[Federal Register Volume 80, Number 167 (Friday, August 28, 2015)]
[Proposed Rules]
[Pages 52217-52224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21293]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 187

[Docket No.: FAA-2015-3597; Notice No. 15-06]
RIN 2120-AK53


Update of Overflight Fee Rates

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This proposed rule would update existing overflight fee rates 
using more current FAA cost accounting and air traffic activity data. 
Overflight fees are charges for aircraft flights that transit U.S.-
controlled airspace, but neither land in nor depart from the United 
States. Overflight fee rates were last updated in 2011. As a result, 
the FAA is not recovering the full cost of the services it provides. 
The FAA proposes to increase the rates for Enroute and Oceanic 
overflights based on fiscal year 2013 cost and air traffic activity 
data. The FAA proposes to phase in this rate increase over three years 
in equal percentage terms. This is a less burdensome approach than the 
alternative of phasing in the new rates in equal absolute terms, and is 
the same methodology used in the previous rulemaking. Finally, the FAA 
proposes several organizational and clarifying revisions to the 
overflight fee requirements.

DATES: Send comments on or before October 27, 2015.

ADDRESSES: Send comments identified by docket number FAA-2015-3597 
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your 
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at 202-493-2251.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments 
from the public to better inform its rulemaking process. DOT posts 
these comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at 
http://www.regulations.gov at any time. Follow the online instructions 
for accessing the docket or go to the Docket Operations in Room W12-140 
of the West Building Ground Floor at 1200 New Jersey Avenue SE., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this action, contact Aleksandra Damsz, Financial Analyst, Office of 
Financial Analysis, AFA-400, Federal Aviation Administration, 800 
Independence Avenue SW., Washington, DC 20591; telephone (202) 267-
8055; email [email protected].

[[Page 52218]]

    For legal questions concerning this action, contact Jonathan Cross, 
Office of the Chief Counsel, Federal Aviation Administration, 800 
Independence Avenue SW., Washington, DC 20591; telephone (202) 267-
7173; email [email protected].

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules establishing fees 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 
Chapter 453, Section 45301 et seq. Under that Chapter, the FAA is 
charged with prescribing regulations for the collection of fees for air 
traffic control and related services provided to aircraft, other than 
military and civilian aircraft of the United States Government or a 
foreign government, that transit U.S.-controlled airspace, but neither 
take off from nor land in the United States (``overflights''). This 
rulemaking is within the scope of that authority.

I. Executive Summary

    The FAA proposes to increase the rates for Enroute and Oceanic 
overflights over a 3-year period to bring cost recovery from Fiscal 
Year (FY) 2008 recovery to FY 2013 recovery. The following table shows 
the proposed increases.

  Table 1--Proposed Rate Increases for Enroute and Oceanic Overflights
------------------------------------------------------------------------
                                           Enroute rate    Oceanic rate
                                             (per 100        (per 100
              Revision date                  nautical        nautical
                                              miles)          miles)
------------------------------------------------------------------------
Current Rate............................          $56.86          $21.63
October 1, 2015.........................           58.45           23.15
October 1, 2016.........................           60.07           24.77
October 1, 2017.........................           61.75           26.51
------------------------------------------------------------------------

    The International Civil Aviation Organization (ICAO) recommends 
that the ``cost to be shared is the full cost of providing the air 
navigation services'' and that the ``approach toward the recovery of 
full costs should be a gradual progression.'' \1\ The FAA requests 
comments on whether it should expedite the rate of increase to achieve 
full cost recovery before 2017.
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    \1\ ICAO's Policies on Charges for Airports and Air Navigation 
Services, Document 9082, at 15-06 (2009).
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    The FAA also proposes several organizational and content revisions 
to part 187 to clarify the overflight fees requirements.

Summary of Costs and Benefits of the Proposed Rule

    The higher overflight rates based on FY 2013 unit costs would allow 
the FAA to move closer to full cost recovery of air traffic control 
services already being provided to operators. The present value of the 
projected fee increases through FY 2018--when the full increase in 
rates would have taken place--would be $9,560,692 for foreign operators 
and $141,888 for domestic operators. The updated fees would provide 
greater incentives for foreign and domestic operators to economize on 
U.S. air traffic control facilities and U.S.-controlled airspace, thus 
increasing the efficient allocation of resources.

