRM does not 

require public agencies to submit and 

maintain a separate PFC application for 

these costs. Rather, the proposal would 

require that PFC administrative support 

costs be treated as a separate project in 

an application, not a separate 

application, if the public agency wishes 

to reimburse itself for these costs using 

PFC revenue. PFC administrative 

support costs include the cost to prepare 

a PFC application or notice of intent as 

well as amendments, and other actions 

associated with that application or 

notice; prepare and distribute quarterly 

reports; and annual audits of its PFC 

program. PFC administrative support 

costs do not include construction or 

project management associated with a 

specific development project. 

Construction or project management 

costs may be treated either as an 

incidental cost within the development 

project or as a separate stand-alone 

project within an application. 

The FAA made no changes to part 158 

because of the comments received on 

this section. 

Duration of Authority To Impose a PFC 

Before Project Implementation 

This provision clarifies the required 

timing of PFC project implementation. 

ACI believes the proposed revisions 

are confusing and recommends alternate 

language. ACI also argued the time 

period for when the decision date is 

used rather than the charge effective 

date should be 30 days rather than the 

60 days specified in the NPRM due to 

other recent or proposed changes 

regarding charge effective dates. 

The FAA has reviewed the proposed 

revision in the NPRM and ACI’s 

suggested alternative language. As a 

result of this review, the FAA has made 

minor revisions to the regulatory 

language to reduce confusion. However, 

the FAA has retained the 60-day time 

period as proposed. Section 

158.43(b)(3), as revised in this 

rulemaking, requires the charge effective 

date be the first day of the month and 

at least 30 days after the approval date. 

For example, an application approved 

April 2, would have a charge effective 

date of June 1, 59 days after the decision 

date. Thus, the FAA has concluded that 

a 60-day time period is the correct 

differential between the charge effective 

and decision dates. 

Amendment of Approved PFC 

This provision modifies the PFC 

amendment procedures to set a 

minimum dollar threshold for 

amendments requiring additional air 

carrier consultation and public notice 

and comment. For projects with original 

approved amounts at or above this 

threshold and for projects that are 

amended to or above this threshold, an 

increase of more than 25 percent would 

trigger the need for consultation and 

public comment. For projects with 

original approved amounts below this 

threshold, public agencies would not 

need to consult with air carriers and 

provide the opportunity for public 

comment, regardless of the percentage 

increase in costs proposed. 

ATA recommended that, for projects 

with an original approved amount 

under $1 million, a limit of 50 percent 

be placed on the percentage of increase 

in the approved project amount allowed 

before the public agency is required to 

undertake additional airline 

consultation and public notice and 

comment. ATA also recommended that 

public agencies be required to undertake 

additional airline consultation and 

public notice for any project with an 

original approved amount of less than 

$1 million whenever the approved 

amount for that project is amended to 

over $1 million. 

The FAA understands the concerns 

underlying ATA’s comments and 

recommendations. Our intention in 

proposing a consultation-triggering 

threshold is to eliminate the burden on 

public agencies and air carriers that is 

related to the required consultation for 

low-cost projects. In the NPRM, the 

FAA attempted to devise a threshold 

that would capture significant changes 

to projects without also capturing small 

projects. The FAA is aware of only a few 

projects in the entire history of the PFC 

program that have been approved as 

low-cost projects and later amended to 

significantly over $1 million. After 

further review and consideration, the 

FAA concludes that the threshold 

proposed in the NPRM is reasonable 

and practical. 

However, in addition to the threshold 

proposed in the NPRM, the FAA has 

decided to adopt ATA’s proposal to 

require additional air carrier 

consultation and public notice and 

comment when the PFC amount of a 

project is amended to over $1 million. 

The FAA declines to adopt ATA’s 

proposal regarding a 50 percent limit on 

the amendment amount for projects 

under $1 million at this time. However, 

the FAA will closely monitor future 

amendments. The FAA will also pay 

particular attention to projects originally 

approved for low PFC amounts and later 

increased significantly. The FAA may 

undertake future rulemaking on 

amendments if it concludes public 

agencies are using the amendment 

thresholds to deliberately avoid future 

air carrier consultation and public 

notice. 

Nonrefundable Tickets 

This provision clarifies that failure to 

travel on a nonrefundable or expired 

airline ticket is not a change in itinerary. 

Ticket purchasers holding 

nonrefundable or expired tickets are not 

entitled to a refund of any associated 

PFCs if the ticket purchaser is not 

entitled to any fare refund. 

Steven Myers is concerned the 

proposal regarding nonrefundable 

tickets is based on ticket costs. Mr. 

Myers argued PFCs should be 

refundable or nonrefundable to all 

travelers regardless of the airfare. Mr. 

Myers is also concerned this proposal 

would disproportionately affect 

minority and low-income travelers. He 

argued that, if this proposal 

disproportionately affects minority and 

low-income travelers, it should be 

subject to appropriate National 

Environmental Policy Act (NEPA) 

analysis. 

While the FAA agrees with Mr. Myers 

that nonrefundable tickets tend to cost 

less than refundable tickets, the FAA 

does not agree that nonrefundable 

tickets tend to be used 

disproportionately by lower income 

travelers. Most travel web sites provide 

an initial sort of ticket options by fare. 

Generally, most travelers’ first review of 

flights shows the more restricted or 

nonrefundable fares; therefore, most 

travelers searching for coach class 

tickets are likely to have been presented 

with the option of purchasing a 

nonrefundable ticket. 

However, the FAA’s proposed 

clarification that passengers holding 

nonrefundable or expired tickets are not 

entitled to a refund of any associated 

PFCs is not based on ticket price. Rather 

it is based on proposed travel in 

conjunction with air carrier fare and 

refund rules. Air carriers offer many 

different fare types with specific rules 

associated with each fare type. Some of 

those fare rules specify that a passenger 

is not entitled to a cash refund of the 

fare if the passenger does not travel as 

ticketed. The FAA is ensuring that PFCs 

are treated similarly. Mr. Myers is 

reminded that where a fare is applied to 

another ticket, so too is the PFC. 

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This provision applies to all travelers 

and thus does not disproportionately 

affect minority or low-income travelers. 

Under the circumstances, NEPA is not 

triggered. 

Air Carrier Collection Compensation 

This provision establishes a 

procedure for the FAA to periodically 

review and set the air carrier collection 

compensation level. 

ATA requested clarification of the 

term ‘‘audited air carrier collection’’ in 

§ 158.53(c)(1). It questions whether the 

FAA would require an opinion from the 

carriers’ auditors as to the accuracy of 

the costs. ATA further questioned 

whether the air carriers’ auditors would 

be able to provide this opinion if the 

carriers’ accounting systems do not 

capture this information specifically for 

PFC collection, handling, and 

remittance. 

ATA also requested the regulations 

state that any future handling fee 

revision adopted as a result of the FAA’s 

periodic review of collection 

compensation may not be reduced 

below the current $0.11. Alternatively, 

ATA suggested the submission of cost 

data be made mandatory to ensure the 

FAA has a complete set of industry data 

to use as the basis for re-setting the 

handling fee. ATA also suggests the 

FAA establish a 5-year cycle for review 

of the handling fee, establish a set of air 

carrier data points that will be used in 

establishing the fee, and publicize this 

endeavor so that air carriers can track 

the data prospectively rather than 

having to look back every 5 years. 

