[Federal Register Volume 65, Number 109 (Tuesday, June 6, 2000)]
[Rules and Regulations]
[Pages 36002-36009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14045]



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Part II





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 187



Fees for FAA Services for Certain Flights; Interim Rule

  Federal Register / Vol. 65, No. 109 / Tuesday, June 6, 2000 / Rules 
and Regulations  

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 187

[Docket No. FAA-00-7018; Amendment No. 187-11]
RIN 2120-AG17


Fees for FAA Services for Certain Flights

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Interim final rule with request for comments; notice of public 
meeting.

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SUMMARY: This document establishes fees for FAA air traffic and related 
services for certain aircraft that transit U.S.-controlled airspace but 
neither take off from, nor land in, the United States. This action will 
allow the FAA to recover through fees the costs it incurs in providing 
these services. The FAA is requesting comments concerning the fee 
schedule and the fee collection process. In addition, the FAA is 
announcing a public meeting on the Interim Final Rule to provide an 
additional opportunity for the public to comment.

DATES: Effective date August 1, 2000. Comments must be received on or 
before October 4, 2000. The public meeting will be held on June 29, 
2000.

ADDRESSES: Comments on this document should be mailed or delivered, in 
duplicate, to: U.S. Department of Transportation Dockets, Docket No. 
FAA-00-7018, 400 Seventh Street SW., Room Plaza 401, Washington, DC 
20590. Comments may be filed and examined in Room Plaza 401 between 10 
a.m. and 5 p.m. weekdays, except Federal holidays. Comments also may be 
sent electronically to the Dockets Management System (DMS) at the 
following Internet address: http://dms.dot.gov/ at any time. Commenters 
who wish to file comments electronically should follow the instructions 
on the DMS web site.
    The public meeting will be held at the Holiday Inn Capitol, 550 C 
Street, SW., Washington, DC 20024; Registration: 8:30 a.m.; Meeting: 9 
a.m.-4 p.m.

FOR FURTHER INFORMATION CONTACT: Randall Fiertz, Office of Performance 
Management, (APF-1), Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington, DC 20591; telephone (202) 267-7140; fax (202) 
493-4191.
    Requests to present a statement at the public meeting on the Fees 
for FAA Services for Certain Flights Interim Final Rule and questions 
regarding the logistics of the meeting should be directed to Judy 
Courbois, Office of Rulemaking (ARM-102), Federal Aviation 
Administration, 800 Independence Avenue, SW., Washington, DC 20591, 
telephone (202) 267-9783; fax (202) 267-5075.

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested persons are invited to participate in this rule by 
submitting such written data, views, or arguments as they may desire. 
Comments relating to the environmental, energy, federalism, or economic 
impact that might result from adopting the rules in this document also 
are invited. The FAA specifically seeks comments on the fee schedule, 
formulas used to determine the cost per unit, the associated collection 
process, and the scope of services for which costs will be recovered. 
Comments must identify the regulatory docket or amendment number and be 
submitted in duplicate to the DOT Rules Docket address specified above.
    All comments received, as well as a report summarizing each 
substantive public contact with FAA personnel concerning this 
rulemaking, will be filed in the docket. The docket is available for 
public inspection before and after the comment closing date. All 
comments received on or before the closing date will be considered by 
the Administrator before taking final action on this rulemaking. 
Comments filed late will be considered as far as possible without 
incurring expense or delay. The proposals in this document may be 
changed in light of the comments received.
    Commenters wishing the FAA to acknowledge receipt of their comments 
submitted in response to this document must include a pre-addressed, 
stamped postcard with those comments on which the following statement 
is made: ``Comments to Docket No. FAA-00-7018.'' The postcard will be 
date stamped and mailed to the commenter. The 120-day comment period is 
intended to allow the international commenters sufficient time to 
submit comments.
    In order to give the public an additional opportunity to comment on 
the Interim Final Rule, the FAA is planning a public meeting. Because 
of this additional opportunity to comment on the Interim Final Rule, 
the FAA does not intend to extend the closing date for comments.
    Requests from persons who wish to present oral statements at the 
public meeting on Fees for FAA Services for Certain Flights Interim 
Final Rule should be received by the FAA no later than June 22, 2000. 
Such requests should be submitted to Judy Courbois, as listed in the 
section titled FOR FURTHER INFORMATION CONTACT. Requests received after 
June 22, 2000, will be scheduled if time is available during the 
meeting; however, the names of those individuals may not appear on the 
written agenda. The FAA will prepare and make available at the meeting 
an agenda listing the scheduled speakers. To accommodate as many 
speakers as possible, the amount of time allocated to each speaker may 
be less than the amount of time requested. Any person desiring to have 
available audiovisual equipment should notify the FAA when requesting 
to be placed on the agenda.

