[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Rules and Regulations]
[Pages 67698-67702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32254]



[[Page 67697]]

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Part VIII





Department of Transportation





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 Transportation Security Administration



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49 CFR Chapter XII and Part 1510



Imposition and Collection of Passenger Civil Aviation Security Service 
Fees; Interim Final Rule

  Federal Register / Vol. 66, No. 250 / Monday, December 31, 2001 / 
Rules and Regulations  

[[Page 67698]]


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DEPARTMENT OF TRANSPORTATION

Transportation Security Administration

49 CFR Chapter XII and Part 1510

[Docket No. TSA-2001-11120]
RIN 2110-AA01


Imposition and Collection of Passenger Civil Aviation Security 
Service Fees

AGENCY: Transportation Security Administration, DOT.

ACTION: Interim final rule.

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SUMMARY: The Transportation Security Administration (TSA) announces the 
imposition of a security service fee in the amount of $2.50 per 
enplanement on passengers of domestic and foreign air carriers in air 
transportation, foreign air transportation, and intrastate air 
transportation originating at airports in the United States. Passengers 
will not be charged for more than two enplanements per one-way trip or 
four enplanements per round trip. The security service fee will apply 
to passengers using frequent flyer awards for air transportation, but 
may not be imposed on other nonrevenue passengers. Direct air carriers 
and foreign air carriers must collect the security service fees on air 
transportation sold on or after February 1, 2002. The direct air 
carriers and foreign air carriers must remit the fees imposed during 
each month to TSA by the last calendar day of the following month.

DATES: This interim final rule is effective on December 31, 2001. 
Although the imposition of the security service fees is statutorily 
exempted from the rulemaking notice and comment procedures set forth in 
the Administrative Procedure Act, comments received on or before March 
1, 2002 will be reviewed and considered.

ADDRESSES: Submit written, signed comments to TSA Docket No. 2001-
11120, the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh 
Street, SW., Washington, DC 20590-0001. All comments received will be 
available for examination at the above address between 9 a.m. and 5 
p.m., e.t., Monday through Friday, except Federal holidays. Those 
desiring notification of receipt of comments must include a self-
addressed, stamped envelope or postcard on which the following 
statement is made: ``Comments to Docket No. TSA-2001-11120. The post 
card will be date stamped and mailed to the sender. Comments also may 
be sent electronically to the Dockets Management System (DMS) at: 
http://dms.dot.gov at any time. Those who wish to file comments 
electronically should follow the instructions on the DMS web site.

FOR FURTHER INFORMATION CONTACT: For guidance involving technical 
matters: A. Thomas Park, Acting Deputy Chief Financial Officer, 
Department of Transportation, Office of the Secretary, Office of the 
Assistant Secretary for Budget and Programs, 400 Seventh St., SW., Room 
10101, Washington, DC 20590; telephone (202) 366-9192. For legal 
interpretation or guidance: Rita M. Maristch, Department of 
Transportation, Office of the General Counsel, Office of Environmental, 
Civil Rights and General Law, 400 Seventh St., SW., Room 10102, 
Washington, DC 20590; telephone (202) 366-9161. Office hours are from 
9:00 a.m. to 5:30 p.m., e.t. Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION:

Availability of the Interim Final Rule and Comments Received

    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Government Printing 
Office's Electronic Bulletin Boards Service at (202) 512-1661. Internet 
users may reach the Federal Register's home page at: http://www.nara.gov/fedreg and the Government Printing Office's database at: 
http://www.access.gpo.gov.
    Internet users can access this document and all comments received 
by TSA through DOT's docket management system web site, http://dms.dot.gov. It is available 24 hours each day, 365 days each year. 
Please follow the instructions online for more information and help.

Small Entity Inquiries

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires TSA to comply with small entity requests for information 
and advice about compliance with statutes and regulations within TSA's 
jurisdiction. However, because TSA was just established on November 19, 
2001, pursuant to Aviation and Transportation Security Act, Public Law 
107-71, it does not yet have the infrastructure or personnel to provide 
such information and guidance. Until such time that it does, the Office 
of the Secretary of Transportation will handle all SBREFA inquiries. 
Accordingly, any small entity that has a question regarding this 
document may contact the individuals listed under the caption For 
Further Information Contact.

