[Federal Register Volume 65, Number 65 (Tuesday, April 4, 2000)]
[Rules and Regulations]
[Pages 17708-17733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7949]



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Part II





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; Final Rule

  Federal Register / Vol. 65, No. 65 / Tuesday, April 4, 2000 / Rules 
and Regulations  

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 93

[Docket No. FAA-99-5927; Amdt. No. 93-81]
2120-AG73


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

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule limits the number of commercial air tours that 
may be conducted in the Grand Canyon National Park Special Flight Rules 
Area (SFRA) and revises the reporting requirements for commercial air 
tours in the SFRA. These changes allow the FAA and the National Park 
Service (NPS) to limit and further asses the impact of aircraft noise 
on the Grand Canyon National Park (GCNP). In addition, this action 
adopts non-substantive changes to 14 CFR part 93, subpart U to improve 
the organization and clarity of the rule. This rule is one part of an 
overall strategy to control aircraft noise on the part environment and 
to assist the NPS to achieve the statutory mandate imposed by the 
National Parks Overflights Act to provide substantial restoration of 
the natural quiet and experience of the park.

DATES: The effective date for the final rule is May 4, 2000.
    Compliance with Sec. 93.325. Until the start of the third quarter 
(July-September) reports will be due as follows: 30 days after the 
close of the first trimester (January-April); 30 days after the end of 
June for the May-June time period. Thereafter, reports are due 30 days 
after the close of the quarter.

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:

Availability of Final Rules

    Any person may obtain a copy of this Final Rule 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 Final 
Rule. An electronic copy of this document may be downloaded using a 
modem and suitable communications software from the FAA regulations 
section of the Fedworld electronic bulletin board service (telephone: 
(703) 321-3339) or the Federal Register's electronic bulletin board 
service (telephone: (202) 512-1661). Internet users may 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.
    This final rule constitutes final agency action under 49 U.S.C. 
46110. Any party to this proceeding, having a substantial interest may 
appeal the order to the courts of appeals of the United States or the 
United States Court of Appeals for the District of Columbia upon 
petition, filed within 60 days after issuance of this Order.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996, requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. Therefore, any small entity that has a 
question regarding this document may contact their local FAA official. 
Internet users can find additional information on SBREFA in the ``Quick 
Jump'' section of the FAA's web page at http://www.faa.gov and may 
electronic inquiries to the following Internet address: [email protected].

I. History

A. FAA's Actions

    Beginning in the summer of 1986, the FAA initiated regulatory 
action to address increasing air traffic over the 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 quite 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 overflight.''
    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 recommendations 
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 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 part; 
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 the GCNP.
    Recommendation No. 10, which is of particular interest to this 
rulemaking,

[[Page 17709]]

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; 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.
    This final rule was issued concurrently with a Notice of Proposed 
Rulemaking (NPRM) 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 an Environmental Assessment and Request 
for Comments; and an Environmental Assessment. The final rule was 
originally to become effective May 1, 1997. On February 26, 1997, the 
FAA delayed the effective date until 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). The Court ruled in favor of the 
FAA and upheld the final rule.

B. Interagency Working Group

    On December 22, 1993, 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 for 
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.

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 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 quiet, 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 GCNP, ``should any final rulemaking determine that issuance of a 
further management plan is necessary to substantially restore natural 
quiet 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).

D. Proposed Rules

    On July 9, 1999, the FAA published two NPRMs (Notice 99-11 and 
Notice 99-12) in accordance with Public Law 100-91, which directs the 
FAA to implement NPS recommendations to provide for the substantial 
restoration of natural quiet and experience in GCNP by reducing the 
impact of aircraft noise from commercial air tours on the GCNP.
    Notice 99-11, Modification of the Dimensions of the Grand Canyon 
National Park Special Flight Rules Area and Flight Free Zones (64 FR 
37296, Docket No. 5926) proposed to modify the dimensions of the GCNP 
SFRA. The proposed changes to the SFRA would modify the eastern portion 
of the SFRA, the Desert View Flight-free Zone (FFZ), the Bright Angel 
FFZ and the Sanup FFZ. Notice 99-12, Commercial Air Tour Limitations in 
the Grand Canyon National Park Special Flight Rules Area, (64 FR 37304, 
Docket No. 5927) proposed to limit the number of commercial air tours 
that may be conducted in the SFRA and to revise the reporting 
requirements for commercial operations in the SFRA.
    While the FAA sought comment on all parts of the NPRMs, there were 
a number of matters in Notice 99-12 that the FAA specifically requested 
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? (2) Whether the time 
reported on the quarterly report should be expressed in Universal 
Coordinated Time (UTC), Mountain Standard Time, or another time 
measurement? (3) Whether reporting should be imposed as a condition of 
an FAA Form 7711-1 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?
    The FAA, in cooperation with the NPS and the Hualapai Indian Tribe, 
prepared a draft Supplemental Environmental Assessment (SEA) for the 
proposed rules to assure conformance with the National Environmental 
Policy Act (NEPA) of 1969, as amended, and other applicable 
environmental laws and regulations. Copies of the draft SEA were 
circulated

[[Page 17710]]

to interested parties and placed in the Docket, where it was available 
for review. On July 9, 1999, the Notice of Availability of the Draft 
Supplemental Environmental Assessment for the Proposed Actions Relating 
to the Grand Canyon National Park was published in the Federal Register 
(64 FR 37192). Comments on the draft SEA were to be received on or 
before September 7, 1999. Comments received in response to this Notice 
of Availability have been addressed in the final SEA published 
concurrently with this final rule. Based upon the final SEA and careful 
review of the public comments to the draft SEA, the FAA has determined 
that a finding of no significant impact (FONSI) is warranted. The final 
SEA and the FONSI were issued during February 2000. Copies have been 
placed in the public docket for this rulemaking, have been circulated 
in interested parties, and may be inspected at the same time and 
location as this final rule.
    On July 20, 1999 (64 FR 38851), the FAA published a notice 
announcing two public meetings on the NPRM. The meetings, which were 
held on August 17 and 19, 1999, in Flagstaff, AZ and Las Vegas, NV, 
respectively, sought additional comment on the NPRMs and on the draft 
supplemental environmental assessment.

II. Background

    The agencies have analyzed the noise situation at the GCNP and 
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 58898). 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 stated that, ``in the 
aggregated and for most individual operators, the number of air tours 
provided can continue to increase while the number of aircraft remains 
the same.'' In view 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 1, 1997 through April 30, 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 final rule, the FAA also is issuing a 
Notice of Availability of Routes which includes certain modifications 
to aircraft routes through the SFRA, and a final rule modifying 
airspace in the SFRA. Additionally, the FAA is issuing a Final 
Supplemental Environmental Assessment which assesses the environmental 
impact of the route modifications, the 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 increasing, 
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 development of the noise management plan.
    For purposes of determining substantial restoration of natural 
quiet, the noise modeling in the SEA is premised on the NPS' noise 
evaluation methodology for GCNP, which was published in the Federal 
Register on January 26, 1999 (64 FR 3969). The NPS formally adopted 
this methodology on July 14, 1999 (64 FR 38006).

III. Comment Discussion and Final Action

    At the close of the comment period, over 1,000 comments were 
received on Notice 99-11 and 556 comments were received on Notice 99-
12. Many commenters sent identical comments to both dockets. Comments 
included form letters sent from the air tour industry and from 
supporters of environmental groups. Comments were also received from 
industry associations (e.g., Grand Canyon Air Tour Council (GCATC), 
Aircraft Owners and Pilots Association (AOPA); Helicopter Association 
International (HAI), Experimental Aircraft Association (EAA); National 
Air Transport Association (NATA); an environmental coalition (Sierra 
Club; Grand Canyon Trust; The Wilderness Society; Friends of the Grand 
Canyon; Maricopa Audubon Society; National Parks and Conservation 
Association; Nature Sounds Society; Quiet Skies Alliance); river 
rafting organizations (Arizona Raft Adventures (ARA); Grand Canyon 
River Guides); air tour operators (Airstar Helicopters; Grand Canyon 
Airlines; Heli USA Airways, Inc.; Papillon Grand Canyon Helicopters; 
Southwest Safaris); aircraft manufacturers (Twin Otter International, 
Ltd.; Stemme USA, Inc.); tourism organizations (Grand Canyon Air 
Tourism Association; Arizona Office of Tourism; Flagstaff Chamber of 
Commerce); government officials (Arizona Speaker of the House; Arizona 
State Legislature; Governor Hull of Arizona; Arizona Corporation 
Commission; Senator Harry Reid of Nevada; Clark County Department of 
Aviation); and representatives of Native American Tribes (Hualapai 
Tribe; Havasupai Tribe; Grand Canyon Resort Corporation (GCRC)). Some 
of the substantive comments include commissioned studies, economic 
analysis and noise impact analyses (J.R. Alberti Engineers; Riddel & 
Schwer).

A. Modification of SFAR 50-2

    A number of air tour operators and elected officials state that 
SFAR 50-2 is working well and generally oppose further regulation.
    AOPA and EAA state that current rules under SFAR 50-2 should be 
maintained without modification.
    In contrast, all environmental groups point out that further 
regulation is necessary to bring the GCNP into compliance with Public 
Law 100-91.
    FAA Response: This regulatory action is a further response to the 
legislative mandate set forth in Public Law 100-91 and the President's 
1996 Executive Memorandum--to substantially restore natural quiet and 
experience in GCNP. The NPS Report to Congress was based on a number of 
studies evaluating whether SFAR 50-2 resulted in a substantial 
restoration of natural quiet. As discussed in the final rule in 1996 
(Docket 28537, December 31, 1996; 61 FR 69302), NPS found that SFAR 50-
2 had not resulted in substantial restoration of natural quiet. In that 
rule the FAA stated, ``An NPS analysis using 1989 FAA survey data of 
commercial sightseeing route activity indicated that 43 percent of GCNP 
met the NPS criterion for substantially restoring natural quiet. 
However, a subsequent NPS analysis using 1995 FAA survey data indicated 
that 31 percent of GCNP met the NPS criterion for substantially 
restoring natural quiet.'' These findings led the NPS to conclude that 
the noise mitigation benefits of SFAR 50-2 were being significantly 
eroded.
    Hence, in 1996, the FAA, in cooperation with NPS, adopted the 1996 
Final Rule creating a number of flight-free zones, a curfew in the 
Dragon and

[[Page 17711]]

Zuni Point corridors and imposing a cap on the number of aircraft used 
by each certificate holder in the GCNP SFRA. In the final rule, the FAA 
estimated that the regulations adopted in 1996 together with the phase 
out of noisier aircraft would provide substantial restoration of 
natural quiet by 2008. See 61 FR 69328. However, the Environmental 
Assessment for this rule was based on a different noise methodology. 
This methodology was set forth in Figure 4-4 of the EA.
    In 1997, however, the FAA issued a Notice of Clarification 
indicating that the number of aircraft available to operators in the 
SFRA had been underestimated and thus the aircraft cap was not an 
adequate surrogate for limiting growth. The FAA found in the Notice 
that ``the impact of increased air tour operations as analyzed in the 
Written Reevaluation of the Environmental Assessment, serves to reduce 
the percentage of the GCNP that will achieve substantial restoration of 
natural quiet * * *  when compared to what was originally assumed in 
the Final EA.'' Notice of Clarification, 62 FR 58898, 58905 (October 
31, 1997).
    Subsequent to the Notice of Clarification, the FAA and NPS 
concluded that further regulatory action was necessary to ensure the 
substantial restoration of natural quiet and experience in accordance 
with Public Law 100-91. Thus, this rulemaking together with the 
airspace modifications adopted in Docket FAA-99-5926 and the adoption 
of the new SFAR route structure will move the GCNP closer towards the 
goal of substantial restoration of natural quiet. As documented by the 
2000 Supplemental Environmental Assessment, however, the goal of 
substantial restoration of natural quiet will not be met by these 
combined rulemakings.

B. Negotiated Rulemaking

    A number of commenters, especially those representing air tour 
operator interests, Clark County Department of Aviation and elected 
officials inquired as to why the FAA chose to embark upon this 
rulemaking instead of using the negotiated rulemaking process.
    HAI says that the proposed restrictions undermine efforts to 
achieve consensus on management of air tour overflights of national 
parks. According to HAI, the future of GCNP overflight rulemaking lies 
in a process of open, public conversation to seek ways in which the 
many legitimate, conflicting interests at stake can be balanced and 
accommodated to the fullest practicable extent. HAI states that the 
current proposals are large steps in the wrong direction, representing 
illogical, arbitrary, and unworkable impositions on an already strained 
process. HAI says that the current proposals for harsh new restrictions 
undermine the air tour community's hope for reasoned discussion of 
divergent points of view among persons of good will.
    Clark County Department of Aviation (Clark County) criticizes the 
FAA for failing to develop its proposed rules without extensive and 
meaningful input from all affected stakeholders. Clark County states 
that the FAA has repeatedly rejected invitations from Clark County and 
others to initiate a negotiated rulemaking process.
    FAA Response: The FAA notes that this rulemaking requires it to 
make very difficult decisions that significantly impact small 
businesses in order to comply with the statutory mandate to 
substantially restore natural quiet and experience in GCNP. Because of 
the nature of the issues involved, both the FAA and NPS have reached 
out to affected parties to try to achieve a workable solution.
    For example, in an attempt to work with the stakeholders, the FAA 
and NPS held a public meeting in Flagstaff, AZ on April 28, 1998. 
Participants in this group included representatives of air tour 
operators, environmental groups, Native American Tribes, and local Las 
Vegas and Tusayan government officials. The group was asked to comment 
on the agencies then proposed route structure and to use the time 
together to negotiate a better solution, if the members did not like 
the proposal. The scheduled two day meeting lasted less than a day as 
most stakeholders held firm to their established positions and were 
unwilling to negotiate. Most parties were not willing to even consider 
another route structure, nor were they willing to consider 
participating in another group discussion or possible mediation.
    A subsequent meeting was held on July 15, 1998 between the FAA and 
the Hualapai Tribe in Peach Springs, Arizona to discuss a tentative air 
tour route proposal around the western Grand Canyon/Sanup area. The 
Hualapai did not view the proposal favorably and informed the agencies 
of their own plans to meet with the air tour operators in an attempt to 
reach a separate agreement. Those talks, however, apparently proved 
fruitless.
    The divergence of comments received to this rule reflects the FAA's 
historical experience with this issue. There are polarized points of 
view on this topic. During the time that this debate has been ongoing, 
the various groups have not been able to reach any agreement. Thus, 
based on the FAA's and NPS' experiences with this issue, the agencies 
do not see that a timely negotiation process is possible. The FAA and 
NPS have expressed a willingness to consider negotiated or consensus 
proposals presented by the stakeholders and have encouraged the 
stakeholders to try to work toward this goal. However, in the absence 
of such proposals it is necessary to move ahead to meet the deadline of 
2008 for substantial restoration of natural quiet and experience that 
was imposed by the President's 1996 Executive Memorandum. Any further 
attempts at negotiated rulemaking will only delay the process.

C. Justification for Rulemaking With Respect to Restoration of Natural 
Quiet (Pub. L. 100-91)

    Air tour operators and many other commenters state that the 
restoration of natural quiet has already been achieved. These 
commenters state that there is significant evidence demonstrating that 
the flights as presently configured fall well within the NPS' target 
goal that 50% of the park achieve ``natural quiet'' for 75-100% of the 
day. Further regulations merely seek to punish the air tour industry. 
In a form letter, 313 commenters state that the statutory mandate of 
Public Law 100-91 has been met.
    GCATC states that the FAA is charged with the responsibility of 
promoting and protecting aviation and the safe use of the nation's 
airspace and that the proposed rule is beyond the scope of this 
mandate.
    The Honorable Mr. Jeff Groscost, Arizona Speaker of the House, 
stated at the Flagstaff, Arizona public hearing on August 17, 1999 that 
restricting operations to 1997-1998 levels is unwarranted. He indicated 
that visitor complaints about noise are at insignificantly low levels 
because the vast majority of park visitors (over 95%) are concentrated 
in areas that are off-limits to air tours. Speaker Groscost indicated 
that the FAA and NPS are off base in attempting to erase noise for the 
benefit of the remaining 5%. In fact, according to FAA and NPS numbers, 
Speaker Groscost states that 3% of this 5% are river rafters who could 
not possibly hear aircraft noise over the sound of the river. He 
comments that to ``restore natural quiet'' for the benefit of the 1.6% 
of park visitors, at the cost of limiting access by air, is grossly 
unfair and unreasonable. This is especially true in light of the fact 
that air tour passengers represent over six to eight times the number 
of backcountry users.

