81 FR 85843 - Update of Overflight Fee Rates
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration Federal Register Volume 81, Issue 229 (November 29, 2016)
Federal Aviation Administration
Federal Register Volume 81, Issue 229 (November 29, 2016)
| Page Range | 85843-85854 | |
| FR Document | 2016-28589 |
[Federal Register Volume 81, Number 229 (Tuesday, November 29, 2016)] [Rules and Regulations] [Pages 85843-85854] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28589] ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 187 [Docket No.: FAA-2015-3597; Amdt. No. 187-36] RIN 2120-AK53 Update of Overflight Fee Rates AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This final rule updates existing overflight fee rates using Fiscal Year (FY) 2013 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 is increasing the rates for enroute and oceanic overflights based on Fiscal Year (FY) 2013 cost and air traffic activity data. The FAA is phasing in this rate increase over 3 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 is making several organizational and clarifying revisions to the overflight fee requirements. DATES: This rule is effective January 1, 2017. ADDRESSES: For information on where to obtain copies of rulemaking documents and other information related to this final rule, see ``How to Obtain Additional Information'' in the SUPPLEMENTARY INFORMATION section of this document. FOR FURTHER INFORMATION 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]. SUPPLEMENTARY INFORMATION: I. Executive Summary On August 28, 2015, the FAA published the notice of proposed rulemaking (NPRM), Update of Overflight Fee Rates (80 FR 52217). This rulemaking updates the existing overflight fees (last updated in a 2011 [[Page 85844]] Final Rule) using more current FAA cost accounting and air traffic activity data. The FAA is increasing the rates for enroute and oceanic overflights over three 12-month intervals to bring cost recovery from FY 2008 to FY 2013 recovery. The following table shows the increases: Table 1--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 January 1, 2017 to January 1, 2018...... 58.45 23.15 January 1, 2018 to January 1, 2019...... 60.07 24.77 January 1, 2019 and Beyond.............. 61.75 26.51 ------------------------------------------------------------------------ Each fee rate will be effective for a 12-month period. However, the FAA will not make fee adjustments based on fiscal year or calendar year, but rather in 12-month intervals based on the effective date of this final rule. The FAA received 74 comments to the NPRM. The Aircraft Owners and Pilots Association (AOPA) and 37 individuals (25 of whom were part of a form letter campaign) raised the issue that the $250 overflight fee billing threshold has not been raised while the fee rate has been raised. As a result, flights that were not getting billed in previous years because they were below the $250 threshold amount are now receiving a bill. Based on the comments received and subsequent analysis, the FAA is increasing the overflight fee billing threshold from $250 to $400. The FAA also finalizes several organizational and content revisions to part 187 to clarify the overflight fees requirements. Summary of Costs and Benefits of the Final Rule The higher overflight rates based on FY 2013 unit costs will 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 fee increases through the third 12-month interval--when the full increase in rates will have taken place--is $9,560,692 for foreign operators and $141,888 for domestic operators. The increased fees 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. Authority for This Rulemaking The FAA's authority to issue rules on 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 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 final rule is within the scope of that authority. III. Background A. History of Overflight Fees The FAA's overflight fees were initially authorized in section 273 of the Federal Aviation Reauthorization Act of 1996. After a series of legal challenges and refinements, overflight fee rates were implemented in their current form in 2001. Since that time the fee rates have been based on cost data from the FAA's Cost Accounting System and air traffic data from the FAA's Traffic Flow Management System (TFMS). They were last updated in 2011. 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. B. 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 process of updating the overflight fee rates. 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. For a full discussion of the ARC's recommendations and FAA's responses, see the NPRM published at 80 FR 52218-52219. IV. Discussion of the Final Rule The FAA received 74 comments to the FAA's notice of proposed rulemaking to update the fee rates. Sixty-eight comments were received from individuals. Of the 68 individual comments received, there were 25 commenters who commented as part of a form letter campaign that focused on the interests of general aviation pilots flying from the U.S. to the Caribbean who make one or more intermediate stops enroute due to the aircraft's limited range or human physiological needs.\1\ The FAA also received comments from three carriers and three associations: Carriers included British Airways, Lufthansa Airlines and Air Canada, and associations included National Airlines Council of Canada (NACC), International Air Transport Association (IATA) and Aircraft Owners and Pilots Association (AOPA). --------------------------------------------------------------------------- \1\ The flight leg between the intermediate fuel or rest stop outside of the United States and the destination outside of the United States qualifies as an overflight generating a fee where the flight leg transits U.S.