Background

The September 11 Terrorist Attacks and the Aviation and Transportation 
Security Act

    The September 11, 2001 terrorist attacks as well as the potential 
for future attacks led Congress to enact the Aviation and 
Transportation Security Act, Public Law 107-71 (ATSA), November 19, 
2001, which established TSA as an administration within the U.S. DOT. 
TSA will be headed by a Presidential appointee to a newly established 
position, the Under Secretary of Transportation for Security (Under 
Secretary). Pursuant to section 101(g)(5) of the ATSA, the Secretary of 
Transportation has delegated to the Deputy Secretary of Transportation 
the authority to carry out the functions of the Under Secretary as they 
relate to aviation security on an interim basis. These duties will be 
assumed by the Under Secretary when he takes office.
    Section 118 of ATSA, which added section 44940 to Title 49, U.S.C., 
requires that within 60 days of ATSA's enactment, or as soon as 
possible thereafter, TSA impose uniform security service fees on 
passengers of domestic and foreign air carriers in air transportation, 
foreign air transportation, and intrastate air transportation 
originating at airports in the United States. ATSA also requires that 
notice of the imposition of these fees be published in the Federal 
Register. However, the statute exempts the imposition of the fees from 
the procedural rulemaking requirements of 5 U.S.C. 553 and the user fee 
requirements of 31 U.S.C. 9701. The fees are to pay the costs of 
providing Federal civil aviation security services, which are described 
in section 44940 as:
    (1) The salary, benefits, overtime, retirement and other costs of 
screening personnel, their supervisors and managers, and Federal law 
enforcement personnel deployed at airport security screening locations;
    (2) The costs of training such personnel and the acquisition, 
operation, and maintenance of equipment used by these personnel;
    (3) The costs of performing background investigations of personnel;
    (4) The costs of the Federal air marshals program;
    (5) The costs of performing civil aviation security research and 
development under Title 49, U.S.C.;
    (6) The costs of Federal Security Managers; and
    (7) The costs of deploying Federal law enforcement personnel.
    According to section 44940(a)(1), the Under Secretary is 
responsible for

[[Page 67699]]

determining the amount of the costs of providing these civil aviation 
security services. Section 44940(b) and (c) provides that the passenger 
security service fee must be reasonably related to the costs of 
providing civil aviation security services, but may not exceed $2.50 
per enplanement or $5.00 per one-way trip. Section 44940(a)(1) also 
provides that the cost determinations by the Under Secretary are 
conclusive and are not subject to judicial review.
    According to section 44940(d) and (e), an air carrier or foreign 
air carrier that sells a ticket for transportation is responsible for 
collecting the security service fees. The security service fee imposed 
is not considered to be part of the amount paid for taxable 
transportation under 26 U.S.C. 4261. Air carriers and foreign air 
carriers must remit the total amount of fees collected during a 
calendar month to TSA by the last calendar day of the following month. 
Any security service fees imposed on, but not collected from, an air 
carrier's or foreign air carrier's passengers as required by this part, 
are the air carrier's or foreign air carrier's responsibility and must 
be included with its monthly remittance. Although the law requires air 
carriers and foreign air carriers to remit the total amount of the fees 
collected each month to TSA, carriers may retain the interest that 
accrues on the principal between the time of collection and remittance 
in accordance with section 44940(e)(3). Section 44940(e)(4) permits the 
Under Secretary to require air carriers and foreign air carriers to 
provide any information necessary to verify that the security service 
fees have been collected and remitted in accordance with law and 
regulation.

