[Federal Register Volume 69, Number 75 (Monday, April 19, 2004)]
[Notices]
[Pages 20957-20958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8818]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration


Notice Concerning the Use of Passenger Facility Change Revenue 
for Debt Service on Non Eligible Airport-Related Projects

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

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SUMMARY: Section 122 of the Vision 100--Century of Aviation 
Reauthorization Act, (Pub. L. 108-176, December 12, 2003) reauthorizing 
the Federal Aviation Administration (FAA) provides the Secretary of 
Transportation discretion to allow Passenger Facility Charge (PFC) 
revenue to be used for making payments for debt service, on debt 
incurred to carry out a project that is not an eligible airport-related 
project when a determination is made that such use is necessary due to 
the financial need of the airport. This notice describes how this new 
position will be implemented administratively.

DATES: This notice becomes effective on April 19, 2004.

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

FOR FURTHER INFORMATION CONTACT: Barry Molar, Manager, Airports 
Financial Assistance Division (APP-500), Room 620, Office of Airport 
Planning and Programming, Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20591, telephone (202) 267-
8827; or 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: The Aviation Safety and Capacity Expansion 
Act of 1990, codified under 49 USC 40117, created the PFC program on 
November 5, 1990. Under the PFC statute, the FAA may authorize a public 
agency to impose a PFC of $1, $2, $3, $4, or $4.50 for each enplaned 
passenger at those commercial service airports that the public agency 
controls. The public agency can then use this PFC revenue to finance 
FAA-approved eligible airport-related projects. The FAA's regulations 
that govern the PFC program are located in 14 CFR part 158 and became 
effective on June 28, 1991.
    To impose a PFC, use PFC revenue or amend an approved PFC, a public 
agency operating an airport must apply for FAA approval by following 
the application process set forth in Part 158. These rules do not 
differ depending on the size of the airport, the type of project or 
whether the FAA has previously reviewed the projects details.
    On December 12, 2003, President Bush signed the Vision 100--Century 
of Aviation Reauthorization Act (Pub. L. 108-176) (Vision 100) into 
law. Section 122 of Vision 100 includes a provision that allows PFC 
revenue to be used for making payments for debt service on debt 
incurred to carry out a project that is not an eligible airport-related 
project when the Secretary of Transportation determines that such use 
is necessary due to the financial need of the airport. By delegation 
from the Secretary of Transportation, the FAA has responsibility to 
administer the PFC program in its entirety.
    The statutory provision provides:

    SEC. 122. USE OF FEES TO PAY DEBT SERVICE.
    Section 40117(b) is further amended by adding at the end of the 
following: ``(6) DEBT SERVICE FOR CERTAIN PROJECTS.--In addition to 
the uses specified in paragraphs (1) and (4), the Secretary may 
authorize a passenger facility fee imposed under paragraph (1) and 
(4) to be used for making payments for debt service on indebtedness 
incurred to carry out at the airport a project that is not an 
eligible airport-related project if the Secretary determines that 
such use is necessary due to the financial need of the airport.''

    In implementing Section 122, the FAA will process applications for 
funding in the same manner as traditional PFC applications. The 
application process will include careful review of the financial need 
of the individual public agency applicant. The FAA is electing to use 
the existing process because a determination of need is best handled on 
a case-by-case basis, focusing on the particular financial situation of 
the individual public agency submitting the PFC application. This 
process develops a record appropriate for the FAA to make the 
determination under Section 122 as to whether funding is necessary due 
to the financial need of the airport.
    All PFC applications are developed and submitted under the guidance 
offered in 14 CFR 158.25. Public agencies are well acquainted with the 
information required for inclusion in the PFC application, including 
documentation of the required consultation process with air carriers. 
Once the application and supporting attachments have been submitted to 
the

[[Page 20958]]

FAA, the Administrator renders a determination that the PFC application 
is substantially complete or not substantially complete. Following the 
initial determination for completeness and notification to the public 
agency, the FAA publishes a notice in the Federal Register advising the 
public of the application and inviting comment. At that time the public 
agency must make the application, notice and other documents relevant 
to the application available for inspection upon request, and may 
publish notice in a newspaper of general circulation in the area where 
the airport is located. After review of the application and public 
comments, the Administrator issues a final decision approving or 
disapproving the application in whole or in part, not later than 120 
days from receipt of the application by the FAA Airports office.
    Where an application requires a determination of need under Section 
122 of Vision 100, a public agency needs to present a thorough 
financial analysis in accordance with 14 CFR 158.25(b) and (c). If an 
airport has developed a financial prospectus that would demonstrate its 
financial need or a financial recovery plan that identifies all 
available resources, it is encouraged to submit these documents with 
the application.
    The public agency may wish to include the following types of 
information as indicators of its financial need in its PFC application:
     Evidence of a change in passenger enplanements 
for a carrier;
     Documentation of negative actions taken on the 
public agency's bond rating;
     Discussion of the inability of the public agency 
to meet bond payments and associated requirements;
     Discussion of alternative sources of revenue 
available to the public agency such as grant funds, state funds, 
concession revenue, and revenue from other carriers serving the 
airport.
     In the case of concession and carrier revenue, 
discuss the impact of any necessary increases to the rate base or 
landing fees as a result of the loss of revenue from a change in 
economic circumstances, for example, the bankruptcy or financial 
troubles of a carrier;
     Discussion of actions taken by the public agency 
to reduce its costs such as operational changes, personnel actions, or 
capital project deferment;
     Any other information the public agency believes 
will document the financial hardship of the airport.
    All information submitted by the public agency through the PFC 
application process will be considered by the FAA in making a final 
agency decision. This final agency decision will include a discussion 
of the financial needs of the public agency under Section 122 of the 
Vision 100 Act.

    Issued in Washington, DC, on April 9, 2004.
Robert Yatzeck,
Acting Director, Office of Airport Planning and Programming.
[FR Doc. 04-8818 Filed 4-16-04; 8:45 am]
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