II. Background

History of Overflight Fees

    The FAA's overflight fees were initially authorized in section 273 
of the Federal Aviation Reauthorization Act of 1996.\2\ After a series 
of legal challenges and refinements, overflight fees were implemented 
in their current form in 2001.\3\ Since that time the fee rates have 
been based on cost data from the FAA's Cost Accounting System (CAS) and 
air traffic data from the FAA's Traffic Flow Management System (TFMS 
\4\). They were last updated in 2011.\5\ The 2011 final rule updated 
the existing rates by using cost and activity data for FY 2008. Because 
the rates had not been updated for 9 years, and the total Enroute and 
Oceanic rate increases were significant, the FAA decided to phase in 
the increases. The 2011 final rule phased in the increases over a 4-
year period, with rate increases occurring on October 1 of 2011, 2012, 
2013, and 2014. Thus, on October 1, 2014, the FAA was recovering the 
amounts that would have produced full cost recovery in FY 2008.
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    \2\ Pub. L. 104-264, 110 Stat. 3213 (Oct. 9, 1996). The 
statutory authority has been updated several times, most recently 
with section 122 of the FAA Modernization and Reform Act of 2012. 
Pub. L. 112-95, 126 Stat. 19 (Feb. 14, 2012).
    \3\ 66 FR 43680 (Aug. 20, 2001). A full discussion of the 
history of overflight fees can be found in the Update of August 2001 
Overflight Fees final rule. See 76 FR 43112, 43112-43114 (Jul. 20, 
2011).
    \4\ TFMS was formerly known as the Enhanced Traffic Management 
System (ETMS).
    \5\ 76 FR 43112 (Jul. 20, 2011).
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Aviation Rulemaking Committee

    The FAA established and chartered an Overflight Fees Aviation 
Rulemaking Committee (ARC) consisting of foreign air carriers (and 
trade associations of those carriers) that are subject to the FAA's 
overflight fees. The ARC was chartered on May 1, 2013, with the task to 
provide the FAA a report detailing recommendations for tasks moving 
forward with the overflight fees update process.
    The ARC met with the FAA on June 12, 2013, and on January 23, 2014. 
On February 14, 2014, the ARC submitted several recommendations on 
future overflight rate updates.\6\
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    \6\ A copy of the ``Recommendation of the Industry Members of 
the 2013/2014 FAA Aviation Rulemaking Committee on Overflight Fees'' 
is available in the docket for this rulemaking.
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    The ARC recommended that the FAA increase overflight rates annually 
from FY 2016 (beginning October 1, 2015) through FY 2018 (beginning 
October 1, 2017) at the compounded annual growth rate (CAGR) of FY 2008 
through FY 2013 FAA costs, calculated separately for the Enroute and 
Oceanic rates. Calculations from CAS show this would result in an 
annual increase of 1.72% for Enroute fees, and an annual increase of 
3.76% for Oceanic fees. In other words, the ARC proposed that the FAA 
phase in the rate increases using equal annual percentage increases as 
done in the 2011 final rule. The final proposed fees are listed in the 
table below:

[[Page 52219]]



Table 2--ARC Proposed Rate Increases for Enroute and Oceanic Overflights
------------------------------------------------------------------------
                                           ARC-Proposed    ARC-Proposed
                                           enroute rate    oceanic rate
              Revision date                  (per 100        (per 100
                                             nautical        nautical
                                              miles)          miles)
------------------------------------------------------------------------
Current Rate............................          $56.86          $21.63
October 1, 2015.........................           57.77           22.40
October 1, 2016.........................           58.75           23.23
October 1, 2017.........................           59.75           24.09
------------------------------------------------------------------------