ACI is concerned that any change in 

the carrier compensation level may have 

an adverse affect on public agencies that 

have pledged their PFCs to bond 

payments. ACI is also concerned that 

escrow costs may be interpreted as 

being the cost a carrier in bankruptcy 

incurs to set up trusts for PFCs in 

accordance with § 158.49(b). 

ACI argued § 158.53 should be 

modified so that any carrier, whether or 

not in bankruptcy, which has failed to 

properly remit PFCs to any airport 

would not be entitled to receive 

compensation for the collection or 

remittance of any PFCs for any airport 

until that carrier has ‘‘made good the 

PFCs it owes.’’ 

ACI also argued that, when 

considering any adjustment to the 

collection compensation level, the FAA 

should disregard any costs submitted by 

carriers that have failed to properly 

collect or remit PFCs. ACI believes the 

FAA should deduct the aggregate 

amount the airports have had to expend 

to collect PFCs from carriers that have 

improperly withheld them along with 

the amount of PFCs improperly 

withheld. 

The FAA mistakenly used the term 

‘‘audited costs’’ in the preamble to the 

NPRM. Rather, the FAA intended to 

indicate costs submitted by a carrier 

should include a certification from the 

airline’s Chief Financial Officer or 

independent auditor that the costs 

submitted are accurate. 

The FAA also mistakenly used the 

term ‘‘escrow costs’’ in the preamble to 

the NPRM. The FAA does not intend to 

allow the inclusion of costs related to 

the provisions of § 158.49(c) in the 

calculation of the carrier compensation 

rate. 

The FAA is not aware of any adverse 

affects experienced by public agencies 

as a result of previous changes in the 

carriers’ compensation rate. However, 

the FAA’s proposed procedures for 

review of compensation rates will 

provide the opportunity for public 

agencies to comment on how any 

proposed change to the rate might affect 

the public agency before that proposed 

change goes into effect. 

Under 49 U.S.C. 40117, the FAA is 

required to calculate the carriers’ 

collection compensation rate based on 

an average of the carriers’ reasonable 

and necessary costs of collecting, 

handling, and remitting the PFCs. 

Therefore, the FAA cannot agree to set 

the current compensation rate of $0.11 

per PFC collected as the permanent 

minimum rate as requested by ATA. Nor 

can the FAA agree to forgo 

consideration of certain carriers’ costs 

when determining the average of their 

costs, as requested by ACI. 

The FAA continues to keep the 

submission of cost data by carriers as a 

voluntary effort. However, the FAA 

agrees it would be less burdensome on 

the carriers if the FAA published a 

schedule well in advance of the next 

FAA review of the compensation rate. 

Therefore, the FAA expects to publish a 

Federal Register notice at an 

appropriate time in the future providing 

this information. As for specific data 

elements air carriers should consider 

tracking, § 158.53(c)(1) includes a list of 

cost categories applicable to the FAA’s 

calculation of the air carrier PFC 

compensation rate. The FAA has added 

a new § 158.53(c)(2). The FAA will 

review data submitted by air carriers, if 

data represents at least 75 percent of 

PFCs collected nationwide. Based on 

analysis of this data, the FAA may set 

a new compensation level. This 

paragraph will ensure that the FAA does 

not make a decision based on grossly 

incomplete industry data. 

The FAA has determined that ACI’s 

proposal that a carrier not be entitled to 

compensation until it properly remits 

all PFCs it owes is not practical given 

the collection, handling, and remittance 

procedures in place. First, carriers are 

entitled to keep the interest earned on 

the PFC revenue between the time the 

PFC is collected from the passenger and 

the time it is remitted to the airport. A 

carrier could not be identified as failing 

to properly remit PFCs to any airport 

until after the carrier earned this 

interest. Second, the airports would 

need to set up some sort of 

clearinghouse to process payments to 

carriers and to monitor carrier 

remittances to all airports. Finally, 

carriers are entitled to compensation 

based on the PFCs collected. This 

compensation is currently taken at the 

time of ticket issuance. ACI’s proposal 

would appear to delay this 

compensation by at least two months 

due to the need to determine if a carrier 

had remitted the PFCs properly 

(remittance occurs at the end of the 

month following collection) and then 

collect all compensation payments from 

the airports. Any significant change to 

part 158 such as this must first be 

subject to public scrutiny and comment. 

This proposal has not been subject to 

such scrutiny. The FAA is accordingly 

not adopting ACI’s proposal regarding 

withholding carrier compensation in 

this rulemaking. 

Environmental Analysis 

Steven Myers stated he could not 

locate paragraph 3f of FAA Order 

1050.1E, referred to in the 

Environmental Analysis section of the 

NPRM. FAA mistakenly referred to an 

incorrect paragraph number. The correct 

reference should have been paragraph 

312d of FAA Order 1050.1E. The FAA 

corrected the paragraph reference in the 

Environmental Analysis section of the 

final rule. 

Corrections and Other Minor Changes to 

the Proposed Rule 

This final rule also corrects 

typograpgical errors that appear in the 

rule text of the proposed rule. The 

following is a list of these corrections to 

the rule text. 

1. § 158.3, Notice of intent—Put ‘‘/’’ 

between ‘‘and’’ and ‘‘or.’’ 

2. § 158.13(c)—Put ‘‘§ ’’ before 

‘‘§ 158.15(b).’’ 

3. § 158.13(d)(2)—Change 

‘‘§ 158.13(b)(1)’’ to ‘‘§ 158.13(d)(1).’’ 

4. § 158.13(g)—Change ‘‘Airport 

Improvement Program’’ to ‘‘Airport 

Grant Program.’’ 

5. § 158.15(b)(6)—Delete ‘‘or’’ at the 

end of this paragraph. 

6. § 158.15(7)—Delete punctuation 

after ‘‘Projects.’’ 

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7. § 158.18(a)—Change ‘‘PFC on 

payments’’ to ‘‘PFC to make payments.’’ 

8. § 158.20(b)—Start paragraph ‘‘Once 

the database development is completed, 

with air carrier capability, public.’’ 

9. § 158.37(b)(1)(ii)(C)—Add ‘‘or’’ at 

the end of the paragraph. 

10. § 158.37(b)(1)(ii)(D)—Add ‘‘; or’’ at 

the end of the paragraph. 

11. § 158.37(b)(5)—Change ‘‘a change’’ 

to ‘‘an increase.’’ 

12. § 158.39(a)—Add ‘‘the’’ between 

‘‘use’’ and ‘‘excess.’’ 

13. § 158.47(c)(3) should be 

§ 158.47(c)(4). 

14. § 158.49(c)(1)(iv)—Change ‘‘its 

PFCs’’ to ‘‘the PFCs it collects.’’ 

15. § 158.53(b)—Change ‘‘account’’ at 

the end of the first sentence to ‘‘PFC 

Revenue.’’ 

16. § 158.53(c)(1)—Change ‘‘file in the 

first sentence to ‘‘provide.’’ 

17. § 158.53(c)(2)—Change ‘‘filed’’ to 

‘‘provided.’’ 

18. § 158.65(b)(2) Add ‘‘following’’ 

between ‘‘the’’ and ‘‘month’’ at the end 

of the first sentence. 

19. § 158.67(c)(2)—Change ‘‘PFC is 

specifically addressed by the auditor’’ to 

auditor specifically addresses the PFC.’’ 

