[Federal Register Volume 70, Number 55 (Wednesday, March 23, 2005)]
[Rules and Regulations]
[Pages 14928-14938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5578]



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Part III





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 158



Passenger Facility Charge Program, Non-Hub Pilot Program and Related 
Changes; Final Rule

  Federal Register / Vol. 70, No. 55 / Wednesday, March 23, 2005 / 
Rules and Regulations  

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 158

Docket No. FAA-2004-17999; Amendment No. 158-3
RIN 2120-AI15


Passenger Facility Charge Program, Non-Hub Pilot Program and 
Related Changes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule amends FAA regulations to create a pilot 
program to test new application and application approval procedures for 
the passenger facility charge (PFC) program. This pilot program will 
run for 3 years from the effective date of this rule and is available 
to non-hub airports. Besides the pilot program, this final rule also 
contains several changes designed to streamline the PFC application and 
amendment procedures for all PFC applications and amendments to improve 
the entire PFC program. The FAA is enacting these changes in response 
to Congressional direction found in the Vision 100--Century of Aviation 
Reauthorization Act.

DATES: This final rule becomes effective May 9, 2005.

FOR FURTHER INFORMATION CONTACT: Sheryl Scarborough, Airports Financial 
Analysis & Passenger Facility Charge Branch, APP-510, Federal Aviation 
Administration, 800 Independence Avenue SW., Washington, DC 20591; 
telephone: (202) 267-8825; facsimile: (202) 267-5302; e-mail: 
[email protected].

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is 
found in Title 49 of the United States Code. Subtitle I, Section 106 
describes the authority of the FAA Administrator. Subtitle VII, 
Aviation Programs, describes in more detail the scope of the agency's 
authority.
    This rulemaking is promulgated under the authority described in 
Subtitle VII, part A, subpart I, section 40117. Under that section, the 
FAA, by delegation, is charged with prescribing regulations to impose a 
passenger facility fee to finance an eligible airport-related project. 
This regulation is within the scope of that authority because Vision 
100 requires the FAA to change the PFC program. The vast majority of 
the changes in this final rule are taken from Vision 100. The remaining 
changes not required by Vision 100 are changes to process, which must 
be made to effect the changes required by Vision 100.

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Documents

    You can get an electronic copy of this final rule using the 
Internet by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) Web page (http://dms.dot.gov/search);
    (2) Visiting the Office of Rulemaking's Web page at http://www.faa.gov/avr/arm/index.cfm; or
    (3) Accessing the Government Printing Office's Web page at http://www.access.gpo.gov/su_docs/aces/aces140.html.
    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. To 
promote a prompt response, please make sure to identify the docket 
number, notice number, or amendment number of this rulemaking in your 
request.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires FAA to comply with small entity requests for information 
or advice about compliance with statutes and regulations within its 
jurisdiction. If you are a small entity and you have a question about 
this document, you may contact your local FAA official or the person 
listed under FOR FURTHER INFORMATION CONTACT. You can find out more 
about SBREFA on the Internet at our Web site: http://www.faa.gov/avr/arm/sbrefa.htm, or by e-mailing us at [email protected].

Applicability

    All applications and amendments submitted after the effective date 
of this rule must comply with and will be processed by the FAA under 
these new rules. Applications and amendments submitted before the 
effective date will be processed under the current rules.

Background

History

    On December 12, 2003, President Bush signed the Vision 100--Century 
of Aviation Reauthorization Act (Vision 100) into law. Vision 100 
mandated many changes to the PFC program and this final rule addresses 
several of these changes. This final rule revises part 158 to implement 
a 3-year non-hub pilot program and related streamlining provisions. 
Vision 100 required the FAA to propose regulations establishing the 
pilot program within 180 days of enactment of the Vision 100 pilot 
program section. The FAA issued proposed regulations on June 9, 2004 
(meeting the 180-day statutory deadline), to implement the pilot 
program. The notice of proposed rulemaking (NPRM) requested public 
comment on the proposed regulations and the comment period ended on 
August 9, 2004 (``Passenger Facility Charge Program, Non-Hub Pilot 
Program and Related Changes'' (69 FR 32298, June 9, 2004)).
    A separate rulemaking in the future will address the other 
statutory and non-statutory changes to the PFC program that are not 
subject to the statutory deadline.

Discussion of Comments

    The FAA received seven comments in response to the notice. All of 
these comments express general support for the efforts and objectives 
of the FAA in proposing the changes to the PFC program in the NPRM. 
Despite this support, most of these commenters also recommended 
specific changes to the NPRM's language.
    Five of the comments are from public agencies: Yakima Air Terminal, 
Yakima, WA; Pangborn Memorial Airport, Wenatchee, WA; Metropolitan 
Washington Airports Authority, Alexandria, VA; Norman Y. Mineta San 
Jose International Airport, San Jose, California; and Massachusetts 
Port Authority, Boston, MA. Two comments are from aviation industry 
groups: the Air Transport Association of America; and a joint 
submission by the Airports Council International--North America and the 
American Association of Airport Executives.
    In the ``Discussion of Comments'' section below, the following 
applies:
    (1) Acronyms: The FAA uses the following acronyms or shortened 
names to identify the associated commenters:
     Air Transport Association of America (ATA)
     Airports Council International--North America/American 
Association of Airports Executives (ACI/AAAE)
     Massachusetts Port Authority (Massport)
     Metropolitan Washington Airports Authority (MWAA)
     Norman Y. Mineta San Jose International Airport (San Jose)
     Pangborn Memorial Airport (Wenatchee)
     Yakima Air Terminal (Yakima)
    (2) Section References: When addressing rule language, all section

[[Page 14929]]

references will refer to either Title 14 of the Code of Federal 
Regulations or the sections of this final rule as numbered in the NPRM.
    The FAA considered all comments received and addresses each of 
these below (although some comments about the same issue are grouped 
together). After reviewing all the comments, the FAA decided to adopt 
the final rule as proposed with some minor changes.

General Comments

    Besides the comments expressing general support for the proposed 
rule, the FAA received two general comments about the PFC program.
Elimination of Monthly and Quarterly Reports
    MWAA suggests the FAA consider eliminating the monthly and 
quarterly reports filed by air carriers to public agencies. In place of 
these reports, MWAA suggests changing the requirement to an annual 
report containing all information currently found in the monthly and 
quarterly reports.
    FAA Response: MWAA's comment addresses an area that is outside the 
scope of this rulemaking. The vast majority of the changes in this 
final rule are taken from Vision 100. The remaining changes not 
required by Vision 100 are changes to process, which must be made to 
effect the changes required by Vision 100. Reporting requirements were 
not included in the NPRM. Therefore, these requirements cannot be 
considered here because the public did not have notice or the 
opportunity to comment on this issue. The FAA will consider MWAA's 
suggestion as a part of a subsequent rulemaking to incorporate the 
remaining provisions of Vision 100 that are not included in this final 
rule.
    Besides any future rulemaking efforts, the FAA is developing a Web-
based PFC data management system. The FAA plans to have a national 
repository for both public agency and air carrier quarterly reports as 
a part of this data management system. The FAA will provide more 
information on this system in the future as the system moves closer to 
operation.
Eliminate Federal Approvals
    ACI/AAAE states the most efficient step for the PFC program would 
be to eliminate all Federal approvals associated with the PFC program, 
making it similar to how airports and airlines interact on airline 
rates and charges. ACI/AAAE states that such a strategy would be part 
of a greater effort toward regulatory simplification and economic 
deregulation of airports that would benefit the entire aviation 
industry.
    FAA Response: ACI/AAAE's proposal would require statutory changes 
that are beyond the scope of this final rule. The FAA will consider 
ACI/AAAE's proposal as part of a subsequent rulemaking to incorporate 
the remaining provisions of Vision 100 that are not included in this 
final rule.