Public Meeting Procedures

    The public meeting will be held on June 29, 2000, at the Holiday 
Inn Capitol, 550 C Street, SW., Washington, DC 20024; Registration: 
8:30 a.m.; Meeting: 9 a.m.-4 p.m.
    The following procedures are established to facilitate the public 
meeting on the Interim Final Rule:
    1. There will be no admission fee or other charge to attend or to 
participate in the public meeting. The meeting will be open to all 
persons who have requested in advance to present statements or who 
register on the day of the meeting (between 8:30 a.m. and 9 a.m.) 
subject to availability of space in the meeting room.
    2. The public meeting may adjourn early if scheduled speakers 
complete their statements in less time than is scheduled for the 
meeting.
    3. The FAA will try to accommodate all speakers; therefore, it may 
be necessary to limit the time available for an individual or group.
    4. Representatives of the FAA will conduct the public meeting. A 
panel of FAA personnel involved in this issue will be present.
    5. Participants should address their comments to the panel. No 
participant will be subject to cross-examination by any other 
participant.
    6. Sign and oral interpretation can be made available at the 
meeting, as well as an assistive listening device, if requested no 
later than 1 week before the meeting.
    7. The meeting will be recorded by a court reporter. A transcript 
of the meeting and any material accepted by the panel during the 
meeting will be included in the public docket (Docket No. FAA-00-7018). 
Any person who is interested in purchasing a copy of the transcript 
should contact the court reporter directly. This information will be 
available at the meeting.

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    8. The FAA will review and consider all material presented by 
participants at the public meeting. Position papers or material 
presenting views or information related to the Interim Final Rule may 
be accepted at the discretion of the presiding officer and subsequently 
placed in the public docket. The FAA requests that persons 
participating in the meeting provide 10 copies of all materials to be 
presented for distribution to the panel members; other copies may be 
provided to the audience at the discretion of the participant.
    9. Statements made by members of the public meeting panel are 
intended to facilitate discussion of the issues or to clarify issues. 
Because the meeting concerning the Fees for FAA Services for Certain 
Flights Interim Final Rule is being held during the comment period, 
final decisions concerning issues that the public may raise cannot be 
made at the meeting. The FAA may, however, ask questions to clarify 
statements made by the public and to ensure a complete and accurate 
record. Comments made at this public meeting will be considered by the 
FAA.
    10. The meeting is designed to solicit public views on the Interim 
Final Rule. Therefore, the meeting will be conducted in an informal and 
nonadversarial manner.

Availability of the Interim 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 Government Printing Office (GPO)'s electronic bulletin 
board service (telephone: (202) 512-1661).
    Internet users may reach the FAA's web page at http://www.faa.gov/avr/arm/nprm/nprm.htm or the GPO's web page at http://www.access.gpo.gov/nara access to recently published rulemaking 
documents.
    Any person may obtain a copy of this document by submitting a 
request to the Federal Aviation Administration, Office of Rulemaking, 
ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling 
(202) 267-9680. Communications must identify the amendment number or 
docket number of this Interim Final Rule.
    Persons interested in being placed on the mailing list for future 
rulemaking documents should request from the above office a copy of 
Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution 
System, which describes the application procedure.

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 on the FAA's 
web page at http://www.faa.gov/avr/arm/sbrefa.htm and may send 
electronic inquiries to the following Internet address: [email protected].

Background

Authority To Establish Fees

    The Federal Aviation Reauthorization Act of 1996 (the Act) directs 
the FAA to establish by Interim Final Rule a fee schedule and 
collection process for air traffic control (ATC) and related services 
provided to aircraft, other than military and civilian aircraft of the 
U.S. Government or of a foreign government, that neither take off from, 
nor land in, the United States (49 U.S.C. 45301, as amended by Pub. L. 
104-264).
    Also, the Act directs the FAA to ensure that the fees allowed by 
the Act are directly related to the FAA's costs of providing the 
service rendered. The Act further states that services for which costs 
may be recovered include the costs of ATC, navigation, weather 
services, training and emergency services that are available to 
facilitate safe transportation over the United States, and other 
services provided by the Administrator or by programs financed by the 
Administrator to flights that neither take off from, nor land in, the 
United States.