    The ARC stated that while it does not challenge the use of CAS as a 
basis for setting the fee, it does not endorse the current methodology 
as a whole and recommends that the cost base exclude certain elements 
of the FAA's overhead and other non-overflight related costs.
    Similar recommendations were proffered in comments leading to the 
2011 final rule.\7\ In consideration of this ARC recommendation, the 
FAA has reviewed its costing methodology and determined that the best 
approach is to update the methodology to exclude Enroute Guam and San 
Juan costs from total FAA costs since these combined control facilities 
may handle a mix of general and commercial aviation traffic. Enroute 
costs for Honolulu were already excluded and are handled similarly to 
Guam and San Juan. With this approach, Enroute costs for Guam, San Juan 
and Honolulu, which are similar facility types, are being treated in 
the same manner. Additionally, to be consistent with the treatment of 
costs for these facilities, flight miles for Honolulu and Guam are 
being excluded from Enroute and Oceanic miles respectively in 
estimating the fees. With this change, the treatment of miles for 
Honolulu, Guam and San Juan are in line with the treatment of costs and 
are consistent with FAA air traffic boundary definitions. The FAA's 
costs used for this fee calculation are total costs because the 
services provided benefit all system users, including overflight users. 
As stated in 2011, any costs related to low activity airports and 
airfields where traffic is controlled by Enroute controllers are de 
minimus. Finally, the allocation of overhead is consistent with the 
currently implemented methodology and with generally accepted 
accounting principles.
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    \7\ See 76 FR 43112, 43114-43116 (Jul. 20, 2011).
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    The ARC industry members recommended that the FAA include all 
traffic receiving services from the FAA ATO personnel in Enroute and 
Oceanic Air Route Traffic Control Centers (ARTCCs) in the determination 
of the flight miles that are used in the rate calculation. The ARC 
contended that currently only filed flight plans (IFR/VFR) are used in 
the fee calculation while a significant portion of the traffic consists 
of the unfiled VFR traffic using flight following or being actively 
separated from IFR.
    For this rulemaking, the ARC recommendation is consistent with the 
FAA's approach to determine the total miles used to calculate the 
overflight fee rate. VFR aircraft, which use flight-following services 
without filing a flight plan, are assigned discrete beacon codes and 
included as part of the total miles used to determine the fee rates.
    The ARC industry members also recommended that the FAA continue to 
engage in meaningful financial discussions with its stakeholders and 
provide full transparency on its cost development through CAS. The 
industry members recommended that the FAA provide the industry 
(including the non-ARC members) on an annual basis with year-to-year 
comparisons of costs and traffic, and that any major changes in 
allocations between cost centers are accompanied by the high level 
summary justifying the changes. The industry members also asked that a 
new ARC be convened in three years to analyze the costs and air traffic 
activity data and determine the need for a future change of rates for 
FY 2019 and beyond based on the updated cost and traffic data.
    The FAA generally supports continued engagement with industry 
members. The FAA will consider reconvening an ARC for future rate 
updates and will continue to provide cost and activity data through the 
rulemaking process.
    Finally, the ARC industry members recommended that the FAA set a 
target on its cost development that remains below inflation and takes 
into consideration the expected development of traffic.
    The FAA believes forecasting based on projected traffic is more 
appropriate than using arbitrary cost targets. Each year the FAA 
publishes a 10-year Aerospace Forecast that includes anticipated levels 
of activity. FAA hiring and capital investments are based on forecasted 
levels of traffic activity.

III. Discussion of the Proposed Rule

    The FAA proposes to update overflight fee rates based on final CAS 
data and TFMS data for FY 2013, which are the most recent cost and air 
traffic activity data available. This update uses the same general 
methodology, calculation, and data sources as those used for the last 
update in 2011.\8\ The general methodology had been recommended by the 
ARC and adopted by the FAA for the 2011 final rule. The FAA continues 
to believe it is a reasonable methodology and has updated this 
methodology based on an ARC recommendation to exclude costs and miles 
for combined control facilities that may handle a mix of general and 
commercial aviation traffic.
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    \8\ A copy of the ``Costing Methodology Report Fiscal Year 
2013'' is available in the docket for this rulemaking.
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    Separate overflight rates have been established, and are currently 
in effect, for flights that transit U.S.-controlled airspace in each of 
two operational environments (Enroute and Oceanic airspace) without 
taking off from or landing in the United States.\9\ The updated Enroute 
rate would be derived by dividing the total costs incurred in the 
Enroute environment in FY 2013 by the number of nautical miles flown in 
U.S.-controlled Enroute airspace in FY 2013. Similarly, the Oceanic 
rate would be derived by dividing the total Oceanic costs for FY 2013 
by the total number of Oceanic miles flown in FY 2013. These 
calculations would each produce a per-mile cost that would be levied as 
a rate per 100 nautical miles flown. The rates calculated (based on FY 
2013 data) for Enroute and Oceanic overflights are $61.75 and $26.51, 
respectively. The step-by-step derivation of these rates, using CAS and 
TFMS numbers for FY

[[Page 52220]]

2013, is shown in the ``Overflight Fee Rate Development Report.'' \10\
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    \9\ A copy of the ``Description of U.S.-Controlled Airspace'' is 
available in the docket for this rulemaking.
    \10\ A copy of the ``Overflight Fee Rate Development Report'' is 
available in the docket for this rulemaking.
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    As in the 2011 update, the FAA proposes to phase in the rate 
increases. This approach is consistent with ICAO's principle of 
gradualism. The FAA proposes a 3-year phase-in for this fee increase. 
The FAA intends the first increase would occur beginning on October 1, 
2015, and proceed according to the following schedule:

