[Federal Register Volume 68, Number 98 (Wednesday, May 21, 2003)]
[Rules and Regulations]
[Pages 27747-27752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12775]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Transportation Security Administration

49 CFR Parts 1510 and 1511

[Docket No. TSA-2001-11120 and TSA-2002-11334; Amendment Nos. 1510-2 
and 1511-1]
RIN 1652-AA29


Temporary Suspension of the September 11th Security Fee and the 
Aviation Security Infrastructure Fee

AGENCY: Transportation Security Administration (TSA), DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Transportation Security Administration (TSA) is issuing 
this rule to temporarily suspend the September 11, 2001, Passenger 
Civil Aviation Security Service Fee and the Aviation Security 
Infrastructure Fee (ASIF) during the period beginning June 1, 2003, and 
ending September 30, 2003, as provided in Public Law 108-11, enacted on 
April 16, 2003, titled, ``Emergency Wartime Supplemental Appropriations 
Act, 2003'' (Appropriations Act).
    TSA interprets the Appropriations Act to prohibit TSA from 
requiring passengers to pay the September 11th Security Fee if they 
purchase air transportation during the suspension period, regardless of 
whether the air transportation actually takes place during the 
suspension period. Accordingly, TSA will not impose the September 11th 
Security Fee on air transportation purchased from 12 a.m., Eastern 
Daylight Time, on June 1, 2003, through 11:59 p.m., Eastern Daylight 
Time, on September 30, 2003.
    The Appropriations Act also prohibits TSA from imposing the ASIF 
during the suspension period. Therefore, air carriers and foreign air 
carriers engaged in air transportation will not incur any obligations 
to make ASIF payments to TSA for the months of June, July, August, and 
September of 2003, which otherwise would have been required to be paid 
to TSA by the last day of July, August, September, and October of 2003, 
respectively.

DATES: This rule is effective from June 1, 2003, through September 30, 
2003.

FOR FURTHER INFORMATION CONTACT: Randall Fiertz, Office of Revenue, 
Office of Finance and Administration, Transportation Security 
Administration Headquarters, West Building, Floor 5, TSA-14, 400 
Seventh Street, SW., Washington, DC 20590; e-mail: [email protected], 
telephone: 571-227-2323; or Susan Truax, Office of the Chief Counsel, 
Transportation Security Administration Headquarters, West Building, 
Floor 8, TSA-2, 400 Seventh Street, SW., Washington, DC 20590; e-mail: 
[email protected], telephone: 571-227-1996.

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Document

    You can get an electronic copy using the Internet by--
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) web page (http://dms.dot.gov/search);
    (2) Accessing the Government Printing Office's web page at http://www.access.gpo.gov/su_docs/aces/aces140.html; or
    (3) Visiting the TSA's Law and Policy web page at http://www.tsa.dot.gov/public/index.jsp.
    In addition, copies are available by writing or calling the 
individuals in the FOR FURTHER INFORMATION CONTACT section. Make sure 
to identify the docket number of this rulemaking.

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 the 
TSA's jurisdiction. Any small entity that has a question regarding this 
document may contact the individuals listed in FOR FURTHER INFORMATION 
CONTACT. Persons can obtain further information regarding SBREFA on the 
Small Business Administration's web page at http://www.sba.gov/advo/laws/law_lib.html.

Good Cause for Immediate Adoption

    This action is being taken without providing the opportunity for 
notice and comment, and it provides for an effective date less than 30 
days after publication in the Federal Register.
    Section 44940(d)(1) of title 49, U.S.C. explicitly exempts the 
imposition of the civil aviation security fees authorized in section 
44940 from the procedural rulemaking notice and comment procedures set 
forth in 5 U.S.C. 553 of the Administrative Procedure Act (APA). Apart 
from that exemption, the APA allows an agency to forego notice and 
comment rulemaking when ``the agency for good cause finds * * * that 
notice and public procedures thereon are impracticable, unnecessary, or 
contrary to the public interest.'' 5 U.S.C. 553(b). TSA finds good 
cause under 5 U.S.C. 553 that notice and comment are impracticable and 
contrary to the public interest before issuing this rule. Immediate 
action is necessary to provide sufficient time to direct and foreign 
air carriers to implement any necessary changes in their business 
practices before the beginning of the suspension period.
    Further, as the Appropriations Act mandates the effective dates for 
the suspension period of the civil aviation security fees, the 
Administrator finds

[[Page 27748]]

that good cause exists under 5 U.S.C. 553(d) for making this final rule 
effective less than 30 days after the date of publication in the 
Federal Register.