History

    On March 20, 1997, the FAA published an Interim Final Rule, Fees 
for Air Traffic Services for Certain Flights through U.S.-Controlled 
Airspace (62 FR 13496), which established fees for FAA air traffic and 
related services provided to certain aircraft that transit U.S.-
controlled airspace but neither take off from, nor land in, the United 
States. The FAA invited public comment on this Interim Final Rule. The 
effective date of the rule was May 19, 1997, and the comment period 
closed on July 18, 1997. In addition, the FAA held a public meeting on 
May 1, 1997. The FAA also published two additional Interim Final Rules 
that amended the original Interim Final Rule on May 2, 1997 (62 FR 
24285) and October 2, 1997 (62 FR 51735).
    This rulemaking was subsequently challenged. The Airline 
Transportation Association of Canada and six airlines petitioned the 
United States Court of Appeals for the District of Columbia (court) to 
review the rule.
    On January 30, 1998, the court issued its opinion on the seven 
petitions consolidated in the case of Asiana Airlines et al., v. the 
FAA, 328 U.S. App. D.C. 237, 134 F. 3d 393, 1998 U.S. App. LEXIS 1286 
(1998). The court rejected the petitioners' claims that the FAA acted 
improperly in employing an expedited procedure before the effective 
date of the Interim Final Rule, and that the FAA violated the anti-
discrimination provisions of various international aviation agreements. 
However, the court concluded that the FAA's methodology of determining 
cost violated statutory requirements.
    Therefore, the court vacated the Interim Final Rule in its entirety 
and remanded the Interim Final Rule to the FAA for further proceedings 
consistent with the opinion.
    Since the date the court vacated the Interim Final Rule issued in 
1997 the FAA has met with various user and aviation interest groups to 
listen to their concerns about fees under the Act. The last such 
meeting was on May 24, 2000, and included the Department of 
Transportation General Counsel and members of her staff. A summary of 
each these meetings can be found in the docket of this rulemaking.

The New Interim Final Rule

    When Congress passed the Act it explicitly required the FAA to 
collect the relevant fees initially by establishing an Interim Final 
Rule. The D.C. Circuit referenced this fact in 1998, but nevertheless 
struck the FAA's earlier rule because it did not comport with another 
Congressional requirement, that is, that the fee be based on costs 
incurred and not value to the user paying the fee. Although nearly 4 
years have passed since the passage of the Act, the Act continues to 
require that the fees be promulgated by Interim Final Rule (see in the 
docket the FAA Information Paper to ICAO, September 1998, entitled 
``Fees for Air Traffic Services for Certain Flights through U.S.-
Controlled Airspace'').
    The Congressional purpose of requiring the fees by Interim Final 
Rule has not been changed by the passage of time. Congress has not 
changed the statutory requirements (despite multiple opportunities to 
do so) and has continued to appropriate funds each year based on the 
collection of these fees. (See May 25, 2000, letter in the

