[Federal Register Volume 64, Number 131 (Friday, July 9, 1999)]
[Proposed Rules]
[Pages 37304-37324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17319]



[[Page 37303]]

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Part V





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 93



Commercial Air Tour Limitation in the Grand Canyon National Park 
Special Flight Rules Area; Proposed Rule

  Federal Register / Vol. 64, No. 131 / Friday, July 9, 1999 / Proposed 
Rules  

[[Page 37304]]



DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 93

[Docket No. FAA-99-5927; Notice No. 99-12]
RIN 2120-AG73


Commercial Air Tour Limitation in the Grand Canyon National Park 
Special Flight Rules Area

AGENCY: Federal Aviation Administration (FAA, DOT).

ACTION: Notice of proposed rulemaking (NPRM).

-----------------------------------------------------------------------

SUMMARY: This document proposes to limit the number of commercial air 
tours that may be conducted in the Grand Canyon National Park Special 
Flight Rules Area (SFRA) and to revise the reporting requirements for 
commercial air tours in the SFRA. These proposed changes would allow 
the FAA and the National Park Service (NPS) to limit and further assess 
the impact of aircraft noise on the Grand Canyon National Park (GCNP). 
In addition, this action proposes non-substantive changes to 14 CFR 
part 93, subpart U to improve the organization and clarity of the rule. 
This document is one part of an overall strategy to control aircraft 
noise on the park environment and to assist the NPS in achieving the 
statutory mandate imposed by Public Law 100-91 to provide substantial 
restoration of natural quiet in the GCNP.

DATES: Comments must be received on or before September 7, 1999.

ADDRESSES: Comments on this NPRM should be mailed or delivered, in 
triplicate, to: U.S. Department of Transportation  Dockets,  Docket  
No.,  [  ], 400 Seventh Street SW., Room Plaza 401, Washington, DC 
20590. Comments may also be sent electronically to the following 
Internet address: [email protected]. Comments may be filed and 
examined in Room Plaza 401 between 10:00 a.m. and 5:00 p.m. weekdays, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT:
Alberta Brown, AFS-200, Office of Flight Standards, Federal Aviation 
Administration, 800 Independence Avenue, SW., Washington, DC 20591; 
Telephone: (202) 267-8321.

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested persons are invited to participate in this proposed 
rulemaking by submitting such written data, views, or arguments, as 
they may desire. Comments relating to the environmental, energy, 
federalism, or economic impact that may result from adopting the 
proposals in this notice are also invited. Comments that provide the 
factual basis supporting the views and suggestions presented are 
particularly helpful in developing reasoned regulatory decisions. 
Comments should identify the regulatory docket number and be submitted 
in triplicate to the above-specified address. A report summarizing any 
substantive public contact with FAA personnel on this rulemaking will 
be filed in the docket. The docket is available for public inspection 
both before and after the closing date for receiving comments.
    Before taking any final action on this proposal, the Administrator 
will consider all comments made on or before the closing date for 
comments, and the proposal may be changed in light of the comments 
received.
    The FAA will acknowledge receipt of a comment if the commenter 
includes a self-addressed, stamped postcard with the comment. The 
postcard should be marked ``Comments to Docket No.     .'' The FAA will 
date, time stamp, and return the postcard.

Availability of the NPRM

    Any person may obtain a copy of this NPRM by submitting a request 
to the Federal Aviation Administration, Office of Rulemaking, 800 
Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-
9677. Communications must identify the notice number of this NPRM. 
Persons interested in being placed on a mailing list for future FAA 
NPRMs should request a copy of advisory Circular No. 11-2A, Notice of 
Proposed Rulemaking Distribution System, which describes application 
procedures.
    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the FAA regulations section 
of the Fedworld electronic bulletin board service (telephone: (703) 
321-3339) or the Federal Register's electronic bulletin board service 
(telephone: (202) 512-1661). Internet users may access the FAA's 
Internet site at http://www.faa.gov or the Federal Register's Internet 
site at http://www.access.gpo.gov/su__docs for access to recently 
published rulemaking documents.

Public Meetings

    The FAA intends to hold two public meetings to provide interested 
members of the public an additional opportunity to comment on this 
proposal. The details pertaining to the public meetings will be 
announced in the notice section of the Federal Register. For more 
information, contact Mark Lawyer at (202) 493-4531 by telephone or 
[email protected] by email.

I. History

A. FAA's Actions

    Beginning in the summer of 1986, the FAA initiated regulatory 
action to address increasing air traffic over Grand Canyon National 
Park (GCNP). On March 26, 1987, the FAA issued Special Federal Aviation 
Regulation (SFAR) No. 50 establishing a special flight rules area and 
other flight regulations in the vicinity of the GCNP (52 FR 9768). The 
purpose of the SFAR was to reduce the risk of midair collision and 
decrease the risk of terrain contact accidents below the rim level. 
These requirements were modified and extended by SFAR 50-1 (52 FR 
22734; June 15, 1987).
    In 1987 Congress enacted Public Law (Pub. L.) 100-91, commonly 
known as the National Parks Overflights Act. Public Law 100-91 stated, 
in part, that ``noise associated with aircraft overflights at Grand 
Canyon National Park [was] causing a significant adverse effect on the 
natural quiet and experience of the park and current aircraft 
operations at the Grand Canyon National Park have raised serious 
concerns regarding public safety, including concerns regarding the 
safety of park users.''
    Section 3 of Public Law 100-91 required the Department of Interior 
(DOI) to submit to the FAA recommendations to protect resources in the 
Grand Canyon from adverse impacts associated with aircraft overflights. 
The law mandated that the recommendations provide for, in part, 
``substantial restoration of the natural quiet and experience of the 
park and protection of public health and safety from adverse effects 
associated with aircraft overflights,''
    In December 1987, the DOI transmitted its ``Grand Canyon Aircraft 
Management Recommendation'' to the FAA, which included both rulemaking 
and non-rulemaking actions. Public Law 100-91 required the FAA to 
prepare and issue a final plan for the management of air traffic above 
the Grand Canyon, implementing the recommendations of DOI without 
change unless the FAA determined that executing the recommendation 
would adversely affect aviation safety.
    On May 27, 1988, the FAA issued SFAR No. 50-2, revising the 
procedures for aircraft operation in the airspace above the Grand 
Canyon (53 FR 20264; June 2, 1988). SFAR No. 50-2 did the following: 
(1) Extended the Special

[[Page 37305]]

Flight Rules Area (SFRA) from the surface to 14,499 feet above mean sea 
level (MSL) in the area of the Grand Canyon; (2) prohibited flight 
below a certain altitude in each of the five sectors of this area, with 
certain exceptions; (3) established four flight-free zones from the 
surface to 14,499 feet MSL; (4) provided for special routes for air 
tours; and (5) contained certain communications requirements for 
flights in the area.
    A second major provision of section 3 of Public Law 100-91 required 
the DOI to submit a report to Congress discussing ``whether the plan 
has succeeded in substantially restoring the natural quiet in the park; 
and * * * such other matters, including possible revisions in the plan, 
as may be of interest.'' On September 12, 1994, the DOI submitted its 
final report and recommendations to Congress. This report, entitled, 
``Report on Effects of Aircraft Overflights on the National Park 
System'' (Report to Congress), was published in July, 1995. The Report 
to Congress recommended numerous revisions to SFAR No. 50-2 in order to 
substantially restore natural quiet in the GCNP.
    Recommendation No. 10, which is of particular interest to this 
rulemaking, states: ``Improve SFAR 50-2 to Effect and Maintain the 
Substantial Restoration of Natural Quiet at Grand Canyon National 
Park.'' This recommendation incorporated the following general 
concepts: simplification of the commercial sightseeing route structure; 
expansion of the flight-free zones; accommodation of the forecasted 
growth in the air tour industry; proposing phase-in of noise efficient/
quiet technology aircraft; temporal restrictions (``flight-free'' time 
periods); use of the full range of methods and tools for problem 
solving; and institution of changes in approaches to park management, 
including the establishment of an acoustic monitoring program by the 
NPS in coordination with the FAA.
    On June 15, 1995, the FAA published a final rule that extended the 
provisions of SFAR No. 50-2 to June 15, 1997 (60 FR 31608), pending 
implementation of the final rule adopting DOI's recommendations.
    On December 31, 1996, the FAA issued the final rule (61 FR 69302) 
implementing many of the recommendations set forth in the DOI report 
including: flight-free zones and corridors; minimum flight altitudes; 
general operating procedures; curfews in the Dragon and Zuni Point 
corridors; reporting requirements; and a cap on the number of 
``commercial sightseeing'' aircraft that could operate in the SFRA. The 
FAA subsequently issued a written interpretation stating that the 
aircraft cap applied to the number of aircraft operating in the SFRA at 
a given time.
    This final rule was issued concurrently with a Notice of Proposed 
Rulemaking regarding Noise Limitations for Aircraft Operations in the 
Vicinity of Grand Canyon National Park; a Notice of Availability of 
Proposed Commercial Air Tour Routes for Grand Canyon National Park and 
Request for Comments; and the Environmental Assessment. The final rule 
was originally scheduled to become effective May 1, 1997. On February 
26, 1997, the FAA published a delay of the effective date to January 
31, 1998 (62 FR 8861), for the establishment of an acoustic monitoring 
program by the NPS in coordination with the FAA.
    On June 15, 1995, the FAA published a final rule that extended the 
provisions of SFAR No. 50-2 to June 15, 1997 (60 FR 31608), pending 
implementation of the final rule adopting DOI's recommendations.
    On December 31, 1996, the FAA issued the final rule (61 FR 69302) 
implementing many of the recommendations set forth in the DOI report 
including: flight-free zones and corridors; minimum flight altitudes; 
general operating procedures; curfews in the Dragon and Zuni Point 
corridors; reporting requirements; and a cap on the number of 
``commercial sightseeing'' aircraft that could operate in the SFRA. The 
FAA subsequently issued a written interpretation stating that the 
aircraft cap applied to the number of aircraft operating in the SFRA at 
a given time.
    This final rule was issued concurrently with a Notice of Proposed 
Rulemaking regarding Noise Limitations for Aircraft Operations in the 
Vicinity of Grand Canyon National Park; a Notice of Availability of 
Proposed Commercial Air Tour Routes for Grand Canyon National Park and 
Request for Comments; and the Environmental Assessment. The final rule 
was originally scheduled to become effective May 1, 1997. On February 
26, 1997, the FAA published a delay of the effective date to January 
31, 1998 (62 FR 8861), for those portions of the December 31, 1996, 
final rule which define the Grand Canyon SFRA (14 CFR Sec. 93.301), 
define the flight-free zones and flight corridors (14 CFR Sec. 93.305), 
and establish minimum flight altitudes in the vicinity of the GCNP (14 
CFR Sec. 93.307). The February 26, 1997, final rule also reinstated the 
corresponding sections of SFAR 50-2 until January 31, 1998 (flight-free 
zones, the Special Flight Rules Area, and minimum flight altitudes). On 
December 17, 1997, the effective date for these sections was delayed to 
January 31, 1999 (62 FR 66248). On December 7, 1998, the effective date 
for 14 CFR Secs. 93.301, 93.305, and 93.307, was delayed until January 
31, 2000 (63 FR 67543).
    The FAA's final rule published in 1996 was challenged before the 
U.S. Court of Appeals for the District of Columbia Circuit by the 
following petitioners: Grand Canyon Air Tour Coalition; the Clark 
County Department of Aviation and the Las Vegas Convention and Visitors 
Authority; the Hualapai Indian Tribe; and seven environmental groups 
led by the Grand Canyon Trust. See Grand Canyon Air Tour Coalition v. 
FAA, 154 F.3d 455 (D.C. Cir., 1998). In general, the petitioners 
charged that the FAA mis-applied Public Law 100-91 in implementing the 
final rule and committed several procedural errors during the 
rulemaking process. The Court ruled in favor of the FAA and upheld the 
final rule.

B. Interagency Working Group

    On December 22, 1993, the then Secretary of Transportation, 
Federico Pena, and Secretary of the Interior, Bruce Babbitt, formed an 
interagency working group (IWG) to explore ways to limit or reduce the 
impacts from overflights on national parks, including the GCNP. 
Secretary Babbitt and Secretary Pena concurred that increased flight 
operations at GCNP and other national parks have significantly 
diminished the national park experience for some park visitors, and 
that measures can and should be taken to preserve a quality park 
experience for visitors, while providing access to the airspace over 
the national parks. The FAA has been working closely with the NPS to 
identify and address the impacts of commercial air tours on the GCNP.

C. President's memorandum

    The President, on April 22, 1996, issued a Memorandum for the Heads 
of Executive Departments and Agencies to address the impact of 
transportation in national parks. Specifically, the President directed 
the Secretary of Transportation to issue proposed regulations for the 
GCNP that would place appropriate limits on sightseeing aircraft to 
reduce the noise immediately, and to make further substantial progress 
towards restoration of natural quite, as defined by the Secretary of 
the Interior, while maintaining aviation safety in accordance with 
Public Law 100-91.
    This memorandum also indicated that, with regard to overflights of 
the

[[Page 37306]]

GCNP, ``should any final rulemaking determine that issuance of a 
further management plan is necessary to substantially restore natural 
quite in the Grand Canyon National Park, [the Secretary of 
Transportation, in consultation with heads of relevant departments and 
agencies] will complete within 5 years a plan that addresses how the 
Federal Aviation Administration and the National Park Service'' will 
achieve the statutory goal not more than 12 years from the date of the 
directive (i.e., 2008).

II. Purpose of This NPRM

    The government has analyzed the noise situation at the GCNP over 
the last two years and has decided that a greater effort must be made 
to reach the statutory goals of Public Law 100-91, especially in light 
of the President's Memorandum. Noise generated by aircraft conducting 
commercial air tours presents a specific type of problem because these 
aircraft generally are operated repeatedly at low altitudes over the 
same routes. Thus, the FAA issued its 1996 final rule and instituted 
the aircraft cap as a means to limit aircraft noise generated by air 
tours.
    In the 1996 final rule, however, the FAA underestimated the number 
of aircraft operated in the SFRA by commercial air tour operators. This 
problem was identified in the Notice of Clarification issued October 
31, 1997 (62 FR 58,898). In fact, the FAA concluded in this Notice that 
``there is enough excess capacity in terms of aircraft numbers for air 
tours to increase by 3.3 percent annually for the next twelve years if 
the demand exists (62 FR 58902).'' The FAA went on to state that ``in 
the aggregate, and for most individual operators, the number of air 
tours provided can continue to increase while the number of aircraft 
remains the same.'' In light of this conclusion, the IWG recommended 
that the FAA and NPS develop a rule that will temporarily limit 
commercial air tours in the GCNP SFRA at the level reported by the air 
tour operators for the period May 1997-April 1998.
    The agencies' goal through this rulemaking is to prevent an 
increase in aircraft noise by limiting the number of commercial air 
tours. Concurrently with this NPRM, the FAA also is issuing a Notice of 
Availability to Routes which indicates certain modifications to 
aircraft routes through the SFRA and an NPRM modifying airspace in the 
SFRA. Additionally, the FAA is issuing a draft supplemental 
Environmental Assessment which assesses the environmental impact of the 
route modifications, the proposed commercial air tours limitation and 
the airspace modifications. The FAA also continues to work on the 
rulemaking initiated on December 31, 1996 proposing quiet technology 
aircraft. All of these steps are aimed at controlling or reducing the 
impact of aircraft noise in the GCNP.
    In addition to preventing the noise situation from worsening, 
controlling the overall number of commercial air tours in the GCNP SFRA 
will facilitate the analysis of noise conditions in the GCNP and aid in 
the design of the noise management plan. Once the commercial air tour 
limitation and the new routes are implemented, the FAA and NPS will be 
better able to consider future noise mitigation strategies.
    The proposed rule is premised on the National Park Service's noise 
evaluation methodology for Grand Canyon National Park, which was 
published in the Federal Register on January 26, 1999 (64 FR 3969). The 
NPS is reviewing comments submitted in response to that notice. If, on 
completion of that review, the NPS determines not to adopt the 
methodology described in the notice (such as the two-zone system and 
accompanying noise thresholds), the FAA will reevaluate the proposal 
and Draft Supplemental Environmental Assessment in light of whatever 
final action is taken by the NPS.

