National Parks Air Tour Fees: Effective Verification and Enforcement Are Needed to Improve Compliance
Published: 2006-05-11T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Omnibus Budget Reconciliation Act of 1993 (the fees legislation) required the National Park Service to begin collecting fees from operators that conduct air tours over national park units that meet certain criteria. Currently, only Grand Canyon, Haleakala, and Hawaii Volcanoes National Parks meet the criteria to charge air tour fees. The Federal Aviation Administration (FAA), in cooperation with the Park Service, also regulates air tours over park units pursuant to the National Parks Overflights Act of 1987 and the National Parks Air Tour Management Act of 2000. GAO was asked to (1) assess the Park Service's collection of air tour fees and (2) identify what factors, if any, hinder the collection of air tour fees. GAO is also providing information on the possible expansion of air tour fees to additional park units.
section_title: What GAO Found
paragraphs: Relying largely on voluntary compliance, the Park Service has collected some, but not all, fees from air tour operators at Grand Canyon, Haleakala, and Hawaii Volcanoes National Parks. After passage of the fees legislation, these three park units instituted air tour fees in 1994 by requesting operators to voluntarily report their air tours and pay appropriate fees monthly. Since then, the Park Service has collected about $19 million at the three park units (in inflation-adjusted 2005 dollars). However, voluntary compliance with the air tour fee requirement has been inconsistent, and several operators are not paying the required fees. For example, GAO found that 13 of the 21 operators conducting air tours over Grand Canyon underpaid their air tour fees for calendar years 2000 through 2003 by more than $1.5 million. The Park Service's ability to collect air tour fees is hindered by several factors. The Park Service cannot verify air tour activity over the three park units. Air tour operators are not required to record and report to either the Park Service or FAA their number of air tours over park units, except for Grand Canyon. Operators at Grand Canyon are required to report their air tours only to FAA. Consequently, the Park Service relies on operators to voluntarily report their air tours and pay the required fees. A GAO January 2006 report recommended that FAA take steps to require operators to report to both agencies their air tours over park units under the 2000 air tour act, including Haleakala and Hawaii Volcanoes. The Park Service cannot effectively enforce compliance due to the lack of air tour data. The Park Service has limited ability to enforce compliance because it does not have jurisdiction over airspace and lacks sufficient air tour data. Conversely, FAA is not required to assist with collecting, or enforcing the collection of, air tour fees. As a result, both Park Service and FAA officials told GAO, the agencies have little or no ability to take enforcement action against noncompliant operators. Different geographic applicability of two laws complicates efforts to collect air tour fees. The fees legislation and the 2000 air tour act have different geographic applicability, which has complicated the Park Service's collection efforts. Air tour fees are currently charged at only 3 of the 86 park units with air tours, based on the criteria established in the fees legislation. Expanding air tour fees to other park units could generate additional funding for the Park Service, but such an expansion would require a legislative change and should be balanced against potential impacts on air tour operators. Legislation could explicitly provide that the additional funding may be used to develop the air tour management plans required by the 2000 air tour act. Regarding the potential impacts on air tour operators, the 2000 air tour act directed FAA to prepare a report to Congress on this subject by October 2000. FAA has drafted the report but has not submitted it to Congress.

section_title: Letter
paragraphs: Millions of visitors each year enjoy our national parks, monuments, historic  sites, and other units of the national park system (national park units).  While most visitors experience the park units on land by walking, driving,  or as part of a bus tour, some visitors view the park units through  commercial, sightseeing air tours (air tours). The Department of the  Interior’s (Interior) National Park Service (Park Service) is responsible for  managing the 390 national park units and for collecting applicable fees  associated with their use. Collecting applicable admission and commercial  tour use fees from individuals, private vehicles, and tour buses that enter  the park units on land is generally a simple process. At those park units that  charge fees, the Park Service typically collects the fees at entrance gates,  and visitors can be denied entry if they do not pay the required fees. To  verify that these visitors and tour buses have paid the fees, the Park Service  periodically checks their receipts, and some park units compare visitation  and vehicle statistics with the fees collected. In contrast, collecting  commercial tour use fees for air tours (air tour fees) has posed some  unique challenges for the Park Service.
As part of legislation giving the Park Service recreation fee authority, the  Omnibus Budget Reconciliation Act of 1993 (the fees legislation) required  the Park Service to begin collecting a commercial tour use fee for all  aircraft conducting tours in the airspace over two park units—Grand  Canyon and Haleakala National Parks (Grand Canyon, Haleakala)—after  October 1, 1993. The air tour fee requirement also applies to any other  park unit that charges an admission fee and for which the Park Service  determines the level of air tour activity over the park unit is equal to or  greater than the level at Grand Canyon or Haleakala. In December 1993,  the Park Service determined that the level of air tour activity over Hawaii  Volcanoes National Park (Hawaii Volcanoes) was equivalent to Haleakala  and that air tour fees would be charged for this park unit as well. The air  tour fee per entry into the airspace of these three park units is $25 per  aircraft with a capacity of 25 or fewer passengers or $50 per aircraft with a  capacity of more than 25 passengers. The fees legislation also allows the  Park Service to periodically make reasonable adjustments to the air tour  fee. At the time of our review, all air tour aircraft at the three relevant park  units carried fewer than 25 passengers, and since the Park Service has not  made any adjustments since 1993 to air tour fees, only the $25 fee has  applied.