Section-by-Section Comments

Section 158.3--Definitions--Small Hub Airport

    ATA questions the FAA's decision not to define ``small hub 
airport'' in this rulemaking. ATA points out that this is the only 
airport size category not defined in the PFC regulation.
    FAA Response: The FAA will not include a definition of ``small hub 
airport'' in the final rule. Currently, the PFC program does not 
contain procedures or requirements specific to small hub airports. 
Therefore, there is no need to define ``small hub airport'' in part 
158. The FAA will consider ATA's proposal as part of a subsequent 
rulemaking to incorporate the remaining provisions of Vision 100 that 
are not included in this final rule.

Section 158.3--Definitions--Significant Business Interest

    MWAA expresses concern that the proposed definition of 
``significant business interest'' might be broader than the existing 
consultation requirement. Currently, the regulation requires public 
agencies to consult with all air carriers and foreign air carriers that 
operated at the airport during the previous year. Specifically, MWAA's 
concern is with the proposed requirement to consult with all air 
carriers that provide scheduled service at the airport. MWAA believes 
it would be better to limit consultation to air carriers with at least 
1 percent of passenger boardings or at least 25,000 passenger boardings 
during the prior calendar year and which currently provide scheduled 
service at the airport.
    FAA Response: The FAA took the definition of ``significant business 
interest'' in the NPRM verbatim from Vision 100. The FAA does not have 
the authority to redefine it and the proposed definition remains 
unchanged. The FAA notes that the ``significant business interest'' 
definition limits the number of carriers the public agency must consult 
with by eliminating most on-demand, non-scheduled carriers from the 
consultation requirement.
    Changes: The FAA made no changes to Sec.  158.3 because of the 
comments received on this section.

Section 158.23--Consultation With Air Carriers and Foreign Air Carriers

    ATA supports the proposal to limit PFC consultation to those 
airlines with a significant business interest at the airport. ATA 
further notes that this change will reduce the administrative burden 
for both airlines and airports.
    ACI/AAAE states that reducing the airline consultation requirement 
to carriers with a significant business interest at the airport is a 
modest step in the right direction. ACI/AAAE believes the practical 
effect of this change will be to eliminate consultation with some 
charter or on-demand operators.
    FAA Response: The FAA agrees with these comments.
    Changes: The FAA made no changes to Sec.  158.23 because of 
comments received on this section.

Section 158.24--Notice and Opportunity for Public Comment

    Yakima states that PFC projects are already subject to public 
scrutiny through the master planning, airport layout plan, and/or 
environmental processes before those projects are submitted for PFC 
approval. Yakima expresses concern that allowing additional public 
participation will provide project opponents the opportunity to stop or 
delay projects they oppose. Yakima suggests the rule be changed to 
allow for the waiver of the public comment provision if a project has 
previously been through a public review process. ACI/AAAE makes a 
similar recommendation.
    Wenatchee requests that PFC projects intended to provide the local 
matching funds for Airport Improvement Program (AIP) grants not be 
required to go through a public comment process because they already 
have FAA approval.
    MWAA argues that adding a requirement for public consultation will 
further lengthen and complicate the PFC process for airports.
    Massport proposes that the FAA waive the PFC public notice process 
for projects that have already undergone significant environmental 
review. If that is not possible, Massport suggests the FAA consider 
allowing a public agency to consolidate the PFC public comment period 
with the public comment period undertaken during the environmental 
review process.
    FAA Response: The public notice and comment period are statutory 
requirements for all PFC applications. Thus, the FAA cannot waive this 
requirement for any projects. This is the case even if the project has 
previously

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undergone a comment period because of master planning or environmental 
processes or is included in an AIP grant.
    As stated in the NPRM, reasonable public notice should not require 
the public agency to duplicate other processes. Thus, neither the NPRM 
nor the final rule preclude the possibility of a public agency using 
its master planning or environmental comment process as its PFC public 
comment period. However, Sec.  158.24 does require the public notice to 
contain certain specific PFC information. Therefore, a consolidated PFC 
and master planning or environmental notice, must at a minimum, contain 
the information required by Sec.  158.24.
    The FAA considers air carrier consultations to be valid for six 
months (see paragraph 2-11 of FAA Order 5500.1, Passenger Facility 
Charge (August 9, 2001)). The FAA is extending that six-month 
validation policy to the public comment process of Sec.  158.24. 
Occasionally, the master planning or environmental comment process may 
occur several years before the filing of a PFC application. Therefore, 
the public agency may not be able to rely on a consolidated comment 
period.
    A public agency may also use its responses to comments developed 
during the master planning or environmental process as a basis for its 
response to similar comments filed because of a PFC public notice.
    However, the AIP process, in and of itself, does not provide for 
any public comment opportunity, and thus cannot be consolidated with a 
PFC comment period. In addition, many projects in AIP grants are not 
required to undergo an environmental process that would result in a 
public comment period. The public may not be aware of, or have the 
opportunity to comment on, a project in an AIP grant.
    Finally, a public agency may opt to hold the public notice and 
comment period concurrently with the air carrier consultation period. 
The public agency may consolidate the PFC process with ongoing master 
planning or environmental processes. Therefore, the FAA does not 
believe the public comment process will lengthen the overall PFC 
application process.
    Changes: The FAA made no changes to Sec.  158.24 because of the 
comments received on this section.

Section 158.25--Applications

    Massport points out a typographical error in line 10 of Sec.  
158.25(b)(7)(i). Specifically, Massport believes the FAA should delete 
the word ``excepted'' and substitute the word ``expected'' in its 
place.
    FAA Response: The FAA agrees.
    Changes: Based on the comment received, the FAA changed the 
language of Sec.  158.25(b)(7)(i) in the final rule by deleting the 
word ``excepted'' and substituting the word ``expected'' in its place.