Paperwork Reduction Act 

As required by the Paperwork 

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

3507(d)), the FAA submitted a copy of 

the new information collection 

requirement(s) in this final rule to the 

Office of Management and Budget 

(OMB) for its review. OMB approved the 

collection of this information and 

assigned OMB Control Number 2120– 

0557. This final rule addresses the 

remaining mandates in Vision 100. Part 

158 recordkeeping/reporting 

requirements affect two groups of 

respondents—air carriers and public 

agencies. There are 450 respondents 

who will respond an estimated 2,400 

times annually. It should be noted that 

air carriers have been collecting, 

keeping records and reporting on other 

aviation related fees (passenger tax, 

customs user fees, international 

transportation tax and immigration user 

fees) for many years. As a result, various 

sophisticated manual and computer 

systems are currently in place and have 

been modified to implement the PFC 

program. The total reporting burden 

hours is 22,805. The total recordkeeping 

burden is 1,220 hours. There were no 

comments directed to the information 

collection burden. 

An agency may not collect or sponsor 

the collection of information, nor may it 

impose an information collection 

requirement unless it displays a 

currently valid OMB control number. 

International Compatibility 

In keeping with U.S. obligations 

under the Convention on International 

Civil Aviation, it is FAA policy to 

comply with International Civil 

Aviation Organization (ICAO) Standards 

and Recommended Practices to the 

maximum extent practicable. The FAA 

has determined that there are no ICAO 

Standards and Recommended Practices 

that correspond to these final 

regulations. 

Regulatory Evaluation, Regulatory 

Flexibility Determination, International 

Trade Impact Assessment, and 

Unfunded Mandates Assessment 

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 

of 1980 (Pub. L. 96–354) requires 

agencies to analyze the economic 

impact of regulatory changes on small 

entities. Third, the Trade Agreements 

Act (Pub. L. 96–39) prohibits agencies 

from setting standards that create 

unnecessary obstacles to the foreign 

commerce of the United States. In 

developing U.S. standards, this Trade 

Act requires agencies to consider 

international standards and, where 

appropriate, that they be the basis of 

U.S. standards. Fourth, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4) requires agencies to prepare a 

written assessment of the costs, benefits, 

and other effects of proposed or final 

rules that include a Federal mandate 

likely to result in the expenditure by 

state, local, or tribal governments, in the 

aggregate or by the private sector, of 

$100 million or more annually (adjusted 

for inflation with base year of 1995). 

This portion of the preamble 

summarizes the FAA’s analysis of the 

economic impacts of this final rule. We 

suggest readers seeking greater detail 

read the full regulatory evaluation, a 

copy of which we have placed in the 

docket for this rulemaking. 

In conducting these analyses, FAA 

has determined this rule: (1) Has 

benefits that justify its costs; (2) is not 

an economically ‘‘significant regulatory 

action’’ as defined in section 3(f) of 

Executive Order 12866; (3) is not 

‘‘significant’’ as defined in DOT’s 

Regulatory Policies and Procedures; (4) 

will not have a significant economic 

impact on a substantial number of small 

entities; (5) will not create unnecessary 

obstacles to the foreign commerce of the 

United States; and (6) will not impose 

an unfunded mandate on state, local, 

tribal governments, or on the private 

sector by exceeding the threshold 

identified above. These analyses are 

summarized below. 

This final rule addresses the 

remaining provisions not addressed in 

previously issued final rules mandated 

by Vision 100-Century of Aviation 

Reauthorization Act (Vision 100) and 

will include changes to administrative 

procedures to improve the efficiency of 

the PFC program. 

The total cost of this final rule is 

estimated to be $1.1 million ($983,000 

present value), and the quantified cost 

savings are estimated to be $3.6 million 

($2.5 million present value). In addition, 

a number of unquantified benefits will 

be attributable to the Vision 100 

statutory provisions and streamlining 

procedures. The net cost savings of this 

final rule are estimated to be $2.5 

million ($1.6 million present value) over 

the ten-year analysis period. 

Regulatory Flexibility Determination 

The Regulatory Flexibility Act of 1980 

(Pub. L. 96–354) (RFA) establishes ‘‘as a 

principle of regulatory issuance that 

agencies shall endeavor, consistent with 

the objectives of the rule and of 

applicable statutes, to fit regulatory and 

informational requirements to the scale 

of the businesses, organizations, and 

governmental jurisdictions subject to 

regulation. To achieve this principle, 

agencies are required to solicit and 

consider flexible regulatory proposals 

and to explain the rationale for their 

actions to assure that such proposals are 

given serious consideration.’’ The RFA 

covers a wide-range of small entities, 

including small businesses, not-forprofit organizations, and small 

governmental jurisdictions. 

Agencies must perform a review to 

determine whether a rule will have a 

significant economic impact on a 

substantial number of small entities. If 

the agency determines that it will, the 

agency must prepare a regulatory 

flexibility analysis as described in the 

RFA. 

However, if an agency determines that 

a rule is not expected to have a 

significant economic impact on a 

substantial number of small entities, 

section 605(b) of the RFA provides that 

the head of the agency may so certify 

and a regulatory flexibility analysis is 

not required. The certification must 

include a statement providing the 

factual basis for this determination, and 

the reasoning should be clear. 

The FAA uses the size standards from 

the Small Business Administration 

(SBA), which classifies ‘‘small’’ entities 

based on either annual revenues or 

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employment. An airport operator (North 

America Industry Classification System 

(NAICS) 488119) is classified as a small 

entity if it has annual revenues of $6 

million or less. According to financial 

reports filed with the FAA in 2003, 195 

airports received PFC revenues with 

annual operating revenues of $6 million 

or less. These small airports account for 

over 60 percent of all airports receiving 

PFC revenues and, therefore, constitute 

a substantial number of small entities. 

The average revenue for these airports 

was $1.7 million and the median 

revenue was $1.1 million for 2003. The 

entire cost to all airports is estimated to 

be $17,100, thus no small airport could 

experience a significant economic 

impact. Small airports will benefit 

proportionately from the establishment 

of the national internet database, and 

could also benefit from section 

158.13(g), which permits the use of PFC 

revenues to fund the non-Federal share 

of air traffic modernization projects, 

thus easing the local financial burden. 

Four airports at which military 

enplanements exceed one percent of all 

enplanements are small entities. The 

deferred collection of PFC will result in 

an extension of the period of collection 

but will not result in any loss of 

revenue. The FAA has determined the 

final rule will not have a significant 

economic impact on small commercial 

airports. 

The SBA standard classifies a 

scheduled and nonscheduled passenger 

air carrier (NAICS 481111) to be a small 

entity if it has 1,500 employees or less. 

FAA has identified 57 air carriers with 

authorization to carry passengers that 

meet this classification. These small air 

carriers provide scheduled services 

under their own code at nearly 100 

airports that have PFCs. In addition, 

some small entities provide air service 

on behalf of a large air carrier under a 

code sharing agreement. The large 

carrier handles all the ticketing and 

accounting procedures. There are a 

number of provisions of the PFC 

program that mitigate any impact on a 

small air carrier. Section 158.9 prohibits 

the imposition of a PFC on Essential Air 

Services (EAS) routes on flights between 

two or more points in Hawaii or Alaska 

aboard an aircraft with less than 60 

seats. There are 150 EAS routes, a 

number of which are served by small 

carriers. Section 158.11 also permits 

airports to request that a class of carriers 

that constitutes not more than one 

percent of total enplanements not 

collect PFCs. Thus some small carriers 

will not be affected by the final rule 

under these provisions. Since no small 

carrier voluntarily submitted PFC 

collection compensation information to 

the NPRM issued on November 20, 

2002, the FAA assumed none of the 

small carriers will incur the cost of 

participating in the final compensation 

collection provision. In addition, small 

carriers that do collect PFCs will not be 

adversely affected. Any adjustments to 

modify ticketing or other administrative 

costs that small air carriers may incur as 

a result of this final rule are at least 

partially if not fully recoverable under 

the existing compensation provisions of 

the rule. The FAA has determined the 

final rule will not have a significant 

economic impact on small air carriers. 