While the Park Service is charged with collecting air tour fees, it is the sole  jurisdiction of the Department of Transportation’s Federal Aviation  Administration (FAA) to regulate or control the airspace over national park  units. As part of its aviation responsibilities, FAA issues certificates to  pilots who conduct air tours, monitors the safety and maintenance of air  tour aircraft, issues applicable air carrier certificates, and takes necessary  enforcement actions. The Park Service does not issue certificates or  business permits to air tour operators.
Congress directed FAA, in cooperation with the Park Service, to regulate  air tours over park units in legislation commonly referred to as the National  Parks Overflights Act of 1987 (Grand Canyon Act) and the National Parks  Air Tour Management Act of 2000 (Air Tour Management Act). The Grand  Canyon Act, among other things, requires FAA to prepare and issue a plan  to manage air traffic above Grand Canyon. FAA and the Park Service are  jointly conducting the environmental work necessary to prepare such a  plan, but in the meantime, FAA has issued special federal aviation  regulations that, in part, require operators to record and report their air  tours over Grand Canyon to FAA. The Air Tour Management Act, among  other things, requires FAA, in cooperation with the Park Service, to develop  air tour management plans for national park units and abutting tribal lands  where commercial air tour companies (air tour operators) apply for  authority to conduct air tours. As of April 2006, the agencies had not  completed any air tour management plans, although plans are in  development for Grand Canyon and six other national park units. Under  the regulations implementing the Grand Canyon Act, FAA has authorized  14 air tour operators to conduct a combined total of 91,250 air tours  annually as of March 2006. Similarly, under the Air Tour Management Act,  FAA has authorized 77 air tour operators at 85 park units to conduct a  combined total of 262,857 air tours annually. Of that amount, 14 operators  are authorized to conduct a combined 28,441 air tours annually at Hawaii  Volcanoes, and 10 operators are authorized for a combined 26,325 air tours  annually at Haleakala.
Although legislation directs the agencies to work together in developing  plans to manage air tours over national park units—and the agencies  anticipate that local FAA district offices will have the lead role in  monitoring and enforcing the plans—no law specifically assigns FAA the  responsibility to carry out enforcement actions against air tour operators  that do not pay their fees. Neither the Grand Canyon Act nor the Air Tour  Management Act establish specific mechanisms for air tour fee collection  and enforcement, except that the Air Tour Management Act required FAA  to report to Congress by October 2000 on the effects that air tour fees are  likely to have on the air tour industry, including (1) the viability of a tax  credit for air tour operators and (2) the financial effects that any proposed  offsets are likely to have on FAA.
In January 2006, we reported on the status of the Air Tour Management  Act’s implementation. We found, among other things, that FAA and the  Park Service lack data to verify air tour activity over park units regulated  by the Air Tour Management Act because FAA and existing laws and  regulations do not require operators to record and report such information.  Consequently, we recommended that FAA establish a procedure for  operators to record and report to both agencies the number of air tours  they conduct over national park units in order to improve enforcement of  that act. The Department of Transportation agreed with our findings in that  report and agreed to consider our recommendations as FAA moves forward  with the air tour management program. As part of our review of the Air  Tour Management Act, we were also asked to review operators’ compliance  with the payment of air tour fees. We chose to report separately on the fees  issue because the fees legislation is distinct from the Air Tour Management  Act, and air tour fees currently apply to only three park units.
In congressional oversight hearings in 2002 and 2004, Interior, a large air  tour operator in Hawaii, and nonprofit conservation organizations raised  concern that some air tour operators have not paid all fees owed to the  national park units as required by the fees legislation. In this context, you  asked us to (1) assess the Park Service’s collection of air tour fees and  operators’ compliance in paying fees and (2) identify what factors, if any,  hinder the collection of air tour fees. We are also providing information on  the possible expansion of air tour fees to additional park units.
In conducting our work, we analyzed Park Service and FAA policies,  guidance, and other relevant documents, as well as applicable laws and  regulations. In addition, we reviewed the Park Service’s data on the  collection of air tour fee payments at the three relevant park units and  FAA’s data on the number of air tours over Grand Canyon, which operators  are required to record and report to FAA. We determined that both  agencies’ data were sufficiently reliable for the purposes of this report. We  also interviewed Park Service officials at headquarters and at the three  park units that have established air tour fees, FAA officials at headquarters  and at the two relevant district offices, and a sample of 18 operators of the  33 that had authority to conduct air tours at the three relevant park units.  This sample included different sizes of air tour operators, as measured by  the number of air tours they are authorized to conduct annually. A more  detailed description of our scope and methodology is presented in  appendix I. We performed our work from January 2005 through April 2006  in accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: The Park Service is responsible for conserving the scenery, the natural and  historic objects, and the plants and wildlife in national park units, and for  providing for the enjoyment of national park units in ways that leave them  unimpaired for future generations. To accomplish its mission, the Park  Service has a budget of about $1.7 billion for fiscal year 2006. The Park  Service also has authority to collect and retain recreation fees from  visitors, including entrance fees, amenity fees, and special permit fees, to  be used primarily at the site where the fee was collected. In fiscal year  2005, the Park Service collected $146.8 million in visitor use fees.