Background

    Under 49 U.S.C. 44940 and the Transportation Security Regulations 
at 49 CFR parts 1510 and 1511, respectively, air carriers and foreign 
air carriers are required to pay to TSA fees known as the September 
11th Security Fee and the Aviation Security Infrastructure Fee (ASIF).
    The September 11th Security Fee is a fee in the amount of $2.50 per 
enplanement imposed by TSA 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. This fee is limited to $2.50 per enplanement for up to two 
enplanements (or up to $5) per one-way trip or four enplanements (or up 
to $10) per round trip. 49 CFR 1510.5(a). Section 118 of the Aviation 
and Transportation Security Act (ATSA) (Pub. L. 107-71; 11/19/2001) 
authorized TSA to impose the September 11th Security Fee to help pay 
TSA's costs of providing civil aviation security services. Under 49 CFR 
1510.9(a) and (b), direct air carriers and foreign air carriers must 
collect from each passenger a September 11th Security Fee on air 
transportation sold on or after February 1, 2002.
    The ASIF is a fee imposed by TSA on air carriers and foreign air 
carriers engaged in air transportation, foreign air transportation, and 
intrastate air transportation, based on each carrier's security costs 
incurred in the year 2000. Section 118 of the ATSA authorized TSA to 
impose the ASIF, to the extent that the September 11th Security Fee was 
insufficient to pay TSA's costs of providing civil aviation security 
services. Under 49 CFR 1511.5 and 1511.7(b), each air carrier and 
foreign air carrier engaged in air transportation must pay to TSA the 
ASIF incurred for each month by the last calendar day of the following 
month. For months up to and including September of 2004, the payment is 
8.333 percent of the total amount of the carrier's costs of screening 
passengers and property transported by passenger aircraft in the United 
States during calendar year 2000.
    On April 16, 2003, the President signed into law the Appropriations 
Act, which among other things, prohibits the Under Secretary for Border 
and Transportation Security (BTS) of the Department of Homeland 
Security from imposing the September 11th Security Fee and the ASIF 
during the period beginning June 1, 2003, and ending September 30, 2003 
(suspension period). TSA, which is an agency within the Department of 
Homeland Security and operating under the direction of the Under 
Secretary of BTS, is the agency charged with imposing these fees by 
regulation. Therefore, TSA is publishing this rule to temporarily 
suspend these fees as required by the Appropriations Act. Unless 
otherwise defined in this document, any terms used in this document 
have the meaning set forth in 49 CFR parts 1510 and 1511.

Discussion of the Rule

    During the suspension period from June 1, 2003, through September 
30, 2003, TSA is suspending Sec. Sec.  1510.5 and 1510.9(a) through 
(c), as well as Sec. Sec.  1511.5(a) through (c) and 1511.7(b), and 
adding new Sec. Sec.  1510.23 and 1511.15, respectively.