Section 158.27--Review of Applications--Federal Register Notice

    Yakima expresses concern that a special interest group could use a 
negative response campaign to try to create the illusion that a project 
is highly controversial. This would then trigger a Federal Register 
notice request for comments. Yakima argues that this would further 
delay a project.
    MWAA asks the FAA to include in the final rule clear standards 
under which the FAA will determine whether a particular PFC application 
will require publishing a Federal Register notice. MWAA expresses 
concern that the FAA will be pressured by third parties to publish 
Federal Register notices for PFC applications that are not significant 
or controversial. This would then further delay PFC application 
implementation.
    ATA cautions the FAA to scrutinize every application to ensure that 
potential controversy or significance, even for an AIP-eligible 
project, is not overlooked.
    FAA Response: As stated in the preamble to the NPRM (69 FR 32298, 
June 9, 2004), the FAA expects to publish a notice in the Federal 
Register only for those applications with significant issues or public 
controversy. The FAA has decided against including any standards in the 
final rule about when the FAA will require a Federal Register notice. 
This approach preserves the statutory flexibility provided by making 
the Federal Register notice optional. The FAA will decide to publish a 
Federal Register notice on a case-by-case basis. The FAA will consider 
all available information, not just air carrier consultation or public 
comments, to determine whether the FAA will publish a Federal Register. 
Therefore, the FAA will scrutinize every application using all 
available sources to ensure significant issues are not overlooked and 
insignificant issues are not exaggerated.

Section 158.27--Review of Applications--Processing Time

    MWAA requests that, for those applications where a Federal Register 
notice is not published, the FAA should reduce its maximum application 
processing time from 120 days to 60 days.
    FAA Response: The 120-day FAA processing time for PFC applications 
(except for the non-hub pilot program) is statutory. Therefore, the FAA 
cannot change it. However, the FAA strives to issue PFC decisions 
efficiently and the FAA often issues those decisions in less than the 
maximum allowed time.
    Changes: The FAA made no changes to Sec.  158.27 because of the 
comments received on this section.

Section 158.30--Pilot Program for PFC Authorization at Non-Hub Airports

    Massport supports the proposed non-hub pilot program. Massport 
urges the FAA to monitor the results of the pilot program so the pilot 
program streamlining provisions can eventually be extended to all 
airports.
    ATA also supports the non-hub pilot program. ATA cautions the FAA 
to be diligent in requiring the participating non-hub airports to 
follow the pilot program rules and to not allow any further shortcuts 
in the process. ATA also urges the FAA to remind participating non-hub 
airports that, although the approval process may be streamlined, there 
are still notice requirements for the actual start and stop of 
collections. ATA points out that the notice requirements are necessary 
to allow airlines to program and account for ticket sales and PFC 
collections properly.
    ACI/AAAE hopes the FAA will use the 3-year pilot program as part of 
its continuing efforts to streamline the PFC process for all commercial 
service airports.
    FAA Response: The FAA does plan to monitor the implementation of 
the non-hub pilot program closely. The FAA intends to identify those 
provisions of the program that work well for non-hub airports and could 
potentially be expanded to larger airports. The FAA will also identify 
those provisions that may need adjusting to meet the intent of the 
statute better.
    In addition, the FAA's pilot program acknowledgement letter will 
include specific reminders that the public agency must follow all 
requirements of the PFC regulation, except for Sec.  158.25. In the 
letter, the FAA will emphasize the requirement to provide adequate 
notice to the carriers to start PFC collections. The letter will also 
stress the procedure to change the charge expiration date in a timely 
manner.
    Changes: The FAA made no changes to Sec.  158.30 because of the 
comments received on this section.

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Section 158.37--Amendment of Approved PFC--Text Clarifications

    MWAA believes the term ``increase the PFC level'' in Sec.  
158.37(b)(1)(i)(C) is unclear. As an alternative, MWAA suggests the 
term ``increase the PFC level to be charged to a passenger.''
    Massport suggests two minor clarifications to make the new language 
clearer. The first of these clarifications is in the use of the term 
``amend an approved PFC.'' Massport believes that ``approved PFC'' 
refers to the charge collected and not the public agency's PFC program 
as approved in a specific Final Agency Decision. Massport suggests the 
FAA change the term ``approved PFC'' to either ``the authority to 
impose and use a PFC'' or ``the FAA's decision with respect to an 
approved PFC.'' The second clarification involves Sec.  158.37(b)(5). 
Massport believes the last clause is redundant and likely incorrect.
    FAA Response: In response to comments, the FAA made revisions to 
all three phrases.
    Rather than adopting the exact phrase suggested by MWAA for Sec.  
158.37(b)(1)(i)(C), the FAA changed the phrase to ``increase the PFC 
level to be collected from each passenger.'' The FAA did this to 
clarify the clause and to be consistent with the language used 
elsewhere in Sec.  158.37.
    The FAA also changed the term ``approved PFC'' to ``the FAA's 
decision with respect to an approved PFC'' wherever appropriate 
throughout Sec.  158.37 to provide the clarification Massport 
requested.
    Finally, the FAA agrees the last clause in Sec.  158.37(b)(5) is 
incorrect. The FAA has changed it to ``any increase in the approved PFC 
level to be collected from each passenger,'' to clarify the original 
intent of the paragraph.

Section 158.37--Amendment of Approved PFC--Financing Costs

    MWAA requests the FAA to change the regulation to include all 
financing costs in a separate project in an application. The FAA's 
current policy is to require public agencies to include financing costs 
with construction costs in each project application. MWAA comments that 
changes in financing costs necessitate filing multiple amendments. 
According to MWAA, one of the benefits of allowing all financing costs 
in a single project is that remaining project costs in each application 
reflect hard construction costs, which are less likely to change over 
time. A second benefit would be that only the lump sum financing cost 
project would need amending if financing costs change.
    ACI/AAAE also expresses concern about current FAA policy requiring 
financing costs to be tied to the projects they finance and not shown 
as a lump sum project. ACI/AAAE believes this will result in numerous 
amendments due to changes in financing costs resulting from market 
conditions.
    FAA Response: The FAA will not allow a public agency to lump 
financing costs into a separate project. The requirement that financing 
costs be tied to individual projects comes from the FAA's need to know 
how much PFC revenue is spent on each project. This includes the 
revenue spent to finance the project. However, the new amendment rules 
distinguish between actions that trigger air carrier consultation and 
public notice and comment and those actions that do not. The new rules 
do not require a change to the current public agency practice of 
consolidating multiple amendment actions on a PFC decision into a 
timely and reasonable single amendment. The FAA does not intend that 
public agencies file separate amendments for each individual project 
when the action is taking place in the same time period.

Section 158.37--Amendment of Approved PFC--Summary of Process

    ACI/AAAE summarizes its understanding of the changes in the 
amendment process. ACI/AAAE states that, for non-controversial 
amendments, the FAA will issue its decision in 30 days. However, if the 
amendment is controversial, the FAA may publish a Federal Register 
notice seeking comment. For controversial amendments, the FAA will 
issue its decision in no later than 120 days.
    FAA Response: ACI/AAAE's analysis of the FAA's processing of 
amendments reflects the current rules. Under the new rules, the FAA 
will process all amendments, regardless of consultation status, within 
30 days of receipt. The new rules do not provide for the FAA to request 
public comment through Federal Register notices. The only public 
comment required by the new amendment process is by the public agency 
for an increase over 25 percent of a PFC project, an increase in the 
PFC level that passengers are charged, or a project change of scope. If 
a public agency is required to conduct public comment, it must file 
copies of the comments with the FAA for consideration with its 
amendment request.