  Table 3--Proposed Rate Increases for Enroute and Oceanic Overflights
------------------------------------------------------------------------
                                           Enroute rate    Oceanic rate
                                             (per 100        (per 100
              Revision date                  nautical        nautical
                                              miles)          miles)
------------------------------------------------------------------------
Current Rate............................          $56.86          $21.63
October 1, 2015.........................           58.45           23.15
October 1, 2016.........................           60.07           24.77
October 1, 2017.........................           61.75           26.51
------------------------------------------------------------------------

    The FAA has considered the ARC recommendation. While the FAA 
believes the ARC's approach is not unreasonable, the FAA has decided to 
not move forward with the ARC recommendation since the methodology to 
increase rates based on the CAGR between FY 2008 through FY 2013 allows 
only a partial recovery of the FY 2013 costs that the FAA is authorized 
to recover. Using that methodology, the FAA would have recovered 
slightly less than 60% for Enroute and 50% for Oceanic of the total 
increase between FY 2015 rates (based on FY 2008 costs) and rates using 
FY 2013 data. The FAA is instead moving forward with the same basic 
approach that was used in the FY 2011 final rule, which would recover 
the FY 2013 cost basis beginning in FY 2018.
    The FAA also proposes organizational changes to part 187 to clarify 
the overflight fee requirements. The FAA proposal replaces current 
Appendix B of part 187 with new Sec. Sec.  187.3 (Definitions), 187.51 
(Applicability of overflight fees), 187.53 (Calculation of overflight 
fees), and 187.55 (Overflight fees billing and payment procedures). 
Except as discussed in the following paragraphs, the FAA proposes no 
changes to the substance of current requirements.
    In Sec.  187.1, the FAA proposes to remove the duplicate reference 
to Appendix A, remove the reference to Appendix B because Appendix B is 
being removed, and add a reference to Appendix C that inadvertently had 
not been added when Appendix C (computation of fees for production 
certification-related services performed outside the United States) was 
added. The FAA proposes a new Sec.  187.3 to contain definitions 
relevant to part 187. The terms overflight, overflight through Enroute 
airspace, overflight through Oceanic airspace, and U.S.-controlled 
airspace had been defined in Appendix B. The FAA proposes to revise the 
definition for U.S.-controlled airspace to be more consistent with the 
definition under international treaties, ICAO standards and guidance, 
customary law, and Presidential Proclamation Number 5928.\11\ Finally, 
the FAA proposes to define great circle distance consistent with the 
FAA's method used for calculating overflight fees.
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    \11\ 54 FR 777 (Dec. 27, 1988).
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    In new Sec.  187.51, the FAA proposes a new paragraph (d) to 
address fees for flights through U.S.-controlled airspace covered by an 
FAA agreement or other binding arrangement. The FAA periodically enters 
into agreements with foreign States, regional groups of States, or 
foreign air navigation services providers to set the terms for the 
FAA's management or control of foreign airspace among other air 
navigation services provided by the FAA. Generally, these agreements 
include specific terms for how the FAA recovers costs for the services 
it provides. This paragraph would avoid a potential conflict between 
such an agreement or arrangement and FAA regulations as well as ensure 
that overflight fee regulations apply uniform conditions and are non-
discriminatory as required under the Chicago Convention. The FAA also 
proposes to remove the exception from overflight fees for Canada-to-
Canada flights because those flights would continue to be addressed 
under proposed paragraph (d).
    In new Sec.  187.53, the FAA proposes to retain the formula for 
calculating overflight fees from existing Appendix B but also proposes 
to clarify the explanation of calculating that fee. The total fee for a 
particular flight would be the sum of the Enroute and Oceanic fees. The 
Enroute and Oceanic fees would be calculated by multiplying the Enroute 
or Oceanic rate (per 100 nautical miles), respectively, by the number 
of miles flown through each segment of Enroute or Oceanic airspace, 
respectively. Miles flown through each segment of airspace would be 
calculated, using great circle distance (GCD), from the point of entry 
into U.S.-controlled airspace to the point of exit from U.S.-controlled 
airspace. As under the current rule, the FAA would use the best 
available flight data to calculate the entry and exit points. The FAA 
is considering removing the formula because it is redundant and has 
created confusion. The FAA requests comments on whether the formula 
still is necessary in light of the narrative explanation.
    The proposed billing and payment procedures in new Sec.  187.55 are 
unchanged from those in existing Appendix B.