The Omnibus Budget Reconciliation Act of 1993 (the fees legislation)  directed the Park Service to establish air tour fees by October 1, 1993. In  the House Budget Committee’s report accompanying the fees legislation,  the committee stated that tour operators generate their revenues by selling  national park units as a destination and, therefore, a modest fee is a  reasonable and justifiable means of addressing impacts they have on park  unit resources and personnel. Under the fees legislation, the Park Service  considers an air tour to be a flight that consists of one or more persons  traveling on an itinerary that has been packaged, priced, or sold for leisure  or recreational purposes by an organization that realizes financial gain  through the provision of the service. The Park Service specifically excludes  flights that are conducted solely as transportation between two points. The  Park Service also determined that air tours that enter and exit the airspace  over any of the applicable park units more than once during a single flight  have to pay only one fee for that air tour. The Park Service implemented the  fee requirement to apply whenever an air tour crosses the boundary of a  qualifying park unit below specified altitudes at each of the park units:  12,000 feet above mean sea level at Haleakala and 5,000 feet above ground  level at Hawaii Volcanoes. At Grand Canyon, the special federal aviation  regulations establish altitude levels that vary with flight patterns.
While the Park Service is the sole agency charged with collecting air tour  fees, it has no authority to regulate or control the airspace over the park  units; that is the sole jurisdiction of FAA. Congress directed FAA and the  Park Service to work together to regulate air tours over park units in the  National Parks Overflights Act of 1987 (Grand Canyon Act) and the  National Parks Air Tour Management Act of 2000 (Air Tour Management  Act). FAA’s mission is to provide the safest, most efficient aerospace  system in the world. FAA is pursuing its mission with an annual budget of  more than $13.8 billion in fiscal year 2006, of which about $7.7 million is  estimated to be spent on air tour management. FAA has tasked its  Western-Pacific Regional Office with working with the Park Service to  implement these two acts. The Park Service established the Soundscapes  Program Center in 2000 (now the Natural Sounds Program) primarily to  work with FAA’s Western-Pacific Regional Office to develop air tour  management plans under the two acts. The Natural Sounds Program’s  budget for fiscal year 2006 is about $1.4 million, according to a program  official.
The Grand Canyon Act, which was enacted 6 years before the fees  legislation, instructed FAA and the Park Service to prepare a management  plan for air traffic over Grand Canyon. Due to the unusually high level of air  tour activity over the canyon and some aircraft accidents in its  vicinity—including a collision in June 1986 between an air tour airplane  and a tour helicopter resulting in 25 deaths—the act directed the Park  Service to submit recommendations to FAA concerning the actions  necessary for the protection of resources and “… substantial restoration of  the natural quiet and experience of the park  and protection  of public health and safety from adverse effects associated with aircraft  overflight.” The act authorized FAA to issue regulations to implement the  plan and authorized the Park Service to enforce the plan’s requirements  under that agency’s own rules and regulations. To date, the two agencies  have not developed an air tour management plan for Grand Canyon and are  currently engaged in an alternative dispute resolution process with other  stakeholders to develop the plan. However, after receiving  recommendations from the Secretary of the Interior, as the Grand Canyon  Act required, FAA revised special federal aviation regulations in June 1988  to regulate air traffic over Grand Canyon. These regulations, among other  things, created flight-free zones, minimum flight altitudes, and specific  flight paths for air tours; required air tour operators to report their air tours  over Grand Canyon to FAA; and established procedures for setting a limit  on the number of air tours allocated to operators over Grand Canyon.  Subsequently, FAA issued a final rule in December 1996 to codify the  special regulations and, in 2000, FAA set the allocations and issued special  authority to the operators based on their level of air tour activity over  Grand Canyon from May 1, 1997, to April 30, 1998. Since then, some air  tour operators have transferred or sold their air tour allocations with FAA’s  knowledge. FAA has changed the total number of allocations only once, in  accordance with a recommendation from Interior to raise the regulated  airspace “ceiling” above Grand Canyon from 14,500 feet to 18,000 feet  above sea level; in February 2005, FAA granted 3,711 air tour allocations to  one operator that had previously been unregulated, which increased the  total number of air tour allocations for Grand Canyon to 93,971.
The Air Tour Management Act, which was enacted 7 years after the fees  legislation, arose from noise and safety concerns, like the Grand Canyon  Act, but applies to all park units, with the exceptions of (1) Grand Canyon  or tribal lands within or abutting that park unit, (2) any air tour operator  flying over or near Lake Mead National Recreation Area solely as a  transportation route to conduct an air tour over Grand Canyon, and (3) any  land or waters in Alaska. The Air Tour Management Act also prohibits any  air tours over Rocky Mountain National Park. This act directed FAA, in  cooperation with the Park Service, to develop air tour management plans  for national park units and abutting tribal lands where air tour operators  apply for authority to conduct air tours. The Air Tour Management Act  defines a “commercial air tour operation” (air tour) as any flight conducted  for compensation or hire in a powered aircraft where a purpose of the flight  is sightseeing over a national park unit, within one-half mile outside its  boundary, or over an abutting tribal land. In the regulations implementing  the Air Tour Management Act, FAA further defined air tours regulated  under that act to include only flights below 5,000 feet above ground level.  To implement the Air Tour Management Act, FAA and the Park Service  signed an interagency memorandum of understanding that established  procedures the two agencies would follow in coordinating the development  of air tour management plans, including a provision that FAA would fund  60 percent of the cost of developing the plans, and the Park Service would  fund 40 percent. This agreement describes the qualifying costs as external  contractor costs required to produce the plans. These qualifying costs  exclude staff salaries, benefits, and travel for agency personnel; agency  equipment and supplies; and any costs for in-house contractors hired by  either agency.