Therefore, as the Administrator of the 

FAA, I certify that this final rule will 

not have a significant economic impact 

on a substantial number of small 

entities. 

International Trade Impact Assessment 

The Trade Agreements Act of 1979 

prohibits Federal agencies from 

establishing any standards or engaging 

in related activities that create 

unnecessary obstacles to the foreign 

commerce of the United States. 

Legitimate domestic objectives, such as 

safety, are not considered unnecessary 

obstacles. The statute also requires 

Federal agencies to consider 

international standards and, where 

appropriate, use the foreign standards as 

the basis for U.S. standards. Foreign 

carriers would be required to collect 

PFCs on wholly domestic U.S. travel 

that U.S. carriers are already required to 

collect, and the foreign carriers will be 

entitled to the same compensation 

provisions as U.S. carriers. The FAA has 

assessed the potential effect of this final 

rule and determined that it will impose 

the same costs on domestic and 

international entities and thus have a 

neutral trade impact. 

Unfunded Mandates Assessment 

The Unfunded Mandates Reform Act 

of 1995 (the Act) is intended, among 

other things, to curb the practice of 

imposing unfunded Federal mandates 

on state, local, and tribal governments. 

Section 202(a) (2 U.S.C. 1532) of Title 

II of the Act requires that each Federal 

agency, to the extent permitted by law, 

prepare a written statement assessing 

the effects of any Federal mandate in a 

proposed or final agency rule that may 

result in the expenditure by state, local, 

tribal governments, in the aggregate, or 

by the private sector, of $100 million or 

more (adjusted annually for inflation) in 

any one year; such a mandate is deemed 

to be a ‘‘significant regulatory action.’’ 

The FAA currently uses an inflationadjusted value of $128.1 million in lieu 

of $100 million. Section 203(a) of the 

Act (2 U.S.C. 1533) provides that before 

establishing any regulatory 

requirements that might significantly or 

uniquely affect small governments, an 

agency shall have developed a plan 

under which the agency shall: (1) 

Provide notice of the requirements to 

potentially affected small governments, 

if any; (2) enable officials of affected 

small governments to provide 

meaningful and timely input in the 

development of regulatory proposals 

containing significant Federal 

intergovernmental mandates; and, (3) 

inform, educate, and advise small 

governments on compliance with the 

requirements. With respect to (2), 

Section 204(a) of the Act (2 U.S.C. 1534) 

requires the Federal agency to develop 

an effective process to permit elected 

officers of state, local, and tribal 

governments (or their designees) to 

provide the input described. 

This final rule does not contain such 

a mandate. The requirements of Title II 

do not apply. 

Executive Order 13132, Federalism 

The FAA has analyzed this final rule 

under the principles and criteria of 

Executive Order 13132, Federalism. We 

determined that this action will not 

have a substantial direct effect on the 

States, or the relationship between the 

national Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, and therefore does 

not have federalism implications. 

Environmental Analysis 

FAA Order 1050.1E identifies FAA 

actions that are categorically excluded 

from preparation of an environmental 

assessment or environmental impact 

statement under the National 

Environmental Policy Act in the 

absence of extraordinary circumstances. 

The FAA has determined this 

rulemaking action qualifies for the 

categorical exclusion identified in 

paragraph 312d and involves no 

extraordinary circumstances. 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use 

The FAA has analyzed this final rule 

under Executive Order 13211, Actions 

Concerning Regulations that 

Significantly Affect Energy Supply, 

Distribution, or Use (May 18, 2001). We 

have determined that it is not a 

‘‘significant energy action’’ under the 

executive order because it is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866, and it is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. 

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Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 28847 

Availability of Rulemaking Documents 

You may get an electronic copy using 

the Internet by: 

(1) Searching the Department of 

Transportation’s electronic Docket 

Management System (DMS) web page 

(http://dms.dot.gov/search); 

(2) Visiting the FAA’s Regulations and 

Policies web page at http:// 

www.faa.gov/regulations_policies/; or 

(3) Accessing the Government 

Printing Office’s web page at http:// 

www.gpoaccess.gov/fr/index.html. 

You may also get a copy by sending 

a request to the Federal Aviation 

Administration, Office of Rulemaking, 

ARM–1, 800 Independence Avenue 

SW., Washington, DC 20591, or by 

calling (202) 267–9680. Make sure to 

identify the amendment number or 

docket number of this rulemaking. 

Anyone is able to search the 

electronic form of all comments 

received into any of our dockets by the 

name of the individual submitting the 

comment (or signing the comment, if 

submitted on behalf of an association, 

business, labor union, etc.). You may 

review DOT’s complete Privacy Act 

statement in the Federal Register 

published on April 11, 2000 (Volume 

65, Number 70; Pages 19477–78) or you 

may visit http://dms.dot.gov. 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996 requires FAA to comply with 

small entity requests for information or 

advice about compliance with statutes 

and regulations within its jurisdiction. If 

you are a small entity and you have a 

question regarding this document, you 

may contact your local FAA official, or 

the person listed under the FOR FURTHER 

INFORMATION CONTACT heading of this 

preamble. You can find out more about 

SBREFA on the Internet at http:// 

www.faa.gov/regulations_policies/ 

rulemaking/sbre_act/. 

List of Subjects in 14 CFR Part 158 

Air carriers, Airports, Passenger 

facility charge, Public agencies, 

Collection compensation. 

The Amendment 

■ Because of the above, the Federal 

Aviation Administration amends part 

158 of Title 14, Code of Federal 

Regulations, as follows: 

PART 158—PASSENGER FACILITY 

CHARGES (PFC’S) 

Subpart A—General 

■ 1. The authority citation for part 158 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40116–40117, 

47106, 47111, 47114–47116, 47524, 47526. 

■ 2. Amend § 158.3 as follows: 

■ a. Revise the definitions for Air travel 

ticket, Approved project, and State to 

read as set forth below. 

■ b. Add definitions for Covered air 

carrier, Financial need, Ground support 

equipment, Notice of intent (to impose 

a PFC or use PFC revenue), and PFC 

administrative support costs in 

alphabetical order to read as set forth 

below. 

§ 158.3 Definitions. 

* * * * * 

Air travel ticket includes all 

documents, electronic records, boarding 

passes, and any other ticketing medium 

about a passenger’s itinerary necessary 

to transport a passenger by air, 

including passenger manifests. 

* * * * * 

Approved project means a project for 

which the FAA has approved using PFC 

revenue under this part. The FAA may 

also approve specific projects contained 

in a single or multi-phased project or 

development described in an airport 

capital plan separately. This includes 

projects acknowledged by the FAA 

under § 158.30 of this part. 