The Proposal

A. Overview

    This NPRM would temporarily limit commercial air tours in the GCNP 
Special Flight Rules Area (SFRA) at the level reported to the FAA by 
the operators for the year May 1, 1997-April 30, 1998 (the base year), 
pending implementation of the Comprehensive Noise Management Plan (see 
discussion in III.B. below). During the implementation of this 
commercial air tour limitation, the FAA and the NPS would collect 
further information regarding commercial SFRA operations and aircraft 
noise in the GCNP. The NPS and the FAA would use the information 
collected during this time to determine whether the ``substantial 
restoration of natural quiet'' has been achieved at the GCNP. In the 
event that the agencies determine that the statutory goal is not met 
through the various noise mitigation techniques adopted, the FAA and 
NPS would need to take further steps to achieve the substantial 
restoration of natural quiet. This could mean that the commercial air 
tour limitation would become permanent and/or that commercial air tours 
would be further limited. This commercial air tour limitation would 
replace the current aircraft cap set forth in Sec. 93.316(b).
    In addition to the limitation on commercial air tours, this 
rulemaking would add a requirement for certificate holders to file a 
visual flight rules (VFR) flight plan to provide the FAA with a 
mechanism for monitoring and enforcing the limitation. This rule also 
would modify the current reporting requirements to require certificate 
holders authorized to conduct commercial air tours in the GCNP SFRA to 
report air tour and other flights that enter the SFRA. This data would 
be used to assess the noise situation in the GCNP and further develop 
the Comprehensive Noise Management Plan.
    The NPRM also would make a number of non-substantive changes to 
Part 93, subpart U. These changes consist of the following: renumbering 
paragraphs; moving subparagraphs into new sections; and amending 
section headings. These changes are intended to make the rule easier to 
read and understand and to reflect the changes proposed herein.

B. Comprehensive Noise Management Plan

    The Comprehensive Noise Management Plan (CNMP) is the overall 
process that the government would use to control and monitor noise 
conditions in the GCNP to achieve the statutory goal of substantial 
restoration of natural quiet. This plan is part of NPS' overall effort 
to reduce noise levels from all sources within the park, as called for 
in the NPS' 1995 General Management Plan.
    As part of the CNMP, the FAA and NPS are working together to 
develop a noise management program that addresses noise from commercial 
air tour overflights. To ensure development of a flexible and adaptive 
approach to noise mitigation and management, this plan will, at a 
minimum do the following: (1) Address development of a reliable 
aircraft operations and noise database; (2) validate and document the 
most effective uses for FAA and NPS noise models in GCNP; (3) explore 
how the conversion to noise efficient/quiet technology aircraft can 
most effectively contribute to the substantial restoration of natural 
quiet while allowing for growth in the industry; and (4) determine how 
to provide operators with incentives to purchase noise efficient/quiet 
technology aircraft. In developing this plan, the FAA and NPS are 
committed to an open process that will provide for full public 
involvement and consultation with the public and affected Native 
American tribes.

[[Page 37307]]

    As discussed above, the effective date for a portion of the 1996 
final rule was delayed. Additionally, the NPRM for Noise Limitations 
for Aircraft Operations in the Vicinity of Grand Canyon National Park 
has not been finalized. A noise management plan also has not been fully 
implemented yet. Work to date has primarily focused on developing a 
database of commercial air tours and developing a plan to improve noise 
modeling at the GCNP.

C. Definitions

    Three new definitions would be added to current Sec. 93.303 and 
would be applicable to part 93, subpart U. Definitions would be added 
for the terms ``allocation'', ``commercial air tour'' and ``commercial 
SFRA operation.'' Additionally, the paragraph designations would be 
removed to simplify administration of this section.
1. Allocation
    The term ``allocation'' would be defined as the authorization to 
conduct a commercial air tour in the Grand Canyon National Park (GCNP) 
Special Flight Rules Area (SFRA). Each certificate holder reporting 
base year (May 1, 1997--April 30, 1998) air tours to the FAA would 
receive one allocation for each commercial air tour reported.
2. Commercial Air Tour
    The term ``commercial air tour'' would be defined as any flight 
conducted for compensation or hire in a powered aircraft where a 
purpose of the flight is sightseeing. If the operator of a flight 
asserts that the flight is not a commercial air tour, the Administrator 
during an administrative review may consider a number of factors in 
determining whether the flight is actually a commercial air tour. 
Factors that the Administrator may consider include, but are not 
limited to--(1) Whether there was a holding out to the public of 
willingness to conduct a sightseeing flight for compensation or hire; 
(2) whether a narrative was provided that referred to areas or points 
of interest on the surface; (3) the area of operation; (4) the 
frequency of flights; (5) the route of flight; (6) the inclusion of 
sightseeing flights as part of any travel arrangement package; or (7) 
whether the flight or flights in question would or would not have been 
canceled based on poor visibility of the surface. The Administrator may 
give more weight to some factors than others in making this 
determination. This definitional change would be consistent with other 
rulemakings that the FAA is working on.
    The current rules at 14 CFR, part 93, subpart U use the term 
``commercial sightseeing flight'' at Secs. 93.305 (Flight-free zones 
and flight-free corridors); 93.307 (Minimum flight altitudes); 93.315 
(Commercial sightseeing flight operations); 93.316 (Commercial 
sightseeing limitations); and 93.317 (Commercial sightseeing flight 
reporting requirements). This NPRM would replace the term ``commercial 
sightseeing flight'' with the term ``commercial air tour'' throughout 
part 93, subpart U.
    The proposed definition would clarify which flights are considered 
commercial air tours. The current rules do not define the term 
``commercial sightseeing flight''. Instead, the FAA has assumed that 
flights operated on the Blue, Black and Green routes that are reported 
to the FAA under Sec. 93.317 are commercial air tour flights with the 
following exceptions: (1) flights using the Blue Direct and Blue Direct 
South routes generally are presumed to be flights to reposition 
aircraft or transportation flights to move passengers from point A to 
point B; and (2) flights using the Green 3 route are operated under an 
FAA Form 7711-1, Certificate of Waiver or Authorization (Form 7711) 
issued by the Las Vegas Flight Standards District Office in support of 
Supai Village and the Havasupai Tribe. The FAA also believes that most 
flights operated on the Brown routes are operated under a Form 7711, 
typically in support of the Canyon's river rafting operations. On 
occasion, a commercial air tour may transition to a Brown route as part 
of a more extensive tour. There are only two east/west routes proposed 
that would be used for all types of commercial SFRA operations. Hence, 
because it will be more difficult to identify air tours based on the 
route flown, the FAA intends to define the term ``commercial air 
tour''.
3. Commercial SFRA Operations
    Public Law 100-91 recognizes that noise associated with ``aircraft 
overflights'' at the GCNP is causing ``a significant adverse effect on 
the natural quiet and experience of the park.'' In order to improve 
noise management in the GCNP, the agencies believe it is necessary to 
impose some requirements on all flights conducted in the SFRA by air 
tour operators, regardless of whether an air tour is actually conducted 
on that flight. Therefore, the FAA proposes to adopt a new term to 
apply to all commercial operations conducted by certificate holders 
authorized to conduct commercial air tours and occurring within the 
GCNP SFRA.
    The term ``Commercial Special Flight Rules Area Operation'' 
(Commercial SFRA Operation) would be defined as any portion of a flight 
within the GCNP SFRA that is conducted by a certificate holder that has 
operations specifications authorizing air tours within the GCNP SFRA. 
This term is broader than the term ``commercial air tour'' as it 
includes air tours as well as transportation, repositioning, 
maintenance, and training/proving flights. The types of flights covered 
by this term would be defined in the ``Las Vegas Flights Standards 
District Office Grand Canyon National Park Special Flight Rules Area 
Procedures Manual'' (see discussion at III.F re: definitions). The term 
``commercial SFRA operations'' does not include supply and 
administrative flights conducted under contract with the Native 
Americans, or other flights conducted under a Form 7711. The FAA 
proposes to create this new term so that it can better account for the 
types of operations occurring within the park other than commercial air 
tours.
    Examples 1 and 2 (below) illustrate the types of commercial SFRA 
operations and how air tours are defined.
    Example 1. A commercial air tour operator conducts a commercial air 
tour through the GCNP SFRA from point A to point B, drops off 
passengers for a ground tour at point B and returns to point A without 
passengers. A subsequent aircraft completes a second tour from point A 
to point B and unloads its passengers at point B. The aircraft then 
picks up the passengers from the first tour, and returns them through 
the GCNP SFRA from point B to point A, completing the round trip air 
tour for these passengers. The initial trip by the first aircraft from 
point A to point B is a commercial air tour. The return trip of the 
first aircraft, without passengers, from point B to point A is a 
repositioning trip. The first trip of the second aircraft is a 
commercial air tour. The return trip of the second aircraft is a 
transportation trip because it moves passengers from point B to point 
A. The two commercial air tours each use one allocation. The other 
flights do not use allocations.
    Example 2. A commercial air tour operator conducts a flight within 
the GCNP SFRA solely for the purpose of performing a flight check on a 
new pilot. During the flight, the aircraft develops mechanical problems 
and makes a precautionary landing. A second aircraft is dispatched with 
a pilot and mechanic to perform any necessary repairs. The first flight 
is a training flight. The second flight is a

[[Page 37308]]

maintenance flight. The return flights for both aircraft are 
repositioning flights. No allocations are used.

D. Requirements Specific to Commercial SFRA Operations

    Section 93.315 would be reorganized and revised to remove the 
capacity limitation on aircraft and to delete the reference to the 
outdated SFAR 38-2. The current language only applies to aircraft 
having a passenger-seat configuration of 30 or fewer seats. The FAA 
believes that removal of the capacity restriction is necessary because 
it is aware that some air tour operators are beginning to use larger 
capacity aircraft. The FAA wants to ensure that each air tour operator, 
regardless of the capacity of aircraft, is held to the same operational 
and safety standards. This section would continue to require commercial 
air tour operators to be certificated under 14 CFR part 119 to operate 
in accordance with either 14 CFR part 121 or part 135 and to hold 
appropriate GCNP SFRA operations specifications.
    Section 93.317 of the NPRM would maintain the current curfew hours 
in the Dragon and Zuni Point corridors (current Sec. 93.316(a)). This 
curfew would now apply to commercial SFRA operations. Currently, the 
curfew applies to ``commercial sightseeing operations,'' which is an 
undefined term. The FAA believes that amending this curfew to include 
commercial SFRA operations would improve management of aircraft noise 
in the Dragon and Zuni Point corridors. With the removal of this 
language from Sec. 93.316 to proposed Sec. 93.317, Sec. 93.316 would be 
removed and reserved.
    Section 93.325 would require certificate holders conducting 
commercial air tours in the GCNP SFRA to report their commercial SFRA 
operations to the FAA on a quarterly basis. As discussed below, this 
reporting requirement is similar to that in current section 93.317 and 
would enable the government to assess more accurately the noise level 
and airspace use in the GCNP and further the development of the 
Comprehensive Noise Management Plan.

E. Operations Limitation

    This NPRM would limit all commercial air tours in the GCNP SFRA on 
a twelve month basis to the number of air tours reported in accordance 
with current Sec. 93.317 for the year May 1, 1997--April 30, 1998. This 
time period is being used as the basis for determining the allocations 
because it is the first twelve months for which the FAA has air tour 
data that has been fully compiled and analyzed. Proposed Sec. 93.319 
would establish this commercial air tour limitation. The number of 
commercial air tours that a certificate holder could conduct would be 
shown on the certificate holder's operations specifications as 
allocations.
    The FAA is proposing that these allocations would remain unchanged 
by the FAA for a twenty-four month period from the effective date of 
this rule. After that time, all certificate holders' allocations may be 
revised based on the following: (1) Data submitted under proposed 
Sec. 93.325; (2) updated noise analysis; and/or (3) the status of the 
Comprehensive Noise Management Plan. Any change in the overall 
allocations to all certificate holders would be subject to notice and 
comment rulemaking.
    The FAA and NPS realize that commercial air tour operators need 
consistency to justify equipment investment and make other business 
plans. In devising the proposed two-year term for the allocations, the 
FAA considered two other alternatives including revising the 
allocations annually or on an ad hoc time basis thereafter. The FAA 
rejected both of these alternatives because it was concerned that 
neither alternative would achieve the proper balance between providing 
the certificate holders with the latitude necessary to conduct 
business, and controlling noise in the GCNP. The FAA solicits comments 
on this matter.
1. Initial Allocation
    Under this NPRM, each commercial air tour would be represented by 
an allocation. Thus, each certificate holder that reported commercial 
air tours to the FAA in accordance with current Sec. 93.317 for the 
base year would receive one allocation for each air tour. The total 
number of commercial air tours that were reported by all of the 
operators to the FAA for that base year was 88,000. This number does 
not include flights in support of air tour operations such as 
transportation flights, training flights, maintenance flights, and 
repositioning flights or flights conducted under a Form 7711.
    To prevent a worsening of noise conditions in the park during the 
peak season, the FAA, in consultation with the NPS, proposes to 
establish a peak season cap that prevents the movement of allocations 
from off-peak season into the peak season. Peak season allocations, 
however, would be permitted to be used during the off-peak season as 
noise during the off-peak season generally is substantially less than 
during the peak season. The FAA proposes that the peak season be 
defined as the period from May 1-September 30; the off-peak season 
would be the period October 1-April 30. This peak/off-peak season 
definition is consistent with the summer and winter season for curfew 
purposes. Peak/off-peak allocations would be determined from the 
information reported to the FAA for the base year. There were 52,500 
commercial air tours reported for May through September in the base 
year.
    This restriction helps to eliminate the potential that noise would 
become worse during the peak season months because operators could 
maximize their allocation use during the time. Additionally, the 
restriction reduces the potential of an airspace congestion problem 
caused by an operator using all of its allocations during the peak 
season and shutting down its business during the off-peak season. This 
was deemed advisable after the FAA utilized its Airport and Airspace 
Simulation Computer Model (SIMMOD), which demonstrated significant use 
of the routes during the peak season.
    In developing the peak/off-peak season distributions, the FAA and 
NPS considered three alternatives: (1) the proposed 5 month peak season 
(May-September); (2) a three month (July-September) peak season; and 
(3) a uniform year with no peak/off-peak delineation. The base year 
data indicates that the July-September time period is the most active 
period. A shorter peak, however, may limit the ability of the operators 
to maximize the use of their allocations since they would not be able 
to use peak season air tour allocations during the off-peak season. 
Consequently, the FAA requests comment specifically on the definition 
of peak/off-peak season.
    Under the proposed rule, allocations also would be separated into 
those that may be used in the Dragon and Zuni Point corridors and those 
that may be used in the rest of the SFRA. Dragon and Zuni Point 
allocations again would be determined based on the number of air tours 
an operator conducted and reported in these corridors for the base 
year. Only operators who reported air tours in these corridors for the 
base year would receive allocations for these corridors. There were 
approximately 43,000 commercial air tours reported for the Dragon and 
Zuni Point corridors for the base year; approximately 29,500 of those 
tours were reported for the peak season.
    The NPS and the FAA believe it is necessary to restrict allocations 
for the Dragon and Zuni Point corridors because the airspace is already

