[Federal Register Volume 67, Number 87 (Monday, May 6, 2002)]
[Proposed Rules]
[Pages 30334-30336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11109]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 67, No. 87 / Monday, May 6, 2002 / Proposed 
Rules  

[[Page 30334]]



DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 187


Fees for FAA Services for Certain Flights

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of inquiry and request for comments.

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

SUMMARY: Since August 1, 2000, the FAA has been charging fees, required 
by law, for air traffic control and related services provided to 
aircraft that fly in U.S.-controlled airspace but neither take off 
from, nor land in, the United States. These fees, commonly referred to 
as ``Overflight Fees,'' were authorized by the Federal Aviation 
Reauthorization Act of 1996, enacted on October 9, 1996.
    The Aviation and transportation Security Act, enacted on November 
19, 2001, amended the Overflight Fee authorization in several respects: 
first, changing the wording of the operative standard by substituting 
``reasonably'' for ``directly'' (thereby requiring that fees be 
``reasonably related'' to costs, rather than ``directly related'') and 
substituting ``Administration's costs as determined by the 
Administrator'' for ``Administration's costs;'' and second, providing 
that ``the determination of such costs by the Administrator are not 
subject to judicial review.''
    The purpose of this notice of inquiry is to solicit public comment 
on whether and to what extent, if any, these latest statutory changes 
require the FAA to modify its Final Rule on Overflight Fees.

EFFECTIVE DATE: The due date for receipt of comments is June 5, 2002. 
This matter is the subject of ongoing litigation before the United 
States Court of Appeals for the District of Columbia Circuit (the 
Court), and the Court has provided 60 days for the FAA to consider the 
effects of recent statutory changes on its Final Rule. The FAA will 
therefore be unable to consider any comments received after the due 
date.

ADDRESSES: Comments 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 may also 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 electronically should follow the instructions on the DMS web 
site.

FOR FURTHER INFORMATION CONTACT: Randall Fiertz, Office of Cost and 
Performance Management (APF-2), Federal Aviation Administration, 800 
Independence Avenue, SW., Washington DC 20591, (202) 267-7140; or Dr. 
Harold (Woody) Davis, Office of the Chief Counsel (AGC-200), Federal 
Aviation Administration, 800 Independence Avenue, SW., Washington DC, 
20591, (202) 267-3152.

SUPPLEMENTARY INFORMATION:   

History

    The Federal Aviation Reauthorization Act of 1996 (the Act) directs 
the FAA to establish by Interim Final Rule (IFR) 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 transit U.S.-
controlled airspace but neither take off from, nor land in, the United 
States (49 U.S.C. 45301, as amended by Pub. L. 104-264). Such flights 
are commonly referred to as ``Overflights.'' The Act further directs 
the FAA to seek public comment after issuing the Interim Final Rule and 
subsequently to issue a Final Rule.
    The Act was substantively amended in November 2001 (see below). As 
originally enacted, it directed the FAA to ensure that the fees 
authorized by the Act were ``directly related'' to the FAA's costs of 
providing the services rendered. The Act further states that ``services 
for which costs may be recovered include the costs of air traffic 
control, navigation, weather services, training and emergency services 
which 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.''
    On March 20, 1997, the FAA published an Interim Final Rule (IFR), 
``Fees for Air Traffic Services for Certain Flights through U.S.-
Controlled Airspace'' (62 FR 13496), which established the Overflight 
Fees. The FAA invited public comment on the IFR and held a public 
meeting on May 1, 1997. The effective date of the rule was May 19, 
1997, and the comment period closed on July 18, 1997. The FAA also 
published two additional amendments to the IFR on May 2, 1997 (62 FR 
24286) and October 2, 1997 (62 FR 51736).
    That rulemaking was subsequently challenged. The Air Transport 
Association of Canada (ATAC) and seven foreign air carriers petitioned 
the Court to review the rule. On January 30, 1998, the Court issued its 
Opinion on the eight consolidated petitions in the case of Asiana 
Airlines v. FAA, 134 F.3d 393 (D.C. Cir. 1998). The Court rejected the 
petitioners' claims that: (a) the FAA acted improperly in employing an 
expedited procedure before the effective date of the IFR; and (b) the 
FAA violated the anti-discrimination provisions of various 
international aviation agreements. The Court, however, concluded that 
the FAA's methodology of determining cost violated statutory 
requirements, vacated the IFR fee schedule, and remanded the IFR to the 
FAA for further proceedings. The FAA subsequently refunded all fees 
(nearly $40 million) collected under the IFR. On July 24, 1998, the FAA 
published a Final Rule (63 FR 40000) removing the 1997 IFR.
    Although the 1997 IFR had been removed, the statutory requirement 
that FAA establish Overflight Fees by IFR remained in effect. 
Therefore, in 1998 the FAA began developing a new IFR on Overflight 
Fees using a different methodology. The fees this time were to be 
derived from cost data produced by the agency's new Cost Accounting 
System (CAS), then under development. On June 6, 2000, the FAA 
published a new IFR with a request for comments and notice of another 
public meeting (65 FR 36002, June 6, 2000). The FAA held the public 
meeting on June 29, 2000, and 12 individuals representing 10 different 
organizations made