Section 158.37--Amendment of Approved PFC--Air Carrier Consultation, 
Public Notice and Comment

    ATA objects to requiring air carrier consultation and public notice 
and comment for increases in a project's cost of more than 25 percent 
but not on changes of less than 25 percent. ATA believes air carrier 
consultation should occur on any proposed increase of 15 percent or 
more of any element of a PFC program.
    In addition, ATA states that full justification for such large cost 
increases must be provided to all interested parties. Finally, ATA is 
concerned the new rules will allow a public agency to unilaterally 
amend a PFC program by less than 25 percent.
    FAA Response: The FAA notes that the 15 percent threshold in the 
current rule is based on 15 percent of an application's total approved 
amount (When the FAA uses the term ``application'' in this document, 
the FAA is referring to an application for authority to collect and/or 
use PFC revenue). In contrast, this final rule bases its 25 percent 
threshold on the original approved amount of each project. Thus, under 
the new rule, airlines and the public will have the opportunity to 
comment on more changes in cost. For example, a public agency with an 
application approved at $500 million wishes to increase a $10 million 
project to $50 million, which is a 500 percent increase in the 
project's cost. Under the new rules, the threshold for determining the 
need for consultation is 25 percent of the $10 million project cost or 
$2.5 million. Under this threshold, air carriers and the public will be 
given the opportunity to comment on this increase from $10 million to 
$50 million or a 500 percent cost increase. However, under the current 
rules, the threshold for determining if consultation is required is 15 
percent of $500 million ($75 million). Therefore, the public agency 
would not have to consult on this amendment under the current rules.
    The final rule includes a requirement in Sec.  158.37(b)(5), that 
public agencies provide justification for any amendment at or above the 
25 percent of project threshold that triggers additional airline 
consultation and public notice.
    Furthermore, the FAA modeled the 25 percent threshold on a common 
contracting practice that allows up to a 25 percent increase in the 
total contract cost or the total cost of any major contract item. This 
contracting practice requires a supplemental agreement or an amendment 
to the contract for increases

[[Page 14932]]

above 25 percent (see, for example, Advisory Circular 5370-10A, 
Standards for Specifying Construction of Airports, as revised (February 
17, 1989)).
    To ATA's comment on unilateral public agency amendments, the new 
rule under Sec.  158.37(c) requires the FAA to approve or disapprove 
all amendment requests. Under the old rule, amendments for certain 
actions, including an increase to the public agency's PFC program of 
less than 15 percent, could be adopted without any FAA action (see 
paragraph 11-6c of FAA Order 5500.1, Passenger Facility Charge (August 
9, 2001)). The FAA expects to revise FAA Order 5500.1 to conform to 
these new regulations in the near future.

Section 158.37--Amendment of Approved PFC--Applicability to Existing 
Applications

    San Jose believes the changes to be implemented for the amendment 
process in this final rule should only apply to PFC programs approved 
after publication of this final rule. In addition, San Jose argues that 
the current amendment rules should apply to any PFC programs (versus 
projects) approved before the final rule is published. Thus, any 
subsequent amendments to the approved PFC program should continue to 
fall under the current amendment rules. San Jose states that the 
airport's procedures for monitoring and completing current projects are 
based on the current amendment rules.
    FAA Response: The FAA does not agree that amendments to PFC 
programs approved before the effective date of this final rule should 
continue to be processed under the current rules. The major change in 
the new rules involves determining when additional consultation and 
public notice and comment are required. The new rules do not affect the 
types of actions permissible under the amendment process. As the PFC 
program transitions from the old to the new rules, there may be 
instances where a public agency delayed an amendment action on one 
project. This delay may have occurred while waiting for actions on 
other projects to be completed. However, the FAA does not agree that 
these transitioning situations will negatively impact a public agency. 
At most, the public agency may be required to hold air carrier 
consultation and public comment for an amendment action that previously 
did not require such consultation. In addition, this rule is not 
effective immediately. Public agencies will have at least 30 days to 
review the changes before they become effective. Also, given that San 
Jose requests that all current PFC programs be grandfathered, the FAA 
could be faced with applying the current rules to amendment requests 
for existing PFC programs for more than 40 years. Meanwhile, other 
public agencies would be required to apply the new rules immediately.
    Changes: Based on all the comments received for Sec.  158.37, the 
FAA changed the language of Sec.  158.37(b)(1)(i)(C) in the final rule 
by adding ``to be collected from each passenger'' to the end of the 
phrase. In addition, the FAA changed the phrase ``approved PFC'' to 
``the FAA's decision with respect to an approved PFC'' where 
appropriate throughout Sec.  158.37. Finally, the FAA changed the last 
clause in Sec.  158.37(b)(5) from ``an increase in total approved PFC 
revenue for the project'' to ``any increase in the approved PFC level 
to be collected from each passenger.''

Discussion of FAA Clarifications

Section 158.25--Applications--Application for Authority To Use PFC 
Revenue

    While reviewing the NPRM, the FAA discovered that it made three 
typographical errors in Sec.  158.25(c). These errors occurred when the 
FAA transferred this section to the NPRM to make the update conform to 
the rest of the changes in Sec.  158.25. Specifically, the FAA inserted 
several paragraphs in this section in incorrect locations. As it reads 
in the NPRM, paragraphs 158.25(c)(1)(i) through (iii), which only 
discuss PFC use authority, are inapplicable to Sec.  158.25(c)(1), 
which discusses a joint impose and use authority application. The FAA 
should have inserted these provisions in Sec. Sec.  
158.25(c)(2)(iii)(A) through (C). Paragraphs 158.25(c)(1)(iv) and (v) 
are also applicable to Sec.  158.25(c)(2) and must be inserted in the 
appropriate section. The FAA is correcting these typographic errors and 
renumbering the section accordingly in this final rule.
    Changes: The FAA moved paragraphs 158.25(c)(1)(i) through (iii) to 
Sec. Sec.  158.25(c)(2)(iii)(A) through (C). The FAA also restored 
Sec.  158.25(c)(1)(i) to read as it does in the current regulation.
    As a result of moving the aforementioned paragraphs, the FAA 
renumbered the following existing paragraphs as indicated:
    (1) Sec. Sec.  158.25(c)(1)(iv) and (v) to Sec. Sec.  
158.25(c)(1)(ii) and (iii);
    (2) Sec. Sec.  158.25(c)(1)(i) through (iii) to Sec. Sec.  
158.25(c)(2)(iii)(A) through (C); and
    (3) Sec. Sec.  158.25(c)(1)(iv) and (v) to Sec. Sec.  
158.25(c)(2)(iv) and (v).

Section 158.37--Amendment of the FAA's Decision With Respect to an 
Approved PFC--Types of Amendments Which Do Not Require Consultation or 
Public Notice and Comment

    The allowable types of amendment actions are subdivided into two 
groups. The first group, Sec.  158.37(b)(1)(i), lists those actions 
that require the public agency to conduct additional consultation and 
public notice and comment. The second group, Sec.  158.37(b)(1)(ii), 
lists those actions that do not require additional consultation or 
public notice and comment. While reviewing the NPRM, the FAA discovered 
that it had inadvertently left the action to delete a project from the 
list of actions in Sec.  158.37(b)(1)(ii).
    Changes: The FAA modified Sec.  158.37(b)(1)(ii)(C) by deleting 
``or'' from the end. The FAA also modified Sec.  158.37(b)(1)(ii)(D) by 
adding ``or'' to the end. Finally, the FAA added a new Sec.  
158.37(b)(1)(ii)(E) listing the action to delete a project.