[[Page 17712]]

    U.S. Senator Harry Reid (Nevada) stated that he voted for Public 
Law 100-91 and believes strongly in its goals. However, ``* * * it was 
never the intention of Congress to authorize the apparently endless 
regulatory process that has ensued.'' Senator Reid stated further that 
``* * * the most fundamental problem is that the Park Service has based 
its plan for restoring natural quiet on a controversial and untested 
approach for measuring noise.'' The approach used needs to reflect the 
actual perception of visitors to the park as shown in surveys that show 
that visitors perceive a dramatic improvement in the noise levels of 
the park over the last 10 years.
    The Grand Canyon River Guides Association and the Utah Chapter of 
the Public Lands Committee of the Sierra Club state that the number of 
flights must be reduced in order to meet the goal of substantial 
restoration of natural quiet. The continued growth alternative is 
unacceptable. These commenters note that the current annual growth, 
according to the data, is about three percent per year, despite claims 
by some air tour operators.
    The Grand Canyon River Guides Association states that the goal set 
forth in the Environmental Assessment--i.e., tour aircraft audible for 
less than 25 percent of the day in more than half of the park area--is 
a weak standard. This commenter believes that this should be a minimum 
goal. The bottom line is that only 19 percent of the park is naturally 
quiet during the busiest days of the summer. The commenter states that 
the claims of a 42 percent restoration are based on an annualized day.
    The Maricopa Audubon Society says that the FAA's standard of quiet 
is weak and the substantial restoration of natural quiet should mean 
most of the park most of the time (for example, 75% of the Park, 100% 
of the time). This commenter adds that the number of air tours has more 
than doubled from 50,000 in 1987 to around 120,000 now, and that the 
FAA should both reduce the cap the number of air tours to at least 1987 
levels in order to achieve the natural quiet that the law mandates. 
Finally, this commenter adds that the FAA should require the removal of 
all flights below the rim.
    The environmental coalition states that Public Law 100-91 provides 
no statutory authorization for the agencies' attempts to balance the 
maintenance of a ``viable'' air tour industry against the mandated 
restoration of natural quiet. Congress unequivocally provided the NPS' 
plan, to be issued by FAA, ``* * * shall provide for substantial 
restoration of natural quiet''. These commenters do not believe that 
Congress directed the agencies to temper, delay, or compromise the 
mandate according to industry needs. The agencies' only duty beyond 
restoring quiet was ensuring that the plan to restore quiet did not 
adversely affect air safety. These commenters urge the agencies to 
choose an alternative that will achieve the statutory mandate within 12 
months. It is simply impermissible for the agencies to decide 
unilaterally to protect the industry, rather than considering readily 
available alternatives that would immediately restore natural quiet.
    The environmental coalition supports the definition of `natural' 
used by NPS, however, it believes the definition of ``substantial 
restoration'' is flawed. It suggests that a more appropriate definition 
would require natural quiet throughout the day in 50 percent of the 
park, as a minimum and natural quiet for at least 80 percent of the day 
in the other half of the park.
    The Utah Chapter of the Public Lands Committee of the Sierra Club 
noted at the Flagstaff Public Hearing that the derogation of North Rim 
vista points and trails during the short summer season is emblematic of 
runaway noise pollution in the canyon generally.
    ARA says that the standard that 50% of Grand Canyon National Park 
must be naturally quiet 75 to 100% of the day is inadequate. This would 
mean that the relatively quiet half of the park could experience 
aircraft noise one minute in every four, and the remainder of the park 
could experience aircraft noise virtually all day long non-stop. ARA 
states that Congress intended for a visitor to the Grand Canyon to 
experience a substantial restoration of natural quiet regardless of 
which day(s) the visitor decides to visit the park. Each visitor should 
have the opportunity to experience natural quiet regardless of the day, 
the month, or the season he or she elects to visit.
    FAA Response: Public Law 100-91 requires NPS to develop 
recommendations regarding ``actions necessary for the protection of 
resources in the Grand Canyon from adverse impacts associated with 
aircraft overflights.'' These recommendations are to provide for the 
``substantial restoration of the natural quiet and experience of the 
park and protection of public health and safety from adverse effects 
associated with aircraft overflight.'' Section 3 of the Public Law 
specifically directed the FAA to ``implement the recommendations of the 
Secretary [of the Department of Interior] without change unless the 
[FAA] determines that implementing the recommendations would adversely 
affect aviation safety.'' Thus FAA's authority to regulate in this 
manner is clear.
    The NPS defined ``natural quiet'' and identified it as a natural 
resource in its 1986 ``Aircraft Management Plan Environmental 
Assessment for Grand Canyon National Park'' which underwent extensive 
public review. The term was subsequently discussed in numerous public 
documents which have undergone public review, including NPS Management 
Policies (1988) and the Advance Notice of Proposed Rulemaking 
concerning Overflights of Units of the National Park System published 
in the Federal Register on March 17, 1994.
    The fact that NPS was given the responsibility to define the 
methods for achieving substantial restoration of natural quiet is 
entirely consistent with its general authority to manage national 
parks. NPS' Management Policies (1988, page 1:3) states that, with 
respect to units of the national park system, the terms ``resources and 
values'' refer to the ``full spectrum of tangible and intangible 
attributes for which parks have been established and are being 
managed'' including ``intangible qualities such as natural quiet.''
    The NPS definition of ``substantial restoration of natural quiet'' 
involves time, area, and acoustic components. Because many park 
visitors typically spend limited time in particular sound environments 
during specific park visits, the amount of aircraft noise present 
during those specific time periods can have great implications for the 
visitor's opportunity to experience natural quiet in those particular 
times and spaces. Visitors with longer exposures, such as backcountry 
and river users have more opportunity to experience a greater variety 
of natural ambient and aircraft sound conditions, as they typically 
move through a number of sound environments.
    Based on noise studies, the NPS has concluded that a visitor's 
opportunity to experience natural quiet during a visit, and the extent 
of noise impact depends upon a number of factors. These factors 
include: the number of flights; the sound levels of those aircraft as 
well as those of other sound sources in the natural environment; and 
the duration of audible aircraft sound experienced by a visitor.
    NPS recommended an operations limitation in its 1994 Report to 
Congress, See Section 10, Recommendation 10.3.10.3. It is but one 
method being implemented to control noise in the GCNP. The type of 
operations limitation adopted in this rule is a modification of the 
aircraft cap

[[Page 17713]]

which was adopted in the 1996 Final Rule. The FAA and NPS determined 
after adoption of the 1996 Final Rule that the aircraft cap did not 
adequately limit growth. This conclusion was explained in the 
reevaluation that was prepared to support the Notice of Clarification 
(discussed above in section III(A), Modification of SFAR 50-2, of this 
rule). The written reevaluation was necessary because the number of 
aircraft available for use in the GCNP SFRA was twice the number that 
was evaluated in the 1996 rule. The NPS noise modeling, as well as FAA 
noise modeling, indicated that the potential growth in the number of 
operations could erode gains made toward substantial restoration of 
natural quiet.
    The FAA, in consultation with the NPS, believes that the operations 
limitation adopted in this final rule strikes an appropriate balance 
between the ground and air users of the GCNP while making significant 
steps towards substantially restoring natural quiet. Thus the rule is 
consistent with the intent of the Public Law. Nothing in Public Law 
100-91 requires the FAA or NPS to ban aircraft overflights of the GCNP 
to reach substantial restoration of natural quiet. In fact, Senator 
McCain, in discussing this legislation on the Senate floor indicated 
that ``what this measure [the bill that was adopted as Public Law 100-
91] does is propose a process whose end result will be to strike a 
balance among all those individuals and interests who use our Nation's 
Park System.'' 133 Cong. Rec. S 1592. In an Oversight Hearing on the 
implementation of Public Law 100-91, Senator McCain further indicated 
that ``* * * it has never been my intent or the intent of Congress that 
air tours should be banned over the Grand Canyon or any other park. Air 
tours are a legitimate and important means of experiencing the Grand 
Canyon * * * But other uses and values, including the right of visitors 
to enjoy the natural quiet of the park, must be protected. Again, the 
challenge and the goal is balance.'' Hearing before the Subcommittee on 
Aviation of the Committee on Public Works and Transportation, House of 
Representatives, 103rd Cong., 2d Sess. (July 27, 1994).
    As a general rule, flights do not operate below the rim. In certain 
isolated situations aircraft being operated on certain fixed routes and 
at fixed altitudes may operate below the ground level of the rim 
temporarily. This occurs because of terrain fluctuations. Safety is not 
compromised by allowing these flights to operate below the rim for a 
short period of time. This action is consistent with Pub. L. 100-9 and 
its legislative history. In Pub. L. 100-91, Congress granted the FAA, 
in consultation with the NPS, the authority to determine rim level 
because ``delineation of the area needs to be made taking into account 
the varying rim levels of the canyon and the potential impact of this 
provision on flight activities and operations.'' S. Rep. 97 (100th 
Cong., 1st Sess. (1987)), reprinted in 1987 U.S. Code Cong. Admin. News 
664.

D. Quiet Technology Incentives

    Several commenters criticize the proposal for failure to offer any 
quite technology incentives. As an incentive to convert to quiet 
technology, Papillon proposes special routing similar to the flight 
route that presently exists at GCNP Airport, and allowing operating 
hours from 7:00 a.m. to 7:00 p.m. with no limitations on the amount of 
flight during those daylight hours. Grand Canyon Airlines suggests that 
allocations should be increased for operators who make use of quiet 
aircraft technology.
    Grand Canyon River Guides Association stated at the Flagstaff 
Public Hearing that noise-efficient technology still makes noise. The 
environmental coalition notes that the incentive to convert should be 
access to the GCNP SFRA airspace.
    Governor Hull states that the FAA and NPS have failed in their 
obligation to provide incentives for quiet technology aircraft. The 
Governor states that the federal government should provide expanded 
opportunity and access for all citizens to experience the GCNP. In the 
proposed rulemaking, however, the Governor notes that the FAA is 
proposing to limit access to the GCNP rather than pursuing a common 
sense approach to expand access through improved technology. Governor 
Hull notes that before proceeding with further limitations on the air 
tours that provide many citizens with their only access to the wonders 
of the Grand Canyon, the FAA and NPS should act aggressively to provide 
the incentives for quite technology. The Governor supports the view 
expressed by Senator McCain, who sponsored the original Act, that 
reasonable air tour access can be protected--along with the 
preservation of natural quiet--if the responsible federal agencies 
diligently pursue technological incentives.
    Stemme USA, Inc., a manufacturer of gliders, requests that the FAA 
exclude the Stemme S10, as well as other aircraft that can operate 
silently, from all current and future flight restrictions over the 
Grand Canyon. Twin Otter International, Ltd. (TOIL) also requests that 
its aircraft be considered as satisfying the quiet technology 
standards. Air tour operators also made suggestions regarding the types 
of aircraft that should be considered as being within the framework of 
quiet technology. Papillon Helicopters provided information at the 
public hearing in Flagstaff, Arizona that based on assurances that the 
NPS would make exceptions for quiet aircraft, Papillon has invested 
over $6.5 million in quiet aircraft technology. A Papillon 
representative stated that no exceptions have yet been made and no laws 
have been passed that justify this investment. Grand Canyon Airlines 
stated that it, along with several other companies, contributed $50,000 
to the NPS to allow them to finish research on quiet technology. Grand 
Canyon Airlines paid $1.4 million for each of their ``Vistaliner'' 
aircraft that employ quiet technology and that are noise efficient 
because they can carry more passengers on fewer flights.
    Grand Canyon Airlines states that the higher fixed costs associated 
with investments in quieter aircraft make it more likely that Grand 
Canyon Airlines and other similarly situated operators will suffer 
disproportionately from the limitations on air tour operations. Not 
only does the NPRM not encourage investment in quiet aircraft but Grand 
Canyon Airlines states it also creates an incentive for operators to 
dump more expensive quiet technology aircraft for cheaper, noisier 
aircraft.
    Grand Canyon Airlines also states that allocations should not be 
imposed, particularly for quiet aircraft, but if imposed they should be 
guaranteed not to decrease. Allocations should increase for operators 
investing in quiet technology. AirStar Helicopters urges the FAA to 
move quiet aircraft technology to the front burner, not wait and 
consider it in the future.
    Comments received from members of the Arizona State Legislature 
state that the proposal, combined with the Park Service's newly adopted 
noise evaluation methodology, creates such uncertainty for the air tour 
industry that they have little incentive to invest in one of the most 
effective means of reducing aircraft sound--quiet technology. Without a 
sense of stability about the future, operators are reluctant to invest 
in costly new equipment. Faced with caps and curfews, they are 
understandably concerned about their ability to amortize the 
investments. Their lenders are equally concerned about the industry's 
future, adding another dimension of uncertainty for operations.

[[Page 17714]]

    ARA says that the incentives for quieter aircraft should not 
further compromise the goal. Rather than allowing quieter aircraft more 
routes, quieter aircraft should be used to meet the existing 
substantial restoration goal.
    FAA Response: The FAA and NPS note that current comments are a 
complete reversal in direction from comments to the NPRM on Noise 
Limitation of Aircraft Operations in the Vicinity of Grand Canyon 
National Park (Docket 28770). Many air tour operators commenting to the 
NPRM in Docket 28770 voiced wide dissatisfaction with the FAA's NPRM on 
quiet technology. Commenters to that docket stated, among other things, 
that the FAA did not have statutory authority to require quiet 
technology, and that imposition of quiet technology would pose an 
unreasonable financial burden on the air tour industry. Additionally, 
many of these commenters disagreed with the proposed aircraft 
categories. In contrast, in Docket FAA-99-5927, commenters supported 
the adoption of quiet technology and urged the FAA to move forward with 
the final rule in Docket 28770.
    The FAA and NPS have been in ongoing discussions to resolve the 
numerous issues raised in the Noise Limitations rulemaking proceeding. 
During this time, growth in the air tour industry appears to have been 
only temporarily arrested by external factors such as the economic 
downturn in Asia. Thus, the agencies have determined that in order to 
make significant strides towards meeting the statutory goal of 
``substantial restoration of the natural quiet'' by the 2008 deadline 
it is necessary to impose this operations limitation. This operations 
limitation will limit operations while the FAA and NPS work to 
implement the quiet technology rule and take any other steps necessary 
to effect the Comprehensive Noise Management Plan.
    The FAA received a number of requests from air tour operators and 
aircraft manufacturers for exceptions to the operations limitations 
rule based on the type of aircraft used in the GCNP. The FAA declines 
to adopt any exceptions to this rule at this time. Until the FAA and 
NPS adopt a final rule defining quiet technology, requests for 
exceptions to this rule based on quiet technology are premature.
    The FAA realizes that this rule may not be consistent with 
encouraging operators to invest in quiet aircraft. However, since the 
FAA and NPS have not yet resolved how to define quiet technology/noise 
efficiency, operators would be premature in making such equipment 
decisions. Since the FAA intends this operations limitation to be 
temporary, the continuation of any such limitation will be revisited 
upon adoption of a rule addressing quiet technology/noise efficiency. 
The comment suggesting an allocation increase for operators investing 
in quiet technology is also premature since there is no definition of 
quiet technology.

E. Delay of Rulemaking

    The Arizona Corporation Commission expresses concern over the lack 
of input from Arizona government officials into the proposed rules. 
Since the GCNP is Arizona's premier tourist destination and an 
extremely significant component of Arizona's tourism industry, the FAA 
should be working with Arizona government officials in developing any 
rules affecting air tours in the Grand Canyon. This commenter notes 
that the Rocky Mountain National Park air tour ban was largely prompted 
by the urgings of Colorado public officials to preemptively ban air 
touring before it emerged.
    A number of air tour operators requested that the FAA delay 
adoption of the final rule until the noise model validation study has 
been completed. Papillon says that there should be no allocations until 
there is a reasonable scientific evaluation of ambient sound levels. 
This evaluation, according to Papillon should establish what the 
ambient sound levels are at the sites in question in the Grand Canyon.
    FAA Response: The FAA appreciates the input from state and local 
officials to the proposed rules. The rulemaking process has welcomed 
and encouraged participation by state and local government officials. 
The decision to proceed with substantial restoration of natural quiet 
at the GCNP was made by Congress in Public Law 100-91. Moreover, as 
discussed above in Section C, that legislation specified the process 
for moving forward with substantial restoration of natural quiet. This 
is the process that the FAA and NPS have adhered to in developing these 
proposed rules.
    In response to the requests to delay this rule pending completion 
of the noise model validation study, the FAA declines to create further 
delay. The noise methodologies used in support of this rule are 
explained further in the Supplemental Environmental Assessment Chapter 
4 and Appendices A through F. The noise modeling employed in the 
Supplemental Environmental Assessment is the Integrated Noise Model 
(INM), the FAA's standard computer methodology for assessing and 
predicting aircraft noise impacts. This model incorporates the ambient 
database supplied by the NPS. Since 1978, the INM has been widely used 
by the aviation community both nationally and internationally, and has 
been continuously refined and updated by the FAA. For these reasons, 
the FAA has determined that a modified version of the INM 5 is an 
appropriate tool to use for the purposes of analyzing noise impacts in 
the vicinity of the GCNP and for determining substantial restoration of 
natural quiet in the GCNP.

