[Federal Register Volume 69, Number 27 (Tuesday, February 10, 2004)]
[Notices]
[Pages 6366-6371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2884]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration


Notice of Policy Regarding the Eligibility of Airport Ground 
Access Transportation Projects for Funding Under the Passenger Facility 
Charge Program

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

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SUMMARY: In accordance with section 123(e) of the Vision 100--Century 
of Aviation Reauthorization Act, (Pub. L. 108-176, December 12, 2003), 
the Federal Aviation Administration (FAA) is publishing its policy with 
regard to the eligibility of airport ground access transportation 
projects for funding under the Passenger Facility Charge (PFC) program.
    The FAA determines the eligibility of airport ground access 
transportation projects, no matter the technology proposed (e.g. road, 
heavy or light rail, water) for funding under the PFC program, on a 
case-by-case basis after a review of the particulars associated with 
each unique proposal. In general, a request to use PFC's to fund an 
airport ground access transportation project must be submitted by a 
qualified applicant and the project must be eligible for funding under 
the Airport Improvement Program (AIP); meet at least one of the PFC 
program objectives and, if applicable, at least one of the significant 
contribution requirements \1\; and be adequately justified (49 U.S.C. 
40117(d)(3)). In addition, all PFC projects must conform to other 
applicable regulatory requirements as referenced in 14 CFR part158 
(e.g., environmental requirements, specified implementation schedules). 
Airport ground access transportation projects proposed at a PFC level 
higher than $3 must also conform to the AIP funding test (49 U.S.C. 
40117(b)(4)(B); 14 CFR 158.17(a)(2)) and the airside needs test (49 
U.S.C. 40117(d)(4); 14 CFR 158.17(a)(3)).
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    \1\ As the FAA has applied the significant contribution 
requirement, a finding that a project meets a PFC objective is 
subsumed within a finding that a project meets the significant 
contribution requirement.

ADDRESSES: This is an informational notice only and comments are not 
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being solicited at this time.

FOR FURTHER INFORMATION CONTACT: Sheryl Scarborough, Financial Analysis 
and Passenger Facility Charge Branch (APP-510), Room 619, Airports 
Financial Assistance Division, Office of Airport Planning and 
Programming, Federal Aviation Administration, 800 Independence Avenue, 
SW., Washington, DC 20591, telephone (202) 267-8825.

SUPPLEMENTARY INFORMATION: In recent yeas, the FAA has been requested 
to approve PFC funding of airport ground access transportation 
facilities. Proposals to build rail transit projects in particular have 
tended to involve large amounts of funds--from several hundred million 
to more than a billion dollars--and thereby generated close scrutiny, 
if not controversy. The Federal Transit Administration (FTA) estimates 
that three dozen or more localities currently have plans or proposals 
to build fixed guideway access projects to their airports.
    We are publishing this policy to comply with the requirement of 
section 123(e) of the Vision Act. Section 123(e) directs the FAA to 
publish its current policy on airport ground access transportation 
project eligibility for PFC funding within 60 days after enactment of 
the Vision 100 Act. By consolidating guidance set forth in the preamble 
to the PFC regulation as well as the PFC regulation itself (14 CFR part 
158), FAA Order 5500.1 ``Passenger Facility Charge'' (August 9, 2001), 
the AIP Handbook (change 1 to FAA Order 5100.38B (January 8, 2004), and 
FAA PFC Records of Decision and Final Agency Decisions approving the 
use of PFC revenue to finance airport ground access transportation 
projects, this notice should assist public agencies eligible to impose 
PFC's, air carriers, local transit operators, and other stakeholders in 
understanding how the FAA applies the statutory and regulatory criteria 
governing the PFC program to airport ground access transportation 
projects. The FAA has a more extensive background in evaluating highway 
ground access projects through its experiences with the various FAA 
airport grant programs and through the numerous requests for PFC 
funding of highway access projects (e.g. Las Vegas McCarran 
International, Miami International, and Baltimore-Washington 
International Airports). Therefore, although it can be used for any 
proposed mode of transportation, this summary of FAA policy reflects 
the FAA's recent experience in approving three major fixed guideway 
access projects--the Light Rail System (LRS) at John F. Kennedy 
International Airport

[[Page 6367]]