-controlled airspace. --------------------------------------------------------------------------- Commenters raised a total of 17 issues. These issues, as well as FAA's responses, are discussed below. A. Overflight Fee Billing Threshold AOPA and 37 individuals (25 of whom were part of the form letter campaign) raised the issue that the $250 overflight fee billing threshold should be raised. Their concern was that while the overflight fee rate has increased, the billing threshold has not increased. As a result, flights that were not being billed in previous years because they [[Page 85845]] were below the threshold are now receiving a bill. Commenters also asked that the threshold be increased to $450 and that the amendment should provide for automatic adjustments to correspond with future increases in overflight fees rates. FAA concurs that the overflight fee billing threshold should be increased. In consideration of the comments, the FAA has analyzed the minimum threshold for overflight billings and has decided to increase this minimum threshold from $250 to $400 as part of this rulemaking. Overflight fee rates (per 100 nautical miles) in the August 2001 final rule were $33.72 for enroute and $18.94 for oceanic and the rule included a minimum billing threshold of $250. The NPRM proposed the following rates over a 3 year period: Table 2--Proposed Enroute and Oceanic Fee Rates ------------------------------------------------------------------------ Enroute rate Oceanic rate Revision date (per 100 nm) (per 100 nm) ------------------------------------------------------------------------ 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 ------------------------------------------------------------------------ This final rule adopts the rates as proposed. The rates under this final rule are 83% higher for enroute and 40% higher for oceanic as compared with the rates in the 2001 final rule ($33.72 for enroute and $18.94 for oceanic). The minimum billing threshold of $250 has been updated to account for the percentage growth in the fee rates, resulting in a threshold of $457.81 for enroute and $349.92 for oceanic. A weighted average of the two rates is then calculated using actual FY 2014 enroute and oceanic miles to calculate the updated billing threshold of $400. B. Excluding General Aviation AOPA and 67 individuals (25 of whom were part of a form letter campaign) commented that U.S. general aviation should be exempt from paying overflight fees. These commenters stated that Congress did not intend to impose overflight fees on general aviation when it granted FAA authority to establish overflight fees. Commenters also stated that charging general aviation traffic does little to recover air traffic control costs and general aviation traffic should not be burdened with overflight fees since they are an existing active consumer of fuel and other taxes which fund FAA and aviation services. Further, commenters stated their view that because the FAA excluded enroute Guam and San Juan costs from total costs in the NPRM, that FAA therefore acknowledged that these fees should not apply to U.S. general aviation traffic. The FAA notes that Congress did not differentiate between general aviation and commercial aviation in the overflight fees statute. Title 49 U.S.C. 45301 (a) states that ``[t]he Administrator shall establish a schedule of new fees, and a collection process for such fees, for . . . [a]ir traffic control and related services provided to aircraft other than military and civilian aircraft of the United States government or of a foreign government that neither take off from, nor land in, the United States.'' Similarly, under the FAA's Fee Regulation, 14 CFR part 187, App. B, any person who conducts a flight through U.S.-controlled airspace that does not include a landing or takeoff in the United States must pay a fee for the FAA's rendering or providing certain services, including but not limited to the following: Air traffic management; communications; navigation; radar surveillance, including separation services; flight information services; procedural control; and emergency services and training. Consistent with the statutory and regulatory requirements, the FAA is required to collect overflight fees from any person who transits US airspace and neither takes off or lands in the United States. Neither the statute nor the regulation permit the FAA to exclude general aviation operators or to consider whether one aviation user group utilizes air traffic control services more than another. Additionally, there is no statutory or regulatory exception to the overflight fee requirement when persons covered by the requirement pay fuel or other related aviation taxes. With regard to enroute Guam and San Juan costs and miles being excluded, the FAA has determined that the NPRM incorrectly stated that the combined enroute Guam and San Juan control facilities ``may handle a mix of general and commercial aviation traffic.'' The FAA had intended to state that these control facilities ``may handle a mix of terminal and enroute aviation traffic.'' This correction does not impact the underlying analysis. Overflight fees are assessed on all traffic types with the exceptions noted in the August 28, 2015 NPRM, which stated that ``The FAA's costs used for this fee calculation are total costs because the services provided benefit all system users, including overflight users''. 