IV. Regulatory Notices and Analyses

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 and Executive Order 13563 direct 
that each Federal agency shall 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 (Pub. 
L. 96-354) requires agencies to analyze the economic impact of 
regulatory changes on small entities. Third, the Trade Agreements Act 
(Pub. L. 96-39) prohibits agencies from setting standards that create 
unnecessary obstacles to the foreign commerce of the United States. In 
developing U.S. standards, the Trade Act requires agencies to consider 
international standards and, where appropriate, that they be 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

[[Page 52221]]

likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more annually (adjusted for inflation with base year of 
1995). This portion of the preamble summarizes the FAA's analysis of 
the economic impacts of this proposed rule.

A. Regulatory Evaluation

    Department of Transportation Order DOT 2100.5 prescribes policies 
and procedures for simplification, analysis, and review of regulations. 
If the expected cost impact is so minimal that a proposed or final rule 
does not warrant a full evaluation, this order permits that a statement 
to that effect and the basis for it be included in the preamble if a 
full regulatory evaluation of the costs and benefits is not prepared. 
Such a determination has been made for this proposed rule. The 
reasoning for this determination follows.
    This proposed rule would institute a 3-year phase-in of rate 
increases for Oceanic and Enroute overflights, with rates per 100 
nautical miles increasing in FY 2016-2018 to $23.15, $24.77, and $26.51 
for Oceanic flights, and to $58.45, $60.07, and $61.75 for Enroute 
flights. The final FY 2018 rate of $26.51 for Oceanic services is 
derived from the FAA's FY 2013 total cost of providing these services 
divided by the total nautical miles flown by operators (overflights and 
non-overflights) in Oceanic airspace. An analogous calculation is made 
to obtain the FY 2018 rate of $61.75 for Enroute services. These higher 
rates based on FY 2013 unit costs would allow the FAA to move closer to 
full cost recovery of air traffic control services already being 
provided to operators.
    Tables 4 and 5 show estimates of the increase in overflight fees 
for domestic operators and foreign operators for FY 2016, FY 2017, and 
FY 2018, using FY 2013 overflight mileage totals assuming no annual 
growth. As the tables show, the present value of the projected fee 
increases through FY 2018--when the full increase in rates would have 
taken place--would be $141,888 for domestic operators and $9,560,692 
for foreign operators. The updated fee rates would provide greater 
incentives for foreign and domestic operators to economize on U.S. air 
traffic control facilities and U.S.-controlled airspace, thus 
increasing the efficient allocation of resources.

                                  Table 4--Domestic Operators--Overflight Fees
----------------------------------------------------------------------------------------------------------------
               Domestic operators                     FY 2015         FY 2016         FY 2017         FY 2018
----------------------------------------------------------------------------------------------------------------
Oceanic Fees (per 100 nm).......................          $21.63          $23.15          $24.77          $26.51
Oceanic Billings w/o Proposed Rule..............         528,616         528,616         528,616         528,616
Oceanic Billings w/Proposed Rule................         528,616         565,707         605,400         647,878
Increase in Oceanic Billings....................               0          37,091          76,784         119,262
Enroute Fees (per 100 nm).......................          $56.86          $58.45          $60.07          $61.75
Enroute Billings w/o Proposed Rule..............         634,376         634,376         634,376         634,376
Enroute Billings w/o Proposed Rule..............         634,376         652,064         670,245         688,933
Increase in Enroute Billings....................               0          17,688          35,869          54,557
Increase in Overflight Billings.................               0          54,779         112,653         173,819
PV Increase in Overflight Billings..............               0         $51,195         $98,395        $141,888
----------------------------------------------------------------------------------------------------------------


                                   Table 5--Foreign Operators--Overflight Fees
----------------------------------------------------------------------------------------------------------------
                Foreign operators                     FY 2015         FY 2016         FY 2017         FY 2018
----------------------------------------------------------------------------------------------------------------
Oceanic Fees (per 100 nm).......................          $21.63          $23.15          $24.77          $26.51
Oceanic Billings w/o Proposed Rule..............      28,072,427      28,072,427      28,072,427      28,072,427
Oceanic Billings w/Proposed Rule................      28,072,427      30,042,152      32,150,083      34,405,920
Increase in Oceanic Billings....................               0       1,969,724       4,077,656       6,333,493
Enroute Fees (per 100 nm).......................          $56.86          $58.45          $60.07          $61.75
Enroute Billings w/o Proposed Rule..............      62,543,288      62,543,288      62,543,288      62,543,288
Enroute Billings w/Proposed Rule................      62,543,288      64,287,136      66,079,607      67,922,055
Increase in Enroute Billings....................               0       1,743,848       3,536,318       5,378,767
Increase in Overflight Billings.................               0       3,713,572       7,613,974      11,712,259
PV Increase in Overflight Billings..............               0      $3,470,628      $6,650,340      $9,560,692
----------------------------------------------------------------------------------------------------------------
Notes: 1. Rates for overflights are per 100 nautical miles. 2. Fees are in U.S. dollars. 3. Values are
  discounted back to FY 2015 at a 7% discount rate.\12\