Paperwork Reduction Act

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

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these final regulations.

Economic Assessment, Regulatory Flexibility Determination, Trade Impact 
Assessment, and Unfunded Mandates Assessment

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
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 requires agencies to analyze the 
economic impact of regulatory changes on small entities. Third, the 
Trade Agreements Act (19 U.S.C. 2531-2533) prohibits agencies from 
setting standards that create unnecessary

[[Page 14933]]

obstacles to the foreign commerce of the United States. In developing 
U.S. standards, this Trade Act also requires agencies to consider 
international standards and, where appropriate, use them as the basis 
of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4) 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 private sector, 
of $100 million or more annually (adjusted for inflation).
    In conducting these analyses, the FAA has determined this rule (1) 
has benefits that justify its costs, is not a ``significant regulatory 
action'' as defined in section 3(f) of Executive Order 12866, and is 
not ``significant'' as defined in DOT's Regulatory Policies and 
Procedures; (2) will not have a significant economic impact on a 
substantial number of small entities; (3) will not reduce barriers to 
international trade; and (4) does not impose an unfunded mandate on 
State, local, or tribal governments, or on the private sector. These 
analyses, available in the docket, are summarized below.

Total Costs and Benefits of This Rulemaking

    The estimated net cost saving of this final rule is $3.8 million 
(or $2.7 million discounted). Although the pilot program would 
terminate after 3 years, the other changes will continue. Airports are 
estimated to have net cost savings over the next ten years of $3.3 
million (or $2.4 million discounted). The FAA is estimated to have net 
cost savings over the next ten years of $475,000 (or $333,600 
discounted). Air carriers would incur only minimal costs in adjusting 
to the proposed changes to part 158.

Who Is Potentially Affected by This Rulemaking

    Commercial airports, air carriers servicing these airports and the 
traveling public using these airports.

Our Cost Assumptions and Sources of Information

     Discount rate--7%.
     Period of analysis--2005-2007 for savings associated with 
the pilot program and 2005-2014 for proposed regulatory changes.
     Monetary values expressed in 2003 dollars.

Changes From the NPRM to the Final Rule

    In the NPRM, the FAA did not distinguish between the cost savings 
to airports for filing a PFC notice and comment amendment with the cost 
savings from filing a PFC non-notice and comment amendment. The 
assumption was that there would have been a savings of $1,667 for each 
amendment regardless of the type filed. However, in the final rule, the 
FAA did distinguish the difference in cost savings of filing a PFC 
notice, and a PFC non-notice, and the savings are $2,500 and $1,250 per 
amendment, respectively. This change resulted in a slight increase of 
cost savings over the analysis period.

Costs (per Individual Action)

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Airport cost to notify and consult with an air carrier              $175
 regarding a PFC application.................................
Airport cost to solicit and include public comment on PFC            600
 application.................................................
Airport cost (non-hub airports) to file a PFC application....      5,000
Airport cost-savings for PFC use application.................      5,000
Airport cost-savings for PFC notice and comment amendment....      1,250
Airport cost-savings for PFC non-notice and comment amendment      2,500
FAA cost of Federal Register notice..........................        500
------------------------------------------------------------------------

    These cost figures are based on the results of a study conducted by 
the FAA, the FAA's experience with the administration of the PFC 
program, and as part of figures determined for paperwork reduction 
analysis.

Alternatives We Considered

    The FAA hired a consultant to review past PFC records of decisions 
and other related materials to assess whether certain PFC procedures 
could be streamlined. On the basis of the study, the FAA put forward 
several ideas for streamlining the PFC process as part of the 
Administration's Reauthorization proposal. Many of these proposals were 
incorporated into the Vision 100 law.

Benefits of This Rulemaking

    The FAA estimates that the net effect of the changes would be a 
decrease in cost for airports and a neutral effect on air carriers and 
airline passengers.

Cost of This Rulemaking

    The net cost savings of this final rule for public agencies over 
the next ten years is estimated at $3.3 million (or $2.4 million 
discounted). The FAA is estimated to have net cost savings over the 
next ten years of $475,000 (or $333,600 discounted).

Final Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principal of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide-range of small 
entities, including small businesses, not-for-profit organizations and 
small governmental jurisdictions.
    Agencies must 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.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, section 605(b) of the RFA provides that the 
head of the agency may so certify and a regulatory flexibility analysis 
is not required. The certification must include a statement providing 
the factual basis for this determination, and the reasoning should be 
clear.
    The FAA has determined that the costs imposed on small commercial 
service airports by this final rule will not have a significant 
economic impact. Any costs associated with this final rule will be 
limited to only what is authorized by statute. Moreover, actual PFC 
collection authority is not affected by the final rule and all costs 
are fully recoverable through the PFC, if necessary, by small 
adjustments in the period of PFC collection. The FAA estimates that a 
small airport will realize net cost-savings of approximately $9,500 
annually under the final rule.

[[Page 14934]]

    The FAA conducted the required review of this final rule and 
determined that it will not have a significant economic impact. 
Accordingly, pursuant to the Regulatory Flexibility Act, 5 U.S.C. 
605(b), the FAA certifies that this final rule will not have a 
significant impact on a substantial number of small entities. As part 
of the public comment process for the Notice of Proposed Rulemaking 
(NPRM), the FAA sought public comments regarding this finding in the 
regulatory evaluation supporting the NPRM. The FAA did not receive any 
comments during the public comment period regarding this finding.

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.
    In accordance with the above statute, the FAA has assessed the 
potential effect of this final rule and has determined that, to the 
extent it imposes any costs affecting international entities, it will 
impose the same costs on domestic and international entities for 
comparable services, and thus has a neutral trade impact.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act) 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 an expenditure of $100 million or more (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.'' The FAA currently 
uses an inflation-adjusted value of $120.7 million in lieu of $100 
million.
    This final rule does not contain such a mandate. The requirements 
of Title II of the Act, therefore, do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and 
criteria of Executive Order 13132, Federalism. We determined that this 
action would not have a substantial direct effect on the States, on 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 would not have federalism implications.

Plain English

    Executive Order 12866 (58 FR 51735, Oct. 4, 1993) requires each 
agency to write regulations that are simple and easy to understand. We 
invite your comments on how to make these regulations easier to 
understand, including answers to questions such as the following:
     Are the requirements in the regulations clearly stated?
     Do the regulations contain unnecessary technical language 
or jargon that interferes with their clarity?
     Would the regulations be easier to understand if they were 
divided into more (but shorter) sections?
     Is the description in the preamble helpful in 
understanding the regulations?
    Please send your comments to the address specified in the ADDRESSES 
section.

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 312d and involves no extraordinary 
circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this final rule under Executive Order 13211, 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). We have determined that it is not 
a ``significant energy action'' under the executive order because it is 
not a ``significant regulatory action'' under Executive Order 12866, 
and it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

List of Subjects in 14 CFR Part 158

    Air carriers, Airports, Passenger facility charge, Public agencies, 
Collection compensation.