80 FR at 52218. While combined control facilities may handle a mix of Terminal and Enroute aviation traffic, this is not an issue because 49 U.S.C. 45301, as noted above, does not distinguish or exempt general aviation users from the fees. C. General Aviation Charged for Same Day Fuel Stops AOPA and 32 individuals (25 of whom were part of a form letter campaign) stated that the FAA's proposal would impose overflight fees on U.S. registered general aviation operations that land in or depart from the United States but also make intermediate stops enroute due to the aircraft's limited range or human physiological needs. AOPA provided an example as follows: [A]n aircraft departs from an airport in Florida destined for the Dominican Republic in the Caribbean, but stops enroute at Nassau to refuel before continuing on to the Dominican Republic that same day. While overflight fees will not be assessed for the first leg of the flight between Florida and the fuel stop in Nassau, overflight fees under the NPRM will be assessed for the second leg of the flight between the fuel stop and the Dominican Republic. In comparison, a non-stop flight between Florida and the Dominican Republic would not result in any overflight fees. The commenters also noted that when general aviation is charged for same-day fuel stops, a significant amount of time is wasted in working with the FAA to get these charges reversed. The FAA emphasizes that overflight fees are assessed based on an evaluation of each flight. During the evaluation process, each flight is reviewed to consider whether an intermediate stop for fuel has occurred. A flight is not considered to be an overflight (i.e., triggering an overflight fee) if it departs or lands in the United States and the FAA can determine that an intermediate [[Page 85846]] stop for fuel occurred. In that case, no fee is assessed. The amount of time on the ground at an intermediary location is considered when making the determination. D. Compromising Safety AOPA and 6 individuals stated that by failing to recognize the limitations of most general aviation aircraft, the proposed rule may encourage non-stop flights to or from U.S. airports in order to avoid overflight fees, even though an intermediate fuel stop would increase the safety of the operation or is otherwise physiologically necessary. Commenters argued that this is not in the best interest of safety. One commenter stated that to avoid the fees ``[t]he pilots will not use air traffic services. They will not travel, or travel unsafely, perhaps to the point of turning off transponders. And with this will cause preventable accidents.'' As previously stated, overflight fees are assessed based on an evaluation of each flight. A flight is not considered to be an overflight if it departs or lands in the United States. This can include intermediate stops for fuel. Additionally, as discussed previously, the FAA is raising the minimum billing threshold from $250 to $400 as part of this rulemaking action. This will provide for air traffic control services in many instances without the pilot necessarily incurring any cost. Discussion of turning off transponders is an unlikely scenario and an unnecessary action. Use of a transponder in and of itself will not generate user fees. User fees are based on the filing of a flight plan and receiving air traffic control services such as flight following or instrument flight rules separation services. A discrete transponder code would also need to be assigned to the aircraft. One could continue to use the transponder without incurring any cost, such as squawking 1200, indicating a Visual Flight Rules (VFR) operation without necessarily receiving air traffic control services. A desire to reduce or minimize the dollar cost associated with any flight does not alleviate a pilot from the duties and responsibilities associated with acting as pilot in command. The pilot in command is the final authority and ultimately responsible for the operational safety of that flight. Pilots avoiding necessary fuel stops and/or turning off transponders to avoid air traffic control services and fees will likely jeopardize the safety of that flight and create unnecessary risk. The overflight fee must be considered part of the planning and associated cost of any flight, where a pilot does not take off or land from an airport located in the United States. Again, intermediate fuel stops that are of a short duration can be considered part of an overall flight that originates or departs from a United States location. E. Cost Recovery Rate Increase In the NPRM, the FAA asked for comments on whether it should expedite the increase of overflight fee rates to achieve full cost recovery. IATA, NACC, Lufthansa, Air Canada and British Airways opposed an expedited increase to enable cost recovery and suggested that the overflight fee rates be frozen at their present level until the ARC is re-convened and a new proposal for the rate increases is discussed and agreed upon. Air Canada noted that the Air Transport Agreement between Canada and the United States states that user charges must be ``just, reasonable, and not unjustly discriminatory.'' The FAA has reviewed the feedback on expediting the increase in overflight fee rates for cost recovery and has decided to proceed with the rate increases proposed in the NPRM without expediting them. Congress has directed the FAA to establish and maintain overflight fees ``reasonably related to the Administration's costs.'' To retain the cost-based relationship, that means the FAA must periodically review and revise its overflight fee rates, and that is why the FAA is now proceeding to the final rule to impose the fee rates proposed in the NPRM. The FAA believes that fees ``reasonably related to the Administration's costs'' would necessarily be ``just, reasonable, and not unjustly discriminatory,'' under the Transport Agreement. In addition, the overflight fees are not unjustly discriminatory because they are assessed only on aircraft flights that transit U.S.