[Federal Register Volume 69, Number 149 (Wednesday, August 4, 2004)]
[Notices]
[Pages 47206-47207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17743]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration


Overflight Fee Notice

AGENCY: Federal Aviation Administration.

ACTION: Notice of agency plans to consult with users on Overflight 
Fees.

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SUMMARY: The recently enacted statute reauthorizing the Federal 
Aviation Administration (FAA) contains a provision that, among other 
things, directs the FAA to consult with users and other interested 
parties regarding the consistency of the FAA's Overflight Fees with the 
international obligations of the United States. This Notice announces 
the FAA's plans for conducting those consultations, including the 
specific date(s), location, and advance registration procedures.

Registering for Consultations

    These consultations will be held on Tuesday, September 14, 2004, 
and if necessary on Wednesday, September 15, 2004, in Washington, DC at 
the Holiday Inn Capitol, 550 C Street, SW., Washington DC, 20024. To 
facilitate discussion and allow for a meaningful dialogue, the FAA will 
limit the number of attendees at any one session to no more than 50 to 
60, but will schedule an additional session if necessary to satisfy 
demand and accommodate all registered participants. The first, and 
possibly only, meeting will be held on Tuesday, September 14, 2004. A 
second meeting will be held if needed the following day.
    We are uncertain as to the level of interest and the number of 
people who will want to participate. For this reason, although the 
consultations are open to all users and other interested parties, the 
FAA reserves the right to limit attendance to no more than two persons 
representing any one organization. Parties wishing to attend should 
register as soon as possible--and no later than Friday, August 20, 
2004--by sending an e-mail reply to [email protected] or, if e-mail is not available, by calling 
Kristin Terrell at Phaneuf Associates at (703) 412-9100. Please provide 
your name and title and the name of the company or organization on 
whose behalf you will be attending. In the case of attorneys or 
consultants attending on behalf of clients, please provide (1) the name 
of your law firm or company; (2) the name of your client; and (3) the 
names and titles of those wishing to attend.
    It is essential that anyone wishing to attend these consultations 
respond to this Notice so we can plan properly for the expected number 
of attendees. Whether or not a second session will be necessary will 
depend upon the number of interested parties requesting to attend. We 
will, as promptly as possible, inform all who have registered of the

[[Page 47207]]

exact date, time and location of the session they can attend, as well 
as other information about the Holiday Inn Capitol in case they want to 
stay there overnight. (The Hotel's phone number for reservations is 
(202) 479-4000.) We cannot guarantee that anyone not registered for the 
consultations in advance will be able to attend a session.

FOR FURTHER INFORMATION CONTACT: David Lawhead, Overflight Fee Program 
Manager (ABU-40), Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington DC 20591, (202) 267-9759.

SUPPLEMENTARY INFORMATION:

History

    The Federal Aviation Reauthorization Act of 1996 directs the FAA to 
establish by Interim Final Rule (IFR) a fee schedule and collection 
process for air traffic control and related services provided to 
aircraft, other than military and civilian aircraft of the U.S. 
Government or of a foreign government, that fly in 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 FAA began charging Overflight Fees in May 1997. The IFR under 
which the fees were established was challenged in court by the Air 
Transport Association of Canada (ATAC) and seven foreign air carriers. 
On January 30, 1998, the U.S. Court of Appeals for the District of 
Columbia Circuit issued an opinion in Asiana Airlines v. FAA, 134 F.3d 
393 (D.C. Cir. 1998), vacating the IFR, finding that FAA's methodology 
for allocating certain costs did not comport with statutory 
requirements. The FAA subsequently refunded all fees (nearly $40 
million) collected under the IFR.
    Although the 1997 IFR was withdrawn, the statutory requirement that 
FAA establish Overflight Fees by IFR remained in effect. In 1998, the 
FAA began developing a new IFR on Overflight Fees using a different 
methodology. The fees were derived from cost data produced by the FAA's 
new Cost Accounting System. FAA issued a new IFR in May 2000 and began 
charging fees again on August 1, 2000. Thereafter, the ATAC and seven 
foreign air carriers (six of the original seven, plus one new one) 
challenged the IFR and the legality of the fees assessed thereunder and 
petitioned the U.S. Court of Appeals for the District of Columbia 
Circuit to invalidate the new IFR. The petitions were consolidated into 
a single case (ATAC v. FAA, No. 00-1334).
    While this case was ongoing, the FAA issued a Final Rule that 
became effective on August 20, 2001. The rule reduced fees more than 
15%, reflecting accounting adjustments, and provided additional 
information that the Court had stated should appear in the 
administrative record to support the agency's schedule of Overflight 
Fees. The eight Petitioners sought judicial review to invalidate the 
Final Rule, which became the second case captioned ATAC v. FAA (No. 01-
1446) and was combined with the first. On April 8, 2003, the Court of 
Appeals issued a decision setting aside both the IFR and the Final 
Rule, finding that the FAA had failed to demonstrate that the 
Overflight Fees were directly related to FAA's costs (ATAC v. FAA, 323 
F.3d 1093 (D.C. Cir. 2003)). The decision did not address any 
international agreements or commitments of the United States.

Vision 100 Legislation

    On December 12, 2003, the President signed into law H.R. 2115, the 
``Vision 100--Century of Aviation Reauthorization Act'' (Pub. L. 108-
176; 117 Stat. 2490). Section 229 of that Act contains several 
provisions relating to Overflight Fees. One of those provisions in 
effect clarifies that, under earlier legislation the Overflight Fees 
need only be ``reasonably,'' not ``directly'' related to FAA's costs of 
providing the services, and shields the Administrator's determinations 
of such costs from judicial review. Another provision of section 229 
provides that the IFR and Final Rule are ``adopted, legalized, and 
confirmed'' by Congress ``as of the date those rules were originally 
issued,'' that is, May 30, 2000, and August 13, 2001, respectively.
    Section 229 of the Act also provides that before the FAA may resume 
the actual collection of Overflight Fees, it must first report to 
Congress on the issues raised by the Court in ATAC v. FAA and ``consult 
with users and other interested parties regarding the consistency of 
the fees under such section with the international obligations of the 
United States.'' With this Notice, the FAA is establishing the process 
of consultation required by the new statute.

Future Actions

    In addition to the September 2004 consultations announced in this 
Notice, which will be narrowly focused on the consistency of the 
current fees with the international obligations of the United States, 
the FAA is now in the process of establishing an aviation rulemaking 
committee (ARC) on Overflight Fees. The purpose of the Overflight Fees 
ARC will be to provide a forum for in-depth review and discussion of 
the data and analytic framework used by the FAA in establishing 
Overflight Fees. Representatives of air carriers, foreign air carriers, 
other system users, and aviation associations will be members of the 
ARC. The ARC will be tasked with providing advice and recommendations 
to the FAA regarding possible changes to Overflight Fees in light of 
methodological improvements, more recent data on costs, changes in the 
scope of the services provided by the FAA, and other factors that may 
be relevant to revising fees.

    Dated: July 28, 2004.
Ramesh K. Punwani,
Assistant Administrator for Financial Services and Chief Financial 
Officer.
[FR Doc. 04-17743 Filed 8-3-04; 8:45 am]
BILLING CODE 4910-13-M