     
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    \12\ Office of Management and Budget, Circular A-94, 
``Guidelines and Discount Rates for Benefit-Cost Analysis of Federal 
Programs,'' October 29, 1992, p. 8.
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B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) 
establishes ``as a principle of regulatory issuance that agencies shall 
endeavor, consistent with the objectives of the rule and of applicable 
statutes, to fit regulatory and informational requirements to the scale 
of the businesses, organizations, and governmental jurisdictions 
subject to regulation. To achieve this principle, agencies are required 
to solicit and consider flexible regulatory proposals and to explain 
the rationale for their actions to assure that such proposals are given 
serious consideration.'' 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 rule will 
have a significant economic impact on a substantial number of small 
entities. If the agency determines that it will, the agency must 
prepare a regulatory flexibility analysis as described in the RFA.
    However, if an agency determines that a rule will not result in 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.

[[Page 52222]]

    For FY 2013 there were 469 domestic operators who overflew U.S.-
controlled airspace, many of whom appear to be small entities. As Table 
4 shows, however, after the phase-in of fee increases has been 
completed, in FY 2018, overflight billings to domestic operators would 
have increased by just $173,819. Dividing this figure by the number of 
FY 2013 domestic overflights, 4762, the FAA estimates that the average 
increase in overflight billings would be $36.50 per operation. 
Accordingly, the proposed rule would not have a significant economic 
impact on a substantial number of small entities.
    Therefore, as provided in section 605(b), the head of the FAA 
certifies that this rulemaking will not have a significant economic 
impact on a substantial number of small entities. The FAA solicits 
comments regarding this determination.

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the 
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal 
agencies from establishing standards or engaging in related activities 
that create unnecessary obstacles to the foreign commerce of the United 
States. Pursuant to these Acts, the establishment of standards is not 
considered an unnecessary obstacle to the foreign commerce of the 
United States, so long as the standard has a legitimate domestic 
objective, such as the protection of safety, and does not operate in a 
manner that excludes imports that meet this objective. The statute also 
requires consideration of international standards and, where 
appropriate, that they be the basis for U.S. standards. ICAO standards 
allow providers of navigation services to require users of these 
services to pay their share of the related costs. The FAA has 
determined that this proposed rule primarily affects foreign commercial 
operators. The proposal to recover costs of providing air navigation 
services is consistent with ICAO standards and international practice. 
Foreign operators would be charged a fee only if they use U.S.-
controlled airspace without taking off or landing in the U.S., and U.S. 
operators would be charged in the same manner. Accordingly, the FAA 
does not believe this proposal would create an unnecessary obstacle to 
the foreign commerce of the United States.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) 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 
(in 1995 dollars) 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 $151.0 million in lieu of $100 
million. This proposed rule does not contain such a mandate; therefore, 
the requirements of Title II of the Act do not apply.

E. 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. The FAA has determined that 
there is no new requirement for information collection associated with 
this rule. The information used to track overflights (including the 
information collection necessary to implement this rule) can be 
accessed from flight plans filed with the FAA. The collection of 
information from the Domestic and International Flight Plans is 
approved under OMB information collection 2120-0026.

F. International Compatibility and Cooperation

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to conform to ICAO 
Standards and Recommended Practices to the maximum extent practicable. 
The FAA has reviewed the corresponding ICAO Standards and Recommended 
Practices and has identified no differences with these proposed 
regulations.
    The ICAO guidance document on aviation fees and charges, ICAO 
Document 9082 (Ninth Edition--2012), ICAO's Policies on Charges for 
Airports and Air Navigation Services, recommends consultations before 
imposing fees. In addition, Article 12 of the Air Transport Agreement 
between the United States of America and the European Union and its 
Member States (April 30, 2007, as amended June 24, 2010) encourages 
consultation.
    By convening an ARC, presenting updated cost and traffic data to 
the ARC, and considering the ARC's recommendation, the FAA consulted 
with system users prior to proposing this overflight fee update. 
Additionally, the FAA invites comments on this proposal, which permits 
participation by all interested parties in the rulemaking process.