The Interim Final Rule

    Pursuant to delegated authority, the Deputy Secretary has 
determined that the security service fee to be paid by passengers will 
be $2.50 per enplanement. Passengers may not be charged for more than 
two enplanements per one-way trip or more than four enplanements per 
round trip.
    For purposes of this interim final rule, we have determined that a 
direct air carrier or foreign air carrier that provides or offers to 
provide air transportation and has control over the operational 
functions performed in providing that transportation is considered to 
be the selling carrier. If a passenger's air transportation includes 
travel on two or more carriers, or if the passenger's air 
transportation is otherwise on an aircraft not operated by the selling 
carrier, the carrier selling the air transportation is responsible for 
remitting the security service fees imposed.
    The Under Secretary has the authority to exempt a passenger 
enplaning at airports in the United States from paying the security 
service fee in circumstances where the passenger does not receive 
screening services pursuant to section 44901. Under this interim final 
rule, the security service fee is imposed only on passengers who 
enplane the following direct air carriers and foreign air carriers: (1) 
A scheduled passenger or public charter passenger operation with an 
aircraft having passenger seating configuration of more than 60 seats; 
(2) a scheduled passenger or public charter passenger operation with an 
aircraft having a passenger seating configuration of less than 61 seats 
when passengers are enplaned from or deplaned into a sterile area. We 
invite comment to address when and whether security service fees should 
be imposed on additional direct air carriers and foreign air carriers.
    Security service fees will not be imposed on passengers enplaning 
on flight segments outside the United States, but will be imposed on 
all flight segments originating in the United States.
    Direct air carriers and foreign air carriers must collect the 
security service fees imposed on air transportation sold on or after 
February 1, 2002. The security service fee imposed by this interim 
final rule applies to passengers using frequent flyer awards for air 
transportation, but is not applicable to other nonrevenue passengers. 
Air carriers and foreign air carriers must identify the security 
service fees imposed by this part as ``September 11th Security Fee'' in 
all its advertisements and solicitations for air transportation.
    Each direct air carrier and foreign air carrier is responsible for 
paying to TSA the security service fees imposed by this rule regardless 
of whether it collects the fees. Each direct air carrier and foreign 
air carrier is required to remit all security service fees imposed 
during February 2002 to TSA by March 31, 2002. For subsequent months, 
security service fees must be remitted by the last calendar day of the 
following month. Specific instructions concerning remittance will be 
provided directly to the direct air carriers and foreign air carriers 
and will be posted on the DOT web site at www.dot.gov in the near 
future.
    The fee is set at the maximum amount permitted by ATSA because the 
costs of providing civil aviation security services, as determined by 
the Deputy Secretary, are greater than the amount that would be 
recovered by the collection of fees that are reasonably related to 
these costs. Specifically, the Deputy Secretary has determined that the 
costs of providing civil aviation security services under section 44940 
not already funded from other sources will conservatively exceed $1 
billion in fiscal year 2002 and that fees collected at the statutory 
maximum would yield less than $1 billion in fiscal year 2002, assuming 
that collections begin on February 1, 2002. It should be noted that DOT 
expects revenues from security service fees to fall short of the amount 
required to cover civil aviation security service costs. In such a 
case, ATSA requires that air carrier fees be assessed in order to cover 
the shortfall. This assessment will be accomplished through a separate 
notice published in the Federal Register during fiscal year 2002.
    Under this rule, direct air carriers and foreign air carriers must 
establish an accounting system to properly track the amount of the 
security service fees imposed, collected, refunded and remitted as well 
as the airports at which the passengers enplaned. Direct air carriers 
and foreign air carriers are required to submit quarterly reports to 
TSA that provide an accounting of fees imposed, collected, refunded and 
remitted. Specific instructions concerning the submission of the 
quarterly reports will be provided directly to the direct air carriers 
and foreign air carriers and will be posted on the DOT web site at 
www.dot.gov in the near future.
    Each direct air carrier and foreign air carrier that collects 
security service fees from more than 50,000 passengers annually must 
provide for an audit of its security service fee accounts and 
activities by an independent certified public accountant on an annual 
basis. The accountant must include in the audit an opinion on whether 
(1) the direct air carrier's or foreign air carrier's procedures for 
collecting, holding, and remitting the fees are fair and reasonable; 
and (2) whether the quarterly reports fairly represent the net 
transactions in the security service fee accounts. The reports, which 
are due to the Under Secretary on the last calendar day of the month 
following the quarter in which the fees were imposed, must provide an 
accounting of the fees imposed, collected, refunded and remitted. The 
reports must specifically identify the carrier involved, the total 
security service fees imposed, collected, refunded and remitted, the 
number of enplanements for which the fee was collected, the total 
number of frequent flyer and nonrevenue passengers, the