(JFK), the monorail project at Newark Liberty International Airport, 
and the Airport MAX project at Portland International Airport (PDX). 
This FAA policy is subject to refinement in the future as different 
issues are raised during the evaluation of new projects.
    The FAA determines the eligibility and justification for airport 
ground access transportation projects, no matter the technology 
proposed (e.g., road, heavy or light rail, water), on a case-by-case 
basis after a review of the particulars associated with each unique 
proposal (Preamble to 14 CFR part 158, Sec. 158.15 Project eligibility 
(56 FR 24258, May 29, 1991)). In general, an airport ground access 
transportation project must: be submitted by a qualified applicant; be 
eligible for funding under the AIP; meet at least one of the PFC 
program objectives and, if applicable, at least one of the significant 
contribution findings; and be adequately justified (49 U.S.C. 
40117(d)(3)). In addition, all PFC projects must conform to other 
applicable regulatory requirements as referenced in 14 CFR part 158 
(e.g., environmental requirements, specified implementation schedules). 
Airport ground access transportation projects approved for PFC levels 
above $3 must also conform to the AIP funding test (49 U.S.C. 
40117(b)(4)(B); 14 CFR 158.17(a)(2)) and the airside needs test (49 
U.S.C. 40117(d)(4); 14 CFR 158.17(a)(3)), as discussed more fully 
below.

I. Qualified Applicants for PFC Projects

1. Who May Apply?

    The PFC statute (49 U.S.C. 40117(a)(2)) and regulation (14 CFR part 
158.5) provide that only ``a public agency that controls a commercial 
service airport'' may submit an application to fund a specific project 
with PFC revenues. As defined in 14 CFR 158.3, a public agency may be 
``a State or any agency of one or more States; a municipality or other 
political subdivision of a State; an authority created by Federal, 
State, or local law; a tax supported organization; or an Indian tribe 
or pueblo that controls a commercial service airport.'' In addition, 
the sponsor of an airport participating in the Pilot Program on Private 
Ownership of Airports (49 U.S.C. 47134) may also submit a PFC 
application. A commercial service airport is defined in 14 CFR 158.3 as 
``a public airport enplaning 2,500 or more passengers annually and 
receiving scheduled service.''

2. May Other Parties Participate in Project Design and Development?

    Public agencies are strongly encouraged to coordinate the design 
and development of airport ground access transportation projects with 
local and regional transportation planning boards (e.g., metropolitan 
planning organizations). This is especially important in cases where 
the PFC-funded project necessitates access or access improvements to a 
public roadway or transit system off airport property. (Section 187 of 
the Vision 100 Act requires public agencies controlling large or medium 
hub airports that are planning to construct or relocate an airport or 
construct a new runway or major runway extension to offer the local 
metropolitan planning organization the opportunity to review any 
airport layout plan or master plan in which the proposed project is 
depicted. This provision is intended to ensure that any ground access 
improvements necessitated by the proposed project are identified in a 
timely manner.) However, projects to be funded with PFC revenues must 
conform to the eligibility conditions specified below. In addition, the 
public agency is the final authority on the type and scope of an 
airport ground access transportation project submitted for PFC funding. 
49 U.S.C. 40117(b)(2) specifies that ``A state, political subdivision 
of a state, or authority of a state or political subdivision that is 
not the eligible agency may not regulate or prohibit the imposition or 
collection of a passenger facility fee or the use of the passenger 
facility revenue.''