In our January 2006 report on the Air Tour Management Act, we found,  among other things, that the Park Service has not fulfilled its agreement  with FAA to fund 40 percent of the cost of developing the air tour  management plans. The Park Service had not requested or received any  dedicated funding for the program until fiscal year 2006, when Congress  provided $500,000 toward air tour management. For fiscal year 2007, the  Park Service has requested $2.4 million for air tour management.  Meanwhile, from fiscal years 2001 through 2005, FAA has funded 100  percent of the initial plans’ development through distinct budget  appropriations totaling $27 million. Although the Park Service has, like  FAA, contributed staff time to work on the development of air tour  management plans, the cost of doing so does not count toward its 40  percent obligation, according to the agreement. Officials from both  agencies told us that if the Park Service does not meet its obligation within  the next 2 years, development of future air tour management plans may be  hindered.
section_title: Largely through Voluntary Compliance, the Park Service Has Collected Some, but Not All, Air Tour Fees at Three Park Units
paragraphs: The Park Service, relying largely on voluntary compliance, has collected  some, but not all, air tour fees from air tour operators at Grand Canyon,  Haleakala, and Hawaii Volcanoes. The Park Service established air tour  fees at Grand Canyon, Haleakala, and Hawaii Volcanoes in March 1994. In  order to collect payments from air tour operators, Park Service officials  sent notice letters to relevant operators that air tours over these three park  units would be subject to the fees beginning in March 1994. However,  officials at Haleakala reached an informal agreement with air tour  operators to not pay fees from 1994 through 2001 if operators followed a  specific flight path. The voluntary agreement established terms such as air  tour routes and no-fly areas and was signed by a group of operators and  Park Service officials at Haleakala; it kept air tours out of the park unit’s   boundary, except for one small corner of the park unit. However, when   Haleakala acquired more land where the air tours were conducted, it  negotiated a new voluntary agreement with operators, which included  paying the $25 air tour fee. Thus, Haleakala did not begin charging air tour  fees until January 2002. Haleakala officials believe that operators have  been mostly compliant with the air tour fee as a result of the voluntary  agreement. Grand Canyon and Hawaii Volcanoes requested each air tour  operator to voluntarily report monthly to the appropriate park unit the  number of air tours conducted, as well as to send a payment covering all  appropriate $25 fees for that month. Under the fees legislation, only park  units charging an admission fee—which could include per-person  admission fees—may charge air tour fees. The Park Service has chosen to  charge air tour fees only at park units that charge a per-vehicle admission  fee.
Since the Park Service began collecting air tour fees 12 years ago, it has  collected about $19 million at the three park units: more than $16 million  at Grand Canyon; about $970,000 at Haleakala; and about $1.9 million at  Hawaii Volcanoes. In general, at least 80 percent of recreation fees,  including air tour fees, collected at a specific park unit remain available for  expenditure, without further appropriation, at that park unit. The fees  must be used for repair, maintenance, and facility enhancement directly  related to visitor enjoyment and access; interpretive and visitor  information; certain habitat restoration and law enforcement; direct costs  associated with the recreation fee program; and other qualifying costs. For  example, at Haleakala, these “80 percent funds” are being used to build new  restrooms for visitors, complete deferred maintenance projects,  rehabilitate exhibits, maintain trails, remove alien and invasive species, and  construct a new entrance station. The balance (generally 20 percent) of  recreation fees collected, including air tour fees, is available to the Park  Service on an agency-wide basis for the same types of projects as the 80  percent funds.
However, voluntary compliance with the air tour fee requirement has been  inconsistent across the three park units, and several operators are not  paying the required fees. For example, we found that 13 of the 21 air tour  operators that conducted air tours over Grand Canyon from May 2000  through December 2003, underpaid their air tour fees by more than $1.5  million. Specifically, in comparing the data that air tour operators reported  to FAA with the data they voluntarily supplied the Park Service, we found  that 6 operators underreported their tours to the Park Service and  underpaid their fees, while 7 operators reported no tours to the Park  Service and paid no fees. Table 1 shows the data that air tour operators at  Grand Canyon reported to FAA and the data the operators voluntarily  supplied the Park Service for paying air tour fees over those 4 years.  Similarly, at Hawaii Volcanoes, one operator, who owed more than $360,000  as of January 2005, has publicly stated that it stopped paying air tour fees  in July 2003 because other operators were not paying—although this  operator resumed paying fees in November 2005 and has consistently paid  fees at Haleakala. One operator at Haleakala also told us it has not been  paying air tour fees.