[[Page 67700]]

total number of passenger enplanements for which the fee was imposed 
but not collected, and the reasons that the fee was not collected in 
such circumstances.
    This rule requires direct air carriers and foreign air carriers to 
allow certain authorized Federal representatives to review and audit 
any of the carrier's books and records and provide other information to 
verify that the security service fees were properly collected and 
remitted.
    The rule's enforcement provision states that direct air carriers 
and foreign air carriers who fail to comply with the requirements of 49 
U.S.C. 44940 or this regulation may be found to be engaging in unfair 
and deceptive practices in violation of 49 U.S.C. 41712. The rule also 
provides notice that the United States may seek collection of any funds 
due it by the direct air carrier or foreign air carrier in accordance 
with 49 CFR part 89. These remedies are in addition to any others 
provided by law.

Requests for Waiver

    Although not legally bound to do so, air carriers and foreign air 
carriers may wish to identify the security service fee on a ticket they 
issue for air transportation. Because ATSA requires that the security 
service fees be collected as soon as possible, there may be 
insufficient time to reconfigure the ticket to allow for such a fee 
category. Therefore, DOT will entertain an air carrier's or foreign air 
carrier's request that it be permitted to combine the amount of the 
security service fee with the amount of the passenger facility charges 
(PFC) identified in the PFC category on the ticket for a transitional 
period not to exceed six months. DOT will also entertain a request for 
a waiver of any DOT and Federal Aviation Administration requirement 
that it believes may conflict with the security service fee as imposed 
by this part. The request for a waiver must be in writing, explain the 
conflict in detail, and be directed to TSA Docket No. 2001-11120, the 
Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh Street, SW., 
Washington, DC 20590-0001. DOT will address requests for a waiver on a 
case-by-case basis.

Good Cause for Immediate Adoption

    Section 44940(d)(1) of title 49, U.S.C., explicitly exempts the 
imposition of the civil aviation security service fees authorized in 
section 44940 from the procedural rulemaking notice and comment 
procedures set forth in 5 U.S.C. 553. Apart from that exemption, it 
would be impractical and contrary to the public interest to provide for 
notice and comment before issuing this rule. Immediate action is 
necessary to begin collecting the security service fees provided for by 
the statute. However, TSA will consider all comments received on or 
before the closing date for comment, including comments received before 
the issuance of this rule. We will also consider comments filed late to 
the extent practicable. We may amend this rule in light of the comments 
we receive.

Paperwork Reduction Act

    TSA has determined that this interim final rule will impose new 
collection of information burdens within the meaning of the Paperwork 
Reduction Act of 1995 (PRA). TSA is required to submit this proposed 
collection of information to Office of Management and Budget (OMB) for 
review and approval and, accordingly, seeks public comments. Interested 
parties are invited to send comments regarding any aspect of the 
information collection requirements, including, but not limited to: (1) 
Whether the collection of information is necessary for the performance 
of TSA, including whether the information has practical utility; (2) 
the accuracy of the estimated burden that DOT has provided to OMB; (3) 
ways to enhance the quality, utility, and clarity of the collection of 
information, and (4) ways to minimize the collection burden without 
reducing the quality of the information collected.
    Pursuant to 5 CFR 1320.13, Emergency processing, TSA has asked OMB 
for temporary emergency approval for this collection. We will publish a 
Federal Register notice with the OMB number when it is approved.

Economic Analyses

    This rulemaking action is taken in an emergency situation within 
the meaning of Section 6(a)(3)(D) of Executive Order 12866, Regulatory 
Planning and Review. It also is considered an emergency regulation 
under Paragraph 11g of the Department's Regulatory Policies and 
Procedures. In addition, it is a significant rule within the meaning of 
the Executive Order and Department's policies and procedures because it 
may impose significant costs on air carriers and foreign air carriers. 
An assessment in accordance with the Executive Order will be conducted 
in the future. No additional regulatory analysis or evaluation 
accompanies this rule. TSA has not assessed whether this rule will have 
a significant economic impact on a substantial number of small entities 
as defined in the Regulatory Flexibility Act of 1980. When no notice of 
proposed rulemaking has first been published, the Regulatory 
Flexibility Act does not apply.
    The current security threat requires that direct air carriers and 
foreign air carriers comply with the necessary actions to ensure the 
safety and security of passengers and operations. Therefore consistent 
with section 44940, the security service fee imposed will be $2.50 per 
passenger. Passengers will not be charged for more than two 
enplanements per one-way trip or four enplanements per round trip. 
Direct air carriers and foreign air carriers are responsible for 
collecting these fees on or after February 1, 2002. OMB has reviewed 
this rule under the provisions of section 6(a)(3)(D) Executive Order 
12866.