The Amendment

0
In consideration of the foregoing, the Federal Aviation Administration 
amends part 158 of Title 14, Code of Federal Regulations, as follows:

PART 158--PASSENGER FACILITY CHARGES (PFC'S)

0
1. The authority citation for part 158 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40116-40117, 47106, 47111, 47114-
47116, 47524, 47526.

0
2. Amend Sec.  158.3 to add the following definitions:


Sec.  158.3  Definitions.

* * * * *
    Non-hub airport means a commercial service airport (as defined in 
49 U.S.C. 47102) that has less than 0.05 percent of the passenger 
boardings in the U.S. in the prior calendar year on an aircraft in 
service in air commerce.
* * * * *
    Significant business interest means an air carrier or foreign air 
carrier that:
    (1) Had no less than 1.0 percent of passenger boardings at that 
airport in the prior calendar year,
    (2) Had at least 25,000 passenger boardings at the airport in that 
prior calendar year, or
    (3) Provides scheduled service at that airport.
* * * * *

0
3. Amend Sec.  158.23 by revising paragraph (a) introductory text to 
read as follows:


Sec.  158.23  Consultation with air carriers and foreign air carriers.

    (a) Notice by public agency. A public agency must provide written 
notice to air carriers and foreign air carriers having a significant 
business interest at the airport where the PFC is proposed. A public 
agency must provide this notice before the public agency files an 
application with the FAA for authority to impose a PFC under Sec.  
158.25(b). In addition, public agencies must provide this notice before 
filing an application with the FAA for authority to use PFC revenue 
under Sec.  158.25(c). Public agencies must also provide this notice 
before filing a notice of intent to impose and/or use a PFC under Sec.  
158.30. Finally, a public agency must provide this notice before filing 
a request to amend the FAA's decision with respect to an approved PFC 
as discussed in Sec.  158.37(b)(1). The notice shall include:
* * * * *

0
4. Add Sec.  158.24 to read as follows:

[[Page 14935]]

Sec.  158.24  Notice and opportunity for public comment.

    (a)(1) Notice by public agency. A public agency must provide 
written notice and an opportunity for public comment before:
    (i) Filing an application with the FAA for authority to impose a 
PFC under Sec.  158.25(b);
    (ii) Filing an application with the FAA for authority to use PFC 
revenue under Sec.  158.25(c);
    (iii) Filing a notice of intent to impose and/or use a PFC under 
Sec.  158.30; and
    (iv) Filing a request to amend a previously approved PFC as 
discussed in Sec.  158.37(b)(1).
    (2) The notice must allow the public to file comments for at least 
30 days, but no more than 45 days, after the date of publication of the 
notice or posting on the public agency's Web site, as applicable.
    (b)(1) Notice contents. The notice required by Sec.  158.24(a) must 
include:
    (i) A description of the project(s) the public agency is 
considering for funding by PFC's;
    (ii) A brief justification for each project the public agency is 
considering for funding by PFC's;
    (iii) The PFC level for each project;
    (iv) The estimated total PFC revenue the public agency will use for 
each project;
    (v) The proposed charge effective date for the application or 
notice of intent;
    (vi) The estimated charge expiration date for the application or 
notice of intent;
    (vii) The estimated total PFC revenue the public agency will 
collect for the application or notice of intent; and
    (viii) The name of and contact information for the person within 
the public agency to whom comments should be sent.
    (2) The public agency must make available a more detailed project 
justification or the justification documents to the public upon 
request.
    (c) Distribution of notice. The public agency must make the notice 
available to the public and interested agencies through one or more of 
the following methods:
    (1) Publication in local newspapers of general circulation;
    (2) Publication in other local media;
    (3) Posting the notice on the public agency's Internet Web site; or
    (4) Any other method acceptable to the Administrator.

0
5. Revise Sec.  158.25 to read as follows:


Sec.  158.25  Applications.

    (a) General. This section specifies the information the public 
agency must file when applying for authority to impose a PFC and for 
authority to use PFC revenue on a project. A public agency may apply 
for such authority at any commercial service airport it controls. The 
public agency must use the proposed PFC to finance airport-related 
projects at that airport or at any existing or proposed airport that 
the public agency controls. A public agency may apply for authority to 
impose a PFC before or concurrent with an application to use PFC 
revenue. If a public agency chooses to apply, it must do so by using 
FAA Form 5500-1, PFC Application (latest edition) and all applicable 
Attachments. The public agency must provide the information required 
under paragraphs (b) or (c), or both, of this section.
    (b) Application for authority to impose a PFC. This paragraph sets 
forth the information to be submitted by all public agencies seeking 
authority to impose a PFC. A separate application shall be submitted 
for each airport at which a PFC is to be imposed. The application shall 
be signed by an authorized official of the public agency, and, unless 
otherwise authorized by the Administrator, must include the following:
    (1) The name and address of the public agency.
    (2) The name and telephone number of the official submitting the 
application on behalf of the public agency.
    (3) The official name of the airport at which the PFC is to be 
imposed.
    (4) The official name of the airport at which a project is 
proposed.
    (5) A copy of the airport capital plan or other documentation of 
planned improvements for each airport at which a PFC financed project 
is proposed.
    (6) A description of each project proposed.
    (7) The project justification, including the extent to which the 
project achieves one or more of the objectives set forth in Sec.  
158.15(a) and (if a PFC level above $3 is requested) the requirements 
of Sec.  158.17. In addition--
    (i) For any project for terminal development, including gates and 
related areas, the public agency shall discuss any existing conditions 
that limit competition between and among air carriers and foreign air 
carriers at the airport, any initiatives it proposes to foster 
opportunities for enhanced competition between and among such carriers, 
and the expected results of such initiatives; or
    (ii) For any terminal development project at a covered airport, the 
public agency shall submit a competition plan in accordance with Sec.  
158.19.
    (8) The charge to be imposed for each project.
    (9) The proposed charge effective date.
    (10) The estimated charge expiration date.
    (11) Information on the consultation with air carriers and foreign 
air carriers having a significant business interest at the airport and 
the public comment process, including:
    (i) A list of such carriers and those notified;
    (ii) A list of carriers that acknowledged receipt of the notice 
provided under Sec.  158.23(a);
    (iii) Lists of carriers that certified agreement and that certified 
disagreement with the project;
    (iv) Information on which method under Sec.  158.24(b) the public 
agency used to meet the public notice requirement; and
    (v) A summary of substantive comments by carriers contained in any 
certifications of disagreement with each project and disagreements with 
each project provided by the public, and the public agency's reasons 
for continuing despite such disagreements.
    (12) If the public agency is also filing a request under Sec.  
158.11--
    (i) The request;
    (ii) A copy of the information provided to the carriers under Sec.  
158.23(a)(3);
    (iii) A copy of the carriers' comments with respect to such 
information;
    (iv) A list of any class or classes of carriers that would not be 
required to collect a PFC if the request is approved; and
    (v) The public agency's reasons for submitting the request in the 
face of opposing comments.
    (13) A copy of information regarding the financing of the project 
presented to the carriers and foreign air carriers under Sec.  158.23 
of this part and as revised during the consultation.
    (14) A copy of all comments received as a result of the carrier 
consultation and public comment processes.
    (15) For an application not accompanied by a concurrent application 
for authority to use PFC revenue:
    (i) A description of any alternative methods being considered by 
the public agency to accomplish the objectives of the project;
    (ii) A description of alternative uses of the PFC revenue to ensure 
such revenue will be used only on eligible projects in the event the 
proposed project is not ultimately approved for use of PFC revenue;
    (iii) A timetable with projected dates for completion of project 
formulation activities and submission of an application to use PFC 
revenue; and