* * * * * 

Covered air carrier means an air 

carrier that files for bankruptcy 

protection or has an involuntary 

bankruptcy proceeding started against it 

after December 12, 2003. An air carrier 

that is currently in compliance with 

PFC remittance requirements and has an 

involuntary bankruptcy proceeding 

commenced against it has 90 days from 

the date such proceeding was filed to 

obtain dismissal of the involuntary 

petition before becoming a covered air 

carrier. An air carrier ceases to be a 

covered air carrier when it emerges from 

bankruptcy protection. 

* * * * * 

Financial need means that a public 

agency cannot meet its operational or 

debt service obligations and does not 

have at least a 2-month capital reserve 

fund. 

* * * * * 

Ground support equipment means 

service and maintenance equipment 

used at an airport to support 

aeronautical operations and related 

activities. Baggage tugs, belt loaders, 

cargo loaders, forklifts, fuel trucks, 

lavatory trucks, and pushback tractors 

are among the types of vehicles that fit 

this definition. 

* * * * * 

Notice of intent (to impose or use PFC 

revenue) means a notice under § 158.30 

from a public agency controlling a nonhub airport that it intends to impose a 

PFC and/or use PFC revenue. Except for 

§§ 158.25 through 30, ‘‘notice of intent’’ 

can be used interchangeably with 

‘‘application.’’ 

* * * * * 

PFC administrative support costs 

means the reasonable and necessary 

costs of developing a PFC application or 

amendment, issuing and maintaining 

the required PFC records, and 

performing the required audit of the 

public agency’s PFC account. These 

costs may include reasonable monthly 

financial account charges and 

transaction fees. 

* * * * * 

State means a State of the United 

States, the District of Columbia, the 

Commonwealth of Puerto Rico, the 

Virgin Islands, American Samoa, the 

Commonwealth of the Northern Mariana 

Islands, and Guam. 

* * * * * 

■ 3. Amend § 158.9 by revising 

paragraphs (a)(4) and (5) and by adding 

paragraph (a)(6) to read as follows: 

§ 158.9 Limitations. 

(a) * * * 

(4) On flights, including flight 

segments, between 2 or more points in 

Hawaii; 

(5) In Alaska aboard an aircraft having 

a certificated seating capacity of fewer 

than 60 passengers; or 

(6) Enplaning at an airport if the 

passenger did not pay for the air 

transportation that resulted in the 

enplanement due to Department of 

Defense charter arrangements and 

payments. 

* * * * * 

■ 4. Amend § 158.13 by revising 

paragraphs (b), (c), (d), and (e) and 

adding paragraphs (f), (g), and (h) to 

read as follows: 

§ 158.13 Use of PFC revenue. 

* * * * * 

(b) PFC administrative support costs. 

Public agencies may use PFC revenue to 

pay for allowable administrative 

support costs. Public agencies must 

submit these costs as a separate project 

in each PFC application. 

(c) Maximum cost for certain lowemission technology projects. If a project 

involves a vehicle or ground support 

equipment using low emission 

technology eligible under § 158.15(b), 

the FAA will determine the maximum 

cost that may be financed by PFC 

revenue. The maximum cost for a new 

vehicle is the incremental amount 

between the purchase price of a new 

low emission vehicle and the purchase 

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28848 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 

price of a standard emission vehicle, or 

the cost of converting a standard 

emission vehicle to a low emission 

vehicle. 

(d) Bond-associated debt service and 

financing costs. (1) Public agencies may 

use PFC revenue to pay debt service and 

financing costs incurred for a bond 

issued to carry out approved projects. 

(2) If the public agency’s bond 

documents require that PFC revenue be 

commingled in the general revenue 

stream of the airport and pledged for the 

benefit of holders of obligations, the 

FAA considers PFC revenue to have 

paid the costs covered in § 158.13(d)(1) 

if— 

(i) An amount equal to the part of the 

proceeds of the bond issued to carry out 

approved projects is used to pay 

allowable costs of such projects; and 

(ii) To the extent the PFC revenue 

collected in any year exceeds the debt 

service and financing costs on such 

bonds during that year, an amount equal 

to the excess is applied as required by 

§ 158.39. 

(e) Exception providing for the use of 

PFC revenue to pay for debt service for 

non-eligible projects. The FAA may 

authorize a public agency under 

§ 158.18 to impose a PFC for payments 

for debt service on indebtedness 

incurred to carry out an airport project 

that is not eligible if the FAA 

determines that such use is necessary 

because of the financial need of the 

airport. 

(f) Combination of PFC revenue and 

Federal grant funds. A public agency 

may combine PFC revenue and airport 

grant funds to carry out an approved 

project. These projects are subject to the 

record keeping and auditing 

requirements of this part, as well as the 

reporting, record keeping and auditing 

requirements imposed by the Airport 

and Airway Improvement Act of 1982 

(AAIA). 

(g) Non-Federal share. Public agencies 

may use PFC revenue to meet the nonFederal share of the cost of projects 

funded under the Federal airport grant 

program or the FAA ‘‘Program to Permit 

Cost-Sharing of Air Traffic 

Modernization Projects’’ under 49 

U.S.C. 44517. 

(h) Approval of project following 

approval to impose a PFC. The public 

agency may not use PFC revenue or 

interest earned thereon except on an 

approved project. 

■ 5. Amend § 158.15 by revising 

paragraphs (b)(5) and (6) and adding 

paragraphs (b)(7) and (8) to read as 

follows: 

§ 158.15 Project eligibility at PFC levels of 

$1, $2, or $3. 

* * * * * 

(b) * * * 

(5) Noise compatibility measures 

eligible for Federal assistance under 49 

U.S.C. 47504, without regard to whether 

the measures are approved under 49 

U.S.C. 47504; 

(6) Construction of gates and related 

areas at which passengers are enplaned 

or deplaned and other areas directly 

related to the movement of passengers 

and baggage in air commerce within the 

boundaries of the airport. These areas 

do not include restaurants, car rental 

and automobile parking facilities, or 

other concessions. Projects required to 

enable added air service by an air carrier 

with less than 50 percent of the annual 

passenger boardings at an airport have 

added eligibility. Such projects may 

include structural foundations and floor 

systems, exterior building walls and 

load-bearing interior columns or walls, 

windows, door and roof systems, 

building utilities (including heating, air 

conditioning, ventilation, plumbing, 

and electrical service), and aircraft 

fueling facilities next to the gate; 

(7) A project approved under the 

FAA’s ‘‘Program to Permit Cost-Sharing 

of Air Traffic Modernization Projects’’ 

under 49 U.S.C. 44517; or 

(8) If the airport is in an air quality 

nonattainment area (as defined by 

section 171(2) of the Clean Air Act (42 

U.S.C. 7501(2)) or a maintenance area 

referred to in section 175A of such Act 

(42 U.S.C. 7505a), and the project will 

result in the airport receiving 

appropriate emission credits as 

described in 49 U.S.C. 47139, a project 

for: 

(i) Converting vehicles eligible under 

§ 158.15(b)(1) and ground support 

equipment powered by a diesel or 

gasoline engine used at a commercial 

service airport to low-emission 

technology certified or verified by the 

Environmental Protection Agency to 

reduce emissions or to use cleaner 

burning conventional fuels; or 

(ii) Acquiring for use at a commercial 

service airport vehicles eligible under 

§ 158.15(b)(1) and, subject to § 158.13(c), 

ground support equipment that include 

low-emission technology or use cleaner 

burning fuels. 

* * * * * 

■ 6. Add § 158.18 to read as follows: 

§ 158.18 Use of PFC revenue to pay for 

debt service for non-eligible projects. 