Since 1994, the Park Service’s efforts to collect unpaid fees have been  uneven. All three of the park units that assess an air tour fee have sent  letters to air tour operators encouraging the payment of fees at various  times from 1994 through today. For example, officials at Hawaii Volcanoes  sent letters in 1994, 1997, 2004, and 2005 to encourage air tour operators  that they believe fly over that park unit to pay the fee. These letters also  sought payment for past fees that were unpaid, or evidence from the  operators that they did not fly over the park unit. In response, some air tour  operators supplied the requested evidence and/or started paying fees for  current air tours. At Grand Canyon, the Park Service filed lawsuits against  three operators that had conducted air tours over that park unit but had not  paid all appropriate fees. The lawsuits resulted in settlements in July 2000  in which each operator agreed to make back payments and continue to  conduct air tours by paying $50 per air tour—$25 for the current tour and  $25 for a past tour—until the settlement amounts were paid, which totaled  about $800,000 from all three operators. However, Park Service officials  stated that all three operators have stopped making back payments: two of  the operators are still conducting air tours but report that they are unable  to afford the payment, and the third operator is no longer in business over  Grand Canyon. Although the officials say that the operators are required to  continue making payments under these settlements, the Park Service has  not pursued their compliance.
section_title: Collections of Air Tour Fees Are Hindered by Several Factors
paragraphs: The Park Service’s ability to collect air tour fees is hindered by several  factors: the agency cannot verify air tour activity over the three park units,  it cannot effectively enforce compliance, and two key laws have different  geographic applicability.
subsections: section_title: The Park Service Cannot Verify Air Tour Activity Over the Three Park Units
paragraphs: The Park Service is unable to verify the number of air tours that operators  conduct over Grand Canyon, Haleakala, and Hawaii Volcanoes, thus  limiting the agency’s ability to ensure that operators are making all the  required payments. Except for Grand Canyon, current laws and regulations  do not require air tour operators to record and report their air tour activity  over national park units to either the Park Service or FAA. At Grand  Canyon, FAA regulations require air tour operators to report all their air  tours to FAA under the special federal aviation regulations implementing  the Grand Canyon Act, although in practice, the operators report all their  flights (not just air tours) over Grand Canyon to FAA. Under these special  regulations, air tour operators report quarterly to FAA, for each flight over  Grand Canyon, the aircraft make, model, and identification number; the  departure date, time, and airport; and the type of flight—such as a tour,  pilot training, or the movement of aircraft among landing locations—and  the route flown.
However, FAA does not collect these data for the purpose of verifying  whether air tour operators are reporting to the Park Service all their air  tours and paying the appropriate fees, and FAA has generally been  unwilling to share these data with the Park Service. Officials in the FAA  district office that is responsible for managing air tours over Grand Canyon  explained that they are unwilling to share these data because they are  concerned their involvement with fees could cause operators to  underreport their air tour activity, which could reduce safety.
Consequently, the Park Service relies on air tour operators to voluntarily  report all their air tours and pay the required fees. Without the ability to  verify operators’ air tour activity, the Park Service cannot ensure that  operators are making all the required payments. In our January 2006 report,  we recommended that FAA establish procedures for air tour operators to  record and report their air tours conducted under the Air Tour Management  Act to both FAA and the Park Service. The Department of Transportation  agreed with our findings in that report and agreed to consider our  recommendations as FAA moves forward with the air tour management  program.
section_title: The Park Service Cannot Effectively Enforce Compliance Due to the Lack of Air Tour Data
paragraphs: The Park Service—the agency charged with collecting air tour fees—has  limited ability to enforce compliance because it does not have jurisdiction  over airspace and lacks sufficient air tour data. Conversely, FAA—the  agency with authority over airspace and air tour operators—is not required  to assist with collecting, or enforcing the collection of, air tour fees.  Neither the Grand Canyon Act nor the Air Tour Management Act requires  that air tour management plans establish specific mechanisms for air tour  fee collection and enforcement. Furthermore, neither act requires fee  compliance as a condition for operators’ authority to conduct air tours over  park units. As a result, both Park Service and FAA officials told us the  agencies currently have little or no ability to take enforcement action  against noncompliant operators.
Although the Park Service could potentially pursue compliance in court,  as occurred at Grand Canyon, or through debt collection by the  Department of the Treasury, neither of these options are feasible at the  other two park units without evidence that an air tour operator flew over a  park unit and did not pay all the fees owed. The lawsuits over air tour fees  at Grand Canyon were successful for the Park Service because FAA, in  those instances, supplied a sufficient amount of data showing that  operators had conducted air tours over the park unit and should have paid  a commensurate amount of fees. Alternatively, the Park Service could refer  outstanding air tour fees owed to the Department of the Treasury for debt  collection. In this case, the Department of the Treasury would attempt to  collect whatever amount is owed by noncompliant operators. The Park  Service would be in a better position to take these more aggressive  collection actions, which would likely result in increased collections, if the  agency had the necessary evidence to prove an operator had conducted air  tours and not paid the required fees.
section_title: Different Geographic Applicability of Two Laws Complicates Efforts to Collect Air Tour Fees
paragraphs: The fees legislation and the Air Tour Management Act and/or their  respective implementing guidelines and regulations have different  geographic applicability, which complicates the Park Service’s efforts to  collect air tour fees. Under the fees legislation, an air tour operator is  required to pay a fee when a tour enters the airspace over a park unit,  whereas the Air Tour Management Act defines air tours as flights over a  national park unit or within a half-mile outside its boundary. Furthermore,  the applicable flight altitudes used by the Park Service to determine the air  tours that are subject to the fees legislation differ from the flight altitudes  established by FAA to determine the air tours that are subject to the Air  Tour Management Act. For example, at Haleakala, payment of the air tour  fee is triggered when air tours cross the park unit’s boundary and fly below  an altitude of 12,000 feet mean sea level. However, air tours are regulated  under the Air Tour Management Act at this park unit when they fly over or  within a half-mile of its boundary and below 5,000 feet above ground level.  Figure 1 shows the difference in the geographic scope of the acts as they  apply to Haleakala.