[[Page 14936]]

    (iv) A projected date of project implementation and completion.
    (16) A signed statement certifying that the public agency will 
comply with the assurances set forth in Appendix A to this part.
    (17) Such additional information as the Administrator may require.
    (c) Application for authority to use PFC revenue. A public agency 
may use PFC revenue only for projects approved under this paragraph. 
This paragraph sets forth the information that a public agency shall 
submit, unless otherwise authorized by the Administrator, when applying 
for the authority to use PFC revenue to finance specific projects.
    (1) An application submitted concurrently with an application for 
the authority to impose a PFC, must include:
    (i) The information required under paragraphs (b)(1) through (15) 
of this section;
    (ii) An FAA Form 5500-1, Attachment G, Airport Layout Plan, 
Airspace, and Environmental Findings (latest edition) providing the 
following information:
    (A) For projects required to be shown on an ALP, the ALP depicting 
the project has been approved by the FAA and the date of such approval;
    (B) All environmental reviews required by the National 
Environmental Policy Act (NEPA) of 1969 have been completed and a copy 
of the final FAA environmental determination with respect to the 
project has been approved, and the date of such approval, if such 
determination is required; and
    (C) The final FAA airspace determination with respect to the 
project has been completed, and the date of such determination, if an 
airspace study is required.
    (iii) The information required by Sec. Sec.  158.25(b)(16) and 
158.25(b)(17).
    (2) An application where the authority to impose a PFC has been 
previously approved:
    (i) Must not be filed until the public agency conducts further 
consultation with air carriers and foreign air carriers under Sec.  
158.23. However, the meeting required under Sec.  158.23(a)(4) is 
optional if there are no changes to the projects after approval of the 
impose authority and further opportunity for public comment under Sec.  
158.24; and
    (ii) Must include a summary of further air carrier consultation and 
the public agency's response to any disagreements submitted under the 
air carrier consultation and public comment processes conducted under 
paragraph (c)(2)(i) of this section;
    (iii) Must include the following, updated and changed where 
appropriate:
    (A) FAA Form 5500-1 without attachments except as required below;
    (B) For any projects where there have been no changes since the FAA 
approved authority to impose a PFC for those projects, a list of 
projects included in this application for use authority. The FAA will 
consider the information on these projects, filed with the impose 
authority application, incorporated by reference; and
    (C) For any project that has changed since receiving impose 
authority, the public agency must file an Attachment B for that project 
clearly describing the changes to the project.
    (iv) An FAA Form 5500-1, Attachment G, Airport Layout Plan, 
Airspace, and Environmental Findings (latest edition) providing the 
following information:
    (A) For projects required to be shown on an ALP, the ALP depicting 
the project has been approved by the FAA and the date of such approval;
    (B) All environmental reviews required by the National 
Environmental Policy Act (NEPA) of 1969 have been completed and a copy 
of the final FAA environmental determination with respect to the 
project has been approved, and the date of such approval, if such 
determination is required; and
    (C) The final FAA airspace determination with respect to the 
project has been completed, and the date of such determination, if an 
airspace study is required; and
    (v) The information required by Sec. Sec.  158.25(b)(16) and 
158.25(b)(17).

0
6. Amend Sec.  158.27 by revising paragraphs (c)(2), (c)(3) 
introductory text, and (c)(4) to read as follows:


Sec.  158.27  Review of applications.

* * * * *
    (c) * * *
    (2) The Administrator may opt to publish a notice in the Federal 
Register advising that the Administrator intends to rule on the 
application and inviting public comment, as set forth in paragraph (e) 
of this section. If the Administrator publishes a notice, the 
Administrator will provide a copy of the notice to the public agency.
    (3) If the Administrator publishes a notice, the public agency--
* * * * *
    (4) After reviewing the application and any public comments 
received from a Federal Register notice, the Administrator issues a 
final decision approving or disapproving the application, in whole or 
in part, before 120 days after the FAA Airports office received the 
application.
* * * * *

0
7. Amend Sec.  158.29 by revising paragraph (c)(2) to read as follows:


Sec.  158.29  The Administrator's decision.

* * * * *
    (c) * * *
    (2) A public agency reapplying for approval to impose or use a PFC 
must comply with Sec. Sec.  158.23, 158.24, and 158.25.
* * * * *

0
8. Add Sec.  158.30 to subpart B to read as follows:


Sec.  158.30  Pilot program for PFC authorization at non-hub airports.

    (a) General. This section specifies the procedures a public agency 
controlling a non-hub airport must follow when notifying the FAA of its 
intent to impose a PFC and to use PFC revenue on a project under this 
section. In addition, this section describes the FAA's rules for 
reviewing and acknowledging a notice of intent filed under this 
section. A public agency may notify the FAA of its intent to impose a 
PFC before or concurrent with a notice of intent to use PFC revenue. A 
public agency must file a notice of intent in the manner and form 
prescribed by the Administrator and must include the information 
required under paragraphs (b), (c), or both, of this section.
    (b) Notice of intent to impose a PFC. This paragraph sets forth the 
information a public agency must file to notify the FAA of its intent 
to impose a PFC under this section. The public agency must file a 
separate notice of intent for each airport at which the public agency 
plans on imposing a PFC. An authorized official of the public agency 
must sign the notice of intent and, unless authorized by the 
Administrator, must include:
    (1) A completed FAA Form 5500-1, PFC Application (latest edition) 
without attachments except as required below;
    (2) Project information (in the form and manner prescribed by the 
FAA) including the project title, PFC funds sought, PFC level sought, 
and, if an existing Airport Improvement Program (AIP) grant already 
covers this project, the grant agreement number.
    (3) If an existing AIP grant does not cover this project, the 
notice of intent must include the information in paragraph (b)(2) of 
this section as well as the following:
    (i) Additional information describing the proposed schedule for the 
project,

[[Page 14937]]