Executive Order 13132, Federalism

    The TSA has analyzed this rule under the principles and criteria of 
Executive Order 13132, Federalism. We determined that this action will 
not have a substantial direct effect on the States, or the relationship 
between the national Government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
Therefore, we have determined that this final rule does not have 
federalism implications.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (the Act), enacted as 
Public Law 104-4 on March 22, 1995, is intended, among other things, to 
curb the practice of imposing unfunded Federal mandates on State, 
local, and tribal governments. Title II of the Act requires each 
Federal agency to prepare a written statement assessing the effects of 
any Federal mandate in a proposed or final agency rule that may result 
in a $100 million or more expenditure (adjusted annually for inflation) 
in any one year by State, local, and tribal governments, in the 
aggregate, or by the private sector.
    The requirements of Title II of the Unfunded Mandates Reform Act of 
1995 do not apply when rulemaking actions are taken without the 
issuance of a notice of proposed rulemaking. Accordingly, the TSA has 
not prepared a statement under the Act.

Environmental Review

    TSA has reviewed this action for purposes of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has 
determined that this action will not have a significant effect on the 
human environment.

Energy Impact

    The energy impact of this rule has been assessed in accordance with 
the

[[Page 67701]]

Energy Policy and Conservation Act (EPCA) Pub. L. 94-163, as amended. 
(42 U.S.C. 6362). It has been determined that this rule is not a major 
regulatory action under the provisions of the EPCA.

List of Subjects in 49 CFR Part 1510

    Accounting, Auditing, Air carriers, Air transportation, 
Enforcement, Federal oversight, Foreign air carriers, Reporting and 
recordkeeping requirements, Security measures.


    Issued in Washington, DC, on December 26th, 2001.
Michael P. Jackson,
Deputy Secretary.

    For the reasons set forth in the preamble, the Transportation 
Security Administration establishes a new chapter XII consisting of 
part 1510 in Title 49 of the Code of Federal Regulations to read as 
follows:

Chapter XII--Transportation Security Administration, Department of 
Transportation

PART 1510--PASSENGER CIVIL AVIATION SECURITY SERVICE FEES

Sec.
1510.1   Applicability and purpose.
1510.3   Definitions.
1510.5   Imposition of security service fees.
1510.7   Air transportation advertisements and solicitations.
1510.9   Collection of security service fees.
1510.11   Handling of security service fees.
1510.13   Remittance of security service fees.
1510.15   Accounting and auditing requirements.
1510.17   Reporting requirements.
1510.19   Federal oversight.
1510.21   Enforcement.

    Authority: 49 U.S.C. 44940.


Sec. 1510.1  Applicability and purpose.

    This part prescribes a uniform fee to be paid by passengers of 
direct air carriers and foreign air carriers in air transportation, 
foreign air transportation, and intrastate air transportation 
originating at airports in the United States to pay for the costs of 
providing civil aviation security services as described in 49 U.S.C. 
44940.


Sec. 1510.3  Definitions.