-controlled airspace, but neither land in nor depart from the United States. Both foreign and domestic operators are charged in the same manner. Those aircraft that do not transit U.S.-controlled airspace pay no fee. F. Marginal Allocation Lufthansa, Air Canada, and IATA commented on the issue of the cost base used for the fee calculation and stated two concerns: The first comment on marginal cost allocation stated generally is that costs for services neither used nor required by overflights should be removed from the cost base. The commenters also expressed concern that the level of overflight fees goes beyond that which is reasonably related to costs for providing air traffic control and related services to these operations. Commenters pointed out that the ARC noted that the amount recovered for non-overflight \2\ services has remained unchanged, while overflight fees have continued to rise at a steady pace over the same period. IATA stated that insufficient data has been provided to justify FAA's claim that under the ARC proposal, ``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.'' --------------------------------------------------------------------------- \2\ ``Non-overflight services'' refers to services provided by the FAA to aircraft that do land in or takeoff from the United States, and operate in U.S. airspace under the direction of the FAA. --------------------------------------------------------------------------- Second, these commenters asserted that it is difficult to allocate overhead costs in a fair and justifiable manner to the air navigation cost base, specifically to the cost base of overflight charges. They asserted that this is because, contrary to most other air navigation service providers around the world, the FAA does not exclusively provide air traffic control services and hence, according to Air Canada, there is a fundamental problem with the FAA's ``organizational structure and complexity and the size of the overhead cost.'' The FAA notes the cost base concerns raised by Lufthansa, Air Canada, and IATA are not accurate. The methodology for estimating the fee is the same one used in the FY 2011 Final Rule to which the ARC had agreed. Since the original issuance of the Final Rule relating to overflight fees in August 2001, the statutory standard for the fees was relaxed by Congress to provide that the fees need to be ``reasonably related'' to costs. This is in contrast to the previous standard in effect at the time of the issuance of the original Interim Final Rule in August 2000. That standard provided that the fees needed to be ``directly'' related to the FAA's costs of providing the air traffic control and related services. The FAA continues to use the same methodology for calculating the fee rates as was used in the 2011 update. The overflight fee rate is calculated by dividing total ATO costs by the total flight miles. The rate calculation methodology is used separately for both enroute and oceanic cost and mile data to derive the overflight fee rate for enroute and oceanic. ATO costs and flight miles used in this calculation are system totals and not related only to overflights. Therefore, there is no need to exclude any costs from the cost base. [[Page 85847]] The FAA and ARC proposals are both based on FY 13 actual rates. The difference in methodology is that the FAA proposed a 3 year compounded annual growth rate (CAGR) phased-in over 3 years. The ARC proposal is based on a 5 year CAGR that only includes 3 years of phase-in. After year 3 the ARC recommended that a new ARC be re-convened to determine the need for updates after that period. Under the ARC's proposal therefore, the FAA would recover less than the FY13 levels. In response to IATA's statement that the FAA has not provided the data to support its claim that ``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 provides the following details (per 100 nautical miles): Table 3--Cost Recovery Comparison ------------------------------------------------------------------------ Enroute Oceanic ------------------------------------------------------------------------ FAA Rate--FY 2008 Cost Recovery......... $56.86 $21.63 FAA Rate--FY 2013 Cost Recovery......... 61.75 26.51 FAA Increase............................ 4.89 4.88 ARC Final Proposed Rate................. 59.75 24.09 ARC Increase............................ 2.89 2.46 ARC Proposed Increase as % of FAA 60% 50% Increase............................... ------------------------------------------------------------------------ Inclusion of overhead is a commonly accepted practice in fee setting, is consistent with generally accepted accounting principles, and is a specifically allowable element of cost under Office of Management and Budget (OMB) Circular No. A-25 on User Charges as well as International Civil Aviation Organization's (ICAO'S) Policies on Charges for Airports and Air Navigation Services. In addition, the same Act of Congress that changed the above fee setting standard from ``directly'' to ``reasonably related'' also gave the Administrator sole and final discretion in the determination of FAA costs. 