(a) The FAA may authorize a public 

agency to impose a PFC to make 

payments for debt service on 

indebtedness incurred to carry out at the 

airport a project that is not eligible if the 

FAA determines it is necessary because 

of the financial need of the airport. The 

FAA defines financial need in § 158.3. 

(b) A public agency may request 

authority to impose a PFC and use PFC 

revenue under this section using the 

PFC application procedures in § 158.25. 

The public agency must document its 

financial position and explain its 

financial recovery plan that uses all 

available resources. 

(c) The FAA reviews the application 

using the procedures in § 158.27. The 

FAA will issue its decision on the 

public agency’s request under § 158.29. 

■ 7. Add § 158.20 to read as follows: 

§ 158.20 Submission of required 

documents. 

(a) Letters and reports required by this 

part may be transmitted to the 

appropriate recipient (the public 

agency, air carrier, and/or the FAA) via 

e-mail, courier, facsimile, or U.S. Postal 

Service. 

(1) Documents sent electronically to 

the FAA must be prepared in a format 

readable by the FAA. Interested parties 

can obtain the format at their local FAA 

Airports Office. 

(2) Any transmission to FAA 

Headquarters, using regular U.S. Postal 

Service, is subject to inspection that 

may result in delay and damage due to 

the security process. 

(b) Once the database development is 

completed with air carrier capability, 

public agencies and air carriers may use 

the FAA’s national PFC database to post 

their required quarterly reports, and, in 

that case, do not have to distribute the 

reports in any other way. 

Subpart B—Application and Approval 

■ 8. Revise § 158.29(a)(1)(ii) and 

(b)(1)(ii) to read as follows: 

§ 158.29 The Administrator’s decision. 

(a) * * * 

(1) * * * 

(ii) The project will achieve the 

objectives and criteria set forth in 

§ 158.15 except for those projects 

approved under § 158.18. 

* * * * * 

(b) * * * 

(1) * * * 

(ii) The project will achieve the 

objectives and criteria set forth in 

§ 158.15 except for those projects 

approved under § 158.18. 

* * * * * 

■ 9. Amend § 158.30 by revising the 

section heading to read as follows: 

§ 158.30 PFC Authorization at Non-Hub 

Airports. 

* * * * * 

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■ 10. Amend § 158.31 by revising the 

introductory text and paragraph (b) to 

read as follows: 

§ 158.31 Duration of authority to impose a 

PFC after project implementation. 

A public agency that has begun 

implementing an approved project may 

impose a PFC until— 

* * * * * 

(b) The total PFC revenue collected 

plus interest earned thereon equals the 

allowable cost of the approved project; 

* * * * * 

■ 11. Amend § 158.33 by revising 

paragraphs (a)(2), (c)(1) introductory 

text, and (c)(2), and adding paragraph 

(a)(3) to read as follows: 

§ 158.33 Duration of authority to impose a 

PFC before project implementation. 

(a) * * * 

(2) 5 years after the charge effective 

date; or 

(3) 5 years after the FAA’s decision on 

the application (if the charge effective 

date is more than 60 days after the 

decision date) if an approved project is 

not implemented. 

* * * * * 

(c) * * * 

(1) 3 years after the charge effective 

date; or 3 years after the FAA’s decision 

on the application if the charge effective 

date is more than 60 days after the 

decision date unless— 

* * * * * 

(2) 5 years after the charge effective 

date; or 5 years after the FAA’s decision 

on the application (if the charge 

effective date is more than 60 days after 

the decision date) unless the public 

agency has obtained project approval. 

* * * * * 

■ 12. Amend § 158.37 by revising the 

section heading, revising paragraphs 

(b)(1)(i)(A), (b)(1)(ii)(C), (b)(1)(ii)(D), 

(b)(1)(ii)(E) and (b)(5), redesignating 

paragraphs (b)(1)(i)(B) and (C) as 

(b)(1)(i)(C) and (D), and adding new 

paragraphs (b)(1)(i)(B) and (b)(1)(ii)(F) to 

read as follows: 

§ 158.37 Amendment of approved PFC. 

* * * * * 

(b) * * * 

(1) * * * 

(i) * * * 

(A) Amend the approved PFC amount 

for a project by more than 25 percent of 

the original approved amount if the 

amount was $1,000,000 or greater, (B) 

Amend the approved PFC amount for a 

project by any percentage if the original 

approved amount was below $1,000,000 

and the amended approved amount is 

$1,000,000 or greater, 

* * * * * 

(ii) * * * 

(C) To institute an increase of 25 

percent or less of the original approved 

amount if the amount was more than 

$1,000,000; or 

(D) To institute an increase of any 

amount if the original approved amount 

of the project was less than $1,000,000 

and if the amended approved amount of 

the project remains below $1,000,000; or 

(E) To establish a new class of carriers 

under § 158.11 or amend any such class 

previously approved; or 

(F) To delete an approved project. 

* * * * * 

(5) Justification, if the amendment 

involves an increase in the PFC amount 

for a project by more than 25 percent of 

the original approved amount if that 

amount is $1,000,000 or greater, an 

increase in the PFC amount by any 

percentage if the original approved 

amount was less than $1,000,000 and 

the amended approved amount is 

$1,000,000 or greater, a change in the 

approved project scope, or any increase 

in the approved PFC level to be 

collected from each passenger. 

* * * * * 

■ 13. Amend § 158.39 by revising 

paragraphs (a) and (d) to read as follows: 

§ 158.39 Use of excess PFC revenue. 

(a) If the PFC revenue remitted to the 

public agency, plus interest earned 

thereon, exceeds the allowable cost of 

the project, the public agency must use 

the excess funds for approved projects 

or to retire outstanding PFC-financed 

bonds. 

* * * * * 

(d) Within 30 days after the authority 

to impose a PFC has expired or been 

terminated, the public agency must 

present a plan to the appropriate FAA 

Airports office to begin using 

accumulated PFC revenue. The plan 

must include a timetable for submitting 

any necessary application under this 

part. If the public agency fails to submit 

such a plan, or if the plan is not 

acceptable to the Administrator, the 

Administrator may reduce Federal 

airport grant program apportioned 

funds. 

Subpart C—Collection, Handling and 

Remittance of PFCs 

■ 14. Amend § 158.43 by revising 

paragraphs (b)(3) and (c) to read as 

follows: 

§ 158.43 Public agency notification to 

collect PFCs. 

* * * * * 

(b) * * * 

(3) The charge effective date will 

always be the first day of the month; 

however, it must be at least 30 days after 

the date the public agency notified the 

air carriers of the FAA’s approval to 

impose the PFC. 

* * * * * 

(c) The public agency must notify air 

carriers required to collect PFCs at its 

airport and the FAA of changes in the 

charge expiration date at least 30 days 

before the existing charge expiration 

date or new charge expiration date, 

whichever comes first. Each notified air 

carrier must notify its agents, including 

other issuing carriers, of such changes. 

* * * * * 

■ 15. Amend § 158.45 by revising 

paragraph (a)(3) to read as follows: 

§ 158.45 Collection of PFCs on tickets 

issued in the U.S. 

(a) * * * 

(3) Issuing carriers and their agents 

shall collect PFCs based on the itinerary 

at the time of issuance. 

(i) Any change in itinerary initiated 

by a passenger that requires an 

adjustment to the amount paid by the 

passenger is subject to collection or 

refund of the PFC as appropriate. 