[[Page 37309]]

congested. The agencies believe that this restriction would help 
maintain the number of air tours in these corridors at a level that 
does not pose a congestion problem and that minimizes the likelihood 
that aircraft noise in this region of the park will increase.
    The FAA believes the initial allocation phase would proceed in a 
manner similar to the example below:
    Assuming the FAA adopts the 5-month proposed peak season. 
Throughout the base year, Operator A reported that half of its air 
tours each month were conducted in the Dragon and Zuni Point corridors. 
Operator B did not report any Dragon and Zuni Point air tours for the 
base year. The following information was reported to the FAA under 
current Sec. 93.317 for theMay 1, 1997-April 30, 1998 time period:

                     Example of Initial Allocations
------------------------------------------------------------------------
                                            Operator A      Operator B
------------------------------------------------------------------------
           Reported operations
Peak:
    May.................................              75              50
    June................................             150             100
    Jul.................................             300             250
    Aug.................................             300             200
    Sep.................................             200             100
                                         -------------------------------
        Subtotal........................            1025             700
Off-Peak:
    Oct.................................              75              25
    Nov.................................              25  ..............
    Dec.................................              50              25
    Jan.................................              25  ..............
    Feb.................................  ..............  ..............
    Mar.................................  ..............  ..............
    Apr.................................              50              25
                                         -------------------------------
        Subtotal........................             225              75
                                         -------------------------------
            Total.......................            1250             775
Dragon/Zuni Point.......................             625            None
------------------------------------------------------------------------
               Allocations
 
Overall:
    Total...............................            1250             775
    Peak Season.........................            1025             700
Dragon/Zuni Point:
    Total...............................             625            None
    Peak................................             513            None
------------------------------------------------------------------------

2. Certificate Holders Receiving Allocations
    The FAA is not reporting each certificate holder's individual 
allocation in this NPRM. Instead, this NPRM will identify those 
certificate holders who reported air tours to the FAA for the base year 
period and are scheduled to receive initial allocations to continue to 
conduct commercial air tours. These certificate holders are, in 
alphabetical order, as follows:

Air Bridge, Inc.; Air Grand Canyon, Inc.; Air Nevada Airlines, Inc.; 
Air Star Helicopters (includes Air Star Airlines); Aladdin Air 
Services, Inc.; AVI, Inc.; Aviation Ventures, Inc. (dba Vision Air); 
Bruce Adams (dba Southwest Safaris); Eagle Canyon Airlines; Grand 
Canyon Airlines; Heli USA Airways, Inc. (dba HeliUSA); Kenai 
Helicopters, Inc.; King Airlines, Inc.; Lake Meade Air, Inc; Las Vegas 
Airlines, Inc.; Las Vegas Helicopters, Inc.; Maverick Helicopters, 
Inc.; Papillon Airways, Inc. (includes Papillon Grand Canyon 
Helicopters); Scenic Airlines, Inc. (includes Las Vegas, Page and all 
other operations); Sundance Helicopters, Inc.; Temple Air Service, 
Inc.; Vista Airlines, Inc.; and Westwind Aviation, Inc.

    Only certificate holders identified above are scheduled to receive 
an initial allocation under this rule.
    Based on its additional research, the FAA believes that one 
certificate holder who reported air tours to the FAA during the base 
year period is no longer in business. Its allocation would be 
distributed among the remaining certificate holders, proportionate to 
the size of each certificate holder's allocation, unless the 
certificate holder listed below as not receiving allocations notifies 
the Manager, Air Transportation Division, AFS-200, Federal Aviation 
Administration, 800 Independence Ave., S.W. Washington, D.C. 20591. 
This written notification must be received on or before the NPRM 
comment deadline and indicate that the certificate holder intends to 
conduct commercial air tours in the GCNP SFRA and is authorized to do 
so. Thus, the following certificate holder will NOT receive an 
allocation UNLESS it notifies the FAA before the close of the comment 
period:

** Flagstaff Safe Flyers, Inc.

    Certificate holders identified as receiving allocations to conduct 
air tours in the SFRA will receive a written notification by certified 
mail, return receipt requested, informing them of the following: (1) 
Total number of air tours allocated in the SFRA; (2) Number of air 
tours allocated in the Dragon and Zuni Point corridors; and (3) Peak 
season allocation for both the total SFRA and Dragon and Zuni Point 
corridors. This notification will be sent out concurrently with 
publication of this NPRM.
    The FAA also will attempt to notify the certificate holder 
identified above as not receiving allocations via certified

[[Page 37310]]

mail, return receipt requested, directed to the last known business 
address.
3. Requesting Modification of Initial Allocation
    The FAA recognizes that the air tour business in the GCNP is 
constantly changing. In fact, the FAA is aware that since the time 
period reflected in the base year data, some businesses have been 
bought and sold. Additionally, the FAA is aware that some operators 
have expanded their business into Las Vegas or modified the focus of 
their business to include some flights in the Dragon and Zuni Point 
corridors. Thus, due to mergers/acquisitions, bankruptcies, or other 
reasons that affect operations, certificate holders may believe that 
data they submitted for the base year does not reflect their current 
business. The FAA is striving to be fair in assessing the allocations. 
Therefore, it is permitting any certificate holder who believes that 
the base year data does not reflect its current operations as of the 
date of this notice to submit a written request to the Manager, Air 
Transportation Division requesting reassessment and indicating why the 
base year data is not an accurate representation. Such a request must 
be supported by written documentable evidence (i.e., contracts, leases, 
or other legal documentation). The FAA anticipates that any 
modifications will only result in redistribution of allocations among 
certificate holders affected by the merger or acquisition, etc., or 
within a certificate holder's allocation distribution (e.g., transfer 
of business operations prior to this NPRM into the Dragon or Zuni Point 
sector).
    Certificate holders requesting modification of the initial 
allocation must submit the information described above in writing to 
Manager, Air Transportation Division, AFS-200, Federal Aviation 
Administration, 800 Independence Ave., SW Washington DC 20591. All 
requests for modification must be received on or before the comment 
deadline. Requests for modifications received after the comment 
deadline will not be considered. The Manager will review the 
information to determine whether the party has provided substantive, 
documentable evidence that the information relied on for the initial 
allocation is not an appropriate standard of measure. Any transfer of 
allocations due to prior mergers, acquisitions, etc. must be agreed to 
by all involved parties. The FAA will not consider increasing an 
initial allocation because of changes in consumer demand or the fact 
that the base year was not a busy year, operationally.
    One example of how the above process would work is set forth below:
    There are four certificate holders reporting commercial air tours 
in the GCNP SFRA, Operators A, B, C and D. In December, 1998 (post 
base-year) Operator A purchased all of Operators C's operations. 
Operator B reported no air tours in the Dragon and Zuni Point corridors 
for the base year but transferred 50% of its operations to the Dragon 
and Zuni Point corridors in November, 1998. Operator D has turned in 
its operations specifications.
    Because all of these changes occurred post base year, they would 
not be reflected by the data used by the FAA to allocate air tours. 
Hence the certificate holders should do the following:
    Operator A should submit a request to the Manager, Air 
Transportation Division to have its allocation re-assessed. It should 
provide copies of all documents relating to the purchase of Operator 
C's business operations and indicate how it believes the numbers should 
be reallocated. Operator A should also submit a statement from Operator 
C supporting the transfer. Operator B should submit a request to the 
Manager, Air Transportation Division requesting that its allocation be 
redistributed so that it receives an allocation for the Dragon and Zuni 
Point corridors. Operator B should submit any written evidence 
documenting its shifting of operations from one area of the GCNP to the 
Dragon and Zuni Point corridors. Operator C is no longer in business. 
Operator D's allocation would be retained by the FAA and be 
redistributed among all remaining operators.

F. Flight Plans

    Proposed Sec. 93.323 would require each certificate holder 
conducting a commercial SFRA operation to file an FAA visual flight 
rules (VFR) flight plan with an FAA Flight Service Station for each 
flight. Each flight segment (one take-off and one landing) would 
require a flight plan. Each certificate holder filing a VFR flight plan 
would be responsible for indicating in the ``remarks'' section of the 
flight plan the purpose of the flight. There would be at least five 
possible purposes: commercial air tour; transportation; repositioning; 
maintenance; and training/proving. The term ``commercial air tour'' 
would be as already defined in the proposed rule. The other five terms 
would be defined in the ``Las Vegas Flight Standards District Office 
Grand Canyon National Park Special Flight Rules Area Procedures 
Manual'' as follows:
    1. Transportation--A flight transporting passengers for 
compensation or hire from point A to point B on a flight other than air 
tour.
    2. Repositioning--A non-revenue flight for the purpose of 
repositioning the aircraft (e.g., a return flight without passengers 
after an air tour and that is conducted to reposition the aircraft for 
the next air tour).
    3. Maintenance flight--A flight conducted under a special flight 
permit, or a support flight to transport necessary repair equipment or 
personnel to an aircraft that has a mechanical problem.
    4. Training/proving--A flight taken for one of the following 
purposes: (1) Pilot training in the SFRA; (2) checking the pilot's 
qualifications to fly in the SFRA in accordance with FAA regulations; 
or (3) an aircraft proving flight conducted in accordance with section 
121.163 or 135.145.
    The information obtained from the flight plan would be used to 
ensure compliance with the commercial air tours limitation. Certificate 
holders may wish to develop ``canned'' flight plans that may be opened 
and closed quickly. Copies would not have to be maintained.
    The FAA considered requiring certificate holders conducting 
commercial air tours to complete a form prior to each commercial air 
tour conducted in the GCNP SFRA. Under this proposal, a certificate 
holder identified as receiving an allocation would receive one form for 
each air tour reported for the base year. The forms would be serialized 
and carbonized. Prior to each commercial air tour, the certificate 
holder would complete the form with the required information, retain a 
copy of its files and keep a copy with the pilot. The information that 
would have been required would have been almost identical to the 
information required for the quarterly reporting at proposed 
Sec. 93.325.
    The FAA rejected the form alternative because it would impose 
burdensome reporting and recordkeeping requirements on the certificate 
holders. The FAA believes that the VFR flight plan requirement is less 
burdensome. At this time, the FAA believes that flight plan filing is a 
feasible approach.

G. Reporting

    The reporting requirement currently contained in Sec. 93.317 would 
be moved to proposed Sec. 93.325 and expanded to cover certificate 
holders conducting transportation flights, repositioning flights, 
maintenance flights or training/proving flights in the GCNP SFRA. The 
information reported would be similar to that currently required by 
Sec. 93.317.

[[Page 37311]]

Commercial SFRA operations can originate in one time zone and cross 
time zones so the FAA wants to ensure that the times reported are 
consistent. At this time, the FAA is proposing that time be shown in 
Universal Coordinated Time (UTC). The FAA seeks comment on whether UTC 
would be the appropriate time measurement or whether an alternative 
time zone (i.e., Mountain Standard Time) should be used.
    The reporting required by proposed Sec. 93.325 would be submitted 
to the Las Vegas Flight Standards District Office on a quarterly basis. 
Currently, certificate holders are required to report three times a 
year. A number of certificate holders, however, have commented to the 
FAA that quarterly filing would be preferred because the timing would 
be consistent with other government reporting requirements (IRS, Social 
Security, etc.). The information submitted on these quarterly reports 
would be used by the FAA and NPS to assess the noise situation in the 
GCNP and in development of the Comprehensive Noise Management Plan. 
Certificate holders would continue to submit the reports in written 
form. Electronic transmission (diskettes, email, etc.) is preferable 
and encouraged.
    Certificate holders conducting flights in the SFRA under Form 7711 
would not be required to report under Sec. 93.325; however, the FAA is 
considering establishing such reporting as a condition of the waiver. 
This reporting would provide the agencies with a clearer picture of the 
types and numbers of flights operating in the SFRA. The FAA seeks 
comment on this matter.