The different geographic applicability of the two laws has complicated the  Park Service’s efforts to collect air tour fees by providing some air tour  operators with a plausible explanation for why they are not paying fees.  Under the existing system, air tour operators can assert that they only fly  within a half-mile of a park unit boundary but do not cross it; therefore,  their air tours are covered by the Air Tour Management Act but not by the  fees legislation. For example, two air tour operators told Park Service  officials in November 2004 that they did not cross Hawaii Volcanoes’  boundary during their air tours of the park unit and, therefore, did not owe  any fees, despite the Park Service’s perception that they crossed the  boundary. To enable the Park Service to verify air tour activity under both  laws and determine the appropriate level of fees owed under the fees  legislation, air tour operators would have to track and report two sets of  data: one for air tours that cross the park unit boundary for fee collection,  and another for air tours that fly within a half-mile of a park unit boundary  for the Air Tour Management Act. As an alternative, the fees legislation and  the Air Tour Management Act would have to be reconciled to have  consistent geographic applicability.
section_title: Expanding Air Tour Fees to Additional Park Units Should Be Balanced against Potential Impacts on Air Tour Operators
paragraphs: As of March 2006, air tour operators had authority from FAA to conduct air  tours over 86 park units, yet only 3 of those park units charge air tour fees.  In specifying that additional park units could assess such fees only if their  level of air tour activity matched that of Grand Canyon or Haleakala, the  fees legislation set a high threshold. As a result, only one additional park  unit, Hawaii Volcanoes, has qualified to charge fees in the past 12 years.  According to FAA data, operators had authority to conduct a combined  total of 91,250 air tours annually over Grand Canyon; 28,441 over Hawaii  Volcanoes; and 26,325 over Haleakala. However, several other park units  have relatively high levels of authorized air tour activity, although not as  high as any of those three park units (see appendix II). For example,  operators have authority to conduct a combined total of 14,074 air tours  annually over Glen Canyon National Recreation Area.  This park unit  charges an admission fee, which is the fees legislation’s other requirement  for a park unit to assess air tour fees. Park Service officials told us they  would like to charge air tour fees at additional park units that charge  admission fees (see table 2), but the fees legislation would have to be  changed to lower the air tour activity threshold.
Expanding air tour fees to other park units could generate additional  funding for the Park Service, but such an expansion would require a  legislative change and should be balanced against any potential impacts on  air tour operators. The legislation could explicitly provide for the use of  additional funding to develop air tour management plans, which officials  from both agencies told us may otherwise be hindered due to insufficient  Park Service funding. In January 2006, we reported that the Park Service  had not funded its share of the development costs for air tour management  plans required by the Air Tour Management Act.
With respect to the effects that air tour fees are likely to have on operators,  FAA drafted a report in January 2001, which is still pending review at the  Department of Transportation. The FAA draft report said that, due to the  nature of the industry, air tour fees have been and will continue to be  shifted to consumers in the form of higher tour prices in most cases. While  the draft report said FAA had no specific information regarding passenger  price sensitivity for air tours, it said estimates suggest that if ticket prices  were raised by 1 percent, a reduction of 2 percent to 4 percent in tickets  sold would be expected. The draft FAA report also said that if air tour fees  were not charged at any park units other than Grand Canyon, there would  be an estimated 2.0 million or 2.1 million air tours over the next 10 years,  assuming a 3 percent or 5 percent growth rate, respectively. If fees were to  be established at all park units, the draft report continued, that estimate  would drop to 1.8 million or 1.9 million at the same growth rates. To offset  the impact of such fees on operators, the draft FAA report stated, air tour  fees could potentially be used as a credit against aviation excise taxes.  However, the draft report said such a credit would present serious  concerns because FAA relies on these taxes for its expenditures.  Consequently, any shortfall would need to be made up by spending  reductions, increased payments by other aviation system users, or the  general taxpayer. The draft FAA report also said the Park Service could use  air tour fees to help finance the development of air tour management plans  and, subsequently, for monitoring air tour activities—but that these  applications should not be linked to a reduction in aviation taxes. Once  FAA submits its report, Congress, the Park Service, and other stakeholders  will have additional information to evaluate whether air tour fees should be  expanded to additional park units.
section_title: Conclusions
paragraphs: The current process for the Park Service’s collection of air tour fees has  three significant limitations: (1) fee payments are based on operators’  voluntary compliance, (2) there is no verification that the correct fees have  been paid, and (3) there is little or no ability to take enforcement actions  against operators that do not pay their fees because the Park Service lacks  the necessary air tour data. While each one of these factors in isolation may  not cause an insurmountable problem, combined they have led to the  ineffective collection of air tour fees. Voluntary compliance could be  effective if it were combined with (1) reliable data to verify that operators  are complying with the fee requirement and (2) appropriate enforcement  actions against operators that do not pay. However, the current process for  collecting air tour fees has emboldened some operators not to pay the  required fees. As a result, those air tour operators that are paying their fees  are put at a competitive disadvantage against those operators that are not  paying the required fees.