II. PFC Project Eligibility

1. How Is PFC Eligibility Established?

    Under 49 U.S.C. 40117(a)(3)(A), PFC eligibility for airport ground 
access transportation projects is identical to that of AIP projects. 
AIP eligibility of airport projects, codified in Chapter 471 of 49 
U.S.C., is summarized in change 1 to FAA Order 5100.38B, AIP Handbook 
(January 8, 2004). 49 U.S.C. 47102(3)(1) specifically identifies 
projects to support the movement of passengers, cargo, and baggage as 
being eligible airport development.
    In past decisions on the eligibility of airport ground access 
transportation projects, the FAA has relied on the eligibility 
conditions summarized in paragraphs 620a, ``Access Roads,'' and 622b, 
``Rail Service to Airports'' of change 1 to FAA Order 5100.38B (January 
8, 2004) and its predecessor FAA Order 5100.38A (October 24, 1989), 
paragraphs 553, ``Airport Roads,'' and 555 ``Rapid Transit 
Facilities.'' The use of eligibility criteria for access roads to judge 
eligibility of rail and fixed guideway systems is based, in part, on a 
March 15, 1971, opinion by the FAA Assistant Associate General Counsel. 
In that opinion, the Assistant Associate General Counsel determined 
that rail service to an airport was AIP eligible under the category of 
airport ``entrance and service roads.'' The eligibility criteria 
summarized in the paragraphs cited above were themselves established 
through agency legal opinions interpreting 49 U.S.C. and its 
predecessor statutes.
    To be AIP and PFC eligible, the airport ground access 
transportation project must meet the following conditions: (1) The road 
or facility may only extend to the nearest public highway or facility 
of sufficient capacity to accommodate airport traffic; (2) the access 
road or facility must be located on the airport or within a right-of-
way acquired by the public agency; and (3) the access road or facility 
must exclusively serve airport traffic . Related facilities, such as 
acceleration and deceleration lanes, exit and entrance ramps, lighting, 
equipment to provide operational control of a rail system or people 
mover, and rail system or people mover stops at intermediate point on 
the airport are eligible when they are a necessary part of an eligible 
access road or facility (change 1 to FAA Order 5100.38B (January 8, 
2004) paragraphs 620a(5) and 622(a). Related facilities may also 
include information technology and other electronic systems that will 
improve the operation, capacity or safety of the ground access 
facility, overhead variable message signs, and traffic control systems.
    In addition to the above eligibility criteria, the public agency 
must retain ownership of the completed ground access transportation 
project. The public agency may choose to operate the facility on its 
own or may choose to lease the facility to a local or regional transit 
agency for operation within a larger local or regional transit system.

2. What Does the FAA Consider the Nearest Highway or Facility?

    An airport ground access transportation project extending off the 
airport must connect to the nearest public highway or facility 
(depending on the transportation mode in question) of sufficient 
capacity to accommodate airport traffic (change 1 to FAA Order 
5100.38B, paragraph 620a(1)). More than one access facility and/or 
connection point may be eligible if the airport traffic is of 
sufficient volume to require more than one access route (change 1 to 
FAA Order 5100.38B,

[[Page 6368]]

paragraph 620a(4)). Situations where more than one access route is 
needed would occur if an existing access route could not be expanded to 
meet expected traffic due to physical, environmental, or other binding 
constraints; or if a particular access route is poorly situated to 
serve a significant flow of traffic associated with a geographically 
separate region served by the airport.
    Moreover, the FAA has allowed an airport ground access 
transportation project to connect to more than one point of a public 
transportation mode if the connections are to physically separated 
systems. For instance, in the case of the LRS at JFK, the FAA allowed 
the LRS to connect to the nearest-points-of access of two separate 
public rail systems (i.e., the New York City Transit Subway and the 
Long Island Rail Road). Given the size of the New York City 
metropolitan area and the extremely close proximity of one rail 
connection point to airport parking facilities to be served by the LRS, 
the FAA determined that the access to two rail sites serving 
geographically distinct areas was reasonable.

3. What Qualifies as Airport-Owned Land or Rights-of-Way?

    Airport ground access transportation projects built entirely on 
airport-owned land within the traditional boundaries of an airport 
clearly meet the airport-owned land requirement for AIP eligibility, as 
stated in change 1 to FAA Order 5100.38B, paragraph 620a(2). Moreover, 
an airport ground access transportation project may extend off the 
traditional boundaries of an airport (to the nearest off-airport 
highway or access facility) provided that the right-of-way for the 
project will be owned and controlled by the public agency for the life 
of the project and the project is connected to the airport at some 
point, thus qualifying as an appurtenant area and within the airport 
boundary under 49 U.S.C. 47102(2)(A)(ii). To satisfy this eligibility 
requirement, the public agency must amend its Airport Layout Plan and 
Exhibit A to show the right-of-way. The FAA's application of these 
eligibility standards was upheld by the U.S. Court of Appeals for the 
District of Columbia Circuit for the JFK LRS PFC decision in the case 
of the Air Transport Association of America v. FAA, 169 F.3d. 1, 5 
(D.C. Cir 1999) finding a certification by the eligible agency to take 
ownership of the right-of-way before it would use PFC funds to be 
adequate, and further, finding that the eligible airport ground access 
transportation project may be attached to the airport terminus to be 
considered within the airport boundary.\2\
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    \2\ The Court reviewed the FAA's application of the eligibility 
standards from FAA Order 5100.38A (October 29, 1989), paragraph 553, 
``Airport Roads,'' and paragraph 555, ``Rapid Transit Facilities.'' 
Among other things, the petitioner had contented that the right-of-
way between the Jamaica Long Island Rail Road Station, a 3.1 mile 
elevated railway along the Van Wyck Expressway, and JFK did not meet 
FAA eligibility requirements because this right-of-way was not ``on-
airport.'' The petitioner argued that for a right-of-way to be on-
airport, it must be attached to the airport landing area along its 
entire length. The court upheld the FAA's position, based upon FAA 
Order 5100.38A, paragraphs 553 and 555, that the right-of-way need 
only be attached to the airport landing area at some point, but not 
necessarily along the entire length of the right-of-way. The court 
also noted that the FAA's interpretation, that once a public agency 
owns the right-of-way, that strip of land is by definition airport-
owned and therefore ``within the airport'' was ``reasonable'' and 
``consisted with the FAA's own regulations and past practice.'' 169 
F. 3d at 6. The court also cited 56 FR 24,254, 24,258 (1991), the 
FAA's preamble to the final PFC rule, which states that ``ground 
transportation projects are eligible if the public agency acquires 
the right-of-way.'' 169 F. 3d at 6.
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4. What Is Exclusive Airport Use?