    (ii) A description of how this project meets one of the PFC 
objectives in Sec.  158.15(a), and
    (iii) A description of how this project meets the adequate 
justification requirement in Sec.  158.15(c).
    (4) A copy of any comments received by the public agency during the 
air carrier consultation and public comment processes (Sec. Sec.  
158.23 and 158.24) and the public agency's response to any 
disagreements.
    (5) If applicable, a request to exclude a class of carriers from 
the requirement to collect the PFC (Sec.  158.11).
    (6) A signed statement certifying that the public agency will 
comply with the assurances set forth in Appendix A to this part.
    (7) Any additional information the Administrator may require.
    (c) Notice of intent to use PFC revenue. A public agency may use 
PFC revenue only for projects included in notices filed under this 
paragraph or approved under Sec.  158.29. This paragraph sets forth the 
information that a public agency must file, unless otherwise authorized 
by the Administrator, in its notice of intent to use PFC revenue to 
finance specific projects under this section.
    (1) A notice of intent to use PFC revenue filed concurrently with a 
notice of intent to impose a PFC must include:
    (i) The information required under paragraphs (b)(1) through (7) of 
this section;
    (ii) A completed FAA Form 5500-1, Attachment G, Airport Layout 
Plan, Airspace, and Environmental Findings (latest edition) for all 
projects not included in an existing Federal airport program grant.
    (2) A notice of intent to use PFC revenue where the FAA has 
previously acknowledged a notice of intent to impose a PFC must:
    (i) Be preceded by further consultation with air carriers and the 
opportunity for public comment under Sec. Sec.  158.23 and 158.24 of 
this part. However, a meeting with the air carriers is optional if all 
information is the same as that provided with the impose authority 
notice;
    (ii) Include a copy of any comments received by the public agency 
during the air carrier consultation and public comment processes 
(Sec. Sec.  158.23 and 158.24) and the public agency's response to any 
disagreements or negative comments; and
    (iii) Include any updated and changed information:
    (A) Required by paragraphs (b)(1), (2), (5), (6), and (7) of this 
section; and
    (B) Required by paragraph (c)(1)(ii) of this section.
    (d) FAA review of notices of intent.
    (1) The FAA will review the notice of intent to determine that:
    (A) The amount and duration of the PFC will not result in revenue 
that exceeds the amount necessary to finance the project(s);
    (B) Each proposed project meets the requirements of Sec.  158.15;
    (C) Each project proposed at a PFC level above $3.00 meets the 
requirements of Sec.  158.17(a)(2) and (3);
    (D) All applicable airport layout plan, airspace, and environmental 
requirements have been met for each project;
    (E) Any request by the public agency to exclude a class of carriers 
from the requirement to collect the PFC is reasonable, not arbitrary, 
nondiscriminatory, and otherwise complies with the law; and
    (F) The consultation and public comment processes complied with 
Sec. Sec.  158.23 and 158.24.
    (2) The FAA will also make a determination regarding the public 
agency's compliance with 49 U.S.C. 47524 and 47526 governing airport 
noise and access restrictions and 49 U.S.C. 47107(b) governing the use 
of airport revenue. Finally, the FAA will review all comments filed 
during the air carrier consultation and public comment processes.
    (e) FAA acknowledgment of notices of intent. Within 30 days of 
receipt of the public agency's notice of intent about its PFC program, 
the FAA will issue a written acknowledgment of the public agency's 
notice. The FAA's acknowledgment may concur with all proposed projects, 
may object to some or all proposed projects, or may object to the 
notice of intent in its entirety. The FAA's acknowledgment will include 
the reason(s) for any objection(s).
    (f) Public agency actions following issuance of FAA acknowledgment 
letter. If the FAA does not object to either a project or the notice of 
intent in its entirety, the public agency may implement its PFC 
program. The public agency's implementation must follow the information 
specified in its notice of intent. If the FAA objects to a project, the 
public agency may not collect or use PFC revenue on that project. If 
the FAA objects to the notice of intent in its entirety, the public 
agency may not implement the PFC program proposed in that notice. When 
implementing a PFC under this section, except for Sec.  158.25, a 
public agency must comply with all sections of part 158.
    (g) Acknowledgment not an order. An FAA acknowledgment issued under 
this section is not considered an order issued by the Secretary for 
purposes of 49 U.S.C. 46110 (Judicial Review).
    (h) Sunset provision. This section will expire May 9, 2008.

0
9. Revise Sec.  158.37 to read as follows:


Sec.  158.37  Amendment of the FAA's decision with respect to an 
approved PFC.

    (a)(1) A public agency may amend the FAA's decision with respect to 
an approved PFC to:
    (i) Increase or decrease the level of PFC the public agency wants 
to collect from each passenger,
    (ii) Increase or decrease the total approved PFC revenue,
    (iii) Change the scope of an approved project,
    (iv) Delete an approved project, or
    (v) Establish a new class of carriers under Sec.  158.11 or amend 
any such class previously approved.
    (2) A public agency may not amend the FAA's decision with respect 
to an approved PFC to add projects, change an approved project to a 
different facility type, or alter an approved project to accomplish a 
different purpose.
    (b) The public agency must file a request to the Administrator to 
amend the FAA's decision with respect to an approved PFC. The request 
must include or demonstrate:
    (1)(i) Further consultation with the air carriers and foreign air 
carriers and seek public comment in accordance with Sec. Sec.  158.23 
and 158.24 when applying for those requests to:
    (A) Amend the approved PFC amount for a project by more than 25 
percent of the original approved amount of the project,
    (B) Change the scope of a project, or
    (C) Increase the PFC level to be collected from each passenger.
    (ii) No further consultation with air carriers and foreign air 
carriers or public comment is required by a public agency in accordance 
with Sec. Sec.  158.23 and 158.24 when applying for an amendment in the 
following situations:
    (A) To institute a decrease in the level of PFC to be collected 
from each passenger;
    (B) To institute a decrease in the total PFC revenue;
    (C) To institute an increase of 25 percent or less for any approved 
PFC project;
    (D) To establish a new class of carriers under Sec.  158.11 or 
amend any such class previously approved; or
    (E) To delete an approved project.
    (2) A copy of any comments received from the processes in paragraph 
(b)(1)(A) of this section for the carrier consultation and the 
opportunity for public comment in accordance with Sec. Sec.  158.23 and 
158.24;

[[Page 14938]]

    (3) The public agency's reasons for continuing despite any 
objections;
    (4) A description of the proposed amendment;
    (5) Justification, if the amendment involves a change in the PFC 
amount for a project by more than 25 percent of the original approved 
amount, a change of the approved project scope, or any increase in the 
approved PFC level to be collected from each passenger;
    (6) A description of how each project meets the requirements of 
Sec.  158.17(b), for each project proposed for an increase of the PFC 
level above $3.00 at a medium or large hub airport;
    (7) A signed statement certifying that the public agency has met 
the requiements of Sec.  158.19, if applicable, for any amendment 
proposing to increase the PFC level above $3.00 at a medium or large 
hub airport; and
    (8) Any other information the Administrator may require.
    (c) The Administrator will approve, partially approve or disapprove 
the amendment request and notify the public agency of the decision 
within 30 days of receipt of the request. If a PFC level of more than 
$3.00 is approved, the Administrator must find the project meets the 
requirements of Sec. Sec.  158.17 and 158.19, if applicable, before the 
public agency can implement the new PFC level.
    (d) The public agency must notify the carriers of any change to the 
FAA's decision with respect to an approved PFC resulting from an 
amendment. The effective date of any new PFC level must be no earlier 
than the first day of a month which is at least 30 days from the date 
the public agency notifies the carriers.

    Issued in Washington, DC, on January 7, 2005.
Marion C. Blakey,
Administrator.
[FR Doc. 05-5578 Filed 3-22-05; 8:45 am]
BILLING CODE 4910-13-U