Suspension of the September 11th Security Fee

    The Appropriations Act prohibits TSA from imposing the September 
11th Security Fee during the suspension period. TSA interprets this 
provision to mean that TSA may not require passengers to pay the 
September 11th Security Fee if they purchase air transportation 
(tickets) during the suspension period, regardless of whether the air 
transportation actually takes place during the suspension period. 
Accordingly, TSA is establishing the following requirements governing 
direct and foreign air carrier compliance with 49 CFR part 1510 during 
the suspension period.
    Tickets Purchased During the Suspension Period. Under TSA's 
regulation at 49 CFR 1510.9, where a passenger purchases a ticket from 
a direct or foreign air carrier, or from the carrier's agent such as a 
travel agent, the carrier must collect the September 11th Security Fee 
from the passenger at that time. Notwithstanding 49 CFR 1510.9(a) and 
(b), a direct air carrier or foreign air carrier must not collect the 
September 11th Security Fee from any passenger for air transportation 
sold during the suspension period. This means that when a passenger 
purchases a ticket from a direct or foreign air carrier or its agent 
and the passenger pays in full for the ticket at any time from 12 a.m., 
Eastern Daylight Time, on June 1, 2003 through 11:59 p.m., Eastern 
Daylight Time, on September 30, 2003, the carrier must not collect the 
September 11th Security Fee from the passenger. Since 49 CFR 1510.5(c) 
imposes the security fee on passengers obtaining tickets by redeeming 
frequent flyer awards, the carrier must not collect the fee on such 
tickets issued during the suspension period. In addition, 
notwithstanding 49 CFR 1510.9(c), the direct or foreign air carrier 
will not incur any obligation to pay the amount of such uncollected fee 
to TSA.
    Under 49 CFR 1510.9(d), direct and foreign air carriers may not 
collect the September 11th Security Fee unless required by part 1510. 
Therefore, if a direct or foreign air carrier collects a September 11th 
Security Fee from a passenger who purchases a ticket during the 
suspension period, the carrier must refund the fee to the passenger.
    Direct and foreign air carriers must continue to collect the 
September 11th Security Fee on air transportation purchased by 
passengers through 11:59 p.m., Eastern Daylight Time, on May 31, 2003, 
even if the flight for which the transportation is purchased is to be 
operated during the suspension period.
    Tickets Reissued During the Suspension Period. If a passenger 
purchases a ticket before the suspension period begins and the carrier 
reissues a replacement ticket during the suspension period without any 
changes to the original itinerary, the carrier continues to be 
responsible for collecting the amount of the September 11th Security 
Fee that applied upon the initial purchase of the ticket. If, as a 
result of the reissuance, however, the ticket is repriced during the 
suspension period, TSA considers the date the ticket was reissued to be 
the date the passenger purchased the ticket. Therefore, the September 
11th Security Fee will not apply to the reissued ticket. Repricing a 
ticket means a transaction in which the itinerary of a paid ticket is 
revised due to voluntary changes made by the passenger and the ticket 
is reissued to determine the new price of the itinerary. Section 
1510.5(c) of 49 CFR imposes the fee on tickets obtained by redeeming 
frequent flyer awards. However, upgrades using these awards are not 
charged an additional fee. Therefore, redeeming these awards during the 
suspension period for cabin upgrades must not be treated as repricing 
the ticket and the fee must continue to be charged. Free upgrades also 
do not constitute repricing and therefore do not result in refund of 
the fee.

    Example 1. A passenger purchases a round-trip ticket before the 
suspension period with two enplanements per one-way trip (for a 
total of four enplanements) and, due to changes made by the 
passenger, the carrier reissues the ticket during the suspension 
period with a revised itinerary of one enplanement per trip (for a 
total of two enplanements), which results in repricing of

[[Page 27749]]

the itinerary. The carrier must refund to the passenger the amount 
of the September 11th Security Fee previously collected when the 
passenger initially purchased the ticket, and the carrier must not 
collect the fee for the reissued ticket.
    Example 2. If a passenger purchases a ticket before the 
suspension period and the carrier reissues the ticket during the 
suspension period because the passenger redeems frequent flier 
awards in order to obtain an upgrade, the carrier must not refund 
the September 11th Security Fee it collected when the passenger 
initially purchased the ticket. Similarly, if the carrier reissues 
the ticket during the suspension period because the carrier provided 
a free upgrade, the carrier must not refund the September 11th 
Security Fee.
    Example 3. If a passenger purchases a ticket prior to the 
suspension period and the travel is already underway during the 
suspension period and there is a repricing of the ticket, the 
carrier must not collect the September 11th Security Fee for the 
changed or unused portion of the itinerary. Therefore, any fee 
collected for the changed or unused portion of the itinerary must be 
refunded to the passenger.

    Prepaid Air Transportation. In the case of prepaid air 
transportation (for example, prepaid ticket advice), if the passenger 
fully prepays air transportation before the suspension period and the 
carrier issues a ticket against the prepaid amount during the 
suspension period, the carrier must collect the September 11th Security 
Fee for that ticket, because TSA considers the air transportation to 
have been purchased before the suspension period. However, if a 
passenger fully prepays air transportation during the suspension period 
and the carrier issues a ticket against the prepaid amount during or 
after the suspension period, the carrier must not collect the September 
11th Security Fee for that ticket.
    Tickets for Passengers on Public Charter Flights. As discussed 
above, under TSA's regulation at 49 CFR 1510.9, where a passenger 
purchases a ticket from a direct or foreign air carrier, or from the 
carrier's agent such as a travel agent, the carrier must collect the 
September 11th Security Fee from the passenger at the time of ticket 
purchase. On January 25, 2002, TSA issued a letter clarifying when the 
fee is considered to be collected in the case of passengers who 
purchase tickets on public charter flights.\1\
---------------------------------------------------------------------------