G. 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 312f and involves no extraordinary 
circumstances.

V. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. The agency has 
determined that this action would not have a substantial direct effect 
on the States, or the relationship between the Federal 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.

B. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

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

C. Executive Order 13609, Promoting International Regulatory 
Cooperation

    Executive Order 13609, Promoting International Regulatory 
Cooperation, (77 FR 26413, May 4, 2012) promotes international 
regulatory cooperation to meet shared challenges involving health, 
safety, labor, security, environmental, and other issues and to reduce, 
eliminate, or prevent unnecessary differences in regulatory 
requirements. The FAA has analyzed this action under the policies and 
agency responsibilities of Executive Order 13609, and has determined 
that this action would have no effect on international regulatory 
cooperation.

VI. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. The agency 
also invites

[[Page 52223]]

comments relating to the economic, environmental, energy, or federalism 
impacts that might result from adopting the proposals in this document. 
The most helpful comments reference a specific portion of the proposal, 
explain the reason for any recommended change, and include supporting 
data. To ensure the docket does not contain duplicate comments, 
commenters should send only one copy of written comments, or if 
comments are filed electronically, commenters should submit only one 
time.
    The FAA will file in the docket all comments it receives, as well 
as a report summarizing each substantive public contact with FAA 
personnel concerning this proposed rulemaking. Before acting on this 
proposal, the FAA will consider all comments it receives on or before 
the closing date for comments. The FAA will consider comments filed 
after the comment period has closed if it is possible to do so without 
incurring expense or delay. The agency may change this proposal in 
light of the comments it receives.
    Proprietary or Confidential Business Information: Commenters should 
not file proprietary or confidential business information in the 
docket. Such information must be sent or delivered directly to the 
person identified in the FOR FURTHER INFORMATION CONTACT section of 
this document, and marked as proprietary or confidential. If submitting 
information on a disk or CD ROM, mark the outside of the disk or CD 
ROM, and identify electronically within the disk or CD ROM the specific 
information that is proprietary or confidential.
    Under 14 CFR 11.35(b), if the FAA is aware of proprietary 
information filed with a comment, the agency does not place it in the 
docket. It is held in a separate file to which the public does not have 
access, and the FAA places a note in the docket that it has received 
it. If the FAA receives a request to examine or copy this information, 
it treats it as any other request under the Freedom of Information Act 
(5 U.S.C. 552). The FAA processes such a request under Department of 
Transportation procedures found in 49 CFR part 7.

B. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the 
Internet by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies or
    3. Accessing the Government Printing Office's Web page at http://www.gpo.gov/fdsys/.
    Copies may also be obtained 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) 267-9677. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this proposed rule, 
including economic analyses and technical reports, may be accessed from 
the Internet through the Federal eRulemaking Portal referenced above.

List of Subjects in 14 CFR Part 187

    Administrative practice and procedure, Air transportation.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend chapter I of title 14, Code of Federal 
Regulations as follows:

PART 187--FEES

0
1. Revise the authority citation for part 187 to read as follows:

    Authority:  31 U.S.C. 9701; 49 U.S.C. 106(f), 106(g), 106(l)(6), 
40104-40105, 40109, 40113-40114, 44702, 45301.

0
2. Revise Sec.  187.1 to read as follows:


Sec.  187.1  Scope.

    This part prescribes fees only for FAA services for which fees are 
not prescribed in other parts of this chapter or in 49 CFR part 7. The 
fees for services furnished in connection with making information 
available to the public are prescribed exclusively in 49 CFR part 7. 
Appendix A to this part prescribes the methodology for computation of 
fees for certification services performed outside the United States. 
Appendix C to this part prescribes the methodology for computation of 
fees for production certification-related services performed outside 
the United States.
0
3. Add Sec.  187.3 to read as follows:


Sec.  187.3  Definitions.