H. Transfer and Termination of Allocations

    Allocations to conduct commercial air tours in the GCNP SFRA would 
be an operating privilege granted to certificate holders who conducted 
and reported commercial air tours during the base year. As proposed, 
the allocations would be subject to reassessment after two years. 
Allocations to conduct commercial air tours in the GCNP SFRA would not 
be a property interest.
    The FAA recognizes that air tour operators often utilize a variety 
of contracting/subcontracting methods to handle passenger loads during 
busy periods. Thus, the FAA proposes to allow an allocation to be 
transferred among certificate holders, subject to three restrictions. 
First, all certificate holders would be required to report any 
transfers to the Las Vegas Flight Standards District Office in writing. 
Permanent transfers (mergers/acquisitions, etc.) would require FAA 
approval through the modification of the operations specifications. 
Temporary transfers (seasonal leases, etc.) would be effective without 
FAA approval. The FAA would not modify the operations specifications 
for temporary arrangements. Second, all certificate holders would be 
subject to all other applicable requirements in the Federal Aviation 
Regulations. Third, allocation authorizing commercial air tours outside 
the Dragon and Zuni Point corridors would not be permitted to be 
transferred into the Dragon and Zuni Point corridors, however, could be 
used outside the Dragon and Zuni Point corridors. This restriction is 
necessary to ensure that flight within these corridors do not increase, 
thus, posing a potential safety and noise problem. A certificate holder 
may increase its peak season allocation outside the Dragon and Zuni 
Point corridors by transferring Dragon and Zuni Point allocations in 
the rest of the SFRA.
    Examples of the interrelationship between the Dragon and Zuni Point 
restriction and the peak season restriction is as follows:
    Example 1: Operator A has a total of 1250 GCNP SFRA allocations to 
operate in the SFRA, with 625 designated for the Dragon and Zuni Point 
corridors. The total peak season GCNP SFRA allocations for Operator A 
is 1025. The Dragon and Zuni Point peak season allocations are 513 (of 
the 1025 GCNP SFRA peak). The Operator may reallocate its Dragon and 
Zuni Point peak allocations in the peak season for the rest of the GCNP 
SFRA. It may also reallocate its Dragon and Zuni Point allocations to 
the off-peak season for use in the rest of the GCNP SFRA.
    Example 2: Operator A has the same allocations as described in 
Example 1 above. Operator A, however, decides to lease for 1 year 100 
peak season allocations for the Dragon and Zuni Point corridors to 
Operator B. Operator B has 50 peak season allocations designated on its 
operations specifications for these corridors. This is permitted since 
Operator A and Operator B both have current Dragon and Zuni Point 
allocations. Thus, Operator A's peak season allocations for these 
corridors decrease to 413 (513-100) for the length of the lease. 
Operator B's Dragon and Zuni Point Corridor peak season allocations 
increase to 150 (50+100) for the length of the lease.
    Example 3: Operator A has the same allocations as described in 
Example 1 above. In year 1 Operator A experiences high consumer demand 
between January and April (off season) for the east/west routes 
(outside the Dragon and Zuni Point corridors). Therefore, Operator A 
decides to use 100 peak season allocations for the Dragon and Zuni 
Point corridors in the off-peak season to operate on the east/west 
routes outside these corridors. This reduces the amount of Dragon and 
Zuni Point allocations it can use during the peak season to 413 in year 
1. In year 2, Operator A experiences a very slow off-peak season 
between the months of January and April and does not use all of its 
off-peak allocations. In the peak season, however, demand in the Dragon 
and Zuni Point corridors is high. Thus, Operator A can use all 513 of 
its peak season Dragon and Zuni Point allocations during this time.
    Certificate holders who voluntarily cease conducting commercial air 
tours in the GCNP SFRA for any consecutive 180-day period would lose 
their allocations. This use or lose provision recognizes that the FAA 
is the sole controller of these allocations. If not used, the holder 
would lose its operating privilege and the FAA would then assert its 
control and decide whether to redistribute the allocations. The FAA 
considered proposing a time period shorter than 180 days, however, 
given the seasonal nature of the air tour business the FAA believes 
that a shorter time could be prejudicial against the certificate 
holders. The FAA believes that 180 days is a reasonable accommodation 
to the certificate holders and allows them the flexibility to manage 
their business. The FAA seeks comment on this matter.
    The FAA also would retain the right to redistribute, reduce or 
revoke allocations based on the need to carry out its statutory mandate 
to regulate for efficiency of airspace or aviation safety. 
Additionally, the FAA could redistribute, reduce or revoke allocations 
if the certificate holder voluntarily surrendered the allocation or in 
the event of an involuntary cessation of business. (i.e., FAA shuts 
down an operator following an FAA enforcement action). This last factor 
likely would occur when the FAA enforced its regulations against a 
certificate holder to improve airspace efficiency or aviation safety.

I. Specific Matters for Comment

    While the FAA seeks comment on all parts of the NPRM, there are a 
number of matters that it specifically would like commenters to 
address:
    (1) Whether the FAA should use a 5 month peak season (May-Sept), a 
three month peak season (July-September), or no peak season for 
purposes of assigning allocations.

[[Page 37312]]

    (2) Whether the time reported on the quarterly report should be 
expressed in Universal Coordinated Time (UCT), Mountain Standard Time, 
or another time measurement.
    (3) Whether reporting should be imposed as a condition of a Form 
7711 and, if so, whether the requirements of proposed Sec. 93.325 would 
be appropriate for such operations.
    (4) Whether 180 days is a proper measurement of time for the use or 
lose provision proposed in Sec. 93.321.
    (5) Whether the initial allocation reflects business operations as 
of the date of this notice.
    (6) Whether the allocations should remain unchanged for any 
specific period of time.
    Following a review of the comments and further consideration, the 
final rule may incorporate changes based on the above questions.

IV. Environmental Review

    The FAA has prepared a draft environmental assessment (EA) for this 
proposed action to ensure conformance with the National Environmental 
Policy Act of 1969. Copies of the draft EA will be circulated to 
interested parties and a copy has been placed in the docket, where it 
will be available for review.

V. Regulatory Evaluation Summary

    Changes to Federal Regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs. Second, 
the Regulatory Flexibility Act requires agencies to analyze the 
economic effect of regulatory changes on small businesses and other 
small entities. Third, the Office of Management and Budget directs 
agencies to assess the effect of regulatory changes on international 
trade. These analyses are summarized here in the preamble, and the full 
Regulatory Evaluation is in the docket.
    Because of the continued high public interest surrounding GCNP 
regulations and the potential implications within a small locality, the 
FAA has determined that this Notice of Proposed Rulemaking (NPRM) would 
be ``a significant regulatory action'' as defined in the Executive 
Order and the Department of Transportation Regulatory Policies and 
Procedures. The FAA also has determined that this NPRM would have a 
significant economic impact on a substantial number of small entities 
(commercial air tour operators conducting flights within Grand Canyon 
National Park), and warrants an initial regulatory flexibility analysis 
(IRFA).
    In conducting these analyses, the FAA has also determined that this 
proposed rule: (1) would not constitute a barrier to international 
trade; and (2) would not contain any Federal intergovernmental or 
private sector mandate.

A. Benefits

    The primary intended benefit of this proposed rule is its 
contribution toward achieving the public mandate imposed by Public Law 
100-91 to substantially restore natural quiet in the GCNP. This is one 
of three actions currently being taken by the FAA to move toward that 
goal. One of the other two actions is issuance of a notice of proposed 
rulemaking to make certain modifications of the airspace designations 
in GCNP. The other action is notification of modifications to air tour 
routes in the park. In addition to a discussion of restoration of 
natural quiet, a quantified analysis is given in this benefits section 
of the increased value that less aircraft noise may provide to ground 
visitor in the park. The FAA has estimated potential benefits two ways 
in this analysis. First, restoration of natural quiet is discussed. 
Second, a quantified estimate is made of the increased value of trips 
to the park by ground visitors if this proposal were implemented.
    The FAA's benefits analysis is limited to commercial air tour 
aircraft noise, because only commercial air tours would be affected by 
this proposed rule. It is recognized that other aircraft operate in the 
vicinity of the Grand Canyon, either above the SFRA or along designated 
corridors (general aviation (GA)) through the SFRA. This noise has not 
been measured on included in the noise models used to obtain the 
estimates contained in this analysis because the FAA believes the 
amount of noise produced by these aircraft is very small compared to 
that of commercial all tour aircraft. GA traffic accounts for about 3 
percent of all aircraft traffic in the GCNP according to the Las Vegas 
FSDO. The FAA does not believe that this amount of noise would affect 
the accuracy of its estimates. The FAA welcomes comments on this 
matter.
1. Restoration of Natural Quiet
    The policy decision of GCNP is that a substantial restoration 
requires that 50% or more of the park achieve ``natural quiet'' (i.e., 
no aircraft audible) for 75-100 percent of the day. That level of 
``quiet'' (50 percent) does not exist today in the park, in spite of 
past actions to limit noise. Based on noise modeling, the FAA estimates 
that today only about 32 percent of the park area has had natural quiet 
restored. Furthermore, if no additional action is taken estimated 
future air tour growth will reduce even that number to about 25 percent 
in nine to ten years. On the other hand, noise modeling indicates that 
this proposal, together with the other two FAA actions, would increase 
the restoration of natural quiet to slightly more than 41 percent and 
maintain that level in the future. The FAA will monitor future 
operations in the park to determine the actual level of natural quiet 
that is restored. It necessary, further actions will be taken to 
ultimately achieve the goal of substantial restoration of natural 
quiet.
2. Increased Value of Ground Visit Analysis
    The benefits of noise reduction attributable to this rulemaking can 
be broadly categorized as use and non-use benefits. Use benefits are 
the benefits perceived by individuals from the direct use of a resource 
such as hiking, rafting, or sightseeing. Non-see benefits are the 
benefits perceived by individuals from merely knowing that a resource 
exists, or is perserved, in a given state. The act benefits of this 
rulemaking have been estimated and are presented below. The non-use 
benefits attributable to this rulemaking have not been estimated.
    The available visitation data for GCNP permits the categorization 
of visitors into backcountry users, river users, and other visitors. 
The activities included in the ``other visitors'' category primarily 
involves sightseeing, as well as other activities such as hiking or 
camping not related to background or river use. The number of visitor-
days (defined as one visitor to a location for all or any part of one 
day) in 1997 for these visitor groups is presented below.

        Number of Visitor-Days--Grand Canyon National Park, 1997
------------------------------------------------------------------------
                                                               Visitor-
                       Visitor group                             days
------------------------------------------------------------------------
Backcountry................................................       99,137
River......................................................      182,481
Other......................................................    5,788,187
                                                            ------------
      Total................................................    6,069,805
------------------------------------------------------------------------
Source: National Park Service.

    While the FAA, based on its projections on air traffic growth at 
the airports around GCNP, assumes that the number of air tours would 
increase at an annual rate of 3.3 percent, the FAA nevertheless, 
assumes that the number of visitor-days at GCNP would remain constant 
at 1997 levels throughout the evaluation period of this rulemaking. 
This assumption is considered to

[[Page 37313]]

reasonable because of the actions the NPS is taking to control visitor 
growth.
    Permits for backcountry and river use are limited to a maximum 
number that can be issued each year. Also, the NPS plans to prevent 
cars from entering GCNP. Rim visitors will be required to park outside 
GCNP and take a shuttle into the Park. This will greatly reduce or 
possibly eliminate any future growth in the number of rim visitors. 
Last, an assumption of constant visitation is a conservative approach 
that would not bias the indicated net benefits of the rulemaking upward 
and would also probably results in benefits being somewhat 
underestimated.
    The GCNP visitor survey indicates that these different visitor 
groups are variously affected by aircraft noise (HBRS, Inc. and Harris, 
Miller, Miller, & Hanson, Inc. 1993). This survey asked respondents to 
classify the interference of aircraft noise with their appreciation of 
the natural quiet of GCNP as either ``not at all,'' ``slightly,'' 
``moderately,'' very much,'' or ``extremely.'' The percent of visitors 
indicating these impacts is presented below by visitor group.

     Visitors Affected by Aircraft Noise--Grand Canyon National Park
------------------------------------------------------------------------
                                      Percent of visitors by category
                                  --------------------------------------
              Impact               Backcountry     River        Other
                                   (percent) a  (percent) b   (percent)
------------------------------------------------------------------------
Not At All.......................         41.0         45.5         76.0
Slightly.........................         15.0         16.5         11.0
Moderately.......................         13.5         10.0          4.0
Very Much........................         14.5         12.5          4.0
Extremely........................         16.0         15.5          5.0
------------------------------------------------------------------------
a Average for summer and fall users.
b Average for motor and oar users.
Source: HBRS, Inc. and Harris, Miller, Miller, & Hanson, Inc. 1993.

    The economic studies selected for use in the benefits transfer, and 
their indicated visitor-day values, are listed below. These values are 
also known as ``consumer surplus.'' Consumer surplus is the maximum 
amount an individual would be willing to pay to use a resource, minus 
the actual costs of use. It is a measure of the net economic benefit 
gained by individuals from participating in recreational activity.

                   Estimated Visitor-Day Values (Consumer Surplus)--Grand Canyon National Park
----------------------------------------------------------------------------------------------------------------
                                                                                                    Visitor-day
              Visitor group                          Study                     Activity           value (1998 $)
----------------------------------------------------------------------------------------------------------------
Backcountry.............................  Bergstrom and Cordell 1991  Backpacking (national               $37.13
                                                                       survey).
River...................................  Bureau of Reclamation 1995  River use in Grand Canyon            92.44
                                                                       NP.
Other...................................  Haspel and Johnson 1982...  Visit to Bryce Canyon NP..           48.72
----------------------------------------------------------------------------------------------------------------
All values indexed to 1998 using the Consumer Price Index for all urban consumers.

    The visitor-day value for backcountry use, $37.13, was derived from 
a national study of outdoor recreation (Bergstrom and Cordell 1991). 
That study estimated an average of $25.88 per visitor-day in consumer 
surplus for backpacking (1987). That value indexed to 1998 is $37.13 
per visitor-day.
    The visitor-day value for river use, $92.44, was derived from the 
economic analysis contained in the Final Environmental Impact Statement 
for Glen Canyon Dam operations (Bureau of Reclamation 1995). 
Originally, the value per visitor-day for river use was $77.24 in 1991. 
That value indexed to 1998 is $92.44 per visitor-day.
    The visitor-day value for all other visitor uses in GCNP, $48.72, 
was derived from an economic analysis of recreation at Bryce Canyon 
National Park. The visitor uses addressed by that analysis were 
considered to closely match those included in the ``other visitors'' 
category for GCNP, primarily sightseeing. That analysis estimated two 
consumer surplus values, $71.00 and $62.00 per vehicle in 1980, using 
alternative techniques. The average of those two values, $66.50 per 
vehicle, was used in the present analysis. An average of 2.7 visitors 
per vehicle per vehicle for Bryce Canyon National Park was then used to 
convert that average to a visitor-day value, $24.63 ($66.50 per vehicle 
divided by 2.7 visitors per vehicle). That value indexed to 1998 is 
$48.72 per visitor-day.
    The FAA assumed that these visitor-day values represent the net 
economic benefits obtained from recreational uses in GCNP absent any 
impacts from commercial air tour aircraft noise. Therefore, these 
values potentially under-state recreational benefits to the extent that 
the were estimated in conditions where aircraft noise was present.
    There is no known economic study that estimates the reduction in 
the value of recreational uses due to commercial air tour aircraft 
noise for areas similar to GCNP. The reductions shown in the chart 
below were assumed in the present analysis.

  Assumed Reductions in Visitor-Day Values--Grand Canyon National Park
------------------------------------------------------------------------
                                                              Reduction
                           Impact                             (percent)
------------------------------------------------------------------------
Slightly...................................................           20
Moderately.................................................           40
Very Much..................................................           60
Extremely..................................................           80
------------------------------------------------------------------------

    These data and assumptions imply the following total loss in value 
from aircraft noise in 1998. The total loss in value of $34.5 million 
was calculated as the product of the number of visitor-days, the 
proportion of visitors affected by aircraft noise, the visitor-day 
value, and the assumed proportional reduction in the visitor-day value, 
for respective impact levels and visitor categories.