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docket from Congressman Duncan, Chairman, Aviation Subcommittee.)
    The FAA has at all times acted as quickly as possible in 
establishing the fees but, as noted by the court in 1998, the FAA has 
been constrained by the lack of accurate cost information on which to 
base the fees. The development of an accurate cost information system, 
which is the predicate for the imposition of reasonable fees, has been 
a time consuming but necessary process. Only recently has the FAA's new 
Cost Accounting System provided this information and only now can the 
FAA proceed with rulemaking as directed by 49 U.S.C. 45301. The FAA has 
therefore determined that the Act continues to require that the fees 
the FAA is now imposing be established initially as an Interim Final 
Rule.
    Therefore, effective 60 days after the publication of this Interim 
Final Rule, the FAA will again assess a fee for air traffic and related 
services provided to users of aircraft that transit U.S.-controlled 
airspace (airspace owned or delegated to the United States) but do not 
take off from or land in the United States. The rule does not apply to 
military and civil aircraft operated by the U.S. Government or by a 
foreign government or to certain Canada-to-Canada flights.
    For the purpose of this rulemaking, U.S.-controlled airspace 
includes all U.S. airspace either directly owned by the United States 
or allocated to the United Sates by the International Civil Aviation 
Organization or by other countries. This can further be defined in 
general as enroute and oceanic airspace. Enroute airspace is generally 
defined, for the purpose of this rulemaking, as airspace where 
primarily radar-based air traffic services are provided. Oceanic 
airspace is generally defined, for the purpose of this rulemaking, as 
airspace where primarily procedural air traffic services are provided. 
A description of the U.S.-controlled airspace by latitude and longitude 
has been placed in the public docket of this rulemaking.
    Canada-to-Canada operations are defined (hereafter ``Canada-to-
Canada'') as flights conducted by any aircraft of any nationality that 
take off from and land in Canada without an intermediate stop outside 
of Canada that operate in U.S.-controlled airspace. Users are defined 
as operators of aircraft flights that neither depart from nor land in 
the United States.
    Flights that transit U.S.-controlled airspace but do not land in or 
depart from the United States (overflights) currently contribute 
nothing financially to the provision of air traffic services (ATS). 
This is despite the fact that these flights use ATS and other services 
that impose costs on the U.S. ATC system. Congress has determined in 
the 1996 Act that these users should bear a portion of the cost of 
those services.
    The air transportation environment has changed over the past 
decades with the advent of increasing numbers of long-range aircraft. 
The use of these aircraft and the routes they are able to fly have 
greatly increased the efficiency of air transportation. Although these 
overflight operations do not generally enter areas of high density air 
traffic, they do use FAA ATS.
    Operators of overflight aircraft benefit from the FAA's provision 
of ATS in several ways. First, and most importantly, FAA's ATS enhance 
safety through ATC, navigation, and communications services. Second, 
flight through U.S.-controlled airspace provides optimized routing for 
long-distance aircraft, which is of great value to the users of these 
aircraft. The level of ATS and other services that is actually provided 
to operators of overflights depends, in part, on the portions of U.S.-
controlled airspace such flights transit. These services can include 
communications, navigation, radar surveillance, emergency services, and 
flight information services. For aircraft transiting U.S. enroute 
airspace, Air Route Traffic Control Centers (ARTCCs) provide separation 
by means of radar surveillance (if they are operating under instrument 
flight rules or in airspace above 18,000 feet). Also, these flights 
generally use navigational aids and radio communication with ARTCCs. 
These services are also provided in certain oceanic areas near islands 
such as Bermuda and The Bahamas.
    For aircraft transiting oceanic airspace, where radar surveillance 
and navigational aids are not available, navigation is generally 
conducted by on-board systems. Aircraft separation, however, is 
provided under procedural control, under which flights report their 
position to an air traffic controller each time they fly over a 
specified reporting point.
    The FAA estimates that approximately 235,000 non-public (i.e. 
aircraft that are not exempt) flights transit U.S.-controlled airspace 
without landing or taking off annually (see the report entitled 
``Overflight Fee Development Report,'' which has been placed in the 
docket).
    The cost to the FAA associated with overflights covered under this 
rule is projected to be approximately $50.4 million, including the cost 
of developing and collecting the fees. This amount represents the sum 
of the separate costs for providing ATC and related services to 
overflights flying through enroute and oceanic airspace as well as all 
development costs and all projected collection costs associated with 
the fees.
    Charging overflights for ATS and related services is accepted in 
the international arena. The International Civil Aviation Organization 
(ICAO) states that ``where air navigation services are provided for 
international use, the providers may require the users to pay their 
share of the costs * * *.'' (Statements by the Council to Contracting 
States on Charges for Airports and Air Navigation Services, Paragraph 
32 (Doc. 9082/5)). Further, paragraph 42 of Doc. 9082/5 notes that 
``providers * * * may require all users to pay their share of the costs 
of providing them regardless of whether or not utilization takes place 
over the territory of the provider state.'' (Document 9082/5 has been 
placed in the docket.)