    The requirement under change 1 of FAA Order 5100.38B paragraph 
620a(3) that the airport ground access transportation project be for 
the exclusive use of airport patrons and employees means that the 
facility can experience no more than incidental use by non-airport 
users. ``Incidental use by non-airport users'' means that through 
system access control procedures, physical alignment, schedules, 
pricing or for other reasons, routine use by non-airport users would be 
unattractive and non-airport users in fact constitute only a minor 
percentage of total system ridership. Exclusive airport use does not 
mean that any non-airport use must be prevented at all costs. In 
evaluating this requirement, the FAA considers whether techniques that 
would enable the public agency to prevent non-airport use would be 
prohibitively expensive. However, use of the airport ground access 
transportation project by more than a minor percentage of non-airport 
users would raise the FAA's concerns with regard to a project's 
eligibility.
    Determining whether a facility meets the standard of exclusive use 
requires a case-by-case evaluation, although certain types of 
facilities are easier to evaluate than others. A rail station located 
within the airport boundary (particularly one in or adjacent to an 
airport terminal as in the case of Lambert-St. Louis, Chicago O'Hare, 
Hartsfield-Jackson Atlanta, Ronald Reagan Washington National, and 
Baltimore-Washington airports) would typically be used only by airport 
users and therefore be an exclusive use facility (some exceptions may 
exist if the rail station is also convenient to a nearby non-airport 
facility). A facility near the boundary of an airport or which 
otherwise may attract non-airport use may qualify as exclusive use if 
system access control could be implemented by design features, pricing 
techniques (making non-airport use non-economical), routing to 
discourage non-airport use, or other methods approved by the FAA \3\. 
If a road or facility is intended to serve both airport and non-airport 
users, only those physically-discrete subsections of the road or 
facility that exclusively serve airport users could be funded with AIP 
or PFC funds. In the case of the PDX Airport MAX rail system, the FAA 
permitted PFC funding for only one of three discrete segments (the on-
airport segment ending at the terminal) as it alone was solely intended 
for use by airport patrons and employees.
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    \3\ For instance, during the FAA's evaluation of the JFK LRS, it 
was suggested that local non-airport commuters might park in the JFK 
long term parking facilities and enter the LRS to access the Long 
Island Railroad or the subway lines. The FAA concluded that such 
non-airport uses of the LRS would be economically unfeasible due to 
the combined cost of the roundtrip LRS fare and airport parking 
relative to alternative means of accessing the non-LRS transit 
system.
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III. PFC Objective and Significant Contribution Findings