(ii) Failure to travel on a 

nonrefundable or expired ticket is not a 

change in itinerary. If the ticket 

purchaser is not permitted any fare 

refund on the unused ticket, the ticket 

purchaser is not permitted a refund of 

any PFC associated with that ticket. 

* * * * * 

■ 16. Amend § 158.47 by revising 

paragraphs (a) and (c)(4) to read as 

follows: 

§ 158.47 Collection of PFCs on tickets 

issued outside the U.S. 

(a) For tickets issued outside the U.S., 

an air carrier or foreign air carrier may 

follow the requirements of either 

§ 158.45 or this section, unless the 

itinerary is for travel wholly within the 

U.S. Air carriers and foreign air carriers 

must comply with § 158.45 where the 

itinerary is for travel wholly within the 

U.S. regardless of where the ticket is 

issued. 

* * * * * 

(c) * * * 

(4) Issuing carriers and their agents 

shall collect PFCs based on the itinerary 

at the time of issuance. 

(i) Any change in itinerary initiated 

by a passenger that requires an 

adjustment to the amount paid by the 

passenger is subject to collection or 

refund of the PFC as appropriate. 

(ii) Failure to travel on a 

nonrefundable or expired ticket is not a 

change in itinerary. If the ticket 

purchaser is not permitted any fare 

refund on the unused ticket, the ticket 

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28850 Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 

purchaser is not permitted a refund of 

any PFC associated with that ticket. 

* * * * * 

■ 17. Amend § 158.49 by revising 

paragraph (b), redesignating paragraph 

(c) as (d) and revising it, and adding 

new paragraph (c) to read as follows: 

§ 158.49 Handling of PFCs. 

* * * * * 

(b) Collecting carriers must account 

for PFC revenue separately. PFC 

revenue may be commingled with the 

air carrier’s other sources of revenue 

except for covered air carriers discussed 

in paragraph (c) of this section. PFC 

revenues held by an air carrier or an 

agent of the air carrier after collection 

are held in trust for the beneficial 

interest of the public agency imposing 

the PFC. Such air carrier or agent holds 

neither legal nor equitable interest in 

the PFC revenues except for any 

handling fee or interest collected on 

unremitted proceeds as authorized in 

§ 158.53. 

(c)(1) A covered air carrier must 

segregate PFC revenue in a designated 

separate PFC account. Regardless of the 

amount of PFC revenue in the covered 

air carrier’s account at the time the 

bankruptcy petition is filed, the covered 

air carrier must deposit into the separate 

PFC account an amount equal to the 

average monthly liability for PFCs 

collected under this section by such air 

carrier or any of its agents. 

(i) The covered air carrier is required 

to create one PFC account to cover all 

PFC revenue it collects. The designated 

PFC account is solely for PFC 

transactions and the covered air carrier 

must make all PFC transactions from 

that PFC account. The covered air 

carrier is not required to create separate 

PFC accounts for each airport where a 

PFC is imposed. 

(ii) The covered air carrier must 

transfer PFCs from its general accounts 

into the separate PFC account in an 

amount equal to the average monthly 

liability for PFCs as the ‘‘PFC reserve.’’ 

The PFC reserve must equal a onemonth average of the sum of the total 

PFCs collected by the covered air 

carrier, net of any credits or handling 

fees allowed by law, during the past 12-

month period of PFC collections 

immediately before entering 

bankruptcy. 

(iii) The minimum PFC reserve 

balance must never fall below the fixed 

amount defined in paragraph (c)(1)(ii) of 

this section. 

(iv) A covered air carrier may 

continue to deposit the PFCs it collects 

into its general operating accounts 

combined with ticket sales revenue. 

However, at least once every business 

day, the covered air carrier must remove 

all PFC revenue (Daily PFC amount) 

from those accounts and transfer it to 

the new PFC account. An estimate based 

on 1⁄30 of the PFC reserve balance is 

permitted in substitution of the Daily 

PFC amount. 

(A) In the event a covered air carrier 

ceases operations while still owing PFC 

remittances, the PFC reserve fund may 

be used to make those remittances. If 

there is any balance in the PFC reserve 

fund after all PFC remittances are made, 

that balance will be returned to the 

covered air carrier’s general account. 

(B) In the event a covered air carrier 

emerges from bankruptcy protection and 

ceases to be a covered air carrier, any 

balance remaining in the PFC reserve 

fund after any outstanding PFC 

obligations are met will be returned to 

the air carrier’s general account. 

(v) If the covered air carrier uses an 

estimate rather than the daily PFC 

amount, the covered air carrier shall 

reconcile the estimated amount with the 

actual amount of PFCs collected for the 

prior month (Actual Monthly PFCs). 

This reconciliation must take place no 

later than the 20th day of the month (or 

the next business day if the date is not 

a business day). In the event the Actual 

Monthly PFCs are greater than the 

aggregate estimated PFC amount, the 

covered air carrier will, within one 

business day of the reconciliation, 

deposit the difference into the PFC 

account. If the Actual Monthly PFCs are 

less than the aggregate estimated PFC 

amount, the covered air carrier will be 

entitled to a credit in the amount of the 

difference to be applied to the daily PFC 

amount due. 

(vi) The covered air carrier is 

permitted to recalculate and reset the 

PFC reserve and daily PFC amount on 

each successive anniversary date of its 

bankruptcy petition using the 

methodology described above. 

(2) If a covered air carrier or its agent 

fails to segregate PFC revenue in 

violation of paragraph (c)(1) of this 

section, the trust fund status of such 

revenue shall not be defeated by an 

inability of any party to identify and 

trace the precise funds in the accounts 

of the air carrier. 

(3) A covered air carrier and its agents 

may not grant to any third party any 

security or other interest in PFC 

revenue. 

(4) A covered air carrier that fails to 

comply with any requirement of 

paragraph (c) of this section, or causes 

an eligible public agency to spend funds 

to recover or retain payment of PFC 

revenue, must compensate that public 

agency for those cost incurred to recover 

the PFCs owed. 

(5) The provisions of paragraph (b) of 

this section that allow the commingling 

of PFCs with other air carrier revenue 

do not apply to a covered air carrier. 

(d) All collecting air carriers must 

disclose the existence and amount of 

PFC funds regarded as trust funds in 

their financial statements. 

■ 18. Revise § 158.53 to read as follows: 

§ 158.53 Collection compensation. 

(a) As compensation for collecting, 

handling, and remitting the PFC 

revenue, the collecting air carrier is 

entitled to: 

(1) $0.11 of each PFC collected. 

(2) Any interest or other investment 

return earned on PFC revenue between 

the time of collection and remittance to 

the public agency. 

(b) A covered air carrier that fails to 

designate a separate PFC account is 

prohibited from collecting interest on 

the PFC revenue. Where a covered air 

carrier maintains a separate PFC 

account in compliance with § 158.49(c), 

it will receive the interest on PFC 

accounts as described in paragraph 

(a)(2) of this section. 