The different geographic applicability of the fees legislation and the Air  Tour Management Act has complicated collection efforts and created an  additional disincentive for operators to accurately report their air tours and  pay the appropriate fees. If the geographic applicability of the acts were  consistent, operators could record and report one set of data to the Park  Service for verification and collection of fees and for air tour management  plans.
In our January 2006 report, we recommended that FAA take steps to  require that operators record and report their air tours under the Air Tour  Management Act to FAA and the Park Service. The implementation of this  recommendation, combined with making the geographic applicability of  the acts consistent, would provide the Park Service with the necessary data  to verify that the proper fees are being paid at Haleakala and Hawaii  Volcanoes—and any future park unit that develops an air tour management  plan, if air tour fees are expanded to additional park units. However, a gap  exists in the reporting requirement for Grand Canyon because the special  federal aviation regulations implementing the Grand Canyon Act required  the data be reported to FAA but not the Park Service.
Finally, by stipulating that additional park units could charge air tour fees  only if they charge admission fees and if their level of activity meets that of  Grand Canyon or Haleakala, the fees legislation sets the bar very high: in  the past 12 years, only one additional park unit has qualified. Lowering the  threshold for air tour activity would allow the Park Service to expand air  tour fees to additional park units and use the proceeds as appropriate  under the recreation fee program. The Air Tour Management Act required  FAA to report to Congress by October 2000 on the effects that air tour fees  are likely to have on air tour operators. Although FAA drafted this report in  January 2001, FAA officials told us the Department of Transportation has  not approved it for submission to Congress. Releasing that report would  enable Congress, the Park Service, and the air tour community to  understand the impacts of air tour fees on operators’ businesses and help  stakeholders to determine whether such fees should be expanded to  additional park units.
section_title: Matter for Congressional Consideration
paragraphs: To enhance the collection of air tour fees, Congress should consider  amending the fees legislation or the Air Tour Management Act to reconcile  the geographic applicability of the two laws.
section_title: Recommendations for Executive Action
paragraphs: In order to improve compliance with air tour fee payments and to help  understand the impacts of such fees on air tour operators’ businesses, we  recommend that the Secretary of Transportation direct the Administrator  of FAA to take the following two actions:  Establish a procedure for air tour operators at Grand Canyon National  Park to report their air tour information simultaneously to the Park  Service and FAA, or ensure that the air tour information is forwarded to  the Park Service once it is reported to FAA by air tour operators.
Report to Congress on the effects that air tour fees are likely to have on  air tour operators as required by the Air Tour Management Act.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided the Departments of the Interior and Transportation with a  draft of this report for review and comment. Interior agreed with our  findings, conclusions, and recommendations, particularly those that  address the need for more accurate and reliable air tour data. Interior,  representing the Park Service, also said it supports lowering the threshold  for the level of air tour activity in order to expand collection of air tour fees  to additional park units. Interior provided written comments that are  included in appendix III, along with our specific response. The Department  of Transportation, representing FAA, offered substantive and technical  comments and, after our revisions discussed below, generally agreed with  our findings, conclusions, and recommendations.
Our draft report contained a Matter for Congressional Consideration that  stated Congress should consider amending the Grand Canyon Act and the  Air Tour Management Act to require compliance with air tour fee payments  as a condition for operating authority to conduct air tours over national  park units. In providing oral comments on the draft report, FAA’s Regional  Administrator for the Western-Pacific Region disagreed with this matter.  The Regional Administrator stated that fee collection, and enforcement of  fee collection, is the responsibility of the Park Service. FAA was also  concerned that since the Park Service currently lacks an administrative  process to provide air tour operators with legal due process before  potentially revoking their operating authority, that this administrative  burden would likely fall on FAA and distract from FAA’s primary focus of  aviation safety. We believe that the collection and enforcement of air tour  fees should be largely the responsibility of the Park Service. However, in  those cases where FAA exclusively receives data that the Park Service  needs to perform this function, FAA should share the data with the Park  Service, as we have recommended. We also agreed with FAA that there was  a risk that much of the administrative burden for making operators’ air tour  operating authority conditioned on fee compliance could unduly fall on  FAA. As a result, we have removed that matter from the report. We now  emphasize in the report that the Park Service could take more aggressive  enforcement actions once it has the necessary air tour flight data.
We are sending copies of this report to the Secretaries of Transportation  and the Interior, and other interested parties. We will also make copies  available to others upon request. In addition, the report will be available at  no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-3841 or nazzaror@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix IV.
section_title: Scope and Methodology
paragraphs: We identified and analyzed applicable laws, regulations, National Park  Service (Park Service) policies, guidance, procedures, and other relevant  documents to assess the Park Service’s collection of air tour fees and  operators’ compliance in paying fees. In addition, we visited the three  relevant park units—Grand Canyon, Haleakala, and Hawaii Volcanoes  National Parks—and reviewed the Park Service’s data on the collection of  air tour fee payments at these three park units. We then adjusted these  figures to express them in inflation-adjusted 2005 dollars. We also reviewed  the Federal Aviation Administration’s (FAA) data on the number of air tours  reported by operators at Grand Canyon National Park. We determined that  both agencies’ data were sufficiently reliable for the purposes of this  report. We also interviewed Park Service and Department of the Interior  (Interior) officials at headquarters, Park Service officials at the three park  units that have established air tour fees, and FAA officials at headquarters  and at the two relevant district offices.