F. Impact on Native American Tribes

Hualapai Nation
    Grand Canyon Resort Corporation (GCRC), representing the economic 
interests of the Hualapai Nation (hereinafter Hualapai Tribe), opposed 
the operations limitations. It states that a freeze on overflights will 
effectively cost the Hualapai Tribe millions of dollars in lost 
revenue. Air tour operators rely on the marketability of an approach to 
Grand Canyon West (GCW) through the Grand Canyon as it presently 
operates. With the imposition of overflight restrictions, GCRC states 
that the Hualapai Tribe would sustain a combined loss of approximately 
$3.5 million dollars over the next two years. In comparison to the 
Hualapai government's annual operating budget of $2.5 million, this is 
tantamount to shutting down a sovereign tribal nation. In a recent 
survey to GCRC's primary air tour operators, it was determined that a 
220% increase in business is projected by 2001. In 1998, approximately 
14,919 flights were conducted at a profit to the Tribe of approximately 
$950,000. GCRC projects that by 2001, 32,869 flights will be conducted 
at a profit of $2,799,777. For a Tribe which is attempting to develop 
its economic resources without the intrusion of casino gambling at the 
south rim, development of GCW is worthy of federal support rather than 
federal suppression. GCRC requests that any operations limitation 
within the SFAR avoid negatively impacting the Native American 
constituency.
    GCRC notes that in addition to the potential loss of landing fees 
which would occur if the operations limitation were imposed, there 
would be a loss of potential revenue associated with tourist amenities 
offered at GCW which are dependent on the discretionary spending of 
visitors. Sales from gift shops, Hualapai arts and crafts, horseback 
riding excursions, hiking trails, food items and cultural presentations 
would suffer. GCRC currently employs 35 full-time Hualapai employees 
and another 20 seasonal full-time employees. This does not account

[[Page 17715]]

for 15 Hualapai tribal members employed by air tour operators.
    The GCRC and the Hualapai Tribal Counsel both indicate that the 
proposed operations limitation would have an immediate negative effect 
upon the number of Hualapai who derive their livelihood from tourism at 
GCW. Thus they request an exemption for the Hualapai Nation to ensure 
the continued employment of Hualapai community members whose 
reservation suffers from a 50-65% unemployment rate.
    The GCRC is currently considering measures which would safeguard 
development at GCW. Environmental threshold studies are in progress, 
which will review the development capacity of GCW. It should remain, 
however, in the Tribe's control to determine the quality and quantity 
of development at GCW. In this regard, GCRC notes that the proposed 
rulemaking is a subtle violation of the Hualapai Tribe's sovereign 
right towards self-determination.
    Additionally, the GCRC states that the FAA's proposed rulemaking 
would contradict the initiatives taken by federal agencies, which have 
funded capital improvements and developments at GCW over the last 
decade. Approximately $5,000,000 has been expended in the development 
of GCW in an attempt to follow through with the DOI's commitment to 
protect and conserve the trust resources of federally recognized Indian 
tribes and tribal members. The Bureau of Indian Affairs participated in 
a guaranteed loan to the Tribe for tourist facilities at GCW totaling 
$1.3 million. The Environmental Protection Agency has expended 
approximately $1.5 million in solar powered water line construction to 
GCW. The United States Department of Agriculture has expended 
approximately $150,000 in water tank construction. In addition to this, 
the Hualapai Tribe has invested $250,000 in an award-winning land use 
plan GCW, $1 million in airstrip and road pavements, $150,000 in well 
drilling procedures, $565,000 in the construction of a terminal 
building and parking lots, and $25,000 in helicopter landing pads and 
fuel tank arrangements. This does not include the salaries of Hualapai 
employees who have dedicated years of planning to the development of 
GCW.
Havasupai Tribe
    The Havasupai Tribe believes that the proposed action to limit 
commercial tours in the SFRA is not stringent enough and that all 
commercial fixed-wing tour flights should be removed from the Havasupai 
Reservation.
Navajo Nation
    The Navajo Nation has expressed its satisfaction with the proposed 
rules during discussions pursuant to consultations conducted in 
accordance with the National Environmental Policy Act (NEPA) and 
National Historic Preservation Act (NHPA).
    FAA Response: The FAA has consulted with the Native American 
interests throughout this rulemaking process. Consultations with the 
ten Native American Tribes and/or Nations potentially impacted by the 
proposed rules have been conducted in accordance with NEPA and NHPA, 
Section 106. Currently, such consultations have concluded for all 
potentially impacted Native American Communities except the Hualapai 
Tribe. During the comment process it was brought to the FAA's attention 
that the Hualapai Tribe had a substantial economic interest in air tour 
business brought to its reservation via air tour operators operating 
under FAA Form 7711-1, Certificates of Waiver or Authorization, to 
deviate from the Green 4 helicopter route and Blue 2 fixed wing route 
and land on the Haulapai Reservation.
    The FAA and NPS recognize that as federal agencies they owe a 
general trust responsibility to Native American Tribes or Nations, 
including the Haulapai Tribe. Pursuant to this unique trust 
responsibility, the FAA and NPS are essentially acting in the interest 
of the Tribe, however, they do so in the context of other federal 
statutes and implementing regulations. Of particular concern when 
considering fulfillment of the federal trust responsibility is the 
economic development and self-sufficiency of the Native American Tribe 
or Nation.
    Based upon information provided by the Hualapai Tribe, 
approximately 45% of the Hualapai Tribe's global fund budget is derived 
from air tour operations at GCW. This income includes air tour operator 
contracts and landing fees, and the tourist dollars brought to the 
Hualapai Reservation by air tours. The income from the air tour 
operations is used to support youth activities and other social 
programs on the Reservation. In addition, air tour operators employ 
members of the Hualapai Tribe.
    The economic analysis in the regulatory evaluation indicates that 
this rulemaking would significantly adversely impact the Hualapai 
Tribe's economic development and self-sufficiency, thereby triggering 
the FAA's and NPS' trust responsibilities. While the air tour numbers 
derived from the operators' reported data are not identical to the 
numbers provided by GCRC, the FAA, using its numbers, still finds the 
impact of the operations limitation to be significantly adverse. The 
FAA believes that the numbers provided by GCRC in its comments include 
flights occurring outside the SFRA. In order to fulfill this trust 
responsibility, the FAA and NPS are excepting flights from the 
commercial air tour allocations requirement when those flights meet the 
following conditions: (1) transit the SFRA along the Blue 2 or Green 4; 
(2) operate under a written contract with the Hualapai Tribe; and (3) 
have an operations specification authorizing such flights. This 
exception is discussed in detail in Section H (7).

G. Discrimination Against Air Visitors

    Several commenters believe the proposal suggests an intentional 
discrimination against the rights of air tour visitors to GCNP as 
compared to ground visitors. Several general aviation commenters have 
also suggested that the proposal is discriminatory against GA aircraft 
in favor of air tour aircraft.
    One commenter states that the air tour visitors are not being 
discriminated against but rather they are being asked to abide by the 
same type visitation limitations that are imposed on other park 
visitors.
    HAI says that visitation of the Grand Canyon by air is uniquely 
ecologically friendly because air tour visitors start no fires, leave 
behind no waste or trash, disturb no plants or soil, introduce no alien 
species, and remove or deface no artifacts. HAI says that efforts to 
further restrict air touring of GCNP are fundamentally misguided from 
an environmental perspective and that the current proposed restrictions 
will be destructive of the environment and the economy, have no basis 
in fact, and should be withdrawn.
    The Cottonwood Chamber of Commerce (Arizona) says that 95% of park 
visitors are unaffected by aircraft sound, and that devastation of the 
air tour industry will result in the loss of aerial viewing 
opportunities for the elderly, handicapped and those with tight time 
schedules. The commenter says that many persons choose air tours due to 
physical or health limitations.
    Las Vegas Helicopters states that the proposed rule will stifle 
access to the Grand Canyon by people who are handicapped, impaired or 
elderly and goes against the policies established by Congress when it 
adopted the Americans with Disabilities Act.

[[Page 17716]]

    FAA Response: It is not the intent of the FAA or NPS to 
discriminate against visitors (air or ground) to the GCNP nor do the 
agencies believe this rule discriminates against air tour visitors. 
Indeed, air tour visitors are in many ways inseparable from ground 
visitors as over 50% of the air tour visitors to GCNP also visit the 
Park on the ground. Also, people who are handicapped, impaired, or 
elderly will continue to enjoy air tour access to the GCNP.
    As discussed above in Section C, Congress' intent in adopting this 
legislation was to manage the airspace in the GCNP and to balance the 
competing interests. The FAA and NPS believe that the rule adopted 
today, together with the Final Rule in Docket FAA-99-5926, modifying 
the airspace and the adoption of the new route structure through the 
SFRA achieve that balance.
    One standard method used by the NPS and other land management 
agencies to protect resources is to limit access to, or use of, certain 
resources. To protect the ground resources at GCNP, overnight camping 
in the backcountry and river rafting, for example, are limited through 
a permit process. Similarly, a number of services offered by park 
concessionaires, e.g., lodging, mule rides, etc., have limited 
availability. At GCNP, only entrance to the Park and dayhiking are 
available to unlimited numbers of visitors. Air tour visitors are 
presently the only ``specialized'' park visitors (i.e., river rafters, 
backcountry campers, mule riders, lodgers, etc.) that are not limited 
by number.
    The agencies do not agree that this rule is misguided from an 
environmental perspective. While air tour visitors do not have the same 
type of environmental impact as ground visitors, they do have an 
environmental impact due to aircraft noise. That impact was recognized 
by Congress and is the reason for the adoption of Public Law 100-91.

H. Section by Section Review

1. Definitions Section 93.303
    This section proposed new terms and definitions for commercial air 
tour and commercial Special Flight Rules Area Operation.
    Several commenters opposed the proposed definition for ``commercial 
air tour'' because they believe it is too broad. Clark County states 
that the greatest long-term threats posed by the proposed rulemakings 
are the ominous precedents they would create for all facets of 
commercial aviation in the West, especially non-tour operations. Clark 
County is concerned because the rule leaves open the possibility that 
commercial transit flights between Las Vegas and Tusayan may be 
regulated in the same fashion as ``air tours.'' The risk that 
restrictions on non-tour flights will be imposed is heightened by the 
vague guidance in the proposed rules regarding what constitutes an 
``air tour'' instead of a transit flight. Clark County believes that 
the list of factors FAA says it will consider leaves too much 
discretion in FAA's hands and allows no certainty for tour operators. 
Many of the factors identified (e.g., ``narratives'' referring to areas 
on the surface, frequency of flights, and area of operations) could 
apply to all commercial air carrier service operating along established 
jet routes east of Las Vegas. The danger is even more acute for 
regional and charter services in the area.
    Clark County believes that the threat posed by this precedent 
extends to commercial aviation beyond the Grand Canyon air tour 
operators. Almost every commercial flight into and out of Clark 
County's airports passes over a National Park or Wilderness Area at 
some point in their route. The suggestion that point-to-point 
transportation could be the subject of restrictions due to 
unsubstantiated ``natural quiet'' concerns creates a specter of 
significant restrictions on aviation in Nevada and elsewhere in the 
West. It also constitutes an unreasonable, unprincipled and illegal 
transfer of airspace jurisdiction from FAA to NPS and other federal 
land managers.
    FAA Response: The FAA is adopting the proposed definitions with 
modification. The definition for commercial air tour is intentionally 
broad. This definition requires the operator and the FAA to look at the 
actual flight and the nature of the operator's business to determine 
whether a flight is considered a commercial air tour. Simply because a 
flight may have one or two of the characteristics identified in the 
definition does not necessarily mean it is a commercial air tour. 
Clearly the more factors that apply to a particular flight, the more 
likely that flight will be found to be a commercial air tour. The 
Administrator may give more weight to some factors than others in 
making a determination under this definition.
    This definition is necessary because currently there is no 
definition for the term ``commercial sightseeing operation,'' which is 
the term used in part 93, subpart U.
    The FAA appreciates the comments voiced by air tour operators 
regarding the new definition for commercial SFRA operations. The 
commenters are concerned because the FAA will begin to collect data on 
all transportation flights and other flights conducted by commercial 
air tour operators in addition to commercial air tour flights. The FAA 
also will require reporting for flights conducted under FAA Form 7711-
1. The adoption of this definition is necessary, however, so that the 
FAA and NPS can begin to understand the aircraft patterns in the SFRA. 
Public Law 100-91 states that noise associated with aircraft 
overflights at GCNP is causing ``a significant adverse effect on the 
natural quiet and experience of the park.'' Thus, the FAA hopes that by 
creating a broad term capturing many types of flights, and requiring 
reporting of those flights, it can develop a database that more 
accurately reflects aircraft noise in the park. The term Commercial 
SFRA Operations by definition only applies to an operator who holds 
GCNP SFRA operations specifications. This rule is focused on air tour 
operations, including flights in support of air tours, because the 
agencies have determined that other types of operations within the SFRA 
contribute minimal noise overall.
    The definition of Commercial SFRA Operation is modified to 
eliminate the term ``air tour'' from the operations specification 
reference. This recognizes the fact that the FSDO may issue other types 
of operations specifications due to changes in market dynamics. The 
term commercial SFRA operations is broader than the term commercial air 
tour and includes not only air tours, but also transportation, 
repositioning, maintenance, training/proving flights and Grand Canyon 
West flights. Grand Canyon West covers flights conducted under the 
section 93.319(f) exception. All of these flights will be defined in 
the ``Las Vegas Flights Standards District Office Grand Canyon National 
Park Special Flight Rules Area Procedures Manual.'' The term 
``commercial SFRA operations'' does not include supply and 
administrative flights conducted under contract with the Native 
Americans pursuant to an FAA Form 7711-1 or any other flights conducted 
under an FAA Form 7711-1.
2. Flight Free Zones and Flight Corridors Section 93.305
    The proposed changes to this section incorporate the definitions 
set forth in section 93.303 by changing the term ``commercial 
sightseeing operation'' to ``commercial air tour''. While there were 
several comments on section 93.303 regarding the definition of 
commercial air tour, there were no comments specific to section 93.305. 
The changes

[[Page 17717]]

to this section are adopted as proposed and are reflected in the final 
rule addressing the airspace modifications, Docket No. FAA-99-5926.
3. Minimum Flight Attitudes section 93.307
    The proposed changes to this section incorporate the definitions 
set forth in section 93.303 by changing the term ``commercial 
sightseeing operation'' to ``commercial air tour''. While there were 
several comments on section 93.303 regarding the definition of 
commercial air tour, there were no comments specific to section 93.307. 
The changes to this section are adopted as proposed and are reflected 
in the final rule addressing the airspace modifications, Docket No. 
FAA-99-5926.
4. Requirements for Commercial Special Flight Rules Area Operations, 
Section 93.315
    No comments were received specific to this section, thus this 
section is adopted as proposed. Pursuant to these amendments, section 
93.315 is reorganized and revised to remove the capacity limitation on 
aircraft and to delete the reference to the outdated SFAR 38-2. The FAA 
believes that removal of the capacity restriction is necessary because 
it is aware that some air tour operators are using larger capacity 
aircraft. The FAA wants to ensure that each operator, regardless of the 
capacity of the aircraft, is held to the same operational and safety 
standards. This section will continue to require commercial SFRA 
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.
5. Section 93.316
    Section 93.316 is removed and reserved as proposed.
6. Curfew Section 93.317
    The proposed rule modified section 93.317 slightly to apply the 
curfew to all commercial SFRA operations. The curfew set forth in 
current part 93 applies to ``commercial sightseeing operations,'' which 
is an undefined term.
    Some commenters state that the change in the curfew is too broad 
and captures too many types of flights that are not air tours. GCATC 
believes the curfew should be eliminated in lieu of the operations 
limitations cap. Air tour operators contend that the curfews have 
caused significant loss to operators located at GCNP Airport and air 
tours should be permitted from 7 a.m. to 7 p.m.
    Sunrise Airlines states that the most effective way of restoring 
natural quite in the GCNP is to remove air tour noise. This penalty 
against the air tour operators is already in place in the form of 
curfews for the Dragon and Zuni Point corridors. Using a summer day of 
14 hours from sunrise to sunset of which 4 hours is during the curfew, 
the result is more than 28% of the day has no air tour noise. Sunrise 
believes consideration also must be given for the many days during the 
slow months of the winter season when the GCNP attains the goal of 
``Substantial Restoration of Natural Quiet''. Sunrise suggests the 
possibility of imposing a curfew on the current Blue One route, and 
believes that would restore natural quiet in much the GCNP without the 
need to either limit growth (allocations) or further limit the airspace 
available for air tours (routes).
    Grand Canyon River Guides Association states that the curfews are 
not long enough and should be expanded to narrow the window for air 
tour operations.
    The environmental coalition believes that the existing curfew 
should be applied to all commercial SFRA flights and should be expanded 
to provide significantly more quiet time after sunrise and before 
sunset.
    FAA Response: The amendment to this section is adopted as proposed. 
The definition for commercial SFRA operations includes all commercial 
operations conducted by certificate holders authorized to conduct 
flights within the GCNP SFRA. Specifically, the types of flights 
included within the curfew are commercial air tours, training/proving, 
maintenance, transportation, and repositioning flights. Only flights 
conducted under FAA Form 7711-1 are not subject to this curfew. This 
exclusion is necessary because the limitations applicable to these 
flights are already specifically defined on the FAA Form 7711-1. In 
some instances, it may be necessary to issue an FAA Form 7711-1 for the 
Dragon or Zuni Point corridor for flights that may not be subject to 
the curfew, e.g., NPS or other public aircraft flights. The FAA 
believes that amending the curfew to include all commercial SFRA 
operations will improve the management of aircraft noise in the Dragon 
and Zuni Point corridors.
    While a number of commenters requested changes to the curfew hours, 
or an extension of the curfew to other areas, these issues were not 
proposed in the NPRM and thus are outside the scope of the proposed 
rule.
    The agencies believe that the curfew is still required on the 
Dragon and Zuni Point corridors even with the adoption of the 
operations limitation. The operations limitation will not affect the 
timing of flights. The FAA and NPS believe that it is important to 
protect natural quiet during curfew hours in the most heavily visited 
portions of the eastern portion of the GCNP. The NPS has identified 
these areas as some of the most sensitive in the park. For 
computational purposes the NPS has established the 12-hour period 
between 7 AM and 7 PM, rather than the period from sun-up to sunset, as 
the ``day'' in the definition of substantial restoration. The fixed 
curfew that was established in the 1996 final rule makes an important 
contribution to substantially restoring natural quiet on a daily basis 
and mitigating noise impacts on the experience of the park visitors in 
this portion of the Canyon.
7. Operations Limitation Section 93.319
    Section 93.319 of the proposed rule sets forth the requirement that 
an air tour operator must have an allocation to conduct commercial air 
tours in the GCNP SFRA. The NPRM set forth the following parameters 
regarding the initial allocation process: (1) Initial allocations would 
be based on the total number of commercial air tours conducted and 
reported by the certificate holder to the FAA for the period May 1, 
1997 through April 30, 1998; (2) allocations would be apportioned 
between peak and non-peak season and between Dragon and Zuni Point 
corridors and the rest of the GCNP SFRA; and (3) an operator's 
allocation will be reflected in its GCNP SFRA operations specification.
    Initial Allocations. Grand Canyon River Guides Association supports 
capping operations at the level reported by operators for May 1, 1997 
through April 30, 1998. However, this commenter adds that there are 
many more flights that should be counted against allocations such as 
aircraft-repositioning flights, training flights, and transportation 
flights.
    Many air tour industry commenters state that the initial 
allocations do not reflect the business operations as of the date of 
Notice 99-12. All air tour industry commenters state that the 1997-1998 
base year used for establishing the allocations was an unusually slow 
year and does not reflect the typical year for Grand Canyon air tour 
operations.
    NATA stated that the base year for determining allocations (May 1, 
1997 through April 30, 1998) was one of the worst years ever. This 
commenter