Canada-to-Canada Operations

    Currently, many Canadian flights transit U.S.-controlled airspace 
because of air traffic coordination between the United States and 
Canada. Routing through U.S.-controlled airspace by U.S. or Canadian 
ATC occurs because it is either the shortest route or it offers the 
most favorable flight conditions. This frequent and variable routing is 
done without regard to the border between Canada and the United States.
    The FAA has a long-standing ATC relationship with the Canadian ATC 
authority, currently known as NAV CANADA, beginning with an exchange of 
notes between the United States and Canadian governments in 1963. The 
FAA has determined that assessing fees on Canada-to-Canada flights 
would be inconsistent with: (1) 49 U.S.C. 106(l), 40103, and 40105; (2) 
the FAA's international agreements with Canada; and (3) the safety of 
all trans-border U.S.-Canadian flights. This determination gives 
maximum effect to all applicable statutes and agreements. The FAA's 
costs associated with Canada-to-Canada flights have been excluded from 
the cost base that overflight fees recoup. Accordingly, the total cost 
of overflights is $50.4 million, but expected billing is approximately 
$39.6 million (the difference being attributed to the FAA's agreements 
with NAV CANADA). These costs do not consider operational benefits 
under the agreements with Canada.

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The Overflight Fee

    As noted above, the Act directs the FAA to establish a fee schedule 
and collection process for ATC and related services provided to 
aircraft other than military and civil aircraft operated by the U.S. 
government or by a foreign government that neither take off from, nor 
land in, the United States. The Act further directs the FAA to issue 
the initial fee schedule and associated collection process as an 
Interim Final Rule, to ask for public comment, and to issue a 
subsequent final rule.
    The Act requires that fees be directly related to the FAA's cost of 
providing the services rendered. Furthermore, the Conference Report for 
the Act states ``* * * assuming similar costs of serving different 
carrier and aircraft types, the fee may not vary based on factors such 
as aircraft seating capacity or revenue derived from passenger fares'' 
(Congressional Record, September 26, 1996, H11316.). Consistent with 
statutory direction, the sense of Congress, as documented in the 
Conference Report, and FAA's aviation safety mission, the FAA has 
developed a uniform and fair fee for all users based on the FAA's Cost 
Accounting System (CAS).
    Two documents have been placed in the docket of this rulemaking 
that detail how the fees in this rule were determined and calculated. 
The first document, ``Cost Methodology Used to Develop Cost of Enroute 
and Oceanic ATC Services'' was prepared by the public accounting firm 
of Arthur Andersen. This document details how the FAA's new CAS, also 
required by the Act, determines the FAA's cost of the two air traffic 
services, enroute and oceanic. The second document, ``Overflight Fee 
Development Report,'' was prepared by the FAA. This document details 
how, based on the CAS, the FAA determined the cost of services provided 
to overflights based on the cost of enroute and oceanic services. The 
document also details how the fees were calculated in this rulemaking. 
Essentially, the overflight fee is computed based on distance flown 
through U.S.-controlled airspace. Separate computations are made for 
services provided in enroute airspace and in oceanic airspace to 
reflect the different costs of providing services in each of these 
environments.
    The FAA will charge users $37.43 per 100 nautical miles (or portion 
thereof) flown in enroute airspace and $20.16 per 100 nautical miles 
(or portion thereof) flown in oceanic airspace.
    Based on the second document, the fee for users (i.e., operators of 
an aircraft overflight) is calculated as follows:

Rij = (DOij  x  CO) + (DEij  x  CE)

Where:

Rij = the fee charged to aircraft flying between city i and 
city j,
DOij= distance traveled in U.S.-controlled oceanic airspace 
expressed in hundreds of nautical miles for aircraft flying between 
city i and city j,
CO = $20.16 per 100 nautical miles flown in oceanic airspace,
DEij = distance traveled in U.S.-controlled enroute airspace 
expressed in hundreds of nautical miles for aircraft flying between 
city i and city j.
CE = $37.43 per 100 nautical miles flown in enroute airspace.

This formula assumes that actual entry and exit data are available for 
individual flights in U.S.-controlled airspace. If not, best available 
flight data will be used.
    The fees are designed to charge only the directly related costs of 
FAA services to overflight users in a logical and fair manner.
    Also, the FAA has determined that no fee will be assessed unless 
the cumulative charges exceed $250 per calendar month, based on 
Greenwich Mean Time (GMT), by any particular user. The fees in this 
Interim Final Rule, including the $250 exclusion, will be reviewed when 
the Final Rule is issued and at least once every 2 years, and adjusted 
to reflect changes in costs.
    The following table illustrates the fee schedule.