    \1\ You may obtain an electronic copy of the letter by accessing 
TSA's electronic docket for TSA 2001-11120. Using the search 
function of the Department of Transportation's electronic Docket 
Management System (DMS) Web page (http://dms.dot.gov/search), type 
in the last 5 digits of the docket number shown above. Click on 
``search.'' On the next page, which contains the docket summary 
information for the docket you selected, click on the link for TSA 
2001-11120-11.
---------------------------------------------------------------------------

    Unlike in the case of scheduled passenger flights, passengers on 
public charter flights purchase their tickets from a public charter 
operator. Regulations of the Department of Transportation require the 
charter operator to place all funds collected from passengers in an 
escrow account and to forward payment to the direct or foreign air 
carrier operating the flight at a later date.\2\ In its January 25th 
letter, TSA made clear that tickets purchased by public charter 
passengers are not considered to be sold for purposes of TSA's 
regulations governing the September 11th Security Fee, until the 
earlier of: (1) The time the direct or foreign air carrier receives 
funds from the public charter escrow account; or (2) the date the 
direct or foreign air carrier operates the flight. The purpose of this 
interpretation by TSA was to more closely align a direct or foreign air 
carrier's obligation to pay the fee to TSA with its actual receipt of 
the fee from the public charter operator. TSA will maintain the 
existing payment structure for the charter operators to remit the 
September 11th Security Fees to direct and foreign air carriers while 
also maintaining the requirements for direct and foreign air carriers 
to remit the fees to TSA during and after the suspension period.
---------------------------------------------------------------------------

    \2\ See 14 CFR 212.8.
---------------------------------------------------------------------------

    As a result, however, the definition of when air transportation is 
sold on a public charter flight for purposes of 49 CFR part 1510 does 
not coincide with the time the passenger actually purchases a ticket 
for that flight. As discussed above, the Appropriations Act suspends 
the imposition of fees on air transportation that a passenger actually 
purchases during the suspension period. Accordingly, TSA is providing 
the following guidance to direct and foreign air carriers related to 
air transportation on public charter flights. During the suspension of 
the September 11th Security Fee, TSA will (1) continue to allow direct 
air carriers to remit the already collected fees to TSA according to 
the structure identified in the January 25, 2002, letter; however (2) 
Charter operators may not collect September 11th Security Fees from 
passengers paying in full during the suspension period.
    Additional Guidance for Suspension of Fees for Public Charter 
Passengers. For passengers on public charter flights, when the 
passenger purchases a ticket from the charter operator, which means 
paying the charter operator in full for the ticket at any time from 12 
a.m., Eastern Daylight Time, on June 1, 2003 through 11:59 p.m., 
Eastern Daylight Time, on September 30, 2003, the public charter 
operator must not collect the September 11th Security Fee from the 
passenger. In addition, since the fee will not be imposed on 
passengers, the direct or foreign air carrier operating the flight must 
not collect the September 11th Security Fee from the charter operator 
for any passengers who purchased tickets from the public charter 
operator during the suspension period. Notwithstanding 49 CFR 
1510.9(c), the direct or foreign air carrier will not incur any 
obligation to pay the amount of such fee (not collected from 
passengers) to TSA.
    Continuing Payment of Fees to TSA. Under 49 CFR 1510.13(a), direct 
and foreign air carriers must pay all September 11th Security Fees 
imposed each calendar month to TSA by the last calendar day of the 
month following the imposition of the fee. Therefore, direct and 
foreign air carriers must pay to TSA any September 11th Security Fees 
imposed on tickets purchased during the month of May, 2003, no later 
than June 30, 2003. In addition, any other security fees imposed prior 
to the suspension period, but not remitted by air carriers to TSA, are 
still due to TSA during and after the suspension period.
    In the case of tickets purchased on public charter flights, direct 
and foreign air carriers must continue to forward to TSA, in accordance 
with 49 CFR 1510, any September 11th Security Fees paid by passengers 
who purchased tickets prior to the beginning of the suspension period. 
These payments continue to be due to TSA by the last calendar day of 
June, July, August, and September of 2003.
    For example, if a passenger purchases a ticket from a public 
charter operator on May 15, 2003, for a flight that will take place on 
June 15, 2003, the public charter operator will collect the September 
11th Security Fee from the passenger and place it in an escrow account. 
As explained in TSA's letter of January 25, 2002, in order to more 
closely align a direct or foreign air carrier's obligation to pay the 
fee to TSA with the carrier's actual receipt of the fee from the public 
charter operator, the ticket is considered to be sold at the time the 
charter operator provides the escrow funds to the direct or foreign air 
carrier operating the flight or the date the flight occurs, whichever 
comes first. If the public charter operator, in the example, provides 
the escrow funds to the carrier on June 14, 2003, the carrier must pay 
the fee to TSA by July 31, 2003. If a direct or foreign air carrier 
does not collect the appropriate fee from a passenger, the air carrier 
is still responsible for paying the fee to TSA.