[[Page 17718]]

contends that it is inappropriate for the FAA to base the future number 
of tours on any single year and that an average of operations over a 
multiple-year period would provide more reasonable figures.
    Similarly, Papillon Grand Canyon states that May 1, 1997 through 
April 30, 1998, is not an appropriate year for establishing 
allocations. Governor Hull also believes that the FAA is using an 
abnormal, low operation year as a baseline in establishing the 
allocations for air tours.
    Windrock Aviation states that, while there is a provision within 
the NPRM for certificate holders to request modification of the 
allocation, the NPRM states specifically that 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. This 
commenter says that this would result in the revocation of their 
certificate and put them out of business. Windrock recommends that, in 
their case, another year be utilized as the base year without reducing 
that number of flights from the total number of flights allocated from 
the remaining air tour operators.
    The environmental coalition states that allocations must include 
all commercial SFRA flights, including river takeouts, FAA Form 7711-1 
flights, so-called `transportation' and `repositioning' flights, and 
training flights. Flights that are not truly tour flights should be 
strictly routed to avoid the SFRA. To a visitor on the ground, each 
pass is a noise event.
    AirStar Helicopters believes that the allocation process is 
predicated on a flawed and non-factual process and therefore should not 
exist.
    Heli USA states that it should not be subject to any allocations or 
other limitations because it operates under special authorization 
granted on FAA Form 7711-1. The commenter says that its operations are 
in support of the Hualapai Nation, and that its flights are not 
considered commercial air tours. Heli USA recommends that the FAA 
clarify that all flights under FAA Form 7711-1 be excepted from the 
definition of ``commercial air tours.''
    A number of air tour operators requested increases in their 
allocations for specific reasons, in addition to the generic concerns 
raised above about the representation of the base year. Reasons for 
these requests can generally be categorized into six main areas: (1) 
Allocations should be adjusted due to significant aircraft down time 
during the base year; (2) allocations should be adjusted to incorporate 
operations that were not reported because they were not conducted in 
the SFRA but, with the airspace modifications implemented on January 
31, 2000, next year will be within the GCNP SFRA; (3) allocations 
should be adjusted for flights servicing the Grand Canyon West Airport 
on the Hualapai Reservation; (4) allocations should be adjusted for 
operators just starting up in the base year; (5) allocations should be 
adjusted due to FAA error; and (6) allocations should be adjusted where 
certificate holders merged or acquired the assets of another operator.
    FAA Response: The FAA is adopting the operations limitation with 
modifications discussed below. The FAA and NPS recognize that the 
operations limitation will limit the ability of the operators to 
increase the number of commercial air tours in the GCNP SFRA and limit 
revenue. The FAA and NPS are sensitive to the fact that this limitation 
may have a trickle down effect with regard to other businesses 
dependent upon air tour passengers and to the tourism industry 
generally located in Las Vegas, Nevada and Arizona. However, the NPS 
recommended in its report to Congress that this operations limitation 
is necessary in order to control the aircraft noise in the GCNP SFRA 
and make progress towards reaching the goal of substantial restoration 
of natural quiet.
    Data on operations levels for the year May 1, 1997 through April 
30, 1998 comprised the most accurate and current data available during 
the period that this rule was being drafted. Data subsequently 
collected from the industry for the year May 1, 1998 through April 30, 
1999 show a slight decline in the number of total operations from the 
previous year. Thus the FAA and NPS believe that the period from May 1, 
1997 through April 30, 1998 is a representative year for the purpose of 
imposing this allocation.
    The FAA, in consultation with NPS, seeks to find a balance between 
the environmental interests of ground visitors and the interests of the 
air tour industry that will help the agencies manage the GCNP airspace 
to further achieve substantial restoration of the natural quiet. Thus, 
to ensure that the allocations process is fair, the FAA has established 
broad parameters to apply to the various types of allocations issues 
presented by the operators. Therefore, while the base year remains the 
same for the implementation of this rule, the FAA has adjusted the air 
tour allocations in accordance with the following parameters:
    First, air tour operators who presented credible documentation 
indicating significant aircraft down time due to maintenance problems 
will receive adjusted allocations. The FAA determined that tit would 
not be in the best interest of safety to penalize an operator who had 
experienced maintenance problems and removed that aircraft from 
operation to assure safe operations and therefore did not have that 
aircraft in operation for much of the base year.
    Second, air tour operators who presented documentation that they 
conducted flights that were not reportable during the base year because 
they were outside the GCNP SFRA, but would be included in the GCNP SFRA 
in the future, will not be limited at this time. This exception is 
adopted at Sec. 93.319(g). The FAA is unable to impose a fair 
limitation since there was no requirement to report these flights. Upon 
implementation of this rule, certificate holders will be required to 
report these commercial SFRA operation. At the conclusion of the first 
year of reporting, the FAA plans to impose an operational limitation 
equal to the number of commercial air tours reported for the 12-month 
period. Additionally, the FAA plans to issue a notice of proposed 
rulemaking to amend section 93.309(g)
    Third, the FAA and NPS have decided to except operators complying 
with specific conditions from the individual allocation process. This 
is necessary in order to fulfill the government's trust responsibility 
to the Hualapai Tribe. As detailed in the regulatory evaluation 
accompanying this rule, the Hualapai Tribe would be significantly 
adversely impacted from an economic perspective if the operations 
limitation were applied to operators servicing Grand Canyon West 
Airport in support of the Hualapai Tribe. These conditions are as 
follows:
    (1) The certificate holder conducts its operation in conformance 
with the route and airspace authorizations as specified in its GCNP 
SFRA operations specifications;
    (2) The certificate holder must have executed a written contract 
with the Hualapai Indian Nation which grants the certificate holder a 
trespass permit and specifies the maximum number of flights to be 
permitted to land at Grand Canyon West airport and at other sites 
located in the vicinity of that airport and operates in compliance with 
that contract; and
    (3) The certificate holder must have a valid operations 
specification that authorizes the certificate holder to conduct the 
operations specified in the contract with the Hualapai Indian Nation 
and specifically approves the

[[Page 17719]]

number of operations that may transit the Grand Canyon National Park 
Special Flight Rules Area under this exception.
    Fourth, the FAA is not adjusting allocations for one operator who 
stated that he was a start-up business. The FAA notes that this 
operator was issued operations specifications for GCNP on October 21, 
1996. The FAA is not considering growth as a factor in its 
reassessment.
    Fifth, the FAA is adjusting some air tour operators' allocations 
where the operators presented documentable evidence that there was an 
error in the FAA calculation.
    Sixth, the FAA is adjusting some air tour operators' allocations 
where they have presented documentable evidence of a contractual 
transaction such as a merger or acquisition. These adjustments were 
based on the contracts negotiated between the parties and attempt to 
reflect the agreements negotiated between those parties.
    The FAA is not limiting any other types of flights other than 
commercial air tours. The FAA considers a commercial air tour to be 
synonymous with the term commercial sightseeing flight as that term is 
used in part 93, subpart U. Since operators were only required to 
report commercial sightseeing flights under current Sec. 93.317, the 
FAA had no regulatory basis for limiting any other type of flight. The 
FAA also disagrees with some commenters who suggest that non-tour 
flights should be routed to avoid the SFRA. The SFRA was designed to 
ensure the use of standardized routes, altitudes, and flight reporting 
procedures to improve safety. This standardization has significantly 
decreased accidents and incidents in the GCNP SFRA.
    Peak Season Apportionment. Most air tour industry commenters are 
opposed to the separation of allocations between peak and off-peak 
season. Some state that there would be no incentive on the part of 
operators to move off-peak season allocations to peak season and that 
this separation would be an unnecessary burden.
    Papillon indicates that if allocations do become regulation, there 
should be no restrictions with regard to what season they can be 
utilized. Park visitation dictates the number of flights that will be 
conducted in a given season. If allocations are on an annual basis 
flight usage will follow the historical past.
    Papillon also states that the concern that air tour operators may 
shut down during off-peak season to move off-season allocations into 
peak-season is not valid. There would be no incentive to move off-
season flights to peak-season. This highly technical business requires 
continuity of personnel, extensive and recurrent training, off-season 
maintenance, etc. The locale of operation is home for the employees of 
these aviation businesses and they must sustain their families on a 
year-round basis. Papillon indicates that the existing limitation on 
the number of aircraft is more equitable than a limit to the number of 
tours.
    Sunrise Airlines states that a five-month peak season (May-Sept) 
would be acceptable for purposes of assigning allocations.
    Air Vegas also finds no reason to control peak/off-peak season as 
the marketplace already does this. They are in agreement with May-
September being on average busier months but argue that depending on 
promotional travel campaigns, other months such as March or October 
have the potential of equal or more enplanements.
    Air Grand Canyon and Windrock Aviation propose that, due to the 
uncertainty of both the weather and tourism, generally, a five month 
period be utilized to distinguish ``peak'' and ``non-peak'' seasons. As 
a caveat to the issue of seasonal caps, the commenters recommend that 
each operator be allowed to shift ten (10) percent of his ``non-peak'' 
allocation to the first and last month of the peak season in the event 
the operator should determine that doing so would better utilize his 
allocation. Air Grand Canyon and Windrock say that this would allow the 
operator to compensate for whether problems and tourism volume 
fluctuations. These commenters believe it also would allow the operator 
to utilize allocations that might otherwise be lost during a 
substantial and protracted winter period. Finally, these commenters 
state that implementation of the recommendation would keep the ``non-
peak'' allocation from being used during the busiest peak months, 
thereby avoiding the air corridor ``congestion'' issues that the NPRM 
anticipates would occur in the event that the operator was allowed to 
shift all of his allocation to the busiest summer months.
    The environmental coalition recommends a seasonal cap to prevent 
the movement of allocations from one season into another. A peak-season 
term of May 1 to September 15 is proposed. Certain areas of the park 
are completely unusable to visitors that seek natural quiet. This 
coalition recommends that a 24 hour per day tour free season be 
established for at least the eastern half of the SFRA from September 
15-December 15 (this period being prior to the snow season). 
Additionally, it recommends a daily reservation limit as is applied to 
other park activities. Such a limit would control the maximum daily 
number of air operations per route.
    ARA is also concerned about allocations shifting into low noise 
time periods and lesser-used flight routes. This commenter favors the 
caps becoming far more specific, such that low use periods and areas of 
the Canyon don't ``fill in'' given the inadequacy of the restoration 
standard.
    FAA Response: The FAA is not adopting the peak season apportionment 
for allocations at this time. The FAA is adopting the Dragon and Zuni 
Point corridor apportionment. The FAA has a number of statutory 
obligations that apply in this rulemaking in addition to the statutory 
mandate set forth in Public Law 100-91. These obligations include 
compliance with the Small Business Regulatory Evaluation and 
Flexibility Act (SBREFA). SBREFA requires the FAA to consider the 
impact of FAA regulations on small businesses and to mitigate adverse 
impacts if possible. In an effort to strike a balance and fulfill the 
FAA's statutory obligations under Public Law 100-91 and SBREFA, the FAA 
is not apportioning the allocations between peak and off-speak season. 
By eliminating this additional allocation restriction, the operators 
will have some flexibility in their business operations so that they 
can mitigate revenue losses that this operations limitation may cause 
them.
    The FAA and NPS, however, are still concerned about the level of 
noise in the GCNP, especially during the peak summer season. Since the 
goal of this rule is to limit operations to control noise, any 
significant increases in noise during the summer season when noise in 
the GCNP is the highest would frustrate that goal. Thus, the NPS will 
be closely monitoring the noise levels in the GCNP over the next two 
years to determine whether the noise level in the park is increasing, 
remaining constant or decreasing. If the NPS determines that the noise 
levels in the GCNP are increasing during the summer season, it may be 
necessary to adopt a peak season apportionment of allocations in two 
years.
    The FAA also will closely monitor the level of air tour traffic 
through the GCNP SFRA to ensure that safety is not compromised by air 
tour operators concentrating their allocations during the summer time 
period. If congestion becomes a significant problem during certain time 
periods such that safety is compromised, the FAA may need to take 
action to mitigate the problem. As noted in the NPRM, the FAA's Airport 
and Airspace Simulation Computer

[[Page 17720]]