[[Page 30335]]

presentations. A discussion of the comments made at the public meeting 
can be found in the docket of this rulemaking (Docket No. FAA-00-7018). 
(This may be found on the Internet by going to the search function of 
the Department of Transportation's electronic Docket Management System 
(DMS) web page (http://dms.dot.gov/search), typing in the last four 
digits of the Docket number (7018), and clicking on ``search.'') The 
FAA began charging fees under the new IFR on August 1, 2000. The FAA 
twice extended the comment period; first on October 6, 2000 (65 FR 
59713), and again on October 27, 2000 (65 FR 64401), closing it finally 
on December 26, 2000.
    On November 1, 2000, the Congress enacted the National 
Transportation Safety Board Amendments Act of 2000 (Public Law 106-
424). Section 16 of that Act deemed the Interim Final Rule, published 
on June 6, 2000, to have been issued in accordance with the procedural 
requirements of the Act.
    Just before the August 1, 2000, effective date of the fees, the 
ATAC and seven foreign air carriers again petitioned the Court to 
review the new IFR. The petitions were again consolidated into a single 
case. Issues raised by the petitioners included some of the same 
process and procedure questions raised in the previous litigation, as 
well as new issues regarding the adequacy of information provided by 
the FAA to support the fees and whether the fees met the statutory 
requirement (subsequently amended; see below) of being ``directly 
related'' to the FAA's costs of providing the services. The Court heard 
oral arguments on May 14, 2001. On July 13, 2001, the Court issued an 
Opinion, finding that the FAA had failed to provide an explanation for 
one assumption in its fee setting methodology (i.e., that the costs, on 
a per-mile basis, of providing ATC and related services to Overflights 
are the same as the costs of providing such services to flights that 
take off and/or land in the United States). Because the FAA had failed 
to address this assumption, the Opinion directed that the IFR be 
vacated. At the time the Opinion was issued, the FAA was in the final 
stages of Executive Branch review of a Final Rule on Overflight Fees, 
which contained a detailed explanation of the assumption in question. 
Because the Court faulted only FAA's failure to provide an explanation 
of an assumption in support of the IFR, and not the substance of the 
IFR itself, the FAA decided to proceed with issuance of the Final Rule 
in order to both meet the requirements of the Act and address the 
concerns of the Court. This was done within the 45-day period between 
the issuance of the Court's Opinion and the issuance of its Mandate 
making the Opinion effective.
    The Final Rule was published in the Federal Register on August 20, 
2001. It reduced the fees established under the IFR by approximately 
15%, effective immediately, back to the original date of imposition 
(i.e., August 1, 2000). The same group of eight petitioners who had 
sought judicial review of the most recent IFR again sought such review 
of the Final Rule. That litigation is ongoing.
    Following the August 20, 2001 publication of the Final Rule, the 
FAA petitioned the Court on August 24, 2001 to reconsider the remedy 
(vacating of the IFR) it had imposed in its Opinion of July 13, 2001. 
On December 28, 2001, the Court granted the FAA's request, modifying 
its July 13 Opinion and issuing a Mandate that did not vacate the IFR.

Legislative Action

    On November 19, 2001, additional legislation was enacted regarding 
Overflight Fees. The Aviation and Transportation Security Act (ATSA), 
Public Law 107-71, contained the following amendment (Section 119(d)):

    (d) AMENDMENT OF GENERAL FEE SCHEDULE PROVISION.--Section 
45301(b)(1)(B) of title 49, United States Code, is amended--(1) by 
striking ``directly'' and inserting ``reasonably''; (2) by striking 
``Administration's costs'' and inserting ``Administration's costs, 
as determined by the Administrator,''; and (3) by adding at the end 
``The Determination of such costs by the Administrator is not 
subject to judicial review.''