[[Page 37314]]



       Estimated Total Lost Value (Consumer Surplus) From Aircraft Noise--Grand Canyon National Park, 1997
                                                [In $ thousands]
----------------------------------------------------------------------------------------------------------------
                                                Visitor category
-----------------------------------------------------------------------------------------------------------------
                           Impact                             Backcountry     River        Other        Total
----------------------------------------------------------------------------------------------------------------
Slightly....................................................         $110         $557       $6,204       $6,871
Moderate....................................................          199          675        4,512        5,386
Very Much...................................................          320        1,265        6,768        8,353
Extremely...................................................          471        2,092       11,280       13,843
                                                             ---------------------------------------------------
      Total.................................................        1,100        4,589       28,764       34,453
----------------------------------------------------------------------------------------------------------------

    The benefit of this rulemaking is the reduction of the total lost 
value associated with the resulting lower future levels of noise from 
commercial air tour aircraft. Through aircraft noise modeling, FAA has 
predicted the number of square miles within GCNP that would be affected 
by various levels of aircraft noise, both with and without the 
commercial air tour limitation and change in routes. These noise levels 
were quantified by a nonlinear measure. The average linearized noise 
measure, weighted by the number of affected square miles, is presented 
below.

  Predicted Future Noise Reductions in Grand Canyon National Park Due to the Commercial Air Tour Limitation and
                                                   New Routes
----------------------------------------------------------------------------------------------------------------
                                                                    Weighted average linearized        Noise
                                                                           noise measure           reduction due
                                                                 --------------------------------     to the
                              Year                                                                limitation and
                                                                  Limitation and     No action        change
                                                                   route change                      (percent)
----------------------------------------------------------------------------------------------------------------
1998............................................................        1,219.23        1,496.04           18.50
2000............................................................        1,219.23        1,577.47           22.71
2003............................................................        1,219.23        1,713.06           28.83
2008............................................................        1,219.23        1,943.88           37.28
----------------------------------------------------------------------------------------------------------------

    These percentage reductions in commercial air tour aircraft noise 
were applied to the total lost consumer surplus value from aircraft 
noise in 1998 ($34.45 million) to estimate the current use benefits for 
future years. Linear interpolation was used to estimate levels of noise 
reduction for years of the evaluation period not shown in the table 
above. This calculation assumes that benefits increase linearly with 
noise reduction (i.e., a constant marginal benefit from noise 
reduction). A three percent discount rate was then applied to calculate 
the present value of use benefits (discounted to the year 1999) over 
the ten-year evaluation period. A three percent discount rate is 
supported by the economics literature for natural resource valuation 
(e.g., Freeman 1993). Federal rulemakings also support a three percent 
discount rate for lost natural resource use valuation (61 FR 453; 61 FR 
20584). The resulting use benefit estimates are presented below.

   Estimated Use Benefits at 3%--Commercial Air Tour Limitation Grand
                          Canyon National Park
                             [In $ millions]
------------------------------------------------------------------------
                                             Estimated
                  Year                       benefits     Present  value
------------------------------------------------------------------------
2000....................................           $7.82           $7.60
2001....................................            8.53            8.04
2002....................................            9.23            8.45
2003....................................            9.93            8.82
2004....................................           10.51            9.09
2005....................................           11.10            9.29
2006....................................           11.68            9.50
2007....................................           12.26            9.68
2008....................................           12.83            9.84
2009....................................           13.43            9.90
                                         -------------------------------
    Total...............................          107.32           90.29
------------------------------------------------------------------------

    It is important to recognize significant uncertainties in this 
estimation. One area of uncertainty relates to the percentage 
reductions in visitor-day values that can be attributed to commercial 
air tour aircraft noise. It was assumed above that there is a 20 
percent reduction for visitors affected ``slightly,'' a 40 percent 
reduction for visitors affected ``moderately,'' a 60 percent reduction 
for visitors affected ``very much,'' and an 80 percent reduction for 
visitors affected ``extremely.'' In recognition of the uncertainty 
surrounding this assumption, one-half of these percentage reductions 
were used to calculate an alternative benefit estimate. Additionally, 
in recognition of the discount rate recommended in OMB Circular A-94, 
alternative benefit estimates were calculated using a seven percent 
discount rate. These alternative benefit estimates are presented below.

[[Page 37315]]



                                      Alternative Estimates of Use Benefits
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                  Visitor-Day Value Reduction Assumption                                Discount rate
----------------------------------------------------------------------------------------------------------------
     Slightly          Moderately         Very much          Extremely              3%                 7%
----------------------------------------------------------------------------------------------------------------
                             Total Present Value Over the 10-Year Evaluation Period
----------------------------------------------------------------------------------------------------------------
           20%                40%                60%                80%             $90.29             $72.98
           10%                20%                30%                40%              45.14              36.49
----------------------------------------------------------------------------------------------------------------
                            Total Present Value Over the Five-Year Evaluation Period
----------------------------------------------------------------------------------------------------------------
           20%                40%                60%                80%              42.00              37.37
           10%                20%                30%                40%              21.00              18.67
----------------------------------------------------------------------------------------------------------------
                             Total Present Value Over the Two-Year Evaluation Period
----------------------------------------------------------------------------------------------------------------
           20%                40%                60%                80%              15.63              14.76
           10%                20%                30%                40%               7.82               7.38
----------------------------------------------------------------------------------------------------------------

    The use benefits discussed above assume that the commercial air 
tour limitation and the change in routes would occur at about the same 
time. The rule being analyzed, however, only limits commercial air 
tours. Hence, benefit estimates were calculated using the same 
methodology described above, but only applying the predicted noise 
reduction due to the commercial air tour limitation. These alternative 
benefit estimates are presented below.

                                      Alternative Estimates of Use Benefits
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                  Visitor-Day Value Reduction Assumption                                Discount rate
----------------------------------------------------------------------------------------------------------------
     Slightly          Moderately         Very much          Extremely              3%                 7%
----------------------------------------------------------------------------------------------------------------
           Total Present Value Over the 10-Year Evaluation Period Commercial Air Tour Limitation Only
----------------------------------------------------------------------------------------------------------------
           20%                40%                60%                80%             $44.05             $34.61
           10%                20%                30%                40%              22.03              17.31
----------------------------------------------------------------------------------------------------------------
          Total Present Value Over the Five-Year Evaluation Period Commercial Air Tour Limitation Only
----------------------------------------------------------------------------------------------------------------
           20%                40%                60%                80%              15.68              13.78
           10%                20%                30%                40%               7.84               6.89
----------------------------------------------------------------------------------------------------------------
           Total Present Value Over the Two-Year Evaluation Period Commercial Air Tour Limitation Only
----------------------------------------------------------------------------------------------------------------
           20%                40%                60%                80%               4.22               3.97
           10%                20%                30%                40%               2.11               1.98
----------------------------------------------------------------------------------------------------------------

    In addition to these use benefits, this rulemaking may generate 
significant no-use benefits. The FAA does not have adequate data to 
estimate the non-use benefits of aircraft noise reduction at GCNP. 
However, there are other studies that suggest potentially significant 
non-use benefits that might be attributed to this rulemaking. One such 
study was done for the Bureau of Reclamation regarding the operation of 
the Glen Canyon Dam (Hagler Bailly Consulting 1995). A national survey 
was conducted for this study, indicating significant non-use benefits 
for changes in Glen Canyon Dam operations. While the magnitude of non-
use benefits estimated in that study are not directly applicable to 
this rulemaking, potentially significant non-use benefits associated 
with aircraft noise reduction are suggested.

B. Costs of Compliance and Initial Regulatory Flexibility Determination 
and Analysis

    The proposed rule would impact all business entities conducting 
commercial air tours over the GCNP. Data collected for the base year 
period (May 1997 to April 1998) shows that there were 25 such entities 
(24 operators, one of whom operated as a fixed wing operator as well as 
a helicopter operator) at that time. This time period will be 
considered the baseline for the analysis. All of the entities are 
``small'' as defined by the Small Business Administration (SBA). Since 
every air tour operator doing business in the GCNP would be 
significantly impacted and they all satisfy the definition of a ``small 
business'', the FAA concludes that there would be a significant 
economic impact on a substantial number of small entities. 
Consequently, the FAA has conducted this analysis of compliance costs 
to include an initial regulatory flexibility analysis as required by 
the Regulatory Flexibility Act.
    The total cost of this rulemaking would largely depend on how 
commercial air tour operators respond to the changes. After reviewing a 
number of operating alternatives the FAA has concluded that the cost of 
the proposed regulation (e.g., five-month peak season) would be a 
reduction in net operating revenue of $177.6 million or $114.6 million 
discounted over the next ten years. There may be some additional cost 
associated with implementing the proposed alternative (i.e., 
activating, filing, and closing a flight plan). This is not expected to 
be

[[Page 37316]]

a significant cost but the FAA is unable to measure fully the cost 
impact at this time and requests public comment. For other provisions 
of the proposed rule ((1) requesting modification and initial 
allocations and (2) transfer and termination of allocations), the ten-
year cost to air tour operators would be $30,000 or $23,000, 
discounted. Finally, the FAA costs over the next ten years (including 
initial allocations) would be $1,445,900 or $1,016,900 discounted. In 
sum, the total cost of this proposed rulemaking over the next ten years 
would be $179.1 million or $115.6 million, discounted.
1. Revenue Impact of Compliance Model
    The main economic impact resulting from limiting commercial air 
tours in the GCNP SFRA is the reduction in projected net operating 
revenue. This number can be calculated by subtracting the net operating 
revenue associated with the projected future number of operations under 
the operations limitation from the net operating revenue associated 
with the projected future number of operations without the operations 
limitation.
    The number of commercial air tours conducted during the May 1997-
April 1998 base year period was used for determining the base number of 
air tours in this analysis. This information, by operator and by route, 
was provided to the FAA in accordance with current section 93.317 of 
Title 14, Code of Federal Regulations (14 CFR). Under the proposed 
rule, each air tour operator that conducted and reported an air tour 
during that period under existing section 93.317 would receive one 
allocation for each air tour reported.
    A certificate holder's total allocations would be divided up into 
peak and off-peak season. The FAA proposes that the peak season be 
defined as the period from May 1-September 30; and the off-peak season 
would be the period October 1-April 30. This peak/off-peak definition 
coincides with the summer and winter season for curfew purposes. Peak/
off-peak allocations would be based on the information reported to the 
FAA for the same time period during the base year.
    Under the proposed rule, allocations also would be separated into 
those that may be used in the Dragon and Zuni Point corridors and those 
that may be used in the rest of the SFRA. Dragon and Zuni Point 
corridors allocations again would be based on the number of air tours 
an operator conducted and reported in those corridors during the base 
year period. Operators reporting no commercial air tours in these 
corridors during the base year period would receive no allocations for 
the Dragon and Zuni Point corridors.
    The baseline number of passengers was estimated for each operator 
in this analysis in a four-step process using data provided from 
interviews and surveys of the affected air tour operators. First, the 
FAA determined how many aircraft and which aircraft, by route, were 
used in the base year time period. Second, the FAA identified the 
maximum number of passengers that each aircraft could legally carry. 
Next, the FAA determined the load factor for type of aircraft on each 
route by operator (in some cases, air tour operators were able to 
provide the FAA this estimate by time of year). After calculating the 
number of passengers for each route and for each type of aircraft, the 
FAA was able to sum this information and determine the baseline number 
of passengers. The FAA estimates the baseline number of passengers to 
be about 616,000.
    The baseline gross operating revenue was calculated for each 
operator for each route in this analysis using data provided from 
published advertisements from air tour operators on the price of each 
type of air tour. The base period gross operating revenue by route was 
calculated by multiplying the estimated number of passengers that flew 
on a specific route for a specific operator by the published retail 
fare. No discounts are assumed.
    Variable operating costs for GCNP air tour operators are defined as 
the costs for crews, fuel and oil, and maintenance per flight hour. The 
data by type of aircraft can be found on Table 4-20 of Economic Values 
for Evaluation of Federal Aviation Administration Investment and 
Regulatory Programs published by the Federal Aviation Administration, 
FAA-APO-98-8, June 1998. Estimates of the time taken to fly a 
particular route were obtained from air tour pilots and individuals in 
the Las Vegas Flight Standards District Office (FSDO). To calculate the 
variable operating cost for a particular route and type of aircraft, 
the FAA multiplied the hourly variable operating costs by the time to 
fly the particular route. In a few instances, the travel time was 
unavailable--the FAA estimated the time using information from other 
air tours and the time it took to complete those tours.
    Baseline net operating revenue for each aircraft by route is the 
difference between the gross operating revenue for each route by 
aircraft and the variable operating costs for each route by aircraft. 
An air tour operator's total net operating revenue is the sum of the 
net operating revenues from all of the routes used by that air tour 
operator.
    The FAA forecast rate of compound annual growth in the GCNP is 
estimated at 3.3 percent per year. This growth rate was derived from a 
composite of tower operations of four Las Vegas vicinity airports and 
those of Tusayan as reported in the 1994 Tower Activity Forecast (TAF). 
It represents different rates of growth at the West and East ends of 
the GCNP. The FAA estimated the future number of monthly operations 
without the proposed rule using projections as described above for each 
route by aircraft type and by operator.
    The model does not take into consideration that air tour operators 
could switch from smaller-sized aircraft to larger-sized aircraft. 
Consequently, in this analysis, the number of available seats is fixed 
throughout the entire time period. Holding the number of seats constant 
and assuming that more individuals would want to take air tours in the 
future implies that air tour operators should be able to raise air tour 
prices. The model does not consider a new equilibrium price given that 
supply becomes fixed while demand increases. Consequently, this model 
assumes a worst case analysis.
2. Cost of Various Alternatives to Operators
a. Peak Season Limitations
    The costs of the three operating scenarios considered in this 
rulemaking are discussed below. Each of the operating scenarios 
considers an alternative delineation of the annual commercial air tours 
against which the proposed operations limitation would be applied. The 
three alternatives are as follows: (1) The proposed 5-month peak season 
(May 1-September 30) with a 7-month off-peak season (October 1-April 
30); (2) a uniform year; e.g., no peak/off-peak seasonal delineation; 
and (3) a 3-month peak season (July 1-September 30) with a 9-month off-
peak season (October 1-June 30).
(1) The Proposed Five-Month Peak Season (May 1 to September 30)
    The proposed rule would limit all commercial air tours in the GCNP 
SFRA on a 12-month basis to the number of air tours reported in 
accordance with current section 93.317 of 14 CFR for the twelve-month 
period from May 1, 1997 to April 30, 1998. Proposed section 93.319 of 
14 CFR would establish this commercial tour limitation. The number of 
commercial air tours that a certificate holder could conduct would be 
shown