[[Page 27750]]

    A carrier may offset fees refunded to passengers during the 
suspension period against future amounts of September 11th Security 
Fees due to TSA in June 2003 and following months under 49 CFR part 
1510.
    Resumption of Imposition of the September 11th Security Fee. TSA 
will resume imposition of the September 11th Security Fee beginning at 
12 a.m. on October 1, 2003, without any further notice. Therefore, 
direct and foreign air carriers must resume collecting and paying to 
TSA the September 11th Security Fee on tickets purchased by passengers 
beginning on 12 a.m., Eastern Daylight Time, on October 1, 2003, in 
accordance with the requirements of 49 CFR part 1510. If an air carrier 
does not collect the appropriate fee from a passenger, that should have 
been collected before the suspension period, the air carrier is still 
responsible for paying the fee to TSA.
    In the case of public charter flights, because public charter 
operators will not collect September 11th Security Fees from passengers 
who purchase tickets during the suspension period, there will be 
instances where the escrow payments that direct or foreign air carriers 
receive from public charter operators after September 30, 2003, will 
not include September 11th Security Fees for some or all of the tickets 
sold for a flight. If the public charter operator did not collect the 
fee due to the suspension, the direct or foreign air carrier will not 
incur any obligation to pay those fees to TSA, notwithstanding 49 CFR 
part 1510.
    Reporting Requirements Continue During the Suspension Period. In 
accordance with 49 CFR 1510.17, each direct and foreign air carrier 
must continue to provide TSA with quarterly reports that provide an 
accounting of fees imposed, collected, refunded, and remitted to TSA. 
If a carrier collects no fees during the suspension period, the carrier 
must submit the required report showing zeros in the appropriate fields 
in the report. The Bureau of Transportation Statistics collects such 
data for TSA. The Bureau website address for reporting the data is 
http://www.bts.gov/oai/tsa/. For further information on these reporting 
requirements, air carriers may also contact Ms. Nancy Sharpe, Data 
Administrator, Bureau of Transportation Statistics, Office of Airline 
Information, K-14, 400 7th Street, SW., Room 4125, Washington, DC 
20590, phone: 202-366-2261, fax: 202-366-3383.
    Travel Involving More than One Carrier. For purposes of 49 CFR part 
1510, a direct air carrier or foreign air carrier that provides or 
offers to provide air 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 selling carrier is 
responsible for paying the September 11th Security Fee applicable to 
the air transportation.

Suspension of the ASIF

    The Appropriations Act prohibits TSA from imposing the ASIF during 
the suspension period, June 1, 2003, to September 30, 2003. Therefore, 
notwithstanding 49 CFR 1511.5 (a) through (c) and 1511.7(b), air 
carriers and foreign air carriers engaged in air transportation will 
not incur any obligations to make payments to TSA for the months of the 
suspension period that otherwise would be required under 49 CFR 
1511.7(b) to be paid in July, August, September, and October of 2003. 
Payment due under 49 CFR 1511.7(b) for May of 2003 remains due by June 
30, 2003. Any other ASIF incurred prior to the suspension period, but 
not remitted to TSA, continues to be due to TSA during and after the 
suspension period.
    TSA will resume imposition of the ASIF beginning October 1, 2003, 
without any further notice. Therefore, direct and foreign air carriers 
must resume making payments to TSA under 49 CFR part 1511, beginning 
with the payment due under 49 CFR 1511.7(b) no later than November 30, 
2003.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the TSA consider the impact of paperwork and other information 
collection burdens imposed on the public. We have determined that there 
are no new information collection requirements associated with this 
rule.

Regulatory Impact Analyses

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866, Regulatory Planning and Review 
(58 FR 51735, October 4, 1993), directs each Federal agency to 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 (5 U.S.C. 601-612) requires agencies 
to analyze the economic impact of regulatory changes on small entities. 
Third, the Office of Management and Budget directs agencies to assess 
the effect of regulatory changes on international trade. Fourth, the 
Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires 
agencies to prepare a written assessment of the costs, benefits, and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more annually (adjusted for inflation.)