Model (SIMMOD) demonstrated significant use of the routes during the 
peak season. At this time, based on the information obtained from the 
operators regarding their current operations, and the specific 
provisions that are being adopted for operators servicing the Hualapai 
Indian Reservation at Grand Canyon West airport, the FAA believes that 
it is not necessary to impose the peak season apportionment from a 
safety perspective.
    While some operators oppose having any restrictions on allocations 
at all, the FAA and NPS have determined that it is necessary to 
apportion allocations between the Dragon and Zuni Point corridors and 
the rest of the GCNP SFRA. This apportionment is necessary because the 
noise in the Dragon and Zuni Point corridors is higher than elsewhere 
in the SFRA. For instance, the FAA regulatory evaluation accompanying 
this rule notes that fixed wing aircraft and helicopters that feature 
or include the Dragon corridor account for just over 45% of all air 
tours during the base year. Zuni Point tours account for just over 19% 
of all air tours. By apportioning allocations, the noise in the Dragon 
and Zuni Point corridors should not increase overall. Additionally, 
this restriction will help to maintain the number of air tours in these 
corridors at a manageable level.
    The FAA is not adopting the suggestions that a tour free season be 
imposed on the eastern half of the SFRA or that a daily reservation 
limit be imposed on the air tour operators. Neither of these 
suggestions were considered in the proposed rule, thus they are outside 
the scope of this rulemaking.
8. Transfer and Termination of Allocations Section 93.321
    This section, as proposed in the NPRM, established that allocations 
are an operating privilege, not a property right. It also sets forth 
certain conditions applicable to allocations, namely: (1) Allocations 
will be reauthorized and redistributed no earlier than two years from 
the date of this rule; (2) any allocations held by the FAA at the time 
of reauthorization may be redistributed among remaining certificate 
holders proportionate to the size of each certificate holder's current 
allocation; (3) the aggregate SFRA allocations will not exceed the 
number of commercial air tours reported to the FAA for the base year of 
May 1, 1997 through April 30, 1998; and (4) allocations may be 
transferred subject to several restrictions. The proposed restrictions 
on allocation transfer were as follows: (1) These transactions are 
subject to all other applicable requirements of this chapter; (2) 
allocations designated for the rest of the SFRA may not be transferred 
into the Dragon or Zuni Point corridor, but allocations designated for 
the Dragon and Zuni Point corridor may be transferred into the rest of 
the SFRA; and (3) a certificate holder must notify the Las Vegas Flight 
Standards District Office within 10 calendar days of an allocation 
transfer.
    This proposed section also contained a reversion provision whereby 
the allocations reverted back to the FAA upon voluntary cessation of 
commercial air tours in the GCNP SFRA for any consecutive 180-day 
period. Additionally, the FAA retained the right to redistribute, 
reduce or revoke allocations based on several conditions.
    Property Interest: Papillon states that allocations must be 
considered a property interest; to not consider them as such would be 
tantamount to the unconstitutional seizure of property. This commenter 
states that their company and others have spent millions of dollars in 
the development of employees, facilities, equipment, marketing, 
promotion, good will, etc., yet the business would be of little value 
if allocations were only an operating privilege. Papillon believes that 
allocations if imposed must be an intangible asset belonging to each 
respective air tour company.
    FAA Response: The FAA is adopting without change the limitation 
that allocations are not a property interest. Title 49 U.S.C. 
Sec. 40103(a) states that the ``United States Government has exclusive 
sovereignty of airspace of the United States.'' The FAA is authorized 
to develop plans and policy for the use of navigable airspace and 
assign by regulation or order the use of the airspace necessary to 
ensure the safety of aircraft and the efficient use of airspace. See 49 
U.S.C. Sec. 40103(b). Under 49 U.S.C. Sec. 44705(a), all air carriers 
or charter air carriers are required to hold an operating certificate 
issued by the FAA authorizing the named person to operate as an air 
carrier. This operating certificate is issued only after the FAA makes 
a finding the ``the person properly and adequately is equipped and able 
to operate safely under [the law].'' Operating certificates may be 
amended, modified, suspended or revoked by the FAA as prescribed under 
Section 44709.
    Thus, the FAA has been granted clear authority to regulate airspace 
and air carriers. The FAA has used this authority, together with its 
authority in Public law 100-91, to establish the GCNP SFRA and to 
regulate for noise efficiency. Given its clear mandate to regulate 
airspace, the FAA cannot grant property rights to an air carrier to use 
the airspace. Thus an allocation must be an operating privilege.
    Two year limitation; Several air tour industry commenters believe 
that the two-year trial term for the proposed rule puts them at a 
severe hardship since they will be unable to predict the future of 
their business activity. These operators argue that the allocation 
system should not be imposed, but if adopted it should be guaranteed 
not to decrease.
    Sunrise Airlines states that allocations assigned to each operator 
must not be decreased for a period of at least five years. Less than 
five years will discourage any potential movement towards quiet 
aircraft technology.
    NATA states that the two-year term of the allocations would impair 
an operator's ability to invest in new equipment and technologies by 
allowing for further reductions in the number of tours permitted. NATA 
points out that operators must have some predictability with regards to 
the future level of activity in order to obtain financing for capital 
improvements, investment in quiet technology aircraft, and other 
business-related investments. In addition, because the allocation 
system is based on a review of only one year's operations, many 
businesses will experience significant reductions in activity, further 
restraining the financial situation of the operators.
    Some members of the Arizona State Legislature state that the noise 
evaluation methodology that will be used during the two-year period 
that flight limitations are imposed is a cause for great concern among 
air tour operators. The sound threshold set for Zone 2 is so low that 
aircraft will be unable to avoid exceeding it, thereby setting the 
stage for further restrictions at the end of the two-year period.
    The Public Lands Committee of the Sierra Club, Utah Chapter, states 
that it conditionally supports the FAA capping the number of flight 
operations at 88,000 annually. However, this commenter cannot support 
the tentative ``try it two years and then we'll see'' aspect of the 
proposal.
    FAA Response: The FAA is adopting the provision that permits it to 
reauthorize and redistribute allocations no earlier than every two 
years. This provision will require allocations to remain unchanged by 
the FAA for a twenty-four month period from the effective date of this 
rule. At the end of that time period, the FAA may, but is not required, 
to engage in another rulemaking to address additional data submitted 
under Sec. 93.325, updated

[[Page 17721]]

noise analysis or the status of the Comprehensive Noise Management 
Plan. The only way in which allocations could be changed in a shorter 
time period, would be if it were necessary for the FAA to utilize its 
authority to regulate for safety. Noise is not a component of the 
conditions in this section.
    The FAA and NPS believe it is necessary to permit modifications of 
the allocations on a 2-year term based upon the results of additional 
noise analysis. This is to allow NPS the ability to address noise 
issues that arise that may impede its ability to meet the statutory 
goal of substantial restoration of natural quiet as set forth in Public 
Law 100-91. Thus, for instance, if noise in the GCNP SFRA is increasing 
due to an increase in commercial SFRA operations, further limitations 
may be necessary.
    The NPS acknowledges that efforts to achieve substantial 
restoration of natural quiet are path breaking, complex, and 
controversial. Perhaps the greatest confusion has resulted from the 
noise evaluation standards employed by the NPS, and specifically the 
``8 decibels below ambient.'' While the 8 decibels below ambient 
standard is a somewhat technical issue, it may be most easily thought 
of as a mathematical conversion factor necessitated by the computer 
modeling. The FAA's computer model (INM) uses a ``weighting'' 
(averaging) process to derive a single, ``average'' value to describe 
the ambient level. The NPS' computer model (NODSS) uses multiple 
frequency bands. NODSS, like the human ear, can discriminate sounds by 
both frequency and volume. It is well accepted in the acoustic 
community that sounds can be heard below the ambient level. In this 
case, aircraft sounds may be heard below the ambient level because the 
aircraft is producing sounds of a different frequency than found in the 
natural environment. Thus, to use INM and to capture the moment when 
aircraft become audible, a conversion of minus 8 decibels from natural 
ambient conditions is used. The minus 8 is derived from laboratory 
studies that showed that sounds of different frequencies become audible 
at between minus 8 and minus 11 decibels below ambient. To reiterate, 
the minus 8 decibels below ambient is not the sound level at which 
aircraft must operate or the acoustic level that must be achieved. It 
is a mathematical conversion necessitated by the computer modeling. The 
minus 8 decibels below ambient describes the ``starting point'' at 
which the measurement of substantial restoration begins.
    Transfer. The Public Lands Committee of the Sierra Club, Utah 
Chapter, states that what is called for, given expiring time under the 
1987 law and 1996 Executive Order, is a decreasing cap until operations 
are returned to approximately 1975 levels. Congress first identified 
the noise as a problem as far back as 1975, and Public Law 100-91 was 
the logical, decisive sequel for a problem only getting worse.
    Windrock Aviation and Grand Canyon Air say that limiting the 
transfer of allocation destroys the value of the business that is 
entitled to make its profits from the allocation it is otherwise 
allowed. Additionally, these provisions, along with the provisions of 
the NPRM limiting the number flights that can be flown, generally, 
severely impact on the ability of those who might otherwise attempt to 
establish a profitable business in the flying of scenic tours at the 
GCNP. They believe that the economic impact of these issues was not 
raised in the NPRM. These commenters add that limitations on allocation 
transfer should be dropped from the NPRM, and that free market 
capitalism should be allowed to control what each individual operator 
does with its allocations.
    ARA believes that allocation caps should not be transferable and 
supports the notion that allocations that fall into disuse be retired. 
The retirement of some allocations over time may prove to be the most 
viable method for reducing air tours toward levels of 1987. It is 
important not to squander the opportunity that the FAA has to maintain 
control over allocations of ``time in airspace,'' not allow transfers 
of allocations between operators, and retire underutilized allocations.
    The Environmental Coalition opposes any transfer of allocations 
from one corridor to another citing possible deterioration of 
conditions in less-noisy areas.
    FAA Response: The FAA is adopting Section 93.321(b)(1)-(4) without 
modification. The purpose of this operations limitation is to maintain 
status quo and prevent the noise levels in the GCNP from increasing 
while the Comprehensive Noise Management Plan is developed. The 
limitation is not designed to be a declining cap. Thus the FAA is not 
adopting the request to impose a declining cap. Consistent with the 
intent of Public Law 100-91, as expressed in the legislative history 
surrounding the adoption of that law, the FAA is not attempting to ban 
air tours in the GCNP. It is seeking to make progress toward the 
mandated goal of substantial restoration of natural quiet.
    Thus to provide the operations with some flexibility to meet 
varying demand, the FAA is permitting allocations to be transferred 
among air tour operators subject to three restrictions. First, all 
certificate holders are required to report any transfers to the Las 
Vegas Flight Standards District Office in writing. Permanent transfers 
(mergers/acquisitions) require FAA approval through the modification of 
the operations specifications. Temporary transfers (seasonal or 
monthly/weekly/daily leases) are effective without FAA approval. The 
FAA will not modify operations specifications for temporary 
arrangements.
    Second, certificate holders are subject to all other applicable 
requirements in the Federal Aviation Regulations. Third, allocations 
authorizing commercial air tours outside of the Dragon or Zuni Point 
corridors are not permitted to be transferred into the Dragon or Zuni 
Point corridors. Allocations specified for the Dragon and Zuni Point 
corridors may be used to other routes in the GCNP SFRA. The FAA 
believes it is necessary to maintain some restrictions on allocation 
transfers to safety manage the airspace and manage aircraft noise. This 
is especially important since the Dragon and Zuni Point corridors tend 
to be the busiest locations in the park for air tours. The FAA does not 
see any reason to limit transfer of allocations from the Dragon and 
Zuni Point corridor into the rest of the SFRA since this airspace is 
not as congested as these corridors and the noise level is not as high. 
Additionally, given the consumer demand to see the Dragon and Zuni 
Point corridors by air, the FAA does not believe that significant 
levels of tours will be transferred from those corridors into the rest 
of the SFRA.
    Termination after 180-day lapse. Several air tour industry 
commenters state that the period allowed for inactivity should be 
lengthened. This is of particular concern for small operators that are 
susceptible to slow-downs inherent in the business.
    Windrock and Air Grand Canyon (AGC) recommend that this provision 
be dropped. They note that it is possible for an operator to use all of 
its non-peak allocations early in the non-peak season and delay using 
its peak season allocations until a month after the peak season starts 
and thereby lose its allocations because of the 180-day lapse rule. 
These commenters maintain that this portion of the NPRM makes no 
logical, financial, or ``noise reduction'' sense. Windrock and AGC 
state that ``the taking away of `allocation' that has not been used for 
180 days by any

[[Page 17722]]

scenic tour operator is inconsistent with both the rights of the tour 
operators and the stated purpose of PL 100-91.''
    Papillon states that in fairness to all operators, but in 
particular small operators, the period allowed for inactivity should be 
lengthened. Small operators are most susceptible to slow downs caused 
by the seasonal nature of the business, equipment failures, serious 
illness of key employees or other adversities beyond the operators' 
control. Papillon proposes that subsequent to a 180-day inactive 
period, the FAA should secure a ``Statement of Intent to Operate'' from 
the tour operator. This statement would outline the operator's business 
plan for the following three-year period. If upon the three-year 
anniversary of that statement, the operator has not resumed air tours 
or sold the business, the FAA would reassign its allocations on a pro 
rata basis to the other active operators.
    AirStar Helicopters maintains that 180 days is too arbitrary and 
recommends a minimum of 360 days, especially in light of the ``use it 
or lose it'' provisions.
    The proposed 180-day lapse period is supported by the Environmental 
Coalition.
    FAA Response: This provision is adopted with the modifications 
discussed below. The FAA recognizes that the loss of an air tour 
operator's allocations would be a significant action. It is not the 
intent of this provision to be punitive. Rather the intent is to ensure 
that allocations are distributed amongst operators who are conducting 
an air tour business in the GCNP SFRA. The use or lose provision is 
important because it recognizes that the FAA is the sole controller of 
the allocations. If not used, the air tour operator will lose its 
allocations, thus its operating privilege in the GCNP SFRA, and the FAA 
will assert its control.
    Based on comments from the air tour operators, the FAA, in 
consultation with NPS, is modifying this section to establish a show 
cause provision prior to the end of 180 consecutive days. Under this 
provision, an operator who does not use its allocations for 180 
consecutive days, but who intends to do so in the future, must submit a 
written request for extension to the Las Vegas FSDO prior to the 
expiration of the 180-consecutive-day period. This written request must 
show why the operator did not conduct business during the prior 180 
days and when it intends to resume business operations. In response the 
FSDO will issue a letter indicating whether the request for an 
extension is approved and the length of the extension granted, if any, 
which will not exceed 180 consecutive days. Operators will be allowed 
to request one extension; thus the maximum amount of time an operator 
would be granted under the use or lose provision would be 360 days.
9. Flight Plans Section 93.323
    This section of the NPRM proposed to 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 
will be responsible for indicating in the ``remarks'' section of the 
flight plan the purpose of the flight. There will be at least six 
possible purposes: commercial air tour; transportation; repositioning; 
maintenance training/proving and Grand canyon West. The term 
``commercial air tour'' will be as already defined in the proposed 
rule. The other five terms will 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 an 
air tour.
    2. Repositioning--A non-revenue flight for the purpose of 
repositioning the aircraft (i.e., a return flight without passengers 
that is conducted to reposition the aircraft for the next flight).
    3. Maintenance flight--A flight conducted under a special flight 
permit, or a support flight to transport necessary repair equipment of 
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.
    5. Grand Canyon West flight--A flight conducted in accordance with 
conditions set forth in section 93.319(f).
    One commenter explained that using flight plans to ensure 
compliance with the commercial air tour limitations is a flight safety 
hazard. If pilots are required to open VFR flight plans, an additional 
workload will detract from the necessary concentration in monitoring 
approach control and/or enroute frequencies while maintaining a 
constant visual vigil.
    Air Vegas notes that its past experience with filing VFR flight 
plans was not positive. It encountered difficulty and confusion when 
numerous aircraft attempted to contact the flight service station to 
open VFR flight plans simultaneously. This commenter stats that the 
opening and closing of VFR flight plans by the pilots, particularly the 
opening, is unacceptable. The commenter says that all operators from 
Las Vegas follow the same route from Hoover Dam to the GCNP SFRA. Once 
inside the GCNP SFRA all aircraft are on the same route, which makes 
the airspace to and in the GCNP SFRA heavily concentrated. If pilots 
are required to open VFR flight plans, an additional workload will 
detract from the necessary concentration in monitoring approach control 
and/or enroute frequencies while maintaining a constant visual vigil.
    FAA Response: This section is adopted with modification. The 
information obtained from the flight plan will be used to ensure 
compliance with the commercial air tours operation limitation. 
Certificate holders may wish to develop ``canned'' flight plans that 
may be opened and closed quickly. Copies will not have to be 
maintained. The FAA does not believe this poses an unreasonable burden 
on the pilot since the pilot does not have to open or close the plan. 
The rule specifies that the certificate holder is responsible for 
filing a VFR flight plan. Thus the certificate holder must designate 
someone who will be responsible for this task. It could be a pilot or a 
dispatcher or someone else employed by the certificate holder who is 
assigned this duty. At this time, the FAA does not believe that there 
will be a resource problem at the flight service stations due to this 
new requirement. However, the FAA will be closely monitoring this 
situation and will take action to mitigate any problems that may 
develop. Certificate holders conducting operations under Sec. 93.309(g) 
are not subject to the VFR flight plan requirements and must continue 
to file an IFR flight plan for GCNP SFRA operations in accordance with 
their operations specifications.
10. Reporting Requirements Section 93.325
    The FAA also proposed to modify the reporting requirements by 
requiring quarterly reports instead of trimester reports. The FAA 
requested comments on requiring reporting from operators conducting 
operations in the GCNP SFRA under an FAA Form 7711-1. A question also 
was raised in the NPRM

[[Page 17723]]

as to the time standard that should be used in the reports.
    No comments were received on the switch from trimester to quarterly 
reporting. Several air tour industry commenters state that reporting 
requirements should not be imposed as a condition of FAA Form 771-1. 
Papillon states that the increased regulation of operations conducted 
under this form would harm the Native American Tribes who are the 
beneficiaries of these activities. Furthermore, these commenters state 
that since these forms are granted under tight restrictions there is no 
need for further control.
    Several commenters suggest that Mountain Standard Time should be 
used for the quarterly reporting requirements. GCATC states that their 
membership is evenly divided on which time measurement to use.
    The Environmental Coalition states that the reporting requirements 
should be applied to all commercial SFRA flights, including 
transportation, repositioning, maintenance, FAA Form 7711-1, and 
training flights. Complete reporting will allow better planning and 
evaluation of resource degradation.
    FAA Response: The FAA is adopting this provision without 
modification. Therefore, under the Final Rule, all commercial SFRA 
operations, including those conducted under Secs. 93.309(g) and 
93.319(f), must be reported on a quarterly basis to the Las Vegas 
Flight Standards District Office. Since commenters are divided on the 
time measurement issue, the FAA has decided that operators are required 
to report operations using UTC time. The information submitted in these 
reports will 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 will continue to submit their reports in 
written form. Electronic submission is preferable and encouraged.
    Additionally, the FAA will require operators conducting operations 
under an FAA Form 7711-1 to report those operations to the Las Vegas 
FSDO. The FAA and NPS need this information to develop a clearer 
picture of the types and numbers of flights operating in the GCNP SFRA. 
The reporting will be set forth as a condition of the FAA Form 7711-1. 
This requirement will apply to public aircraft, such as NPS aircraft, 
as well. The FAA does not believe requiring operators to report FAA 
Form 7711-1 flights will harm the Indian tribes.
    The reporting requirements will become effective 30 days after 
publication. Because the rule is being implemented after the start of a 
quarter, operators will report 30 days after the close of the first 
trimester (January--April) under the old rule, 30 days after the end of 
June for the May--June time period. July 1st would then start the 
quarterly reporting requirement.