(c)(1) Collecting air carriers may 

provide collection cost data periodically 

to the FAA after the agency issues a 

notice in the Federal Register that 

specifies the information and deadline 

for filing the information. Submission of 

the information is voluntary. The 

requested information must include 

data on interest earned by the air 

carriers on PFC revenue and air carrier 

collection, handling, and remittance 

costs in the following categories: 

(i) Credit card fees; 

(ii) Audit fees; 

(iii) PFC disclosure fees; 

(iv) Reservations costs; 

(v) Passenger service costs; 

(vi) Revenue accounting, data entry, 

accounts payable, tax, and legal fees; 

(vii) Corporate property department 

costs; 

(viii) Training for reservations agents, 

ticket agents, and other departments; 

(ix) Ongoing carrier information 

systems costs; 

(x) Ongoing computer reservations 

systems costs; and 

(xi) Airline Reporting Corporation 

fees. 

(2) The FAA may determine a new 

compensation level based on an analysis 

of the data provided under paragraph 

(c)(1) of this section, if the data is 

submitted by carriers representing at 

least 75 percent of PFCs collected 

nationwide. 

(3) Any new compensation level 

determined by the FAA under 

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Federal Register / Vol. 72, No. 99 / Wednesday, May 23, 2007 / Rules and Regulations 28851 

paragraph (b)(2) of this section will 

replace the level identified in paragraph 

(a)(1) of this section. 

Subpart D—Report, Recordkeeping 

and Audits 

■ 19. Amend § 158.63 by revising 

paragraphs (a) and (c) to read as follows: 

§ 158.63 Reporting requirements: Public 

agency. 

(a) The public agency must provide 

quarterly reports to air carriers 

collecting PFCs for the public agency 

with a copy to the appropriate FAA 

Airports Office. The quarterly report 

must include: 

(1) Actual PFC revenue received from 

collecting air carriers, interest earned, 

and project expenditures for the quarter; 

(2) Cumulative actual PFC revenue 

received, interest earned, project 

expenditures, and the amount 

committed for use on currently 

approved projects, including the 

quarter; 

(3) The PFC level for each project; and 

(4) Each project’s current schedule. 

* * * * * 

(c) For medium and large hub 

airports, the public agency must provide 

to the FAA, by July 1 of each year, an 

estimate of PFC revenue to be collected 

for each airport in the following fiscal 

year. 

■ 20. Revise § 158.65 to read as follows: 

§ 158.65 Reporting requirements: 

Collecting air carriers. 

(a) Each air carrier collecting PFCs for 

a public agency must provide quarterly 

reports to the public agency unless 

otherwise agreed by the collecting air 

carrier and public agency, providing an 

accounting of funds collected and funds 

remitted. 

(1) Unless otherwise agreed by the 

collecting air carrier and public agency, 

reports must state: 

(i) The collecting air carrier and 

airport involved, 

(ii) The total PFC revenue collected, 

(iii) The total PFC revenue refunded 

to passengers, 

(iv) The collected revenue withheld 

for reimbursement of expenses under 

§ 158.53, and 

(v) The dates and amounts of each 

remittance for the quarter. 

(2) The report must be filed by the last 

day of the month following the calendar 

quarter or other period agreed by the 

collecting carrier and public agency for 

which funds were collected. 

(b) A covered air carrier must provide 

the FAA with: 

(1) A copy of its quarterly report by 

the established schedule under 

paragraph (a) of this section; and 

(2) A monthly PFC account statement 

delivered not later than the fifth day of 

the following month. This monthly 

statement must include: 

(i) The balance in the account on the 

first day of the month, 

(ii) The total funds deposited during 

the month, 

(iii) The total funds disbursed during 

the month, and 

(iv) The closing balance in the 

account. 

■ 21. Amend § 158.67 by revising 

paragraph (c)(2) to read as follows: 

§ 158.67 Recordkeeping and auditing: 

Public agency. 

* * * * * 

(c) * * * 

(2) Conducted as part of an audit 

under Office of Management and Budget 

Circular A–133 (the Single Audit Act of 

1984, Pub. L. 98–502, and the Single 

Audit Act Amendments of 1996, Pub. L. 

104–156) provided the auditor 

specifically addresses the PFC. 

* * * * * 

Subpart E—Termination 

■ 22. Revise § 158.81 to read as follows: 

§ 158.81 General. 

This subpart contains the procedures 

for termination of PFCs or loss of 

Federal airport grant funds for 

violations of this part or 49 U.S.C. 

40117. This subpart does not address 

the circumstances under which the 

authority to collect PFCs may be 

terminated for violations of 49 U.S.C. 

47523 through 47528. 

§ 158.97 [Removed] 

■ 23. Remove § 158.97. 

■ 24. Amend appendix A to part 158 by 

revising paragraphs 10 and 12 of section 

B of this appendix to read as follows: 

Appendix A to Part 158—Assurances 

* * * * * 

*** 

10. Recordkeeping and Audit. It will 

maintain an accounting record for audit 

purposes for 3 years after physical and 

financial completion of the project. All 

records must satisfy the requirements of 14 

CFR part 158 and contain documentary 

evidence for all items of project costs. 

* * * * * 

12. Compliance with 49 U.S.C. 47523 

through 47528. It understands 49 U.S.C. 

47524 and 47526 require that the authority to 

impose a PFC be terminated if the 

Administrator determines the public agency 

has failed to comply with those sections of 

the United States Code or with the 

implementing regulations published under 

the Code. 

Issued in Washington, DC, on May 14, 

2007. 

Marion C. Blakey, 

Administrator. 

[FR Doc. E7–9941 Filed 5–22–07; 8:45 am] 

BILLING CODE 4910–13–P 

FEDERAL TRADE COMMISSION 

16 CFR Part 4 

Access Requests From Foreign Law 

Enforcement Agencies for Consumer 

Protection Materials 

AGENCY: Federal Trade Commission. 

ACTION: Final rule amendment. 

SUMMARY: The Federal Trade 

Commission is amending Rule 4.11 of 

its Rules of Practice, which addresses 

disclosure requests, to add a new 

provision, Rule 4.11(j). The new 

provision conforms the agency’s rules to 

its authority to share confidential 

information in non-antitrust matters 

with foreign law enforcers, with 

appropriate confidentiality assurances 

and subject to certain restrictions, as 

provided for under the recently-enacted 

U.S. SAFE WEB Act of 2006, Pub. L. No. 

109–455, 120 Stat. 3372 (2006). The 

Commission is also amending Rules 

4.10(d) and (e), which describe certain 

materials subject to prohibitions on 

disclosures and exceptions for specified 

circumstances, to cross-reference the 

new Rule 4.11(j). 

DATES: Effective Date: May 23, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Joannie T. Wei, Attorney, Office of the 

General Counsel, Federal Trade 

Commission, 600 Pennsylvania Avenue, 

NW., Washington, DC 20580, (202) 326– 

2840, jwei@ftc.gov. 

SUPPLEMENTARY INFORMATION: The 

Undertaking Spam, Spyware and Fraud 

Enforcement With Enforcers beyond 

Borders Act of 2006 (U.S. SAFE WEB 

Act), Pub. L. No. 109–455, 120 Stat. 

3372 (2006), was enacted to enhance the 

Federal Trade Commission’s 

enforcement activities against a range of 

practices that harm U.S. consumers, 

including illegal spam, spyware, crossborder fraud and deception, misleading 

health and safety advertising, privacy 

and security breaches, and other law 

violations. The practices the FTC 

enforces against are increasingly global 

in nature, and the U.S. SAFE WEB Act 

improves the FTC’s ability to cooperate 

with its foreign counterparts to combat 

such practices. 

Authority to share certain materials 

with foreign law enforcement agencies. 

Information sharing is one area in which 

the U.S. SAFE WEB Act strengthens the