    The following definitions apply in this part:
    Air carrier means a citizen of the United States who undertakes 
directly to engage in or provide air transportation.
    Air transportation means intrastate, interstate or foreign air 
transportation.
    Aircraft means a device that is used or intended to be used for 
flight in the air.
    Airport means any landing area used regularly by aircraft for 
receiving or discharging passengers or cargo.
    Direct air carrier and foreign air carrier means a selling carrier.
    Foreign air carrier means any person other than a citizen of the 
United States who undertakes directly to engage in or provide air 
transportation.
    Foreign air transportation means the carriage by aircraft of 
persons for compensation or hire between a place in the United States 
and any place outside of the United States.
    Frequent flyer award means a zero-fare award of air transportation 
that a domestic air carrier or foreign air carrier provides to a 
passenger in exchange for accumulated travel mileage credits in a 
customer loyalty program, whether or not the term frequent flyer is 
used in the definition of that program.
    Interstate air transportation means the carriage by aircraft of 
persons for compensation or hire within the United States.
    Intrastate air transportation means the carriage of persons for 
compensation or hire wholly within the same State of the United States.
    Nonrevenue passenger means a passenger receiving air transportation 
from an air carrier or foreign air carrier for which the air carrier or 
foreign air carrier does not receive remuneration.
    One-way trip means any trip that is not a round trip.
    Origin point means the location at which a trip on a complete air 
travel itinerary begins.
    Passenger enplanement means a person boarding in the United States 
in scheduled or nonscheduled service on aircraft in intrastate, 
interstate, or foreign air transportation.
    Principal means the aggregate amount of all passenger security 
services fees due to be remitted to the Transportation Security 
Administration by an air carrier as required by this part.
    Round trip means a trip on an air travel itinerary that terminates 
at the origin point.
    Selling carrier means an air carrier or foreign air carrier that 
provides or offers to provide air transportation and has control over 
the operational functions performed in providing that air 
transportation.
    Under Secretary means the Under Secretary of Transportation for 
Security or the Under Secretary's designee.


Sec. 1510.5  Imposition of security service fees.

    (a) The security service fee will be $2.50 per passenger 
enplanement. The security service fee is imposed only on passengers of 
direct air carriers and foreign air carrier described in 
Sec. 1510.9(a). Passengers may not be charged for more than two 
enplanements per one-way trip or four enplanements per round trip.
    (b) The security service fee will be imposed on all flight segments 
originating at an airport in the United States.
    (c) The security service fee must be imposed on passengers who 
obtained the ticket for air transportation with a frequent flyer award, 
but may not be imposed on any other nonrevenue passengers.
    (d) Passengers enplaning a flight segment outside of the United 
States are not subject to the security service fee for that 
enplanement.


Sec. 1510.7  Air transportation advertisements and solicitations.

    A direct air carrier and foreign air carrier must identify the 
security service fee imposed by this part as ``September 11th Security 
Fee'' in all its advertisements and solicitations for air 
transportation.


Sec. 1510.9  Collection of security service fees.

    (a) The following direct air carriers and foreign air carriers must 
collect security service fees from passengers enplaning:
    (1) A scheduled passenger or public charter passenger operation 
with an aircraft having passenger seating configuration of more than 60 
seats.
    (2) A scheduled passenger or public charter passenger operation 
with an aircraft having a passenger seating configuration of less than 
61 seats when passengers are enplaned from or deplaned into a sterile 
area.
    (b) Direct air carriers and foreign air carriers must collect from 
each passenger, to the extent provided in Sec. 1510.5, a security 
service fee on air transportation sold on or after February 1, 2002. 
The security service fee must be based on the air travel itinerary at 
the time the air transportation is sold. Any changes by the passenger 
to the itinerary that alter the number of enplanements are subject to 
additional collection or refund of the security service fee by the 
direct air carrier or foreign air carrier as appropriate. Direct air 
carriers and foreign air carriers are solely liable to TSA for 
additional security service fees imposed because of involuntary 
enplanement changes to the itinerary.
    (c) Whether or not the security service fee is collected as 
required by this part, the direct air carrier or foreign air carrier 
selling the air transportation is solely liable to TSA for the fee and 
must remit the fee as required in Sec. 1510.13.

[[Page 67702]]

    (d) Direct air carriers and foreign air carriers may not collect 
security service fees not imposed by this part.


Sec. 1510.11  Handling of security service fees.