Executive Order 12866 Assessment

    In conducting these analyses, TSA has determined that the economic 
impact of this rule does not meet the standards for a ``significant 
regulatory action'' under section 3(f) of Executive Order 12866 and 
does not require an assessment of potential costs and benefits under 
section 6(a)(3), of that Order. However, TSA has determined that 
because of the public interest in the subject of security fees, this 
rule is considered significant and, therefore, has been reviewed by the 
Office of Management and Budget. Although a regulatory analysis or 
evaluation does not accompany this rule, TSA recognizes the rule will 
impose no or de minimus costs on the aviation industry and the public 
other than those weighed by Congress in passing the Appropriations Act. 
Air carriers will benefit through not having to collect the security 
fees and the public will benefit by not having to pay the security 
fees. The September 11th Security Fee that passengers will not have to 
pay and air carriers will not have to collect and remit to TSA is 
estimated to be $600 million. The Aviation Security Infrastructure Fee 
that air carriers will not incur, and therefore will not remit to TSA, 
is estimated to be $100 million. This mandatory security fee suspension 
totaling $700 million is imposed by the Appropriations Act and is not a 
direct impact of this rulemaking. This rule addresses implementation of 
the suspension of the fee as it relates to the initial fee imposition 
requirements provided in 49 CFR part 1510.

Regulatory Flexibility Act Assessment

    The Regulatory Flexibility Act (RFA) of 1980 requires that agencies 
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. For purposes 
of the RFA, small entities include small businesses, not-for-profit 
organizations, and small governmental jurisdictions. Individuals and 
States are not included in the definition of a small entity. When no 
notice of proposed rulemaking has first been published, no

[[Page 27751]]

such assessment is required for a final rule.

International Trade Impact Assessment

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States. Legitimate domestic objectives, such as safety, are not 
considered unnecessary obstacles. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards. TSA has assessed the potential 
effect of this rulemaking and has determined that it will not have a 
significant impact on foreign commerce and, therefore, has no effect on 
any trade-sensitive activity.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 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; such a mandate is deemed to be a 
``significant regulatory action.''
    This rulemaking does not contain such a mandate. The requirements 
of Title II of the Act, therefore, do not apply and TSA has not 
prepared a statement under the Act.

Executive Order 13132, Federalism

    The TSA has analyzed this final 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, and therefore does not have federalism implications.

Environmental Analysis

    The TSA has reviewed this action for purposes of the National 
Environmental Policy Act of 1969 (NEPA) (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 the notice has been assessed in accordance 
with the Energy Policy and Conservation Act (EPCA) Public Law 94-163, 
as amended (42 U.S.C. 6362). We have determined that this rulemaking is 
not a major regulatory action under the provisions of the EPCA.

List of Subjects in 49 CFR Parts 1510 and 1511

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

The Amendment

0
In consideration of the foregoing, the Transportation Security 
Administration amends Chapter XII of Title 49, Code of Federal 
Regulations, as follows:

SUBCHAPTER A--ADMINISTRATIVE AND PROCEDURAL RULES

PART 1510--PASSENGER CIVIL AVIATION SECURITY SERVICE FEES

0
1. The authority citation for part 1510 continues to read as follows:

    Authority: 49 U.S.C. 44940.


0
2. From June 1, 2003, through September 30, 2003, suspend Sec. Sec.  
1510.5 and 1510.9(a) through (c), and add a new Sec.  1510.23 to read 
as follows:


Sec.  1510.23  Temporary suspension of the September 11th Security Fee.