[[Page 37317]]

on the certificate holder's operations specifications as an allocation.
    A certificate holder's total allocations would be divided up into 
peak season and off-peak season. Under the proposed rule, the peak 
season would be defined as the period from May 1 to September 30; the 
off-peak season would be the period October 1 to April 30. This peak/
off-peak definition would coincide with the summer and winter season 
curfew purposes. Peak/off-peak allocations would be based on the 
information reported to the FAA for the time period during the base 
year period. Off-peak allocations could not be used during peak season; 
however, peak season allocations could be used during off-peak. Under 
the proposed rule, allocations also would be separated into those that 
may be used in the Dragon and Zuni Point corridors and those that may 
be used in the rest of the SFRA but not in the Dragon and Zuni Point 
corridors. Dragon and Zuni Point allocations again would be determined 
based on the number of commercial air tours an air tour operator 
reported in this region for the base year period. Operators reporting 
no commercial air tours in these corridors for the base year would 
receive no allocations for these corridors.
    The FAA is proposing that these allocations would be valid for a 
two-year period. After that time, the certificate holder's allocations 
may be revised or removed based on the data submitted under proposed 
section 93.325; an updated noise analysis; and/or the status of the 
Comprehensive Noise Management Plan. In this analysis, the FAA assumed 
that this operation process would continue for ten years.
(2) A Uniform Year With No Peak/Off Peak Delineation
    The first operating alternative to the proposed rule would limit 
all commercial air tours in the GCNP SFRA on a 12-month basis to the 
number of air tours reported in accordance with current section 93.317 
for the year May 1, 1997 to April 30, 1998. As discussed under the 
proposed rule, the number of commercial air tours that a certificate 
holder could conduct would be shown on the certificate holder's 
operations specifications as an allocation. Air tour operators, under 
this alternative could compress all of their air tour allocations into 
the most active period should they desire. It is also assumed, as 
discussed under the proposed rule, that allocations would be separated 
into those that may be used in the Dragon and Zuni Point corridors and 
those that may be used in the rest of the SFRA.
    It is assumed that these allocations would also be valid for a two-
year period. After that time, the certificate holder's allocations may 
be revised based on the data submitted under proposed Sec. 93.325; an 
updated noise analysis; and/or the status of the Comprehensive Noise 
Management Plan.
    The FAA is not currently able to estimate how this alternative 
would impact net revenue differently than the proposed rule's impact on 
net revenue. Nevertheless, the FAA is aware that this alternative would 
allow an operator to shift air tour operations from the off-peak, 
winter season to the peak, summer season. The incentive to do this 
would be particularly strong if prices are higher during the peak, 
summer season or if aircraft have more passengers per flight, than 
during off-peak, winter season.
    If prices are higher or aircraft are flown with more passengers per 
flight during the peak, summer season, an operator could reduce the 
proposed regulation's impact on its net revenues by shifting operations 
from the off-peak, winter season to the peak, summer season. 
Unfortunately, if the air tour operators were allowed to shift 
operations from the winter to the summer, then aircraft noise would 
also be shifted from the winter (when aircraft noise is less of a 
problem) to the summer (when aircraft noise is more a problem).
(3) A Three-Month Peak Season (July 1 to September 30)
    Another operating alternative to the proposed rule would also limit 
all commercial air tours in the GCNP SFRA on a 12-month basis. 
Commercial air tours conducted by certificate holders in the SFRA would 
not exceed the amount of air tours reported in accordance with current 
section 93.317 for the year May 1, 1997 to April 30, 1998. As discussed 
under the previous alternative, the number of air tours that a 
certificate holder could conduct would be shown on the certificate 
holder's operations specifications as an allocation.
    Under this alternative, as with the other alternatives, a 
certificate holder's total allocations would also be divided up into 
peak season and off-peak season.
    Allocations also would be separated into those that may be used in 
the Dragon and Zuni Point corridors and those that may be used in the 
rest of the SFRA. Dragon and Zuni Point allocations again would be 
determined based on the number of air tours an operator reported in 
this region for the base year. Only operators who reported air tours in 
these corridors for the base year would receive allocations for these 
corridors.
    It is assumed that these allocations would also be valid for a two-
year period. After that time, the certificate holder's allocations may 
be revised based on the data submitted under proposed Sec. 93.325; an 
updated noise analysis; and/or the status of the Comprehensive Noise 
Management Plan.
    The FAA is not currently able to estimate how this three-month peak 
seasion alternative would impact net revenue in a different way than 
the proposed rule's impact on net revenue. Nevertheless, the FAA is 
aware that this alternative would allow an operator to shift commercial 
air tours from the off-peak winter season to May and June. The 
incentive to do this would be strong if prices are higher during May 
and June or if aircraft have more passengers per commercial air tour 
during May and June than during the off-peak, winter season. If prices 
are higher during May or June or if aircraft can be flown with more 
passengers per flight during these two months, then an operator could 
reduce the proposed regulation's impact on net revenue by shifting air 
tour allocations from the off-peak winter season to May and June. If 
commercial air tour operators were allowed to shift air tours from the 
winter to May and June, then aircraft noise would also be shifted from 
the winter (when there is less aircraft noise) to these two months.
b. Cost of Various Reporting Requirements Alternatives to Operators
    The FAA considered two reporting requirement alternatives in the 
proposed rule. They are quarterly reporting and trimester reporting. 
The existing rule requires certificate holders to report three times 
annually. Since the existing rule already requires certificate holders 
to establish a system to implement the reporting requirement, there are 
assumed to be no start-up costs.
(1) Reporting on a Trimester Basis
    It is assumed that the information for these reports is currently 
being updated throughout the entire timeframe. The total amount of time 
needed to update this information is a function of the number of 
aircraft maintained by each operator. The FAA assumes that it takes 
each operator about five minutes per aircraft per day regardless of the 
season to record the updated information into a master spreadsheet. The 
total cost of the existing rule in 1997 dollars for this task is 
$753.000 or $529,000 discounted over ten years at 7 percent. This is a

[[Page 37318]]

current requirement of the regulations (adopted in 1996) and these 
costs were previously accounted for in the regulatory evaluation 
prepared for the 1996 final rule.
    The written information would have been provided to the Las Vegas 
FSDO three times per year. The FAA assumes that each operator would 
have to collate and verify the information that they had been 
collecting throughout the year. The time it takes to complete these two 
tasks would be two hours per operator regardless of the number of 
aircraft and assumes that the operators would have been recording the 
information throughout the year. The total cost to the industry of the 
existing rule is estimated at $34,000 for ten years or $24,000 
discounted.
    In sum, the FAA estimates that the cost associated with regular 
updating and trimester reporting for the existing rule is $787,000 or 
$552,000 discounted over ten years. The FAA is, however, proposing to 
replace the trimester reporting requirement with a quarterly reporting 
requirement.
(2) Reporting on a Quarterly Basis
    As stated previously under the section on trimester reporting, it 
is assumed that updating is taking place throughout the entire 
timeframe. The total amount of time needed to update this information 
would be a function of the number of aircraft maintained by each 
operator. The FAA assumes that it would take each operator about five 
minutes per aircraft per day regardless of the season to record the 
updated information onto a master spreadsheet. The total cost in 1997 
dollars absent the existing rule for this task would be $753,000 or 
$529,000 discounted over ten years at 7 percent.
    Under this reporting requirement scenario, which is the proposed 
rule, the written information would have to be provided to the Las 
Vegas FSDO four times per year. The FAA assumes that each operator 
would have to collate and verify the information that they have been 
collecting throughout the year. The time it takes to complete these two 
tasks would be two hours per operator regardless of the number of 
aircraft and assumes that the operators would have been recording the 
information throughout the year. Given the wage rate of a Director of 
Operations at $22.50 per hour, the FAA estimates that this provision 
would cost each operator $180 per year ($22.50/hour  x  2 hours  x  4 
times/year=$180 per operator; 200 hours/year to the industry, assuming 
the operator of the mixed fleet reports fixed-wing and helicopter tour 
business separately) absent the existing rule. The total cost to the 
industry is estimated at $45,000 for ten years or $31,600 discounted.
    In sum, the FAA estimates that the cost associated with regular 
updating and quarterly reporting absent the existing rule would be 
$798,000 or $560,000, discounted over ten years.
    The incremental cost of reporting three times annually versus four 
times annually is the difference in costs shown previously. The total 
incremental cost to industry of the proposed rule is estimated at 
$11,000 for ten years or $8,000 discounted. For the first year, the 
incremental costs are approximately $1,000. The two-year costs are 
estimated at $2,000. The five-year costs are estimated at $5,000 or 
$4,000 discounted.
    Some commercial air tour operators stated that trimester reporting 
would be more burdensome than quarterly reporting because trimester 
reporting does not correspond with other business reporting 
requirements. However, because an additional fourth report would be 
required, quarterly reporting would be more costly.
c. Cost of Implementing the Rule
    The FAA considered two means of monitoring the allocation usage--a 
form method and a flight plan method. The flight plan method is 
proposed in this rule. The following is a discussion of these two 
methods.
(1) Form Method
    The form method would require certificate holders conducting 
commercial air tours in the Special Flight Rules Area (SFRA) to 
complete an SFRA Operation Form provided by the FAA prior to the 
beginning of each commercial SFRA operation. A commercial SFRA 
operation would consist of a point-to-point flight of the aircraft.
    The FAA estimates that it would take about one minute for the 
certificate holder to complete each form because much of the 
information would have been pre-printed. Based on the previously noted 
operators' reports for the base year period, the FAA estimates that no 
more than approximately 88,000 commercial air tours would have to be 
reported annually. The FAA estimates that the total annual cost in 1997 
dollars would be between $29,000 and $30,000 [$20.00/hour  x  88,000 
forms  x  1 minute per form]/60 = $29,300/year; 1,467 hours per year to 
the industry) or about $27,400 discounted in the first year. The total 
cost would be $293,000 over ten years or $206,000, discounted. The two-
year costs are estimated at $58,600 or $53,000 discounted. The five-
year costs are estimated at $146,500 or $120,300 discounted.
(2) Flight Plan Method
    Section 93.323 of the proposed rule would require each certificate 
holder of a commercial SFRA operation to file a visual flight rules 
(VFR) flight plan with an FAA flight Service Station for each flight. A 
flight consists of one take-off and one landing. The ``remarks'' 
section of the flight plan would be completed to indicate the purpose 
of the flight out of five designated purposes. These purposes would be: 
(1) commercial air tour; (2) transportation; (3) repositioning; (4) 
maintenance; and (5) training/proving. The information obtained from 
the flight plan would be used to ensure compliance with the commercial 
air tour limitation. Copies would not have to be maintained or carried 
on board by the certificate holder.
    The extent to which an operator would be impacted by these costs 
would depend upon the volume of commercial air tour business in the 
GCNP and the number of aircraft and pilots providing air tour service. 
Additionally, the cost impact would be influenced by whether the 
operator conducts air tours daily on a regular frequency.
    Relying on information from the Las Vegas flight Standards District 
Office (FSDO), the FAA has identified the following four principal 
areas where start up costs for the larger, more regularly scheduled 
operators would be incurred: (a) Creation of ``canned'' VFR flight 
plans (templates) to be filed with the Reno or Prescott Flight Service 
Station; (b) rewriting of existing General Operations Manuals to 
incorporate the new procedures; (c) set-up of a pilot training program; 
and (d) training of pilots. The FAA assumes each operator's Director of 
Operations (DO) would be responsible for the first three tasks and 
possibly the fourth, the instructing of the pilots in the new 
procedures.
    The FAA estimates that the amount of time required of the DO to 
create and file a template with the Flight Service Stations (task `a') 
is about 2 days. Task `b' would require 2 days for part 121 operators 
and part 135 operators; and task `c', the development of pilot 
instruction in VFR flight plan procedures would require 2 days. 
Finally, the FAA believes that the VFR flight plan procedures could be 
presented to the pilots currently conducting air tours in the Canyon 
through an operational bulletin. Presentation of the procedures to new 
hires would be part of an operator's on-going costs; the FAA assumes 
each

[[Page 37319]]

operator would incorporate this into the periodic review, modification, 
and update of plans as noted in the next section.
    The FAA estimates that the total start-up costs to the Grand Canyon 
air tour operators for the VFR flight filing requirements would be 
about $22,320 or $20,850 discounted.
    The VFR flight filing procedures requires the following sequence of 
activities: (1) Filing a flight plan; (2) activating the flight plan; 
and (3) closing the flight plan. The opening and closing of a flight 
plan would be the responsibility of the pilot-in-command and would be a 
part of normally assigned duties. This usually takes about one to five 
minutes.
    The FAA is unable to accurately assess the variable or on-going 
costs of the VFR flight filing plan procedures at this time. 
Specifically, the FAA cannot precisely account for the costs incurred 
by opening and closing a flight plan, nor can the FAA accurately 
account for the costs each operator would typically incur in filing a 
flight plan. The FAA, therefore, requests public comment.
    The FAA believes there would also be additional on-going 
requirements and costs imposed on the Las Vegas FSDO with proposed 
Sec. 93.323. Coordinating and cross referencing the daily air tour 
activity recorded by the Flight Service Station with the operator 
reporting requirements, and monitoring the activity for potential 
enforcement action would add requirements to the Las Vegas FSDO's 
current mission that would task current staffing levels. Some of these 
activities (not enforcement) could be a part of the workload of a 
senior analyst/statistician assigned to manage the reporting 
requirements.
d. Cost of Other Provisions to Operators
    Operators would incur costs associated with (1) requesting 
modification to initial allocations and (2) transfer of allocations. 
The FAA estimates that the cost of these provisions could be up to 
$20,000 or $14,000 discounted over ten years. The following is a 
discussion of the costs associated with these two provisions.
(1) Requesting Modification to Initial Allocations
    The FAA recognizes that the air tour business in the GCNP is 
constantly changing. Due to mergers/acquisitions, bankruptcies, etc., 
certificate holders may believe that the data submitted for May 1997 to 
April 1998 does not reflect their current business operations. 
Therefore, the FAA would permit any certificate holder who believes 
that the base year data does not reflect its current business operation 
to submit a written request to the Manager, Air Transportation Division 
that its allocation be reassessed. The request should explain why the 
base year reported data does not properly reflect its current 
operations. The operator must provide supporting documentation.
    The FAA estimates that as many as five operators may request 
modifications to their initial allocations. The FAA estimates that each 
operator would incur one-time costs of between $500 and $1,000 to 
complete and provide the required information to the FAA. Therefore the 
one-time cost to the industry would be between $2,500 and $5,000 or 
between $2,300 and $4,700, discounted. The FAA requests information 
from affected air tour operators on the validity of this estimate.
(2) Transfer of Allocations
    Allocations to conduct air tours in the GCNP SFRA would be 
considered an operating privilege initially granted to certificate 
holders, who conducted commercial air tours during the base year and 
reported them to the FAA. As proposed, the allocation would be subject 
to reassessment no earlier than two years after the effective date of 
the rule. The FAA recognizes that air tour operators often utilize a 
variety of contracting/subcontracting methods to handle passenger loads 
during busy periods. Thus, the FAA proposes to allow allocations to be 
transferred among certificate holders, subject to several restrictions.
    Under the proposed rule a certificate holder would be required to 
report any transfer of allocations to the Las Vegas FSDO in writing.
    The FAA distinguishes between temporary and permanent transfers of 
allocations. In the former case, the FAA recognizes the current 
business practice of air tour operators to occasionally sell, exchange 
or otherwise transfer air tour bookings (usually to an overflow 
operator) to accommodate unexpected surges in demand.
    Temporary transfers would not require FAA approval, nor would the 
FAA modify the involved operators' operations specifications. The FAA 
assumes any operator costs associated with temporary transfers to be 
part of the on-going business cost of conducting air tours of the Grand 
Canyon. The FAA also assumes any costs associated with notifying the 
Las Vegas FSDO of such temporary transfers would be de minimus. 
Similarly, FAA costs associated with the processing of these written 
notices concerning temporary transfers would be de minimus.
    Permanent transfers of allocations resulting from mergers/
acquisitions, bankruptcies, etc. would require FAA approval through the 
modification of the operations specifications in addition to the 
required reporting to the Las Vegas FSDO in writing. The FAA cannot 
predict how many such permanent transfers might occur or estimate 
associated costs. The FAA, however, is aware of two acquisitions that 
occurred during the base period and offers the following example of 
what costs might result if no more than two operators were to submit 
requests for permanent transfers of allocations to the FAA annually. 
The FAA requests operator comment regarding the likely costs of a 
permanent transfer.
    If each operator would incur costs of between $500 and $1,000 
(which includes two days effort per operator) to complete and provide 
the required information to the FAA, then the annual cost to the 
industry would be between $1,000 and $2,000 annually (about 32 hours 
annually) or between $900 and $1,900 discounted. The cost over 10 years 
would be between $10,000 and $20,000 or between $7,000 and $14,000, 
discounted. The two-year costs are estimated at between $2,000 and 
$4,000 or between $1,800 and $3,600 discounted. The five-year costs are 
estimated at between $5,000 and $10,000 or between $4,100 and $8,200, 
discounted.
3. Cost of Proposed Rule to the FAA
    The FAA, as a result of this proposed rule, would incur costs in 
four ways. The FAA would incur costs associated with the initial 
allocation, recording and tracking, filing of flight plans, and 
transfer of allocations. Over the next ten years, FAA costs are 
expected to be $1,445,900 or $1,016,900, discounted. The following is a 
discussion of these cost components.
a. Initial allocation, and recording and tracking
    The FAA would need to develop an allocation process and prepare the 
necessary information to send to each air tour operator. This one time 
administrative work would require analyst, clerk, legal and management 
resources. The FAA estimates that this would result in an agency cost 
of $3,700 in the first year only. The discounted cost is $3,500.
    In addition, the FAA would incur recurring annual costs from the 
recording and tracking of the information provided by the operators. 
Again, this would require analyst, clerk,