BILLING CODE 4910-13-P

[[Page 36006]]

[GRAPHIC] [TIFF OMITTED] TR06JN00.000

BILLING CODE 4910-13-C

[[Page 36007]]

Fee Collection Process and Enforcement

    The FAA has established and maintains data from several sources, 
including but not limited to, flight plans and radar/radio data that 
identifies the point of entry and exit, aircraft registration number, 
and the type of aircraft for all aircraft entering U.S.-controlled 
airspace. Information will be extracted from the database and used, 
along with the fee formula, to compute each fee. The fee will include a 
charge to cover the cost of developing the fee as well as the cost of 
billing and collection.
    The FAA will bill users pursuant to 49 CFR part 89 by sending a 
monthly invoice. Affected commercial users are requested to designate 
and submit to the FAA the name and address of a U.S. agent for billing. 
Users not providing a billing address will be billed at the address of 
record of the aircraft owner as maintained in the country where the 
aircraft is registered.
    As provided in Sec. 187.15(d), monthly remittance of fees of $1,000 
or more are to be paid by electronic funds transfer. Monthly 
remittances below $1,000 may be paid by electronic funds transfer, 
check, money order, credit card, or draft. All payments must be in U.S. 
currency.
    Invoices that become delinquent will be collected according to 49 
CFR part 89. The FAA intends to pursue vigorously all delinquent 
balances to the extent provided by law.
    If any adjustments are necessary in the fees billed or collected 
the FAA will follow the procedures in 49 CFR part 89 to settle debts of 
users. This includes issuing credits and refunds to users as 
appropriate and authorized by law.

Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3507(d)), the information collection requirements 
associated with this interim final rule were submitted to the Office of 
Management and Budget (OMB) for review and approval. There are no new 
requirements for the information collection associated with this 
amendment. An estimated 300 to 600 aircraft operators are requested to 
provide the FAA the name, the address, and phone number of any operator 
obtaining overflight services. It is estimated to take between 5 
minutes and several days to complete the one-page form, depending on 
how long it takes a carrier to notify its billing department, and for 
that department to set up an account from which to pay these funds, for 
a total of 50 hours. This would be a one-time collection unless the 
carrier needs to change any of the information provided to the FAA.
    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 OMB control number. The OMB control number associated 
with this collection is Number 2120-0618.

Compatibility With ICAO Standards

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
reviewed the corresponding ICAO Standards and Recommended Practices and 
has identified no differences with these regulations.

Regulatory Evaluation Summary

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs. Second, 
the Regulatory Flexibility Act of 1980 requires agencies to analyze the 
economic effect of regulatory changes on small entities. Third, OMB 
directs agencies to assess the effect of regulatory changes on small 
entities and changes on international trade. In conducting these 
analyses, the FAA has determined that this Interim Final Rule is ``a 
significant regulatory action'' under section 3(f) of Executive Order 
12866 and, therefore, is subject to review by OMB. The Interim Final 
Rule is considered significant under the regulatory policies and 
procedures of the Department of Transportation (44 FR 11034, February 
26, 1979). This Interim Final Rule should not have a significant impact 
on a substantial number of small entities and will not constitute a 
barrier to international trade. All of these analyses have been 
prepared as a regulatory evaluation and are summarized below. The FAA 
invites the public to provide comments and supporting data on the 
assumptions made in this evaluation. All comments received will be 
considered in the final regulatory evaluation. A copy of the complete 
regulatory evaluation has also been placed into the docket.

Benefits

    In addition to authority to establish fees, the Act directs the FAA 
to ensure that the fees are directly related to the FAA's costs of 
providing the service rendered. The Act states that services for which 
costs may be recovered include ATC, navigation, weather services, 
training, and emergency services. The fees collected will reimburse the 
FAA for the actual cost of services in the manner authorized by 
Congress. Thus, the beneficiaries of this service, rather than the 
taxpayer, would largely pay for the service provided by the FAA. 
Moreover, the fees being established by the FAA cover only the costs of 
providing these services.
    Charging a user fee is expected to result in better allocation of 
scarce societal and FAA resources. A fee will establish a mechanism 
through which those who use a service cover the majority of the costs 
for resources necessary to fund the service that is provided. This will 
result in a more efficient allocation of resources, and the efficient 
allocation of resources will benefit society at large, because more 
resources will become available for other services demanded by the 
public.
    The user fee is expected to generate approximately $39.6 million in 
billings during the first 12 months of this rule, including the cost of 
collections. The FAA believes the established fees are equitable and 
justified.