    For the purpose of this part:
    Great circle distance means the shortest distance between two 
points on the surface of the Earth.
    Overflight means a flight through U.S.-controlled airspace that 
does not include a landing in or takeoff from the United States.
    Overflight through Enroute airspace means an overflight through 
U.S.-controlled airspace where primarily radar-based air traffic 
services are provided.
    Overflight through Oceanic airspace means an overflight through 
U.S.-controlled airspace where primarily procedural air traffic 
services are provided.
    U.S.-controlled airspace means all airspace over the territory of 
the United States, extending 12 nautical miles from the coastline of 
U.S. territory; any airspace delegated to the United States for U.S. 
control by other countries or under a regional air navigation 
agreement; or any international airspace, or airspace of undetermined 
sovereignty, for which the United States has accepted responsibility 
for providing air traffic control services.
0
4. Add Sec. Sec.  187.51, 187.53, and 187.55 to read as follows:


Sec.  187.51  Applicability of overflight fees.

    (a) Except as provided in paragraphs (c) or (d) of this section, 
any person who conducts an overflight through either Enroute or Oceanic 
airspace must pay a fee as calculated in section 187.53.
    (b) Services. Persons covered by paragraph (a) of this section must 
pay a fee for the FAA's rendering or providing of certain services, 
including but not limited to the following:
    (1) Air traffic management.
    (2) Communications.
    (3) Navigation.
    (4) Radar surveillance, including separation services.
    (5) Flight information services.
    (6) Procedural control.
    (7) Emergency services and training.
    (c) The FAA does not assess a fee for any military or civilian 
overflight operated by the United States Government or by any foreign 
government.
    (d) Fees for overflights through U.S.-controlled airspace covered 
by a written FAA agreement or other binding arrangement are charged 
according to the terms of that agreement or arrangement unless the 
terms are silent on fees.


Sec.  187.53  Calculation of overflight fees.

    (a) The FAA assesses a total fee that is the sum of the Enroute and 
Oceanic calculated fees.
    (1) Enroute fee. The Enroute fee is calculated by multiplying the 
Enroute rate in paragraph (c) of this section by the total number of 
nautical miles flown through each segment of Enroute airspace divided 
by 100 (because the Enroute rate is expressed per 100 nautical miles).
    (2) Oceanic fee. The Oceanic fee is calculated by multiplying the 
Oceanic rate in paragraph (c) of this section by the total number of 
nautical miles flown through each segment of Oceanic

[[Page 52224]]

airspace divided by 100 (because the Oceanic rate is expressed per 100 
nautical miles).
    (b) Distance flown through each segment of Enroute or Oceanic 
airspace is based on the great circle distance (GCD) from the point of 
entry into U.S.-controlled airspace to the point of exit from U.S.-
controlled airspace based on FAA flight data. Where actual entry and 
exit points are not available, the FAA will use the best available 
flight data to calculate the entry and exit points.
    (c) The rate for each 100 nautical miles flown through Enroute or 
Oceanic airspace is:

------------------------------------------------------------------------
               Time period                 Enroute rate    Oceanic rate
------------------------------------------------------------------------
Through September 30, 2015..............           56.86           21.63
October 1, 2015 through September 30,              58.45           23.15
 2016...................................
October 1, 2016 through September 30,              60.07           24.77
 2017...................................
October 1, 2017 and beyond..............           61.75           26.51
------------------------------------------------------------------------

    (d) The formula for the total overflight fee is:
Rij = E*DEij/100 + O*DOij/100

Where:

Rij = the total fee charged to aircraft flying between 
entry point i and exit point j.
DEij = total distance flown through each segment of 
Enroute airspace between entry point i and exit point j.
DOij = total distance flown through each segment of 
Oceanic airspace between entry point i and exit point j.
E and O = the Enroute and Oceanic rates, respectively, set forth in 
paragraph (c) of this section.

    (e) The FAA will review the rates described in this section at 
least once every 2 years and will adjust them to reflect the current 
costs and volume of the services provided.


Sec.  187.55  Overflight fees billing and payment procedures.

    (a) The FAA will send an invoice to each user when fees are owed to 
the FAA. If the FAA cannot identify the user, then an invoice will be 
sent to the registered owner. Users will be billed at the address of 
record in the country where the aircraft is registered, unless a 
billing address is otherwise provided.
    (b) The FAA will send an invoice if the monthly (based on Universal 
Coordinated Time) fees equal or exceed $250.
    (c) Payment must be made by one of the methods described in Sec.  
187.15(d).

Appendix B to Part 187--[Removed and Reserved]

0
5. Remove and reserve Appendix B to Part 187.

    Issued under authority provided by 49 U.S.C. 106(f) and 45302, 
in Washington, DC, on August 24, 2015.
David Rickard,
Director, Office of Financial Analysis.
[FR Doc. 2015-21293 Filed 8-27-15; 8:45 am]
 BILLING CODE 4910-13-P