    (a) Direct air carriers and foreign air carriers are responsible 
for the safekeeping of all security service fees from the time of 
collection to remittance.
    (b) Security service fees collected by a direct air carrier or 
foreign air carrier are held in trust by that direct carrier for the 
beneficial interest of the United States in paying for the costs of 
providing civil aviation security services described in 49 U.S.C. 
44940. The direct air carrier or foreign air carrier holds neither 
legal nor equitable interest in the security service fees except for 
the right to retain any accrued interest on the principal amounts 
collected pursuant to Sec. 1510.13(b).
    (c) Direct air carriers and foreign air carriers must account for 
security service fees separately, but the fees may be commingled with 
the carriers' other sources of revenue.
    (d) Direct air carriers and foreign air carriers must disclose in 
their financial statements the existence and the amount of security 
service fee held in trust.


Sec. 1510.13  Remittance of security service fees.

    (a) Each direct air carrier and foreign air carrier must remit all 
security service fees imposed each calendar month to TSA, as directed 
by the Under Secretary, by the last calendar day of the month following 
the imposition.
    (b) Direct air carriers and foreign air carriers may retain any 
interest that accrues on the principal amounts collected between the 
date of collection and the date the fee is remitted to TSA in 
accordance with paragraph (a) of this section.
    (c) Direct air carriers and foreign air carriers are prohibited 
from retaining any portion of the principal to offset the costs of 
collecting, handling, or remitting the passenger security service fees.
    (d) Security service fees are payable to the ``Transportation 
Security Administration'' in U.S. currency and drawn on a U.S. bank.
    (1) Fees of $1,000 or more must be remitted by electronic funds 
transfer.
    (2) Fees under $1,000 may be remitted by electronic funds transfer, 
check, money order, wire transfer, or draft.
    (e) Direct air carriers and foreign air carriers are responsible 
for paying any bank processing charges on the security service fees 
collected or remitted under this part when such charges are assessed on 
the U.S. government.


Sec. 1510.15  Accounting and auditing requirements.

    (a) Direct air carriers and foreign air carriers must establish and 
maintain an accounting system to account for the security service fees 
imposed, collected, refunded and remitted. The accounting records must 
identify the airports at which the passengers were enplaned.
    (b) Each direct air carrier and foreign air carrier that collects 
security services fees from more than 50,000 passengers annually must 
provide for an audit at least annually of its security service fee 
activities or accounts.
    (c) Audits pursuant to paragraph (b) of this section must be 
performed by an independent certified public accountant and may be of 
limited scope. The accountant must express an opinion on the fairness 
and reasonableness of the direct air carrier's and foreign air 
carrier's procedures for collecting, holding, and remitting the fees. 
The opinion must also address whether the quarterly reports required in 
Sec. 1510.17 fairly represent the net transactions in the security 
service fee accounts.


Sec. 1510.17  Reporting requirements.

    (a) Each direct air carrier and foreign air carrier collecting 
security service fees must provide TSA with quarterly reports that 
provide an accounting of fees imposed, collected, refunded and 
remitted.
    (b) Quarterly reports must state the direct air carrier or foreign 
air carrier involved, the total security service fee imposed, 
collected, refunded and remitted, the number of enplanements for which 
a fee was collected, the total number of frequent flyer and nonrevenue 
passengers, and the total number of enplanements for which the fee was 
not collected. The reports must explain why any fee imposed under this 
part was not collected.
    (c) The report must be filed by the last day of the calendar month 
following the quarter in which the fees were imposed.


Sec. 1510.19  Federal oversight.

    Direct air carriers and foreign air carriers must allow any 
authorized representative of the Under Secretary, the Secretary of 
Transportation, the Inspector General of the Department of 
Transportation, or the Comptroller General of the United States to 
audit or review any of its books and records and provide any other 
information necessary to verify that the security service fees were 
properly collected and remitted consistent with this part.


Sec. 1510.21  Enforcement

    A direct air carrier's or foreign air carrier's failure to comply 
with the requirements 49 U.S.C. 44940 or the provisions of this part 
may be considered to be an unfair and deceptive practice in violation 
of 49 U.S.C. 41712 and may also result in a claim due the United States 
by the carrier collectable pursuant to 49 CFR part 89. These remedies 
are in addition to any others remedies provided by law.

[FR Doc. 01-32254 Filed 12-28-01; 11:17 am]
BILLING CODE 4910-62-P