Paperwork Reduction Act

    Information collection requirements pertaining to this final rule 
have been approved by the Office of Management and Budget (OMB) under 
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), and have been assigned OMB Control Number 2120-0653. No 
comments were received on this information collection submission. 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.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these regulations.

Regulatory Evaluation Summary

    This rule is considered significant under the regulatory policies 
and procedures of the Department of Transportation (44 FR 11034; 
February 26, 1979) but is not considered a significant regulatory 
action under Executive Order 12866.
    Proposed and final rule changes to Federal regulations must undergo 
several economic analyses. First, Executive Order 12866 directs that 
each Federal agency propose or adopt a regulation only upon a reasoned 
determination that the benefits of the intended regulation justify its 
costs. Second, the Regulatory Flexibility Act of 1980, as amended March 
1996, requires agencies to analyze the economic effects of regulatory 
changes on small entities. Third, the Office of Management and Budget 
directs agencies to assess the effects of regulatory changes on 
international trade.
    The final rule will impose a significant economic impact on a 
substantial number of small entities. In terms of international trade, 
the rule will neither impose a competitive trade disadvantage to U.S. 
air carriers operating domestically nor to foreign air carriers 
deplaning or enplaning passengers within the United States. This 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.
    The FAA analyzed the expected costs of this regulatory proposal for 
a 10-year period (2000 through 2009). All costs in this analysis are 
expressed in 1998 dollars.
    This summary examines the costs and benefits of the final rule that 
will temporarily limit the number of commercial air tours that may be 
conducted in the Special Flight Rules Area (SFRA) of the Grand Canyon 
National Park (GCNP). This rule is necessary as part of an effort to 
achieve the statutory mandate imposed by Public Law 100-91 to provide 
substantial restoration of natural quiet and experience in GCNP.
    The estimated 10-year cost of this regulation will be $155.4 
million ($100.3 million, discounted). The majority of the impact of 
this regulation will be $154.3 million, ($99.6 million, discounted) in 
lost revenue (net of variable operating costs) due to the imposition of 
air tour operations limits. After two years, this requirement may be 
reviewed and subject to change. At the end of the two years review, the 
cost in lost revenue will be $13.2 million ($11.9 million, discounted). 
The status of the quiet technology rulemaking and the Comprehensive 
Aircraft Noise Management Plan will also be taken into consideration at 
that time. The estimated 10-year cost of the other provisions to air 
tour operators is $30,000 or $23,000, discounted. FAA costs are 
estimated at $1.06 million or $746,400, discounted over ten years.
    The primary benefit of this rule is its contribution toward meeting 
the statutory mandate of substantially restoring natural quiet in GCNP. 
Quantifiable benefits are the use benefits perceived by individuals 
from the direct use of a resource such as hiking, rafting, or 
sightseeing. The estimated 10-year use benefits for ground visitors 
only, as a result of this rule, are $20.36 million, discounted at 7 
percent. In addition to these use benefits, this rulemaking may 
generate non-use benefits. The non-use benefits of this rulemaking 
along with the associated rule and commercial air tour routes notice 
include reduction in existing commercial air tour aircraft noise 
impacts to certain traditional cultural properties of importance to 
several Native American Tribes and Nations in the vicinity of the Grand

[[Page 17724]]

Canyon National Park. Related benefits to these Native Americans 
include protection of their religious practices from interference from 
overhead commercial air tour aircraft flights. The FAA, at this time, 
does not have adequate data to estimate these non-use benefits of 
commercial air tour aircraft noise reduction at the Grand Canyon 
National Park and adjacent traditional cultural properties, but 
believes that they are significant. The FAA is promulgating this rule 
in response to congressional mandate.

Commercial Air Tour Industry Profile

    The Grand Canyon is the most active commercial air tour location in 
the United States. Based on Grand Canyon air tour operator reports, 
requirements contained in Sec. 93.317, and comments containing 
additional statistical detail, the FAA has revised its original 
estimates for the first full year of reporting (May 1, 1997 through 
April 30, 1998)--hereafter referred to as the baseline period, from 
approximately 88,000 to 90,000 commercial air tours. These air tours 
provided aerial viewing of the Canyon to about 642,000 passengers, and 
accounted for just under $100 million ($99.3 million) in revenue. In 
the baseline period there were 24 air tour operators reporting, 17 of 
whom conducted air tours over GCNP in airplanes, 6 in helicopters, and 
1 operator in a mixed fleet.

Benefits

    The primary intended benefit of this rule is its contribution 
toward achieving the statutory mandate imposed by Public Law 100-91 to 
substantially restore natural quiet in GCNP. The FAA's and NPS' 
benefits analysis is limited to commercial air tour aircraft noise 
because only commercial air tours will be affected by this rule.
    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 70-100 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 that number to about 25 percent in 9 
to 10 years. On the other hand, noise modeling indicates that this 
rule, together with the other two FAA actions, will 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.

Increased Value of Ground Visit Analysis

    The benefits of aircraft noise reduction attributable to this 
rulemaking can be broadly categorized as use and non-use benefits. 
Increased use benefits from reduced aircraft noise are the added 
benefits perceived by ground visitors from the direct use of a resource 
such as hiking, rafting, or sightseeing. However, use benefits also 
include the benefits perceived by individuals taking air tours. If 
restrictions are imposed on air tour operations, some of the use 
benefits perceived by individuals taking air tours will be lost. The 
benefits to air tourists have not been quantified due to a lack of 
information. The benefits to ground visitors due to this rulemaking 
have been quantified and are presented below. Non-use benefits are the 
benefits perceived by individuals from merely knowing that a resource 
exists, or is preserved, in a given state. The non-use benefits 
attributable to this rulemaking have not been estimated.
    An economic study has not been conducted specifically to estimate 
the benefits of this rulemaking. While generally accepted methodologies 
exist to estimate such values, those techniques are costly and require 
a significant period of time for the requisite study design, data 
collection, and analysis steps. An alternative to these resource-
intensive techniques is the ``benefits transfer'' methodology. That 
methodology combines value estimates from existing economic studies 
with site-specific information (in this case, regarding visitation 
levels and the nature and extent of noise impacts) to estimate 
benefits. The benefits transfer methodology has been accepted as an 
appropriate methodology for estimating natural resource values in two 
other rulemakings.
    The benefits transfer methodology was used to estimate the benefits 
of this rulemaking where sufficient information existed to do so. This 
estimation was possible for ground visitors to GCNP, but not for air 
tourists or for the non-use benefits.

Benefits of Ground Visitors

    The site-specific information used in the estimation of benefits 
accruing to ground visitors includes visitation data for GCNP for 
calendar year 1998 and a visitor survey conducted to document the 
visitor impacts of aircraft noise within GCNP. 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 canyon rim sightseeing, 
as well as other activities not related to backcountry or river use. 
The total number of visitor-days in 1998 for these visitor groups was 
92,100 for backcountry, 66,900 for river and 5.31 million for ``other 
visitors''.
    For purposes of this benefits estimate, the number of visitor-days 
at GCNP is assumed to remain constant at 1998 levels throughout the 
evaluation period of the rulemaking. The GCNP visitor survey indicates 
that these different visitor groups are variously affected by aircraft 
noise. This survey asked respondents to classify the interference of 
aircraft noise with their enjoyment of GCNP as either ``not at all'', 
``slightly'', ``moderately'', ``very much'', or ``extremely''.
    The economic studies selected for use in the benefits transfer 
discuss visitor-day values, which 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.
    The visitor-day value for backcountry use, $37.13, was derived from 
a national study of outdoor recreation. 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. 
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.
    FAA assumed that these visitor-day values represented the net 
economic benefits obtained from recreational uses in GCNP absent any 
impacts from aircraft noise. Therefore, it is important to note that 
these values potentially under-state recreational benefits to the 
extent that they 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 aircraft noise for areas similar 
to GCNP. Therefore, reductions were assumed in the present analysis. 
The data and assumptions imply the total value of $17.7 million, which 
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 17725]]

    The benefit of this rulemaking is that portion of the total lost 
value that is associated with the resulting future levels of noise 
reduction. 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.
    The reductions in aircraft noise were applied to the total lost 
consumer surplus value from all aircraft noise in 1998 ($17.73 million) 
to estimate the current use benefits for future years. This calculation 
assumes that benefits increase linearly with noise reduction (i.e., a 
constant marginal benefit from noise reduction). The resulting use 
benefit estimates the sum to $31.29 million ($25.83 million at the 3 
percent discount rate and $20.36 million at the 7 percent discount 
rate) over ten years. The use benefits for this rule and the airspace 
final rule will be $45.86 million over ten years, discounted at 7 
percent.

Benefits of Air Tourists

    The use benefits perceived by individuals taking air tours will 
likely decrease as a result of this rulemaking. This is due to a 
reduction in the number of air tours that will be available because of 
the commercial air tour limitation. FAA estimates that the number of 
commercial air tours in GCNP would increase an average of 3.3 percent 
per year without this rulemaking. The effect of the commercial air tour 
limitation will be to control the number of air tours on affected 
routes by limiting the amount of growth that would otherwise occur.
    FAA estimates that commercial air tours serving approximately 
530,000 air tourists in the base year will be subject to the 
limitation. Assuming that the passenger capacity and load factors for 
commercial air tours remain constant, the impact of the commercial air 
tour limitation will be to eliminate the average 3.3 percent annual 
growth rate in air tourists that would otherwise occur.
    The FAA was unable to estimate the visitor-day value of air 
tourists, given the available data. Nevertheless, an average visitor-
day value for air tourists that exceeds the visitor-day value for 
ground tourists would suggest the use benefit losses of air tourists 
exceed the use benefit gains of ground tourists. The undiscounted total 
use benefits of ground tourists from 2000 to 2009 was estimated above 
as $31.29 million, given the commercial air tour limitation only. 
Dividing that value by the estimated 1,490,000 individuals who will be 
potentially excluded from taking air tours over the same period 
indicates a threshold value for air tourists of $18.70 per visitor-day. 
The threshold value for air tourists given both the commercial air tour 
limitation and route changes is $40.06 per visitor-day.
    It is important to recognize that this simple analysis of air 
tourist use benefits does not necessarily indicate a complete loss of 
benefits associated with this rulemaking. As noted above, increases in 
either the passenger capacity or load factors of affected flight 
operations will decrease the reduction in use benefits of air tourists.

Benefits to Native American Communities

    Benefits of this rulemaking and the associated airspace rulemaking 
and the changes to the commercial air tour routes also include those 
accruing to several local native American cultural and religious 
practices. The overall size of the 20 LAEQ12hr noise exposure area over 
tribal lands will be reduced as a result of these actions. This 
rulemaking and related actions will also reduce air tour aircraft noise 
levels from the existing noise levels over certain traditional cultural 
properties and ensure increased privacy and protect Native American 
religious practices (however, some traditional cultural properties in 
the vicinity of the direct routes from Las Vegas to the Grand Canyon 
Airport will receive an increase in noise).

Costs of Compliance and Regulatory Flexibility Determination and 
Analysis

    The FAA estimates that the regulation will result in a potential 
reduction in future net operating revenue of $154.3 million ($99.6 
million, discounted). Additionally, the FAA estimates that there would 
be approximately $22,320 ($20,860 discounted) start-up costs to 
operators to implement the flight plan (i.e., filing, activating, and 
closing a flight plan) adopted from this rulemaking. For quarterly 
reporting and the other provisions of the rule ((1) requesting 
modification and initial allocations and (2) transfer of allocations), 
the cost to air tour operators is estimated to be $30,000 over ten 
years or $23,000, discounted. Finally, the FAA costs over the next 10 
years (including initial allocations) will be $1.06 million or $746,400 
discounted. In sum, the total cost of this rule over the next 10 years 
will be $155.4 million or $100.3 million, discounted.
    The main economic impact resulting from the commercial air tour 
limitation in the GCNP SFRA is the reduction in potential future net 
operating revenue. This can be calculated by subtracting the net 
operating revenue associated with the projected future number of 
commercial air tours under the air tour limitation from the net 
operating revenue associated with the projected future number of 
commercial air tours without the air tour limitation.
    The baseline 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. 
Variable operating costs for GCNP air tour operators are defined as the 
costs for crews, fuel and oil, and maintenance per flight hour. 
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.
    Commercial air tours in GCNP currently are fixed to the extent that 
air tour operators cannot increase the number of aircraft shown on 
their operations specifications for use in the GCNP SFRA. The FAA 
estimated the future number of monthly operations without the final 
rule. In some cases, it would not be practically feasible to conduct 
more air tours in a given day because the aircraft were already used to 
their fullest extent practical.
    The final rule assumes that the allocations awarded to each 
operator will be valid for a two-year period. After that time, the air 
tour operator's allocations may be revised for various reasons. In this 
analysis the FAA assumed that this allocation would continue beyond two 
years.
    The analysis 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 will want to take air tours 
in the future implies that air tour operators should be able to raise 
air tour prices. This analysis does not consider a new equilibrium 
price given that supply becomes fixed while demand increases.

Cost of Operating Scenario to Operators--Uniform Year With No Peak/Off 
Peak Delineation on Commercial Air Tours

    In the final rule, the FAA is not adopting either peak season

[[Page 17726]]

apportionment for allocations discussed in the NPRM Based on these 
decisions:
     After the first two years, the certificate holder's 
allocations may be revised based on the data submitted under 
Sec. 93.325, an updated noise analysis, and/or the status of the 
Comprehensive Noise Management Plan.
     Allocations will 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 except in the Dragon and Zuni Point corridors. 
Dragon and Zuni Point corridor allocations again will be determined 
based on the number of operations an air tour operator conducted in 
this region for the base year period. Operators conducting no 
operations in these corridors for the base year will receive no 
allocations for this region.
    The final rule will limit all commercial air tours in the GCNP SFRA 
on a 12 month basis so that such operations conducted by certificate 
holders in the SFRA do not exceed the amount of air tours reported in 
accordance with current Sec. 93.317 for the base year. The number of 
commercial air tours that a certificate holder can conduct will be 
shown on the certificate holder's operations specifications as 
allocations.

Revisions in Accordance With Specific Rule Changes in Consideration of 
the Hualapai Tribe and Substantial Economic Impact

    Ninety percent of the helicopter and 10 percent of the airplane 
tours that are conducted along the SFAR 50-2 Green 4 and Blue 2 air 
tour routes respectively, land on the Hualapai Indian Reservation (the 
Reservation) either along the Colorado river, at Grand Canyon West 
Airport (GCW), or both. Both the helicopter and airplane tours landing 
at the Reservation are a significant source of income and employment to 
the Hualapai Indian Nation (the Tribe).
    The Hualapai Reservation encompasses approximately 1 million acres 
adjoining the southwestern quadrant of GCNP and includes 108 miles of 
the Colorado River through the Grand Canyon. The majority of the 
Reservation's inhabitants live below the poverty level and unemployment 
was estimated in 1995 to range from 50-70 percent of the adult 
population. Much of the Tribal economy is based on tourism, and Grand 
Canyon West has been identified by the Tribe as the primary means by 
which to address its high unemployment rate while preserving the 
Tribe's natural and cultural resources.
    In the NPRM, the FAA considered the impact of an operations 
limitation on the Tribe within the context of the 2.5 multiplier. 
However, the FAA, through comments and testimony offered at the Las 
Vegas public hearing held in August 1999, believes the direct impact to 
the Tribe is more severe than initially believed. Therefore, in this 
Final rule, the FAA will not impose a limitation on certain air tours 
to the Reservation due to the significant adverse economic impact on 
the Tribe so long as these tours are operated in compliance with 
Sec. 93.319(f).
    The FAA is adopting May 1, 1998 through April 30, 1999 as the more 
appropriate baseline to assess its cost relief estimates for the Tribe 
because the FAA believes this baseline more accurately portrays the 
current economic activity at GCW and the Reservation. After the 
completion of federally funded airport renovations and runway 
resurfacing during the fall of 1997, there was a significant increase 
in air tours and tourism to the Reservation. In addition, a helicopter 
operator, well established in the Tusayan air tour market, expanded 
operations to the West end and began conducting helicopter tours in 
support of the Tribe after the close of the May 1, 1997 through April 
30, 1998 baseline period.
    Comparing May 1, 1998 through April 30, 1999 to the May 1, 1997 
through April 30, 1998 baseline, the FAA estimates that all applicable 
air tours increased to about 21,850 (10,950 airplane; 10,900 
helicopter). The Tribe collects at least $2.3 million annually from air 
tour operators in the form of landing fees, monthly leases, trespass 
permits and per passenger payments for a Reservation guided tour and 
lunch plus an unspecified amount derived from passenger purchases of 
crafts and souvenirs.
    Assuming the 3.3 percent compound annual rate of growth, the FAA 
estimates that in the absence of an exception being extended to the 
applicable air tours, the Tribe would forego the potential revenue 
generated from an additional 25,700 air tours carrying 133,900 over the 
2000-2009 time period. The restoration to the Tribe of future revenue 
over the years 2000-2009 resulting from the elimination of operations 
limitations on those tours will be approximately $643,400 in landing 
fees and $4.3 million in ground tour revenue. This action, then, 
removes a restraint placed on the Tribe's uninterrupted access to these 
air tours and their passengers, the principal revenue source for the 
Reservations's continued economic development, and the FAA estimates 
that this cost relief will be $4.9 million ($3.1 million, discounted) 
over the next ten years.
    To remain consistent with the overall Regulatory Evaluation and 
costs of this Final Rule, the analysis that follows concerning the 
operators and tours that are conducted to GCW Airport and the 
Reservation will use the May 1, 1997 through April 30, 1998 baseline. 
From this baseline data, the FAA estimates that about 19,200 (11,300 
airplane; 7,900 helicopter) air tours were conducted along the Blue 2 
and Green 4 air tour routes. These air tours were conducted by 10 
airplane and 4 helicopter operators, and carried approximately 119,000 
passengers that generated $19.9 million in gross operating revenue 
($16.2 million in net operating revenue). Using the 3.3 percent 
compound annual rate of growth, if no exception were granted, the FAA 
estimates that the total cost of the final rule will be $198.4 million. 
The part of this final rule cost attributable to an operations 
limitation along these two air tour routes would be approximately $58.3 
million ($37.6 million, discounted) in gross operating revenue losses 
and $48.3 million ($31.4 million, discounted) in net operating revenue 
losses for the years 2000 through 2009.
    By excepting the air tours of the operators maintaining valid 
contracts with the Tribe that are conducted along these two air tour 
routes, the FAA has reduced the overall cost (net operating revenue) of 
this Final Rule by $43.9 million ($28.5 million, discounted) to $154.5 
million ($99.5 million, discounted) for the ten-year period 2000-2009. 
These amounts were calculated based on an estimated reduction in air 
tours and air tour passengers of approximately 51,550 and 320,500, 
respectively, for the same ten-year time frame. Thus, by excepting 
those air tours conducted along these two air tour routes that are in 
support of the Tribe, the FAA estimates that the actual amount of the 
cost contributed to the total cost of this final rule will be reduced 
to $5.1 million ($3.3 million, discounted) in gross operating revenue 
losses and $4.5 million ($2.9 million, discounted) in net operating 
revenue losses for the years 2000 through 2009.
    In the absence of the exception, the FAA estimates the portion of 
the above costs that are directly associated with a 3.3 percent growth 
in the current level of tours conducted along the two air tour routes 
in support of Tribal economic development is $34.2 million ($20.2 
million, discounted) in reduced gross operating revenue and $31.2 
million ($20.25 million, discounted) in reduced net operating revenue 
over ten