    In addition to AIP eligibility, the PFC statute as implemented by 
14 CFR part 158, requires that PFC projects, including PFC-funded 
airport ground access transportation projects, must accomplish one or 
more PFC program objectives and, if applicable, be found to make a 
significant contribution to the national air transportation system in 
one or more specific areas, depending on the size of the airport and 
the proposed PFC level. In accordance with 49 U.S.C. 40117(d)(2), as 
implemented by 14 CFR 158.15(a), the PFC program objectives are: (1) 
Preserving or enhancing the safety, capacity, or security of the 
national air transportation system; (2) reducing noise or mitigate 
noise impacts resulting from an airport that is part of such system; or 
(3) furnishing opportunities for enhanced competition between or among 
air carriers. In accordance with 49 U.S.C. 40117(b)(4)(A) as 
implemented by 14 CFR 158.17(b), a large or medium hub airport 
proposing a project at a $4 or $4.50 PFC level must demonstrate that 
the project makes a significant contribution to: (1) Improving air 
safety and security; (2) increasing competition among air carriers; (3) 
reducing current or anticipated congestion; or (4)

[[Page 6369]]

reducing the impact of aviation noise on people living near the 
airport.
    Any public agency requesting PFC funding for an airport ground 
access transportation project at a $1, $2, or $3 PFC level must meet 
the PFC Objectives requirement. Ground access transportation projects 
proposed for funding at a $4 or $4.50 PFC level at a small hub or 
smaller airport must also meet the PFC Objectives requirement. However, 
airport ground access transportation projects proposed for funding at a 
$4 or $4.50 PFC level at a large or medium hub airport must meet the 
significant contribution requirement.

1. Which PFC Objectives Are Typically Met by an Airport Ground Access 
Transportation Project?

    Typically, public agencies propose that an airport ground access 
transportation project meets the objective of preservation or 
enhancement of capacity of the national air transportation system, in 
that airport passengers or air cargo customers may be afforded faster 
and/or more reliable access times to airports, thus reducing total trip 
times. The FAA uses reduced trip time as a rough gauge of capacity 
benefits as it means that the national air transportation system can 
accommodate the same number of people or amount of air cargo with less 
average delay, or alternatively, a larger number of people or a larger 
amount of air cargo at the same level of average delay. These airport 
passengers or air cargo customers could include users of the proposed 
access system, as well as users of other means of airport access who 
would benefit from reductions in ground congestion enabled by the 
proposed system.
    A public agency may propose that an airport ground access 
transportation project meets other PFC objectives apart from or in 
addition to capacity preservation or enhancement. For instance, a 
project could benefit competition between airlines if the improved 
ground access results in a passenger being able to choose between air 
carriers operating at different airports. In all cases, the 
objective(s) cited for the project must be realistic and supported by 
analysis. The degree to which the project meets its objective(s) is, in 
turn, the basis for the determination of the project's justification.

2. Which Significant Contribution Findings Are Typically Proposed for 
an Airport Ground Access Transportation Project?

    Similar to the PFC objectives requirement, public agencies 
typically prepare an airport ground access transportation project 
description and justification to meet the ``reduce current or 
anticipated congestion`` significant contribution finding. The public 
agency's analysis may be similar to that outlined under the PFC 
objectives discussion above. In analyzing the significant contribution 
benefits of a ``congestion'' project, the FAA considers the following 
questions; in addition to any unique aspects of a project: (1) Does the 
project support or is it a part of a capacity project to which the FAA 
has allocated Federal resources or that would qualify for such 
resources?; (2) Is the project included in an AIP Letter of Intent or 
does it satisfy the FAA's benefit-cost criteria for large AIP 
discretionary investments?; (3) Has the project been identified as an 
important item in an FAA Airport Capacity Enhancement Plan?; or (4) 
Does the project alleviate an important constraint on airport growth or 
service? (FAA Order 5500.1, Passenger Facility Charge, (August 9, 
2001), paragraph 10-12b.)

3. How Does the FAA Analyze an Airport Ground Access Transportation 
Project That Is Undertaken To Obtain Necessary Local Approvals for 
Other PFC Financed Projects?

    In some cases, a state or local government agency (other than the 
airport public agency) may condition its approval of an airport project 
requested by the public agency with the requirement that the public 
agency also build an airport ground access transportation project. To 
date, the FAA has not permitted the PFC objectives or other PFC 
requirements that must be met by the requested airport project to be 
imputed to the airport ground access transportation project simply 
because the access project has been made a condition of the airport 
project's approval as a matter of state or local law. Rather, the FAA 
has consistently required that the proposed airport ground access 
transportation project, on its own merits, satisfy one or more of the 
PFC objectives, as well as conform to the other requirements of the PFC 
statute and regulation, before granting approval of the airport ground 
access transportation project.