Cost of Collection of User Fees to the FAA

    The FAA estimates a one-time development cost of approximately $1.6 
million. The FAA will amortize these development costs over a 2-year 
period in equal annual amounts of approximately $800,000. A small 
portion of the original development costs are included in the current 
development costs because some items such as system design or hardware 
will be used for fee collection under the current rule. In addition to 
the development costs, the FAA estimates an annual operating cost of 
approximately $1 million.
    The costs of collection of the fee are relatively small compared to 
the billings. The cost of collection will be reviewed at least once 
every 2 years at the same time when fee charges are reviewed and 
adjusted to reflect the current costs of performing the services 
covered. The first review will be scheduled for no later than 2 years 
after the date of publication of the Final Rule. Fees will be adjusted 
to reflect historical great circle distance entry and exit mileage 
within U.S.-controlled airspace.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to

[[Page 36008]]

fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide-range of small 
entities, including small businesses, not-for-profit organizations, and 
small governmental entities.
    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 as described in 
the RFA.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, section 605(b) of the RFA provides that the 
head of the agency may so certify and a regulatory flexibility analysis 
is not required. The certification must include a statement providing 
the factual basis for this determination, and the reasoning should be 
clear.
    The overflight fee will primarily affect foreign users. Since the 
RFA applies to domestic entities and does not apply to foreign 
entities, no consideration of the Interim Final Rule's impact on 
foreign users is required. In addition, because no fee will be assessed 
to a user unless they accumulate charges that exceed $250 per month, 
small domestic and infrequent operators should not be impacted by the 
rule. Accordingly, the FAA certifies that this rule will not have a 
significant economic impact on a substantial number of small entities.

International Trade Impact

    The overflight provisions will primarily affect foreign commercial 
operators. Most commercial aircraft are designed to operate more 
efficiently at altitudes in excess of 18,000 feet. All operations at 
altitudes at or above 18,000 feet controlled by the United States must 
be under ATC. The FAA believes that it is unlikely that foreign 
commercial users will alter behavior to avoid using ATS and other 
services. In addition, to some extent, commercial users are able to 
pass the overflight fee on to their passengers or cargo customers.
    The Interim Final Rule may have a favorable competitive impact on 
U.S. commercial operators. Currently U.S. commercial operators are at a 
comparative disadvantage with their foreign counterparts when users 
(U.S. and foreign) must pay user fees to transit other countries' 
airspace while foreign users do not have to pay a fee to transit U.S.-
controlled airspace. The Interim Final Rule could enhance the 
competitiveness of domestic commercial operators in international 
markets.

Executive Order 13132, Federalism

    The FAA has analyzed this interim final rule under the principles 
and criteria of Executive Order 13132, Federalism. The FAA has 
determined that this action will 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 interim final rule does not have federalism implications.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
codified in 2 U.S.C. 1501-1571, 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 by State, local, and tribal governments, in 
the aggregate, or by the private sector, of $100 million or more 
(adjusted annually for inflation) in any 1 year. Section 204(a) of the 
UMRA, 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 proposed 
``significant intergovernmental mandate.'' A ``significant 
intergovernmental mandate'' under the UMRA 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 1 year. Section 203 of the 
UMRA, 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 that, among other things, provides for notice to 
potentially affected small governments, if any, and for a meaningful 
and timely opportunity to provide input in the development of 
regulatory proposals.
    This rule does not contain any Federal intergovernmental mandates 
or private sector mandate that exceeds $100 million in any 1 year.

Environmental Analysis

    FAA Order 1050.1D defines FAA actions that may be categorically 
excluded from preparation of a National Environmental Policy Act 
environmental assessment or environmental impact statement. In 
accordance with FAA Order 1050.1D, appendix 4, paragraph 4(j), this 
rulemaking action qualifies for a categorical exclusion.

Energy Impact

    The energy impact of the Interim Final Rule has been assessed in 
accordance with the Energy Policy and Conservation Act (EPCA), Pub. L. 
94-163, and FAA Order 1053.1. It has been determined that the Interim 
Final Rule is not a major regulatory action under the provisions of the 
EPCA.

List of Subjects in 14 CFR Part 187

    Administrative practice and procedure and Air transportation.

The Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration amends part 187 of Title 14, Code of Federal Regulations 
as follows:

PART 187--FEES

    1. The authority citation for part 187 continues to read as 
follows:

    Authority: 31 U.S.C. 9701, 49 U.S.C. 106(g), 49 U.S.C. 
106(l)(6), 40104-40105, 40109, 40113-40114, 44702.