[[Page 17727]]

years. This is based on reductions in air tours and passengers of 
22,000 and 119,200, respectively, resulting from the operations 
limitation part of the final rule.
    The FAA does not have data indicating the percentage of air tours 
reported in the baseline period that landed at the Reservation. Thus, 
those operators who currently hold contracts with the Hualapai will 
also receive their allocations as originally established. The FAA 
estimates that the non-Hualapai portion of the air tour business 
conducted by these operators along these two routes could expand at 3.3 
percent for twelve years before the cost impact of the operations 
limitation becomes measurable. Thus, during the ten-year time frame 
2000-2009, there will be no costs incurred by operators maintaining 
contracts with the Tribe for that portion of their air tour business 
conducted along these two routes that does not necessarily contribute 
to the economic development of the Tribe. The FAA estimates that the 
portion of the above costs associated with a 3.3 percent growth in the 
current level of non-Hualapai tours conducted along the two air tour 
routes is $19.0 million ($12.3 million, discounted) in reduced gross 
operating revenue and $12.7 million ($8.2 million, discounted) in 
reduced net operating revenue for the years 2000-2009.
    By extending an exception from the operations limitation part of 
the final rule to those air tours and air tour operators who maintain 
contracts with and provide economic support to the Tribe, the FAA 
estimates the final costs of this rule attributable to air tours 
conducted along these two air tour routes will be reduced to $5.1 
million ($3.3 million, discounted) in gross operating revenue and $4.5 
million ($2.9 million, discounted) in net operating revenue for the 
years 2000-2009.
    The overall total cost relief accruing to the operators for the 
years 2000-2009 provided in this Final Rule by excepting the air tour 
businesses that maintain contracts with the Tribe from the operations 
limitation component is estimated to be $53.2 million ($34.3 million, 
discounted) in gross operating revenues and $43.9 million ($28.5 
million, discounted) in net operating revenues. Therefore, by excepting 
the air tours along these two air routes that are conducted in support 
of the Tribe, the FAA has reduced the overall cost (net operating 
revenue) of this Final Rule to $155.4 million ($100.3 million, 
discounted) for the ten-year period 2000-2009.

Cost of Reporting Requirements to Operators

    The FAA considered two reporting requirement alternatives in the 
NPRM, these being quarterly reporting and trimester reporting. The 
existing rule requires certificate holders to report three times 
annually, but the final rule will change this to quarterly reporting, 
in Sec. 93.325. Since the existing rule already requires certificate 
holders to establish a system to implement the reporting requirement, 
the FAA assumed there will be no start-up costs to implement this 
requirement.
    Under the reporting requirement scenario, the written information 
will have to be provided to the Las Vegas FSDO four times per year. The 
FAA assumes that each operator will 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 2 hours per operator 
regardless of the number of aircraft; this assumes that the operators 
have been recording the information throughout the year. The total 
incremental cost to the industry to move to quarterly reporting is 
estimated at $11,000 for 10 years or $8,600, discounted.
    The FAA considered two alternative means of monitoring the 
allocations, a form system and the filing of flight plans, in the NPRM. 
The requirement to file a flight plan is in the final rule. Section 
93.323 of the final rule will require each certificate holder 
conducting a commercial SFRA operation to file a visual flight rules 
(VFR) flight plan with an FAA Flight Service Station for each such 
flight. A flight consists of one take-off and one landing. The 
``remarks'' section of the flight plan will be completed to indicate 
the purpose of the flight out of six designated purposes. The 
information obtained from the flight plan will be used to ensure 
compliance with the commercial air tour limitation. Copies will not 
have to be maintained by the certificate holder or carried on board the 
aircraft.
    The extent to which an operator will be impacted will depend upon 
the volume of his/her commercial air tour business in GCNP and the 
number of aircraft and pilots providing air tour service. Additionally, 
the cost impact will be influenced by whether the operator conducts air 
tours daily on a regular frequency.
    Relying on information from the Las Vegas FSDO, the FAA has 
identified the following four principal areas where start up costs for 
the larger, more regularly scheduled operators will 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 the first three tasks and possibly the fourth, the instructing 
of the pilots in the new procedures, will be the responsibility of each 
operator's Director of Operations. The FAA estimates that the total 
initial fixed costs to the Grand Canyon air tour operators for the VFR 
flight filing requirements will be about $22,300 or $20,900, 
discounted.

Cost of Other Provisions to Operators

    Operators will incur costs associated with (1) requesting 
modification and allocations and (2) transfer of allocations. The FAA 
estimates that the cost of these provisions can be up to $20,000 or 
$14,000, discounted over 10 years.
    The FAA recognizes that the air tour business in the GCNP is 
constantly changing. Thus, due to mergers/acquisitions, bankruptcies, 
etc., certificate holders may believe that the data submitted for May 
1, 1997 to April 30, 1993 was not reflective of their business 
operations. Therefore, the FAA permitted any certificate holder who 
believed that the base year data does not reflect its business 
operation to submit a written statement requesting that its initial 
allocation be revised.
    Ten operators requested modifications to their proposed initial 
allocations following publication of the NPRM. The one-time cost to the 
industry would be between $2,500 and $5,000 (which includes ten days or 
80 hours of effort) or between $2,300 and $4,700, discounted.
    The FAA also recognizes that air tour operators often utilize a 
variety of contracting/subcontracting methods to handle passenger loads 
during busy periods. Therefore, the FAA will allow an allocation to be 
transferred among certificate holders, subject to the restrictions 
enumerated in the Preamble of this rule. Under the final rule, all 
certificate holders are required to report any transfer of allocations 
to the Law Vegas FSDO in writing. The FAA distinguishes between 
temporary and permanent transfers of allocations.
    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 and views such costs as de minimus. Permanent 
transfers of allocations resulting from mergers/acquisitions, 
bankruptcies, or other

[[Page 17728]]

reasons that affect operations, will require FAA approval through the 
modification of the operations specifications in addition to the 
required reporting to the Law Vegas FSDO in writing.
    For this analysis, the FAA assumes two operator transfers per year. 
The annual cost to the industry will be between $1,000 and $2,000 
annually (about a total of 32 hours annually) or between $900 and 
$1,900, discounted. The cost over 10 years will be between $10,000 and 
$20,000 or between $7,000 and $14,000, discounted.

Cost of the Final Rule to the FAA

    The FAA, as a result of this rule, will incur costs associated with 
the initial allocation, recording and tracking, filing of flight plans, 
and transfer of allocations. Over the next 10 years, FAA costs are 
expected to be $1.06 million or $746,400 discounted.
    Under this final rule, each certificate holder reporting commercial 
air tours to the FAA in accordance with current Sec. 93.317 will 
receive one allocation for each air tour conducted and reported during 
the base year period. Certificate holders identified in the NPRM as 
receiving allocations to conduct air tours in the SFRA received written 
notification of their allocations.
    The FAA will need to develop an allocation process and prepare the 
necessary information to send to each air tour operator. This one-time 
administrative work will require analyst, clerical, legal, and 
management resources. The FAA assumes that it will take about two weeks 
to set up a spreadsheet and prepare the necessary information to send 
to each air tour operator. The initial cost to implement this part of 
the rule will be $3,800 in the first year only.
    In addition, the FAA will incur recurring annual costs from the 
recording and tracking of the information provided by the provided by 
the operators. Again, this will require analyst, clerical, legal,and 
management resources. The agency estimates that the total cost of these 
elements would be about $99,300 annually and $992,800 over ten years 
($697,300, discounted).
    Allocations to conduct air tour operations in the GCNP SFRA will be 
an operating privilege initially granted to the certificate holders who 
conducted air tour operations during the base year and reported them to 
the FAA. This allocation will be subject to reassessment after two 
years.
    The FAA estimates that, on average, the FAA will spend about 80 
hours managing the transfer of allocations from each merger or 160 
hours annually assuming two mergers, transfers, etc. annually. The FAA 
estimates that cost will be about $6,500 annually or $64,800 over ten 
years or $45,500, discounted.

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.'' The Small Business Administration defines 
airlines with 1,500 or fewer employees for the air transportation 
industry as small entities. For this final rule, the small entity group 
is considered to be operators conducting commercial air tours in the 
GCNP SFRA and having 1,500 or fewer employees. The FAA has identified a 
total of 25 such entities that meet this definition.
    Agencies must perform a review to determine whether a proposed or 
final rule will have a significant economic impact on a substantial 
number of small entities. If the determination is that it will, the 
agency must prepare a regulatory flexibility analysis (RFA) as 
described in the Act.
    The FAA has estimated the annualized cost impact on each of these 
25 small entities potentially impacted by the rule. The final rule is 
expected to impose an estimated total cost on operators of $155.4 
million ($100.3 million, discounted). The average annualized cost over 
ten years is estimated at about $960,000 for each operator (with a 
range of $200 to $6.3 million). The FAA has determined that the rule 
will have a significant impact on a substantial number of small 
entities, and has performed a regulatory flexibility analysis. As 
discussed above, most small entities will incur an economically 
significant impact.
    Under Section 603(b) of the RFA (as amended), each regulatory 
flexibility analysis is required to consider alternatives that will 
reduce the regulatory burden on affected small entities. The FAA has 
examined several alternative provisions of this final rule that will be 
discussed below. In addition, the FAA is also required to address these 
points: (1) Reasons why the FAA is considering the rule, (2) the 
objectives and legal basis for the rule, (3) the kind and number of 
small entities to which the rule will apply, (4) the projected 
reporting, recordkeeping, and other compliance requirements of the 
rule, and (5) all Federal rules that may duplicate, overlap, or 
conflict with the rule.

Reasons Why the FAA Is Considering the Final 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 NPS to develop recommendations to achieve the substantial 
restoration of natural quiet in GCNP. The FAA was directed, pursuant to 
Public Law 100-91, to implement these recommendations unless there was 
a safety reason not to do so. The FAA and NPS believe it is necessary 
to impose a commercial air tour limitation in order to stabilize noise 
levels in the SFRA while further noise analysis is conducted.

The Objectives and Legal Basis for the Final Rule

    The objective of the final rule is to limit all commercial air 
tours in the GCNP SFRA on a 12-month basis. Commercial air tours 
conducted by certificate holders in the SFRA are not to exceed the 
amount of air tours reported in accordance with current Sec. 93.317 for 
the period from May 1, 1997 through April 30, 1998.
    The legal basis for the 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 have raised serious concerns regarding public 
safety, including concerns regarding the safety of park users.'' 
Further congressional direction is discussed in the history section of 
this regulatory evaluation.

The Kind and Number of Small Entities to Which the Final Rule Would 
Apply

    The final rule applies to 24 affected part 135 and part 121 
commercial air tour operators, each having 1,500 or fewer employees. 
The FAA estimates that all 24 operators (25 entities) will be impacted 
by the final rule. The FAA has limited financial profile information 
(e.g., operating revenue, operating expenses, operating profit, net 
operating revenue, and passenger revenue) for six of the impacted 
operators. Balance sheet information on assets and liabilities is not 
readily available. However, the FAA received financial information from 
two

[[Page 17729]]

air tour operators; a summary of their submitted material is discussed 
in the Appendix to the full economic analysis.

The Projected Reporting, Recordkeeping, and Other Compliance 
Requirements of the Final Rule

    Each of the operators affected by this rule will need to comply 
with certain reporting requirements. Certificate holders conducting 
commercial SFRA operations will complete a flight plan for each flight. 
The FAA estimates this compliance effort can impose an additional one 
to five minutes on the part of the certificate holder per operation for 
each of the small entities during each year of compliance, for a total 
of 4,500 hours annually.
    In addition, certificate holders conducting commercial air tours 
will need to report quarterly to the FAA certain information on the 
total operations conducted in the SFRA to the FAA. The FAA estimates 
that this compliance effort will take place four times per year (one 
additional time compared to the current rule) and will impose an 
additional 50 hours of labor on the industry annually. This provision 
will cause an operator, regardless of the number of aircraft, to expend 
an additional 2 hours of labor annually (including record maintenance).
    The initial assigned allocation involved operator requests for 
modifications that the FAA estimates will impose about 1 to 2 person 
days of added work. Ten operators requested modification to their 
allocations. As discussed above, the FAA estimates that the paperwork 
burden to each of these firms will range from 8 to 16 hours.
    Finally, the FAA assumes that no more than 2 operators each year 
are likely to submit requests for permanent transfers of allocations 
(e.g., to enter, leave or merge). The FAA estimates that the two firms 
will spend about 32 hours annually preparing the required documentation 
to be submitted to the FAA.
    Excluding the provisions that impose a one-time burden (initial 
allocations that will affect five operators the first year annually of 
80 hours total), the FAA estimates each certificate holder will have 
imposed an additional annual reporting burden on average of 575 hours 
of labor. Over a period of 10 years, a total of approximately 143,750 
hours will be spent.

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 final rule.