IV. Adequate Justification

     The FAA notes that, in addition to meeting the statutory and 
regulatory criteria of eligibility, PFC-funded ground access 
transportation projects must be adequately justified. This requirement 
is established by 49 U.S.C. 40117(d)(3). The nature of the project 
justification depends in large measure on which PFC objective the 
public agency relief on to support the project. Airport ground access 
transportation projects are typically intended to preserve or enhance 
the capacity of the national air transportation system. In this case, 
the justification should be framed in terms of the project's effect on 
capacity.

1. How Can a Public Agency Demonstrate Adequate Justification for an 
Airport Access Road Project?

    In the case of standard airport access road projects, the case for 
new or enlarged roads can usually be made by a straightforward traffic 
study. The traffic study should demonstrate the impact of the access 
road project in reducing roadway congestion and trip times to the 
airport. Usually, the need for new road capacity is evident to all 
users of an airport and can be clearly demonstrated based on these 
studies.

2. How Can a Public Agency Demonstrate Adequate Justification for an 
Intermodal Project?

    Intermodal projects--especially rail or other fixed guideway 
systems--can be complex to analyze. To date, the FAA has issued PFC 
decisions on only a few large-scale airport rail projects and has 
employed two methods to determine adequate justification. Due to this 
limited scope of prior experience, the FAA continues to consider 
adequate justification on a case-by-case basis and is not prepared at 
this time to constrain public agencies' options for establishing 
justification. The FAA has relief on the specialized expertise of the 
FTA to validate measured capacity effects of airport rail projects and 
will continue to do so.
     An airport ground access transportation project can be found 
adequately justified if it has the effect of alleviating a ground 
access constraint that otherwise would impede or restrain use of the 
airport by air passengers. Using this method, the public agency must 
demonstrate that, but for the proposed system, use of the airport would 
be substantially less, either now or in the future, than it would 
otherwise be due to ground access constraints. The Office of the 
Inspector General (OIG) agreed with this as an approach to the adequate 
justification requirement in a January 21, 1998, management advisory to 
the FAA pertaining to the JFK LRS PFC decision. In the case of the JFK

[[Page 6370]]

LRS, the FAA found the LRS to be adequately justified based on analysis 
that showed that, but for the LRS, 3.35 million fewer air passengers 
would be able to access JFK by the year 2013 due to roadway access 
constraints.
     The FAA has also accepted as adequate justification the public 
agency's demonstration that the benefits of the project in terms of 
reduced travel time to the airport (either for project passengers 
themselves or for all air passengers who benefit from less congested 
roadways) are reasonable relative to the PFC cost of the project. This 
approach was used, in part, to establish adequate justification for the 
Airport MAX light rail system that will link PDX to the regional rail 
network. Use of this method of analysis is voluntary for the public 
agency, as current regulations do not require public agencies to use 
benefit-cost analysis to show adequate justification for a PFC project.
     However, the requirement for adequate justification is not 
voluntary. A decision not to a benefit-cost analysis does not relieve a 
public agency of the need to demonstrate adequate justification in some 
other way. The FAA and FTA will consider other methods of establishing 
adequate justification that a public agency may believe better 
addresses its unique access project. At a minimum, an acceptable 
approach must demonstrate that a rail project will produce a reasonable 
stream of congestion reduction or other access benefits to air 
passengers relative to the scale and cost of the project. Thus, under 
whatever method is selected, the FAA would normally expect the level of 
justification for the project to increase as the amount of PFC funding 
requested for the project increases. We strongly recommend that the 
public agency consult with the FAA and FTA early in the planning/study 
process (and well in advance of submission of a PFC application to fund 
such a project) to identify a mutually acceptable approach to 
establishing adequate justification for the particular project.

V. Other Issues Potentially Affecting PFC Decisions on Airport Ground 
Access Transportation Projects

    In its January 21, 1998, management advisory to the FAA, the OIG 
recommended that the FAA consider two other elements about the JFK LRS 
in addition to the project's effect on air passenger use of JFK (see 
Adequate Justification, above). Because of the great expense of the LRS 
project, the OIG recommended that the FAA verify that the project, if 
approved, would not create a risk to investment plans for enhancing 
airside safety, security, and capacity. The OIG also recommended that 
the public agency explain why the LRS should be funded without 
contribution from surface transportation funds or other non-airport 
revenues.

1. Must a Public Agency Fully Fund Airside Safety, Security, and 
Capacity Projects Before Applying PFC Funds to Airport Ground Access 
Transportation Projects?