    2. In Sec. 187.1, add the following sentences to the end of the 
section:


Sec. 187.1  Scope.

    * * * Appendix A to this part prescribes the methodology for 
computation of fees for certification services performed outside the 
United States. Appendix B to this part prescribes the fees for certain 
aircraft flights that transit U.S.-controlled airspace.

    3. In Sec. 187.15, add paragraph (d) to read as follows:


Sec. 187.15  Payment of fees.

* * * * *
    (d) The fees described in appendix B of this part are payable to 
the Federal Aviation Administration in U.S. currency. Remittance of 
fees of $1,000 or more are to be paid by electronic funds transfer. 
Remittances below $1,000 may be paid by electronic funds transfer, 
check, money order, credit card, or draft.

    4. In Part 187, add appendix B to read as follows:

[[Page 36009]]

Appendix B to Part 187--Fees for FAA Services for Certain Flights

    (a) Applicability. Except as provided in paragraphs (b) and (c) 
of this appendix, this appendix applies to any person who conducts a 
flight through U.S.-controlled airspace that does not include a 
landing or takeoff in the United States. U.S.-controlled airspace is 
defined as all U.S. airspace either directly owned by the United 
States or allocated to the United States by the International Civil 
Aviation Organization or by other countries. This is further 
defined, for this section only, as enroute and oceanic airspace. 
Enroute airspace is defined, for this section only, as airspace 
where primarily radar-based air traffic services are provided. 
Oceanic airspace is defined, for this section only, as airspace 
where primarily procedural air traffic services are provided.
    (b) Governmental flights. This appendix does not apply to any 
military or civil flight operated by the United States Government or 
by any foreign government.
    (c) Canada-to-Canada flights. This appendix will not apply to 
any operator of a flight that takes off and lands in Canada, without 
an intermediate stop outside Canada, that operates in U.S.-
controlled airspace.
    (d) Services. Persons covered by paragraph (a) of this appendix 
must pay a fee for the use of certain services, including but not 
limited to the following:
    (1) Air traffic management.
    (2) Communications.
    (3) Navigation.
    (4) Radar surveillance, including separation services.
    (5) Flight information services.
    (6) Procedural control.
    (7) Emergency services and training.
    (e) Methodology for the computation of fees. 
    (1) For the use of any of the services listed in paragraph (d) 
of this appendix, the fee is computed based on the distance flown in 
either enroute or oceanic airspace (U.S.-controlled airspace.) 
Distance flown is based on the great circle distance (GCD) for the 
actual point of entry and the actual point of exit of U.S.-
controlled airspace. Fees are assessed using the methodology 
presented in paragraph (e)(2) of this appendix. Where actual entry 
and exit points are not available, the best available flight data 
will be used to calculate the fee.
    (2) A User (operator of an overflight) is assessed a fee for 
each 100 nautical miles (or portion thereof) flown in U.S.-
controlled airspace. Separate calculations are made for transiting 
enroute and oceanic airspace. The total fee charged for an 
overflight between any two cities is equal to the sum of these two 
charges. This relationship is summarized as:

Rij = $20.16*DOij + $37.43*DEij,

Where:
Rij = the fee charged to aircraft flying between city i 
and city j,
DOij= distance traveled in U.S.-controlled oceanic 
airspace expressed in hundreds of nautical miles for aircraft flying 
between city i and city j,
DEij = distance traveled in U.S.-controlled enroute 
airspace expressed in hundreds of nautical miles for aircraft flying 
between city i and city j.

    (f) Billing and payment procedures. 
    (1) Billing. The FAA will send an invoice to each user that is 
covered by this appendix when fees are owed to the FAA. No invoice 
will be sent unless the monthly (based on Greenwich Mean Time) fees 
for service equal or exceed $250. Users will be billed at the 
address of record in the country where the aircraft is registered, 
unless a billing address is otherwise provided.
    (2) Payment. Payment must be made by one of the methods 
described in Sec. 187.15(d).
    (g) Review of fees. The fees prescribed in this appendix will be 
reviewed at least once every 2 years and adjusted to reflect the 
current costs of performing the services covered by this appendix.

    Issued in Washington, DC, on May 30, 2000.
Jane F. Garvey,
Administrator.
[FR Doc. 00-14045 Filed 6-2-00; 8:45 am]
BILLING CODE 4910-13-P