[[Page 37320]]

management and legal resources. For the purpose of this cost 
assessment, the FAA assumes that one additional agency employee would 
be required at the GS-14 grade level. Based on FAA resources required 
to record and track data provided by operators since 1997, the agency 
estimates that the total cost for the FAA of these elements would be 
about $138,000 annually or $1,379,000 over ten years ($968,587, 
discounted).
b. Transfer of Allocations
    The FAA estimates that on average it would spend about 80 hours 
managing each transfer of allocations or 160 hours annually assuming 
two permanent transfers. Based upon the salary of a GS-13 employee of 
$39.50/hour, the FAA estimates that cost would be about $6,300 
annually, $63,200 over ten years or $44,400, discounted.
    In sum, the FAA would incur costs associated with the initial 
allocation, tracking and monitoring, filing a flight plan, and transfer 
and termination of allocations. Over the next ten years, FAA costs are 
expected to be $1,445,900 or $1,016,900, discounted.

C. Summary of Benefits and Costs

    Public Law 100-91 was adopted to substantially restore natural 
quiet and experience in Grand Canyon National Park. The primary 
intended benefit of this proposed rule is its contribution toward 
restoring natural quiet and experience in Grand Canyon National Park. 
The estimated 10-year use benefits (benefits derived from hiking, 
rafting, or sightseeing) as a result of this proposed rule and the 
other two accompanying proposed rules would be about $73 million, 
discounted at seven percent over ten years (about $35 million if this 
proposed rule is adopted alone). The FAA does not have adequate data to 
estimate the non-use benefits of aircraft noise reduction at GCNP, but 
believes this rulmaking may generate significant non-use benefits. 
Studies cited in the Regulatory Evaluation suggest potentially 
significant non-use benefits associated with aircraft noise reduction 
in GCNP as a result of this rulemaking.
    The estimated 10-year cost of this proposed regulation would be 
$179.1 million or $115.6 million discounted. The majority of the costs 
of this proposed regulation, would be $177.6 million, ($114.6 million, 
discounted) in projected lost revenue (net of variable operating 
costs). The estimated 10-year cost of the other provisions to air tour 
operators which includes (1) reporting four times annually, (2) filing 
of flight plans, (3) transfer of allocations and (4) requesting 
modifications and initial allocations is $30,000, or $23,000 
discounted. FAA costs include those associated with initial 
allocations, annual recording and tracking, and transfer of 
allocations. These FAA costs are estimated at $1,445,900 or $1,016,900, 
discounted.

Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (RFA) was enacted by 
Congress to ensure that small entities (small business and small not-
for-profit government jurisdictions) are not unnecessarily and 
disproportionately burdened by Federal regulations. The RFA, which was 
amended March 1996, requires regulatory agencies to review rules to 
determine if they have ``a significant economic impact on a substantial 
number of small entities,'' FAA's interim regulatory flexibility policy 
and guidelines establish threshold costs and small entity size 
standards for complying with RFA requirements. This guidance defines 
small entities in terms of size thresholds, significant economic impact 
in terms of annualized cost thresholds, and substantial number as a 
number which is not less than eleven and which is more than one-third 
of the small entities subject to the proposed or final rule.
    The Small Business Administration defines small entities to be 
those airlines with 1,500 or fewer employees for the air transportation 
industry. For this proposed rule, the small entity group is considered 
to be operators conducting commercial air tours in the GCNP and having 
1,500 or fewer employees. The FAA has identified a total or 25 such 
entities (24 operators, one of whom operated as a fixed-wing operator 
as well as a helicopter operator) that meet this definition.
    The FAA has estimated the annualized cost impact on each of these 
25 small entities potentially impacted by the proposed rule. The 
proposed rule is expected to impose an estimated total cost of $177.6 
million or $114.6 million, discounted over the next 10 years. The 
annualized cost over ten years is estimated at about $25.5 million for 
all of the affected entities. The FAA has determined that the proposal 
would have a significant impact on a substantial number of small 
entities, and has performed on initial regulatory flexibility analysis. 
All 25 small entities would incur an economically significant impact.
    Under Section 603(b) of the RFA (as amended), each initial 
regulatory flexibility analysis is required to address these points: 
(1) reasons why the FAA is considering the proposed rule, (2) the 
objectives and legal basis for the proposed rule, (3) the kind and 
number of small entities to which the proposed rule would apply, (4) 
the reporting, and other compliance requirements of the proposed rule, 
and (5) all Federal rules that may duplicate, overlap, or conflict with 
the proposed rule.
1. Reasons Why the FAA Is Considering the Proposed Rule
    Public Law 100-91 recognizes that noise associated with ``aircraft 
overflights'' at the GCNP is causing ``a significant adverse effect on 
the natural quiet and experience of the park.'' This legislation 
directed the FAA and NPS to work together to achieve substantial 
restoration of natural quiet in the GCNP. In order to stabilize noise 
levels in the SFRA while further noise analysis is conducted, the FAA 
and NPS believe it is necessary to impose a commercial air tour 
limitation.
2. The Objectives and Legal Basis for the Proposed Rule
    The objective of the proposed rule is to limit commercial air tours 
in the GCNP SFRA. Commercial air tours conducted by certificate holders 
in the SFRA are not to exceed the amount of air tours reported in 
accordance with current section 93.317 for the period from May 1, 1997 
through April 30, 1998.
    The legal basis for the proposed rule is found in Public Law 100-
91, commonly known as the National parks Overflights Act. Public Law 
100-91 stated in part, that ``noise associated with aircraft 
overflights at GCNP [was] causing a significant adverse effect on the 
natural quiet and experience of the park and current aircraft 
operations at the Grand Canyon National Park has raised serious 
concerns regarding public safety, including concerns regarding the 
safety of park users.'' Further congressional direction is discussed in 
the history section of the full regulatory evaluation.
3. The Kind and Number of Small Entities to Which the Proposed Rule 
Would Apply
    The proposed rule applies to 24 potentially affected part 135 and 
121 commercial air tour operators, each having 1500 or fewer employees. 
The FAA estimates that all 24 of these operators (25 entities) would be 
impacted by the proposal.
4. The Projected Reporting and Other Compliance Requirements of the 
Proposed Rule
    Each of the 24 operators affected by this proposal would need to 
comply with certain reporting and

[[Page 37321]]

recordkeeping requirements. Certificate holders conducting commercial 
air tours in the GCNP SFRA would complete a flight plan for each 
flight. The FAA estimates this compliance effort would occur at the 
beginning of a flight and would impose an additional one to five 
minutes on the part of the certificate holder per operation for each of 
the 25 small entities during each year of compliance, for a total of 
10,956 hours annually. This estimate is limited to compliance 
associated with commercial air tours.
    Certificate holders conducting commercial air tours would need to 
report quarterly to the FAA certain information on the total operations 
conducted in the GCNP SFRA to the FAA. The FAA estimates that this 
compliance effort would take place four times per year (one additional 
time compared to the existing rule) and would impose an additional 50 
hours of labor on the industry annually. This provision would cause an 
operator, regardless of the number of aircraft, to expend an additional 
two hours of labor annually (including record maintenance).
    The initial assigned allocation could involve operator requests for 
modifications in some instances that the FAA estimates would impose 
about 80 hours total the first year on five operators. The FAA 
estimates that the paperwork burden to each of these operators would be 
about 16 hours (see earlier discussion).
    Finally, the FAA expects that two operators would enter the 
industry and would leave the industry through mergers, acquisitions or 
bankruptcies. The FAA estimates that two operators would spend about 32 
hours annually.
    Excluding the provisions that impose a one-time burden (initial 
allocations would affect five operators the first year annually; 80 
hours total), each certificate holder would have imposed an additional 
annual reporting burden on average of 581 hours of labor. This 
estimate, however, is highly dependent upon how many aircraft and how 
many operations the certificate holder flies per year. For a period of 
10 years, a total of approximately 143,750 hours would be spent.
5. All Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule
    The FAA is unaware of any federal rules that either duplicate, 
overlap, or conflict with the proposed rule. The FAA welcomes comment 
on this.
6. Affordability Analysis
    For the purpose of this Initial Regulatory Flexibility Analysis, an 
affordability analysis is an assessment of the ability of small 
entities to meet costs imposed by the proposed rule. There are two 
types of costs imposed by the rule--(1) out-of-pocket costs (actual 
expenditures) associated with certain documentation and (2) loss of 
potential future operating revenue above current levels associated with 
a freeze in the level of operations. This latter burden may be 
significant to financial viability for companies that depend on growth 
in operating revenue to provide cash needed to meet long-term 
obligations such as equipment purchase loans.
    An operator's short-run financial strength is substantially 
influenced, among other things, by its working capital position and its 
ability to pay short-term liabilities. Unfortunately, data is not 
available on the amount of working capital that these operators have to 
finance changes in short term costs.
    There is an alternative perspective to the assessment of 
affordability based on working capital of the proposed rule. The 
alternative perspective pertains to the size of the annualized costs of 
the proposed rule relative to annual revenues. The lower the relative 
importance of those costs, the greater the likelihood of implementing 
either offsetting cost saving efficiencies or raising fares to cover 
increased costs without substantially decreasing passengers.
    This analysis assesses affordability by examining the annualized 
cost of compliance relative to an estimate of total Grand Crayon 
commercial air tour operating revenues for each of the 25 small 
entities. (Note: There are 24 operators covered by this rule, but one 
operator conducts helicopter operations under one business entity and 
airplane operations under another separate business entity.) The 
annualized change in net operating revenues corresponds to foregoing 
the anticipated three percent per year growth of undiscounted net 
operating revenues. This number is relatively constant across all air 
tour operators because the majority of the negative impact (lost 
revenues) imposed by this rulemaking is directly related to the number 
of air tours that are being conducted. For these operators, there may 
be some prospect of absorbing the cost of the proposed rule through 
fare increases (especially since the cost model does not account for 
increasing demand with a fixed supply).
    It appears that given the current state of the industry, changes in 
net operating revenues may be offset by increased prices. The limit on 
air tours would restrict the future supply of Grand Canyon air tours 
while demand for air tours is expected to increase. No clear conclusion 
can be drawn with regard to the abilities for small entities to afford 
the reductions in net operating revenues that would be imposed by this 
NPRM because the FAA is not able at this time to estimate the amount of 
revenue increase obtained through price increases. The FAA requests 
small entities to provide better information supporting this assertion 
or any alternative.
7. Disproportionality Analysis
    The FAA does not believe that reporting requirements imposed by the 
proposed rule would disadvantage any of the 25 small entities relative 
to large operators because there are no affected large operators.
    The smallest operators are expected to incur some higher costs 
relative to their size than larger operators do. This is because while 
all operators have periodic reporting requirements, the smallest 
operators would not be able to spread their reporting costs across as 
many operations as the larger operators. Consequently, the periodic 
reporting requirements would be proportionately greater for the 
smallest operators compared to the other small operators. However, 
these reporting costs are a relatively small portion of the economic 
impact of this rulemaking. As a result this cost disadvantage to the 
small operators is not expected to be significant.
8. Competitiveness Analysis
    All air tour operators currently operating in the GCNP are small 
entities. All these operators would be proportionately impacted by the 
commercial air tour limitation provision of this rulemaking (the 
limitation has the greatest impact of all provisions of this 
rulemaking). The small operators would not be put at a disadvantage 
relative to the larger operators as a result of this provision. There 
are some paperwork costs that impact each operator equall, regardless 
of size. In this case the larger operators could have an advantage over 
the smaller operators since the larger operators could spread these 
costs among more passengers. However, these particular paperwork costs 
are small and any relative advantage that the larger operators could 
have as a result of the paperwork cost would be insignificant.

[[Page 37322]]

    This proposed rulemaking has one feature that impacts 
competitiveness. The operation limitation would protect established 
operators from competition from wholly new entrants. Under this 
proposed rule, a new entrant could conduct commercial air tours in the 
GCNP SFRA only if it were able to purchase allocations from another 
operator and satisfy all other requirements of the Federal Aviation 
Regulations. Thus, the potential maximum number of air tours conducted 
in the GCNP SFRA would not change.
    The FAA solicits comments on this matter. Specifically, commenters 
are asked to provide information on the impact this proposed rule would 
have on the continued ability of small airlines to compete in the 
existing market. The FAA requests that supporting data on markets and 
cost be provided with the comments.