    The answer to this question depends on what PFC level the public 
agency proposes for the project.
    The PFC statute and regulation do not assign priority to projects 
meeting any one objective of the PFC program or to airside projects in 
preference to non-airside projects for projects proposed at a $1, $2, 
or $3 PFC level. Accordingly, the FAA cannot require that a public 
agency fund an airside project in preference to an airport ground 
access transportation project at these PFC levels. However, the FAA 
would be very concerned to find that critical airport safety, security, 
and/or airside capacity needs could not be funded as a result of the 
funding of an airport ground access transportation project. In order to 
evaluate such concerns, the FAA may require that the public agency 
provide relevant materials for the FAA's review. The PFC regulation, 14 
CFR 158.25, already requires that the public agency submit the 
airport's capital plan with the PFC application. If a funding 
deficiency is revealed, the FAA would encourage the public agency to 
correct this deficiency.
    Airport ground access transportation projects proposed at a $4 or 
$4.50 PFC level, regardless of the size of the airport, must meet an 
airside needs test pursuant to 49 U.S.C. 40117(d)(4); 14 CFR 
158.17(a)(3). This test requires that the public agency demonstrate 
that it has made adequate provision for financing the airside needs of 
the airport, including runways, taxiways, aprons, and aircraft gates. 
Typically, the FAA reviews any available planning and inspection 
documents to determine the airside needs of the airport and then 
reviews the public agency's airport capital plan, submitted with the 
PFC application, to ensure that any needed airside projects are 
included in the capital plan.

2. Does the Allocation of Some Non-PFC Funds to an Airport Ground 
Access Transportation Project Increase the Likelihood That the Project 
Will Be Approved for PFC Funding?

    The PFC eligibility of an airport ground access transportation 
project does not depend upon whether the public agency also 
contemplates using other sources to fund portions of the project. There 
is no requirement in the PFC statute or regulation for public agencies 
to fund such projects intermodally (i.e., from multiple transit funding 
sources). The FAA has identified factors that could encourage or 
discourage a public agency in pursuing intermodal funding. The 
magnitude of aviation benefits expected of the project to establish 
adequate justification for PFC funding will be less if the amount of 
PFC funding requested is reduced by non-PFC participation. Non-PFC or 
non-airport financial participation may also help build local consensus 
for the project by ameliorating concerns on the part of the aviation 
community about the use of airport resources for non-airside 
investments. However, the partial funding of a project from non-PFC 
sources does not negate the exclusive use requirement associated with 
PFC funding. In any instance where PFC funding is used to fund a 
component of an intermodal project, that component must be for 
exclusive airport use (see PFC Project Eligibility, above) and the 
public agency must adequately demonstrate that the funding sources are 
viable. The exclusive use requirement might complicate the ability of a 
public agency to qualify for the expenditure of funds from traditional 
sources of transit capital (e.g. FTA's major capital investments 
program) unless the project can be easily separated into exclusive and 
mixed-use components.

3. Must a Public Agency Use or Pledge To Use AIP Grant Funds on an 
Airport Ground Access Transportation Project Before the Project Can Be 
Approved for PFC Funding?

    The answer to this question depends on what PFC level the public 
agency proposes for the project.
    The PFC statute and regulation do not require that a public agency 
use AIP grant funds for projects proposed at a $1, $2, or $3 PFC level.
    Airport ground access transportation projects proposed at a $4 or 
$4.50 PFC level, regardless of the size of the airport, must meet an 
AIP funding test. This test requires that the FAA make a finding that 
the project cannot be paid for from AIP funds reasonably expected to be 
available in order to approve the project (49 U.S.C. 40117(b)(4); 14 
CFR 158.17(a)(2)).

[[Page 6371]]

VI. Use of Other Airport Revenue To Finance Airport Ground Access 
Transportation Projects

    Eligibility for funding of airport ground access transportation 
projects with airport revenues is different than that for PFC or AIP 
funds. Guidance for use of such airport revenues on airport ground 
access transportation projects is provided in ``Policies and Procedures 
Concerning the Use of Airport Revenue,'' Section V.A.9 (64 FR 7718-
7719, February 16, 1999).

    Issued in Washington, DC on February 3, 2004.
Catherine M. Lang,
Deputy Associate Administrator for Airports.
[FR Doc. 04-2884 Filed 2-9-04; 8:45 am]
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