    (a) Suspension of the September 11th Security Fee. (1) 
Notwithstanding 49 CFR 1510.9(a) and (b), a direct air carrier or 
foreign air carrier must not collect the September 11th Security Fee 
from any passenger for air transportation sold during the suspension 
period. For purposes of this section, the suspension period is 12:00 
a.m., Eastern Daylight Time, on June 1, 2003, through 11:59 p.m., 
Eastern Daylight Time, on September 30, 2003. When a passenger 
purchases a ticket from a direct or foreign air carrier or its agent 
and the passenger pays in full, including through redemption of 
frequent flier awards, for the ticket during the suspension period, the 
carrier must not collect the September 11th Security Fee from the 
passenger. In addition, notwithstanding 49 CFR 1510.9(c), the direct or 
foreign air carrier will not incur any obligation to pay the amount of 
such uncollected fee to TSA.
    (2) If a direct or foreign air carrier collects a September 11th 
Security Fee from a passenger who purchases a ticket during the 
suspension period, the carrier must refund the fee to the passenger.
    (3) Direct and foreign air carriers must continue to collect the 
September 11th Security Fee on air transportation purchased by 
passengers through 11:59 p.m., Eastern Daylight Time, on May 31, 2003, 
even if the flight for which the transportation is purchased is to be 
operated during the suspension period.
    (b) Tickets reissued during the suspension period. (1) If a 
passenger purchases a ticket before the suspension period begins and 
the carrier reissues a replacement ticket during the suspension period 
without any changes to the original itinerary, the carrier continues to 
be responsible for collecting the amount of the September 11th Security 
Fee that applied upon the initial purchase of the ticket. If, as a 
result of the reissuance, however, the ticket is repriced during the 
suspension period, the September 11th Security Fee will not apply to 
the reissued ticket. Repricing a ticket means a transaction in which 
the itinerary of a paid ticket is revised due to voluntary changes made 
by the passenger and the ticket is reissued to determine the new price 
of the itinerary. Redemption of frequent flyer awards during the 
suspension period for cabin upgrades does not constitute repricing of 
the ticket and therefore the fee must continue to be charged. Free 
upgrades do not constitute repricing and therefore do not result in 
refund of the fee.

    (i) Example 1. A passenger purchases a round-trip ticket before 
the suspension period with two enplanements per one-way trip (for a 
total of four enplanements) and, due to changes made by the 
passenger, the carrier reissues the ticket during the suspension 
period with a revised itinerary of one enplanement per trip (for a 
total of two enplanements), which results in repricing of the 
itinerary. The carrier must refund to the passenger the amount of 
the September 11th Security Fee previously collected when the 
passenger initially purchased the ticket, and the carrier must not 
collect the fee for the reissued ticket.
    (ii) Example 2. If a passenger purchases a ticket before the 
suspension period and the carrier reissues the ticket during the 
suspension period because the passenger redeems frequent flier 
awards in order to obtain an upgrade, the carrier must not refund 
the September 11th Security Fee it collected when the passenger 
initially purchased the ticket. Similarly, if the carrier reissues 
the ticket during the suspension period because the carrier provided 
a free upgrade, the carrier must not refund the September 11th 
Security Fee.
    (iii) Example 3. If a passenger purchases a ticket prior to the 
suspension period and the travel is already underway during the 
suspension period and there is a repricing of the ticket, the 
carrier must not collect the September 11th Security Fee for the 
changed or unused portion of the itinerary. Therefore, any fee 
collected for the changed or unused portion of the itinerary must be 
refunded to the passenger.


[[Page 27752]]


    (2) Prepaid air transportation. In the case of prepaid air 
transportation (for example, prepaid ticket advice), if the passenger 
prepays air transportation before the suspension period and the carrier 
issues a ticket against the prepaid amount during the suspension 
period, the carrier must collect the September 11th Security Fee for 
that ticket. However, if a passenger prepays air transportation during 
the suspension period and the carrier issues a ticket against the 
prepaid amount during or after the suspension period, the carrier must 
not collect the September 11th Security Fee for that ticket.
    (c) Tickets for passengers on public charter flights. (1) A direct 
or foreign air carrier operating a public charter flight must not 
collect the September 11th Security Fee from the charter operator for 
any passengers who purchased air transportation (tickets) from the 
public charter operator and paid in full during the suspension period. 
Notwithstanding 49 CFR 1510.9(c), the direct or foreign air carrier 
will not incur any obligation to pay the amount of such fee (not 
collected from passengers) to TSA.
    (d) Continuing payment of fees to TSA. (1) Direct and foreign air 
carriers must pay to TSA any September 11th Security Fees imposed on 
tickets purchased during the month of May, 2003, no later than June 30, 
2003. In addition, any other security fees imposed prior to the 
suspension period, but not remitted by air carriers to TSA, remain due 
to TSA during and after the suspension period.
    (2) In the case of tickets purchased on public charter flights, 
direct and foreign air carriers must continue to forward to TSA, in 
accordance with 49 CFR 1510, any September 11th Security Fees paid by 
passengers who purchased tickets prior to the beginning of the 
suspension period. These payments continue to be due to TSA by the last 
calendar day of June, July, August, and September of 2003.