D. Summary of Costs of Compliance

    The estimated 10-year cost of the proposed regulation, which 
divides the year into a five-month peak season and a seven-month off-
peak season would be $177.6 million, ($114.6 million, discounted) in 
lost revenue (net of variable operating costs). The estimated 10-year 
cost of the non-operators alternatives which includes (1) Reporting 
four times annually, (2) filing of flight plans, (3) transfer of 
allocations and (4) requesting modifications to initial allocations is 
$30,000, or $23,000 discounted. In sum, the estimated 10-year cost to 
air tour operators as a result of this proposed rule would be $178.4 
million or $115.2 million, discounted.
    FAA costs include those associated with initial allocations, annual 
recording and tracking, transfer and terminations of allocations, and 
filing of flight plans. These FAA costs are estimated at $1,445,900 or 
$1,016,900, discounted. In sum, the FAA estimates that the 10-year cost 
of this proposed rule would be $179.1 million or $115.6 million 
discounted.

E. International Trade Impact Assessment

    The FAA has determined that the rulemaking would not affect non-
U.S. operators of foreign aircraft operating outside the United States 
nor affect U.S. trade. It could, however, have an impact on commercial 
air tours at the GCNP, much of which includes foreign tourists.
    The United States Air Tour Association estimates that 60 percent of 
all commercial air passengers in the United States are foreign 
nationals. The Las Vegas FSDO and some operators, however, believe this 
estimate to be considerably higher at the Grand Canyon, perhaps as high 
as 90 percent. To the extent the proposed operational limitation 
rulemaking dampens foreign visitor demand for commercial air tours of 
the Grand Canyon, the commercial air tour industry could potentially 
experience an additional loss of revenue beyond what is expected as a 
result of the operations limitation.
    The FAA is unable to determine the loss of commercial air tour 
revenue that might result from lowered foreign demand for commercial 
air tours at GCNP for reasons unrelated to this proposed rulemaking.

F. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (the Act), 
enacted as Public Law 104-4 on March 22, 1995, requires each Federal 
agency, to the extend permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure of $100 million or more (when 
adjusted annually for inflation) in any one year by State, local, and 
tribal governments in the aggregate, or by the private sector. Section 
204(a) of the Act, 2 U.S.C. 1532(a), requires the Federal agency to 
develop an effective process to permit timely input by elected officers 
(or their designees) of State, local, and tribal governments on a 
proposed ``significant intergovernmental mandate.'' A ``significant 
intergovernmental mandate'' under the Act is any provision in a Federal 
agency regulation that would impose an enforceable duty upon State, 
local and tribal governments in the aggregate of $100 million (adjusted 
annually for inflation) in any one year. Section 203 of the Act, U.S.C. 
1533, which supplements section 204(a), provides that, before 
establishing any regulatory requirements that might significantly or 
uniquely affect small governments, the agency shall have developed a 
plan, which, among other things, must provide for notice to potentially 
affected small governments, if any, and for a meaningful and timely 
opportunity for these small governments to provide input in the 
development of regulatory proposals.
    This proposed rule does not contain any Federal intergovernmental 
or private sector mandates. Therefore, the requirements of Title II of 
the Unfunded Mandates Reform Act of 1995 do not apply.

VI. Federalism Implications

    This proposed rule would not have substantial effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with executive 
Order 12612, it is determined that this proposed rule would not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment.

VII. Paperwork Reduction Act

    This proposal contains the following new information collection 
requirements subject to review by the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
Sec. 3507(d)).
    Proposed Sec. 93.321 would require each operator that receives an 
allocation from another operator to report the transfer in writing to 
the Las Vegas Flight Standards District Office before the transferee 
may use the allocation. Temporary transfers would require FAA 
notification but no FAA approval. Permanent transfers (mergers, 
acquisitions, etc.) would require FAA notification and FAA approval. 
The FAA estimates that the cost of the paperwork burden associated with 
initial allocations would be $450 (a one-time cost during the first 
year only). The FAA estimates that there would be approximately two 
permanent transfers per year at a total cost per year of $720.
    Proposed Sec. 93.323 would require each of the affected commercial 
air tour operators to file a visual flight rules (VFR) flight plan for 
each flight and list the purpose of the flight in the ``remarks'' 
section. There would be no requirement for the operator to keep a copy 
of the flight plan nor for the pilot to carry a copy of the flight plan 
during flight. The flight plan could be ``canned'' so that it would be 
on file and could be activated easily. Computations assume that all air 
tour operators would use ``canned'' flight plans. Opening and closing 
flight plans would be part of the normal duties of a pilot, a 
dispatcher, or other person designated by the certificate holder. The 
FAA estimates that filing of flight plans with an FAA Flight Service 
Station and activation of these flight plans for each flight would 
require 368 hours per year at a cost of $8,280.
    Proposed Sec. 93.325 would require each operator to report to the 
FAA on a quarterly basis. This would increase the existing reporting 
requirement by one report per year. It would also add the make and 
model of aircraft and further divides flights into segments based on 
departure airports. The previous requirement (93.317) was only for 
sightseeing flights. The proposed rule would require all flights in the 
Special

[[Page 37323]]

flight Rules Area, which includes transportation flights, repositioning 
flights, maintenance ferries, and training/proving flights. The 
quarterly aspect of reporting is at the operators' request. Existing 
Sec. 93.317 requires reporting three times per year. The operators 
expressed a preference for quarterly reporting as this more closely 
matches how they do business and report to other government entities. 
The FAA estimates that this additional burden will require 46 hours per 
year at a cost of $1,035 for all operators.
    The total estimated annual cost of the paperwork burden for the 
proposed rule is $10,485.
    The agency is soliciting comments to (1) evaluate whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information will have practical utility; (2) evaluate the accuracy of 
the agency's estimate of the burden; (3) enhance the quality, utility, 
and clarity of the information to be collected; and (4) minimize the 
burden of the collection of information on those who are to respond, 
including through the use of appropriate automated, electronic, 
mechanical, or other techological collection techniques or other forms 
of information technology (for example, permitting electronic 
submission of responses). Individuals and organizations may submit 
comments on the information collection requirement by September 7, 
1999, to the address listed in the ADDRESSES section of this document.
    An agency may not conduct or sponsor and a person is not required 
to respond to a collection of information unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
The public will be notified of the OMB control number when it is 
assigned.

List of Subjects

14 CFR Part 93

    Air traffic control, Airports, Navigation (Air), Reporting and 
Recordkeeping requirements.

The Proposed Amendment

    For the reasons set forth above, the Federal Aviation 
Administration proposes to amend part 93, chapter 1 of title 14, Code 
of Federal Regulations, as follows:

PART 93--SPECIAL AIR TRAFFIC RULES AND AIRPORT TRAFFIC PATTERNS

    1. The authority citation for part 93 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502, 
44514, 44701, 44719, 46301.

    2. Section 93.303 is revised to read as follows:


Sec. 93.303  Definitions.

    For the purposes of this subpart:
    Allocation means authorization to conduct a commercial air tour in 
the Grand Canyon National Park (GCNP) Special Flight Rules Area (SFRA).
    Commercial air tour means any flight conducted for compensation or 
hire in a powered aircraft where a purpose of the flight is 
sightseeing. If the operator of a flight asserts that the flight is not 
a commercial air tour, factors that can be considered by the 
Administrator in making a determination of whether the flight is a 
commercial air tour include, but are not limited to--
    (1) Whether there was a holding out to the public of willingness to 
conduct a sightseeing flight for compensation or hire;
    (2) Whether a narrative was provided that referred to areas or 
points of interest on the surface;
    (3) The area of operation;
    (4) The frequency of flights;
    (5) The route of flight;
    (6) The inclusion of sightseeing flights as part of any travel 
arrangement package; or
    (7) Whether the flight in question would or would not have been 
canceled based on poor visibility of the surface.
    Commercial SFRA Operation means any portion of any flight within 
the GCNP SFRA that is conducted by a certificate holder that has 
operations specifications authorizing air tours within the GCNP SFRA. 
This term does not include operations conducted under an FAA Form 7711-
1, Certificate of Waiver or Authorization. The types of flights covered 
by this definition are set forth in the ``Las Vegas Flight Standards 
District Office Grand Canyon National Park Special Flight Rules Area 
Procedures Manual'' available from the Las Vegas Flight Standards 
District Office.
    Flight Standards District Office means the FAA Flight Standards 
District Office with jurisdiction for the geographical area containing 
the Grand Canyon.
    Park means Grand Canyon National Park.
    Special Flight Rules Area means the Grand Canyon National Park 
Special Flight Rules Area.
    3. Section 93.305 is amended by revising the last sentence in 
paragraph (a) and in paragraph (b) to read as follows (Note: The 
instructions in this amendment refer to Sec. 93.305 as it currently 
exists. But if adopted, these changes would be made in addition to the 
changes in Notice No. 99-11 published elsewhere in this issue):


Sec. 93.305  Flight-free zones and flight corridors.

* * * * *
    (a) * * *
    (a) * * * This corridor is 2 nautical miles wide for commercial air 
tour flights and 4 nautical miles wide for transient and general 
aviation operations.
    (b) * * * This corridor is 2 nautical miles wide for commercial air 
tour flights and 4 nautical miles wide for transient and general 
aviation operations.
* * * * *
    4. Section 93.307 is amended by revising the headings of paragraphs 
(a)(1) and (b)(1) to read as follows:


Sec. 93.307  Minimum flight altitudes.

* * * * *
    (a) * * *
    (1) Commercial air tours--
* * * * *
    (b) * * *
    (1) Commercial air tours--
* * * * *
    5. Section 93.315 is revised to read as follows:


93.315  Requirements for Commercial Special Flight Rules Area 
operations.

    Each person conducting commercial Special Flight Rules Area 
operations must be certificated in accordance with Part 119 for Part 
135 or 121 operations and hold appropriate Grand Canyon National Park 
Special Flight Rules Area operations specifications.


Sec. 93.316  [Removed and reserved]

    6. Section 93.316 is removed and reserved.
    7. Section 93.317 is revised to read as follows:


Sec. 93.317  Commercial Special Flight Rules Area operation curfew.

    Unless otherwise authorized by the Flight Standards District 
Office, no person may conduct a commercial Special Flight Rules Area 
operation in the Dragon and Zuni Point corridors during the following 
flight-free periods:
    (a) Summer season (May 1-September 30)--6 p.m. to 8 a.m. daily; and
    (b) Winter season (October 1-April 30)--5 p.m. to 9 a.m. daily.
    8. Section 93.319 is added to read as follows:


Sec. 93.319  Commercial air tour limitations.

    (a) No certificate holder certificated in accordance with part 119 
for part 121 or 135 operations may conduct more commercial air tours in 
any calendar

[[Page 37324]]

year than the number of allocations specified on the certificate 
holder's operations specifications.
    (b) The Administrator determines the number of initial allocations 
for each certificate holder based on the total number of commercial air 
tours conducted by the certificate holder and reported to the FAA 
during the period beginning on May 1, 1997 and ending on April 30, 
1998.
    (c) Certificate holders who conducted commercial air tours during 
the base year and reported them to the FAA receive an initial 
allocation.
    (d) Allocations are apportioned between peak season and off-season. 
Peak season allocations may be used in the off-season, but off-season 
allocations may not be used in the peak season. For the purposes of 
this section seasons are defined as follows:

(1) Peak-Season: May 1-September 30
(2) Off-Season: October 1-April 30

    (e) A certificate holder must use one allocation for each flight 
that is a commercial air tour.
    (f) Each certificate holder's operation specifications will 
identify the following information, as applicable:
    (1) Total SFRA allocations;
    (2) Dragon corridor and Zuni Point corridor allocations;
    (3) Peak season allocations for the SFRA; and
    (4) Peak season allocations for the Dragon and Zuni Point 
corridors.
    9. Section 93.321 is added to read as follows:


Sec. 93.321  Transfer and termination of allocations.

    (a) Allocations are not a property interest; they are an operating 
privilege subject to absolute FAA control.
    (b) Allocations are subject to the following conditions:
    (1) The Administrator will re-authorize and re-distribute 
allocations no earlier than two years from the effective date of this 
rule.
    (2) Allocations that are held by the FAA at the time of 
reallocation may be distributed among remaining certificate holders, 
proportionate to the size of each certificate holder's allocation.
    (3) The aggregate SFRA allocations will not exceed the number of 
operations reported to the FAA for the base year beginning on May 1, 
1997 and ending on April 30, 1998.
    (4) Allocations may be transferred among Part 135 or Part 121 
certificate holders, subject to the following:
    (i) Such transactions are subject to all other applicable 
requirements of this chapter.
    (ii) Allocations authorizing commercial air tours outside the 
Dragon and Zuni Point corridors may not be transferred into the Dragon 
and Zuni Point corridors. Allocations authorizing commercial air tours 
within the Dragon and Zuni Point corridors may be transferred outside 
of the Dragon and Zuni Point corridors.
    (iii) A certificate holder must notify in writing the Las Vegas 
Flight Standards District Office within 10 calendar days of a transfer 
of allocations. This notification must identify the parties involved, 
the type of transfer (permanent or temporary) and the number of 
allocations transferred. Permanent transfers are not effective until 
the Flight Standards District Office reissues the operations 
specifications reflecting the transfer. Temporary transfers are 
effective upon notification of the Flight Standards District Office.
    (5) An allocation will revert to the FAA upon voluntary cessation 
of commercial air tours within the SFRA for any consecutive 180-day 
period.
    (6) The FAA retains the right to re-distribute, reduce, or revoke 
allocations based on:
    (i) efficiency of airspace;
    (ii) voluntary surrender of allocations;
    (iii) involuntary cessation of operations; and
    (iv) aviation safety.
    10. Section 93.323 is added to read as follows:


Sec. 93.323  Flight plans.

    Each certificate holder conducting a commercial SFRA operation must 
file a visual flight rules (VFR) flight plan in accordance with 
Sec. 91.153. The flight plan must be on file with a FAA Flight Service 
Station prior to each flight. Each VFR flight plan must identify the 
purpose of the flight in the ``remarks'' section according to one of 
the types set forth in the ``Las Vegas Flight Standards District Office 
Grand Canyon National Park Special Flight Rules Area Procedures 
Manual'' available from the Las Vegas Flight Standards District Office.
    11. Section 93.325 is added to read as follows:


Sec. 93.325  Quarterly reporting.

    (a) Each certificate holder must submit in writing, within 30 days 
of the end of each calendar quarter, the total number of commercial 
SFRA operations conducted for that quarter. Quarterly reports must be 
filed with the Las Vegas Flight Standards District Office.
    (b) Each quarterly report must contain the following information:
    (1) Make and model of aircraft;
    (2) Identification number (registration number) for each aircraft;
    (3) Departure airport for each segment flown;
    (4) Departure date and actual Universal Coordinated Time, as 
applicable for each segment flown;
    (5) Type of operation; and
    (6) Route(s) flown.

    Issued in Washington, DC, on July 1, 1999.
L. Nicholas Lacey,
Director, Office of Flight Standards.
[FR Doc. 99-17319 Filed 7-6-99; 12:06 pm]
BILLING CODE 4910-13-M