Alternatives

    Aircraft noise in the GCNP can be controlled in a number of ways. 
Hence, noise-reducing measures can be accomplished through any one or a 
combination of these methods. As directed by Public Law 100-91, NPS 
developed a number of recommendations to substantially restore natural 
quiet. These recommendations were included in NPS' 1994 Report to 
Congress. These recommendations included a number of different 
approaches to achieving the statutory mandate of Public Law 100-91. 
Some of these recommendations were adopted in 1996. Others have been 
under consideration. The following summarize the status of each of 
these recommendations:
Altitude Restrictions
    As one alternative, aircraft could be required to fly above 
specific altitudes in certain parts of GCNP. The noise generated by 
these aircraft flying at higher altitudes would be more widely 
dispersed before it reached the ground than if these aircraft were 
flying at lower altitudes. Ground visitors would then be less likely to 
hear the aircraft the higher up they are flying. Air tour passengers, 
however, would see less dramatic views of the Grand Canyon when flying 
at higher altitudes.
    The FAA has adopted this approach as one of the several options it 
is using to control aircraft noise in GCNP. On May 27, 1998, the FAA 
issued SFAR No. 50-2. This SFAR established four flight-free zones from 
the surface to 14,499 feet above mean sea level in the area of the 
Grand Canyon. It also prohibited flight below a certain altitude in 
certain sectors of the Grand Canyon. On December 31, 1996, the FAA 
issued a final rule (61 FR 69302) which raised the ceiling of the SFRA 
to 17,999.
Establishment of Air Tour Routes
    Another approach used by the FAA is to contain aircraft noise to 
certain parts of the Grand Canyon by establishing air tour routes. On 
May 27, 1998, the FAA issued SFAR No. 50-2, which provided for special 
routes for air tours. On December 31, 1996, the FAA issued a final rule 
(61 (FR 69302) which established a new FFZ and altered the boundaries 
of the other already established FFZs. This rule change necessitates a 
change in the air tour routes, which the FAA will establish next year 
(enforcement of the airspace actions in 61 FR 69302 has been delayed 
until after the establishment of these new routes).
Air Tour Curfews
    Visitors to the Grand Canyon are likely to be more annoyed by 
aircraft noise during certain times of the day than at other times of 
the day. The FAA established air tour curfews in 61 FR 69302 to address 
this problem. In the summer season, air tours may not operate in the 
Dragon and Zuni Point corridors between the hours of 6 pm and 8 am; in 
the winter, the curfew is between 5 pm and 9 am. In future rulemakings, 
this curfew may be expanded to the rest of the Grand Canyon or the 
curfew hours may be expanded.
Limits on the Number of Aircraft That Can Be Used
    On December 31, 1996, the FAA issued a final rule (61 FR 69302) 
which placed a cap on the number of ``commercial sightseeing'' aircraft 
that could operate in the SFAR. The FAA is revising this final rule to 
limit the number of air tours instead of aircraft because it was 
determined the aircraft cap was not an adequate limit on growth.
Limits on the Number of Air Tour Operations
    Capping the number of flights allowed in the GCNP is another 
approach for limited aircraft noise that may be permitted in the park. 
This approach is being adopted by the FAA with this particular 
rulemaking. This final rule temporarily limits all commercial air tours 
in the GCNP SFRA on a calendar year basis so that such air tours 
conducted by certificate holders in the SFRA do not exceed the amount 
of air tours reported in accordance with current Sec. 93.317.
Expansion of Flight Free Zones
    Another approach that the FAA uses to control aircraft noise in the 
Grand Canyon is to establish Flight Free Zones. Aircraft, under this 
alternative, would be forbidden from flying over certain parts of the 
GCNP. This highly restrictive alternative is designed to protect 
certain areas from any noise emanating from aircraft overhead. SFAR 50-
2 established four flight-free zones from the surface to 14,499 feet 
mean sea level. On December 31, 1996, the FAA established a new FFZ, 
merged to existing FFZs, and expanded the other two FFZs.
Phase Out of Noisy Aircraft
    An approach that the FAA is currently considering is mandating that 
noisy aircraft be phased out of service over the Grand Canyon. The FAA 
proposed such an action by issuing an

[[Page 17730]]

NPRM on December 31, 1996 to phase out noisy aircraft by 2008. This 
could be a very expensive rulemaking; costs were estimated at $173 
million (undiscounted) in the 1996 NPRM. All these costs would have to 
be borne by 25 small operators. The FAA has delayed issuing a final 
rule in order to consider other less costly actions. However, the FAA 
may choose to issue a final rule on this action in the future.
Encourage the Use of Quiet Aircraft
    This recommendation would require aircraft used in GCNP to meet a 
yet to be defined standard to be considered quiet technology. As stated 
in the December 1996 final rule on Special Flight Rules in the Vicinity 
of Grand Canton National Park, quieter aircraft technology incentives 
are viewed as another approach to substantially restore natural quiet 
to the Grand Canyon while maintaining a viable tour industry.
Establishment of Aircraft Noise Budgets
    An approach that the FAA has not yet adopted, but which is under 
consideration is the noise budget. In this alternative, the FAA would 
consider letting the market place allow the aircraft owners to 
determine which airplanes to fly by rationing the amount of noise that 
any tour operator could emit. Each tour operator would be allotted a 
specific amount of noise ``credits'' to be spent over a specific period 
of time, such as a day, week, or month. These credits would be 
allocated based on a formula that takes into account the number of 
tours, and the number and type of aircraft that they had in the base 
year. Each aircraft type would be assigned a rating based on how noisy 
it was when compared to a certain decibel level; the noisier the 
aircraft, the higher its rating. When an operator flew any particular 
aircraft on its tour, it would use up this numerical rating against the 
number of noise credits that it had been allocated.
    Tour operators could increase their number of tours in two basic 
ways. They could purchase credits from other operators, thus allowing 
more tours and/or noisier aircraft. Alternatively, they could invest in 
quieter aircraft, thus allowing them to fly more tours. Of course, 
operators could do both, which would certainly increase their number of 
flights.
    A variation on this alternative would be to assign specific routes 
or specific times of day with positive and negative bonus ``points''. 
These points could either add to or subtract from the aircraft's rating 
as incentive for operators to fly or not to fly certain routes or at 
certain times of the day. Thus, an operator who chose the ``negative 
points'' routes and/or times of the day would be rewarded by being able 
to fly more tours. On the other hand, since some of the ``positive 
point'' routes and/or times of the day might be the more lucrative ones 
(where and when everyone would want to fly), operators would also be 
free to try to maximize profits by fling these.
    While the FAA has not currently adopted this alternative, the FAA 
may consider adopting this alternative or elements of this alternative 
in the future.
Time of Week Restriction
    Another alternative not yet under active consideration would be to 
restrict tours to specific days during the week. This way, certain 
parts of the Park or the entire Park could be noise free for entire 
days. This approach might be used during the October ``oars only 
rafting period.'' A variation would be to combine this alternative with 
time of day restrictions. Hence, a certain corridor could, for example, 
be off-limits for tours for 2 mornings and 3 afternoons during the 
week.
    Another variation would be to give the tour operators a number of 
day-of-the-week ``credits'' and allow the tour operators to bid on 
which days they would want to fly each corridor and how many tours 
would be flown on each of the days when tours would be allowed. This 
variation would allow operators to maximize profits given the 
constraint of days of the week when tours would not be allowed.
    It should be noted that these and, possibly additional alternative, 
may be considered in the context of efforts to encourage the use of 
quiet technology. Where possible, the FAA will seek to implement 
options that will lower air tour operators' overall costs while 
promoting the goal of substantial restoration of natural quiet.

Affordability Analysis

    For the purpose of this RFA, an affordability analysis is an 
assessment of the ability of small entities to meet costs imposed by 
the final rule. These are two types of costs imposed by the rule: (1) 
out-of-pocket costs (actual expenditures) associated with applications 
and documentation and (2) loss of potential future operating revenue 
associated with an increase in the level above current levels. This 
latter burden may be significant to financial viability because 
companies depend on growth in operating revenue to provide necessary 
cash to meet long-term obligations such as equipment purchase loans. A 
company's short-run financial strength is substantially influenced, 
among other things, by its liquidity (working capital position and its 
ability to pay short-term liabilities). Unfortunately, most of the data 
to analyze this are not available.
    There is an alternative perspective to the assessment of 
affordability, which pertains to the size of the annualized costs of 
the 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 Canyon 
commercial air tour operating revenues for each of the small entities. 
The annualized change in net operating revenues corresponds to 
foregoing the anticipated 3.3 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 rule through fare 
increases.
    It appears that given the current state of the industry, changes in 
net operating revenues might be offset by increased airfares. The limit 
on air tours will restrict the future supply of Grand Canyon air tours 
while demand for air tours is expected to increase, which might make it 
easier for affected entities to increase prices. No clear conclusion 
can be drawn with regard to the abilities of small entities to afford 
the reductions in net operating revenues that will be imposed by this 
final rule because the FAA is not able to estimate the amount of 
revenue increase obtained through price increases.

Disproportionality Analysis

    The FAA does not believe any of the 25 entities will be 
disadvantaged relative to larger operators because within the context 
of the RFA, all Grand Canyon commercial air tour operators are small 
regardless of their size relative to one another.

Competitiveness Analysis

    All air tour operators currently operating in GCNP are small 
entities. All these operators will be proportionately impacted by the 
commercial air tour limitation provision of this rulemaking (the 
commercial air tour limitation has the greatest impact of

[[Page 17731]]

all provisions of this rulemaking). The smaller operators will not be 
put at a disadvantage relative to the largest operators as a result of 
this provision.
    Except for air tours to and from Grand Canyon West Airport, this 
rulemaking contains one feature impacting competitiveness. The 
commercial air tour limitation will protect established operators from 
competition from new entrants or form newly established operators who 
are just getting set up and therefore provide only a limited number of 
air tours. In this instance, the commercial air tour limitation puts 
new entrants and newly established operators at a disadvantage to the 
established operators because that provision will limit the number of 
air tours they can provide to only those allocation that they can 
obtain through transfer.

Business Closure Analysis

    The FAA is unable to determine with certainty the extent to which 
the final rule will cause small entities to close their operations. 
However, the limited profit and loss data that the FAA has and the 
affordability analysis can be an indicator in business closures. In 
1997 and 1998, of the data that the FAA has for 6 air tour operators, 
two of these air tour operators experienced losses in both years.
    In determining whether or not any of the 25 small entities will 
close business as the result of compliance with this rule, one question 
must be answered: ``Will the cost of compliance be so great as to 
impair an entity's ability to remain in business?'' The FAA has 
incomplete information on which or how many of these small entities are 
already in serious financial difficulty and the limited number of 
commenters who supplied information to the docket did not elaborate on 
this. However, this rule can have a significant impact on those small 
entities that re already experiencing financial difficulty. This 
rulemaking can prevent them from escaping their financial difficulties 
through increased revenues from an increase in futurecommercial air 
tours. To what extent the proposed rule makes the difference in whether 
these entitles remain in business is difficult to answer.

Summary of Benefits and Costs

    Public Law 100-91 was adopted to substantially restore natural 
quiet and experience in GCNP. The primary intended benefit of this rule 
is its contribution toward restoring natural quiet and experience in 
GCNP. The FAA estimates that this rule, together with its two 
associated actions of route adjustments, will restore natural quiet to 
about 41 percent of the park. The estimated 10-year use benefits 
(benefits derived from hiking, rafting, or sightseeing) as a result of 
this rule and the associated actions will be about $39.8 million, 
discounted as 7 percent over 10 years. This rule, without the 
associated actions, will provide a discounted ``use'' benefit to ground 
visitors of about $20.4 million over the same period. The FAA does not 
have adequate data to estimate the non-use benefits of aircraft noise 
reduction at GCNP, but believes this rulemaking may generate 
significant non-use benefits.
    The estimated 10-year cost of these regulations will be $155.4 
million ($100.3 million, discounted). The majority of the costs of 
these regulations will be $154.3 million ($98.6 million, discounted) 
due to the imposition of air tour operations limits. After two years, 
this requirement may be reviewed and subject to change. At the end of 
the two years review, the cost in lost revenue will be $13.2 million 
($11.9 million, discounted). The status of the quiet technology 
rulemaking and the Comprehensive Aircraft Noise Management plan will 
also be taken into consideration at that time. The estimated 10-year 
cost of the other provisions to air tour operators is $30,000, or 
$23,000, discounted. FAA costs are estimated at $1.06 million or 
$746,400 discounted.

International Trade Impact Assessment

    The FAA has determined that the rulemaking will not affect non-U.S. 
operators of foreign aircraft operating outside the United States nor 
will affect U.S. trade. It can, however, have an impact on commercial 
air tour business at GCNP, much of which is foreign.
    The United States Air Tour Association estimated that 60 percent of 
all commercial air tourists 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 air tour limitation rulemaking disrupts the 
marketing of Grand Canyon air tours to foreign visitors and thereby 
reduces their patronage of these tour, the commercial air tour industry 
can potentially experience an additional loss of revenue beyond what is 
expected as a result of the cap.
    The FAA cannot put a dollar value on the portion of the potential 
loss in commercial air tour revenue associated with a weakening in 
foreign demand for U.S. services concomitant with the limitation on 
commercial air tours of the Grand Canyon.

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 extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure 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. 1534(a), requires the Federal agency to 
develop an effective process to permit timely input by elected officers 
(or their designees) of State, local, and tribal governments on a 
``significant intergovernmental mandate.'' A ``significant 
intergovernmental mandate'' under the Act is any provision in a Federal 
agency regulation that will impose an enforceable duty upon State, 
local, and tribal governments in the aggregate of $100 million 
(adjusted annually for inflation) in any one year. Section 203 of the 
Act, 2 U.S.C. 1533, which supplements section 204(a), provides that, 
before establishing any regulatory requirements that might 
significantly or uniquely affect small governments, the agency shall 
have developed a plan, 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 final 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.

Federalism Implications

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. The FAA determined that 
this action does not have a substantial direct effect 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, the FAA has determined that this final rule 
does not have federalism implications.

Environmental Review

    The FAA has prepared a Final Supplemental Environmental Assessment 
(FSEA) for this final rule to

[[Page 17732]]

ensure conformance with the National Environmental Policy Act of 1969. 
Copies of the FSEA will be circulated to interested parties and a copy 
has been placed in the docket, where it will be available for review.

Energy Impact

    The energy impact of the notice has been assessed in accordance 
with the Energy Policy and Conservation Act (EPCA) Public Law 94-163, 
as amended (43 U.S.C. 6362) and FAA Order 1053.1. It has been 
determined that the final rule is not a major regulatory action under 
the provisions of the EPCA.

List of Subjects in 14 CFR Part 93

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

The Amendment

    For the reasons set forth above, the Federal Aviation 
Administration amends part 93, in chapter I 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 Special Flight Rules Area Operation means any portion of 
any flight within the Grand Canyon National Park Special Flight Rules 
Area that is conducted by a certificate holder that has operations 
specifications authorizing flights within the Grand Canyon National 
Park Special Flight Rules Area. 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'' which is 
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 93.315 is revised to read as follows:


Sec. 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]

    4. Section 93.316 is removed and reserved.

    5. 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.

    6. Section 93.319 is added to read as follows:


Sec. 93.319   Commercial air tour limitations.

    (a) Unless excepted under paragraph (f) or (g) of this section, no 
certificate holder certificated in accordance with part 119 for part 
121 or 135 operations may conduct more commercial air tours in the 
Grand Canyon National Park in any calendar 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, unless excepted under paragraph (g).
    (c) Certificate holders who conducted commercial air tours during 
the base year and reported them to the FAA receive an initial 
allocation.
    (d) A certificate holder must use one allocation for each flight 
that is a commercial air tour, unless excepted under paragraph (f) or 
(g) of this section.
    (e) Each certificate holder's operation specifications will 
identify the following information, as applicable:
    (1) Total SFRA allocations; and
    (2) Dragon corridor and Zuni Point corridor allocations.
    (f) Certificate holders satisfying the requirements of Sec. 93.315 
of this subpart are not required to use a commercial air tour 
allocation for each commercial air tour flight in the GCNP SFRA 
provided the following conditions are satisfied:
    (1) The certificate holder conducts its operations in conformance 
with the routes and airspace authorizations as specified in its Grand 
Canyon National Park Special Flight Rules Area operations 
specifications;
    (2) The certificate holder must have executed a written contract 
with the Hualapai Indian Nation which grants the certificate holder a 
trespass permit and specifies the maximum number of flights to be 
permitted to land at Grand Canyon West Airport and at other sites 
located in the vicinity of that airport and operates in compliance with 
that contract; and
    (3) The certificate holder must have a valid operations 
specification that authorizes the certificate holder to conduct the 
operations specified in the contract with the Hualapai Indian Nation 
and specifically approves the number of operations that may transit the 
Grand Canyon National Park Special Flight Rules Area under this 
exception.
    (g) Certificate holders conducting commercial air tours at or above 
14,500 feet MSL but below 18,000 feet MSL who did not receive initial 
allocations in 1999 because they were not required to report during the 
base year may operate without an allocation when conducting air tours 
at those altitudes. Certificate holders conducting commercial air tours 
in the area affected

[[Page 17733]]

by the eastward shift of the SFRA who did not receive initial 
allocations in 1999 because they were not required to report during the 
base year may continue to operate on the specified routes without an 
allocation in the area bounded by longitude line 111 degrees 42 minutes 
east and longitude line 111 degrees 36 minutes east. This exception 
does not include operation in the Zuni Point corridor.

    7. 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, except as adjusted to incorporate 
operations occurring for the base year of April 1, 2000 and ending on 
March 31, 2001, that operate at or above 14,500 feet MSL and below 
18,000 feet MSL and operations in the area affected by the eastward 
shift of the SFRA bounded by longitude line 111 degrees 42 minutes east 
to longitude 111 degrees 36 minutes east.
    (4) Allocations may be transferred among Part 135 or Part 121 
certificate holders, subject to all of 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.
    (5) An allocation will revert to the FAA upon voluntary cessation 
of commercial air tours within the SFRA for any consecutive 180-day 
period unless the certificate holder notifies the FSDO in writing, 
prior to the expiration of the 180-day time period, of the following: 
the reason why the certificate holder has not conducted any commercial 
air tours during the consecutive 180-day period; and the date the 
certificate holder intends on resuming commercial air tours operations. 
The FSDO will notify the certificate holder of any extension to the 
consecutive 180-days. A certificate holder may be granted one 
extension.
    (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.

    8. 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. This section does not apply to operations conducted in 
accordance with Sec. 93.309(g). 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'' which is available from the Las Vegas 
Flight Standards District Office.

    9. 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 March 28, 2000.
Jane F. Garvey,
Administrator.
[FR Doc. 00-7949 Filed 3-28-00; 4:59 pm]
BILLING CODE 4910-13-M