In addition, we interviewed a probability sample of 18 operators of the 33  that had authority from FAA to conduct air tours at the time of our visits in  2005 over the three relevant park units. The sample was selected in such a  way as to serve the purposes of both this report and our January 2006  report on the National Parks Air Tour Management Act of 2000 (Air Tour  Management Act). To choose the air tour operators to interview, we  stratified the operators at each park unit into three groups based on the  number of annual air tours FAA authorized at each park unit: small (3,000  or fewer air tours), medium (between 3,001 and 10,000 air tours), and large  (more than 10,000 air tours). The 18 air tour operators we interviewed  were: Air Grand Canyon, Inc.; Aris, Inc.; Aviation Ventures, Inc.; Big Island  Air, Inc.; Call Air, Inc.; Grand Canyon Airlines, Inc.; Helicopter Consultants  of Maui, Inc.; K&S Helicopters, Inc.; King Airelines, Inc.; Manuiwa Airways,  Inc.; Maverick Helicopters, Inc.; Mokulele Flight Service, Inc.; Rainbow  Pacific Helicopters, Ltd.; Safari Aviation, Inc.; Scenic Airlines, Inc.;  Schuman Aviation, Co. Ltd.; Sunshine Helicopters, Inc.; and Vista  Helicopter Services, Inc.
For Grand Canyon National Park (Grand Canyon), 11 of the 17 operators  that had authority to conduct air tours in July 2005 also had authority to  conduct air tours over nearby Lake Mead National Recreation Area (Lake Mead). For purposes of this report and our January 2006 report, we  needed to focus on those operators that had authority to conduct air tours  at both park units, so we randomly selected operators from those 11  operators. Specifically, we interviewed 3 of the 6 small, 3 of the 3 medium,  and 1 of the 2 large operators that had authority to conduct air tours over  both Grand Canyon and Lake Mead.
For Haleakala and Hawaii Volcanoes National Parks (Haleakala, Hawaii  Volcanoes), 8 operators had authority to conduct tours over both park  units, and 8 other operators had authority to conduct tours over either  Haleakala or Hawaii Volcanoes, but not both. Ten of these 16 operators  were small, 5 were medium, and 1 was large. We interviewed the 1 large  operator, 3 of the 5 medium operators (selected randomly), and 7 of the 10  small operators (selected as follows). For purposes of our January 2006  report, we needed the perspective of operators that had authority to  conduct air tours over all 6 national park units in Hawaii, so we first  selected all operators (3 small operators) that met that criterion. This  meant we interviewed those 3 small operators, plus we randomly selected 4  of the remaining 7 small operators that had authority at either Haleakala or  Hawaii Volcanoes, but not both. Table 3 details the selection of our sample  of operators.
We assessed budget data describing the Park Service’s requests for annual  appropriations and FAA’s funding dedicated to developing air tour  management plans. This budget information covered fiscal years 2001  through 2006 and were obtained from budget appropriation reports, the  agencies’ budget requests, and budget summaries provided by FAA and a  contractor. We determined that these data were sufficiently reliable for the  purposes of this report.
To identify what factors hinder the collection of air tour fees, and to  provide information on the possible expansion of air tour fees to additional  park units, we considered the results of our January 2006 report,  particularly the sections on the lack of data on air tour activity over park  units and the Park Service’s not funding its share of the cost of developing  air tour management plans. We also interviewed Park Service, Interior, and  FAA officials and reviewed FAA’s January 2001 draft report to Congress on  the likely effects that air tour fees will have on air tour operators. In  addition, we reviewed Park Service data on the park units that charge  admission fees. We also assessed data reflecting the number of annual air  tours authorized by FAA for operators over various national park units  under the Air Tour Management Act and the National Parks Overflights Act  of 1987. We interviewed agency officials regarding a series of data  reliability questions addressing areas such as data entry, data access,  quality control procedures, and data accuracy and completeness. We asked  follow-up questions whenever necessary. We determined that these data  were sufficiently reliable for the purposes of this report.
We performed our work from January 2005 through April 2006 in  accordance with generally accepted government auditing standards.
section_title: Number of Authorized Air Tours over National Park Units and Admission Fee Information
paragraphs: Lake Mead National Recreation Area (includes part of  Parashant National Monument)
Statue of Liberty National Monument (includes Ellis Island  National Monument)
Golden Gate National Recreation Area (includes Alcatraz  Island, Muir Woods National Monument, Presidio of San  Francisco, and Fort Point National Historic Site)
San Francisco Maritime National Historical Park North Cascades National Park (includes Lake Chelan  National Recreation Area)
section_title: Comments from the Department of the Interior
paragraphs: The following are GAO’s comments on the Department of the Interior’s  letter dated April 20, 2006.
subsections: section_title: GAO Comments
paragraphs: 1. Our draft report did not contain any recommendations to the National  Park Service.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Jeffery D. Malcolm, Assistant  Director; Josey Ballenger; Alisha Chugh; Wyatt R. Hundrup; Richard  Johnson; Alison O’Neill; Judy Pagano; Anne Rhodes-Kline; and Carol  Herrnstadt Shulman made key contributions to this report.  Also  contributing to the report were Roy Judy, Steve Martin, and Jena Sinkfield.