    Thus, the statutory authorization for FAA's Overflight Fees (49 
U.S.C. 45301(b)(1)(B)) now provides that ``the Administrator shall 
ensure that each of the fees * * * is reasonably related to the 
Administration's costs, as determined by the Administrator, of 
providing the service rendered'' to overflights.
    The accompanying Conference Committee Managers' Report on the ATSA 
addressed the amendment of the ``Overflight Fee'' language, as follows:

    The Conference substitute amends section 45301(b) of title 49, 
United States Code, with respect to limitations on overflight fees 
to (1) to make the language consistent with the new security fee 
language of this Act, and (2) to clarify Congressional intent with 
respect to the FAA costs upon which the fees can be based. 
Specifically, the conference substitute replaces the word 
``directly'' with ``reasonably,'' since the word ``directly'' has 
been a source of much confusion and narrow interpretation, and has 
been a primary cause of recurring litigation which has frustrated 
and delayed the FAA's imposition of the overflight fees for a number 
of years. Additionally, this amendment specifies that the FAA's 
costs upon which the fees are based are to be determined solely by 
the Administrator. This is to clarify that the Administrator has 
full authority to determine costs by appropriate means. This 
amendment is not intended to require revision of the fees recently 
promulgated by the FAA (66 FR 43680, Aug. 20, 2001) but rather, to 
clarify longstanding Congressional intent that the FAA expeditiously 
and continuously collect the fees authorized under section 45301(a) 
of title 49.

    The enactment of these statutory changes raises the question of 
what specific further rulemaking action, if any, is required by the 
FAA.
    On January 25, 2002, the FAA sought from the Court a limited remand 
of the record in the Final Rule case. As stated in the agency motion:

    The purpose of the requested remand would be to permit the FAA, 
on its own initiative, to conduct a limited reconsideration of the 
final rule in light of the new legislation. More specifically, the 
agency would conduct such reconsideration solely to determine the 
extent, if any, to which the change in the operative statutory 
standard requires the FAA to modify its final rule. If the agency 
determines that no such modification is required by the changes in 
the statute from ``directly related'' to ``reasonably related,'' and 
the substitution of ``Administration's costs, as determined by the 
Administrator'' for ``Administration's costs,'' the agency would 
continue with the final rule that it has already adopted. This is 
because the FAA seeks to determine only whether Congress has 
required the agency to make changes in its final rule, and does not 
contemplate making any discretionary changes at this time.

    On April 22, 2002, the Court ordered the Final Rule record returned 
to FAA ``so that it may conduct proceedings, for no more than 60 days 
from the date of this order, to determine to what extent, if any, the 
Aviation and Transportation Security Act, Public Law 107-71, Section 
119(d) (November 19, 2001), requires the agency to modify its final 
rule, ``Fees for [F]AA Services for Certain Flights.'' 66 FR 46380 
(Aug. 20, 2001).''

Request for Comments

    Given the demonstrated significant interest of a large number of 
parties in matters relating to FAA's Overflight Fees, and consistent 
with the Court's order, the FAA seeks public comment regarding the 
extent, if any, to which the change in the ATSA requires the FAA to 
modify its Final Rule. Under the terms of the remand granted by the 
Court, the FAA must complete its reconsideration within 60 days from 
the

[[Page 30336]]

date of the remand. The Court granted the remand on April 22, 2002; 
therefore, the 60-day deadline for completion of all action on this 
matter by the FAA is June 21, 2002.
    The FAA believes that providing an opportunity for public comment 
on this matter is very much in the public interest. It should also 
serve the interest of both judicial economy and efficient agency 
administration since this proceeding will permit the FAA, in advance of 
judicial review of its Final Rule, to consider any possible impact of 
the ATSA amendment, which was enacted after the Final Rule had been 
issued and the petitions for review of that rule had been filed with 
the Court.
    Accordingly, before making its decision as to whether the statutory 
change requires modification of the Final Rule, the FAA is allowing 30 
days (within the 60 days stipulated by the Court) during which 
interested parties may address and provide comments on this matter.

    Dated: April 30, 2002.
Chris Bertram,
Assistant Administrator for Financial Services and Chief Financial 
Officer.
[FR Doc. 02-11109 Filed 5-1-02; 3:45 pm]
BILLING CODE 4910-13-M