    (i) Example. If a passenger purchases a ticket from a public 
charter operator on May 15, 2003, for a flight that will take place 
on June 15, 2003, the public charter operator will collect the 
September 11th Security Fee from the passenger and place it in an 
escrow account. If the public charter operator provides the escrow 
funds to the carrier on June 14, 2003, the carrier must pay the fee 
to TSA by July 31, 2003.
    (ii) [Reserved]

    (3) A carrier may offset fees refunded to passengers during the 
suspension period against future amounts of September 11th Security 
Fees due to TSA in June 2003 and following months under 49 CFR part 
1510.
    (4) If a carrier does not collect the appropriate fee from a 
passenger that should have been collected before the suspension period, 
the air carrier remains responsible for paying the fee to TSA.
    (e) Resumption of imposition of the September 11th Security Fee. 
(1) TSA will resume imposition of the September 11th Security Fee 
beginning at 12 a.m. on October 1, 2003, without any further notice. 
Therefore, direct and foreign air carriers must resume collecting and 
paying to TSA the September 11th Security Fee on tickets purchased by 
passengers beginning on 12 a.m., Eastern Daylight Time, on October 1, 
2003, in accordance with the requirements of 49 CFR part 1510. These 
fees imposed in October 2003 are due to TSA no later than November 30, 
2003.
    (2) In the case of public charter flights, because public charter 
operators will not collect September 11th Security Fees from passengers 
who purchase tickets during the suspension period, there will be 
instances where the escrow payments that direct or foreign air carriers 
receive from public charter operators after September 30, 2003, will 
not include September 11th Security Fees for some or all of the tickets 
sold for a flight. If the public charter operator did not collect the 
fee for this reason, the direct or foreign air carrier will not incur 
any obligation to pay those fees to TSA, notwithstanding 49 CFR part 
1510.
    (f) Reporting requirements continue during the suspension period. 
In accordance with 49 CFR 1510.17, each direct and foreign air carrier 
must provide TSA with quarterly reports that provide an accounting of 
fees imposed, collected, refunded, and remitted to TSA. If a carrier 
collects no fees during the suspension period, the carrier must submit 
the required report showing zeros in the appropriate fields in the 
report. The Bureau of Transportation Statistics collects such data for 
TSA. The Bureau website address for reporting the data is http://www.bts.gov/oai/tsa/. For further information on these reporting 
requirements, air carriers may also contact Ms. Nancy Sharpe, Data 
Administrator, Bureau of Transportation Statistics, Office of Airline 
Information, K-14, 400 Seventh Street, SW., Room 4125, Washington, DC 
20590, phone: 202-366-2261, fax: 202-366-3383.
    (g) Travel involving more than one carrier. For purposes of 49 CFR 
part 1510, a direct air carrier or foreign air carrier that provides or 
offers to provide air 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 selling carrier is 
responsible for paying the September 11th Security Fee applicable to 
the air transportation.

PART 1511--AVIATION SECURITY INFRASTRUCTURE FEE

0
3. The authority citation for part 1511 continues to read as follows:

    Authority: 49 U.S.C. 44901 and 44940.


0
4. From June 1, 2003, through September 30, 2003, suspend Sec. Sec.  
1511.5(a) through (c) and 1511.7(b), and add a new Sec.  1511.15 to 
read as follows:


Sec.  1511.15  Temporary Suspension of the ASIF.

    (a) Notwithstanding 49 CFR 1511.5 (a) through (c) and 1511.7(b), an 
air carrier or foreign air carrier engaged in air transportation will 
not incur any obligation to make payments to TSA for the months of the 
suspension period that otherwise would be required under 49 CFR 
1511.7(b) to be paid in July, August, September, and October of 2003. 
Payment due under 49 CFR 1511.7(b) for May of 2003 remains due by June 
30, 2003. Any other ASIF incurred by an air carrier or foreign air 
carrier prior to the suspension period, but not remitted to TSA, 
continues to be due to TSA during and after the suspension period.
    (b) TSA will resume imposition of the ASIF beginning October 1, 
2003, without any further notice. Therefore, each air carrier and 
foreign air carriers must resume making payments to TSA under 49 CFR 
part 1511, beginning with the payment due under 49 CFR 1511.7(b) no 
later than November 30, 2003.

    Issued in Arlington, VA, on May 15, 2003.
James M. Loy,
Administrator.
[FR Doc. 03-12775 Filed 5-19-03; 10:52 am]
BILLING CODE 4910-62-P