49 U.S.C. 45301(b)(1). Again, the methodology used for determining overhead also remains unchanged from the FY2011 Final Rule and is based on FAA's Cost Accounting System. G. FAA Costs Lufthansa, Air Canada, NACC and IATA commented on the issue of increasing FAA costs. They expressed concern over the steady pace at which FAA operational costs continue to rise and their impact on overflight fees. Industry partners are expected to embark on cost control and cost reduction efforts and the FAA is urged to commit to a cost efficiency target that remains below inflation. Also, IATA expressed disagreement with the NPRM stating that the FAA ``believes forecasting based on projected traffic is more appropriate than using arbitrary cost targets'' and stated that it has found that unanticipated and untimely economic occurrences can significantly impact forecast-based traffic projections, resulting in inaccurate accounting of traffic demand, business plans, required resources, and funding streams. As an example, over the past several years, the FAA forecast has consistently overestimated the growth projections for operations in the National Airspace System. Lufthansa suggested freezing the overflight fee rates at their current level and ``reconsider the whole question of overflight fees.'' The issue of FAA's operational costs, and the rate at which they may increase, is outside the scope of this rulemaking. Under the statutory requirement, overflight fees must be ``reasonably related to the Administration's costs, as determined by the Administrator, of providing the services rendered.'' 49 U.S.C. 45301(b)(1). Neither the FAA traffic forecast nor cost targets are used in the fee calculation, but rather fees are calculated based on actual cost and miles. H. Overflight Fee Calculation Cost Base Lufthansa, IATA and Air Canada commented on the cost base used for the overflight fee rate calculation. Lufthansa and Air Canada both asserted that Air Route Traffic Control Center's (ARTCC's) have staff dedicated to manage, organize and optimize traffic approaching major airports in metropolitan areas. These working positions and all associated costs are included in the cost base for enroute, as the traffic concerned is still hundreds of miles away from the respective TRACON. As part of the enroute cost base, the costs are partly paid for by overflight fees. However, according to the commenters, overflying traffic does not require those services and hence, these costs should be excluded from the cost base used for the rate calculation. IATA also reiterated that the ARC recommended that the costs for services not used by overflights (e.g., flow control into major airports and approach services at airports and airfields not served by a TRACON) be removed from the cost base. Lufthansa also commented that it is unacceptable for the FAA to simply qualify services as ``de minimis'' without providing any details and justification. According to Lufthansa, ``[t]he NPRM on overflight fees is about facts and data and transparency of these. The term[] ``de minimis'' is a qualification, but not a quantification, and is not appropriate or acceptable in this context.'' The FAA does not agree that costs relating to flow control should be removed from the enroute cost base. The Traffic Management Unit personnel at the enroute centers are responsible for the safe and efficient flow of all traffic, including overflights, in their airspace, and it would be neither reasonable nor practicable for the FAA to attempt to sort out and exclude the portion of such costs solely attributed to overflights. Moreover, air traffic flow management is a specifically allowable item for cost recovery under ICAO's Policies on Charges for Airports and Air Navigation Services (ICAO Document 9082). While it is true that there are low activity airports and airfields that are not served by a TRACON or an air traffic control tower, and that in these instances the air traffic control services are provided by enroute controllers, the level of such activity is sufficiently low that it does not require increased staffing. See 76 FR 43114-43115 (July 20, 2011). I. Failed ARC Process British Airways, Air Canada, Lufthansa, IATA and NACC expressed disappointment that the FAA has chosen to dismiss the ARC's recommendations and stated that they viewed the ARC process as failed. They stated concern that the FAA's proposed rule included several new methodologies for which there had not [[Page 85848]] been any consultation with industry and for which prior indication and relevant information required to accurately determine the cost-based charges had not been provided. Had any prior indication or concerns been raised, these ARC members stated that they could have provided guidance to the Agency. Additionally, these ARC members stated that the FAA released its NPRM one month prior to the current rate expiration date, leaving no time for the ARC members to react to it and develop an alternative that could be supported by all parties. Under the ARC's May 1, 2013 Charter, the objective of the ARC was to provide ``advice and recommendations on the appropriate amounts for future overflight fees.'' However, the FAA has no obligation to accept the advice and recommendations; it takes the ARC's report under advisement. The agency also is not required to coordinate with the ARC after the ARC has issued its report. In most cases, the ARC would be terminated after its business has concluded. While the FAA considered the ARC's recommendations, it declined to implement the recommendations. Also, FY 2015 enroute and oceanic overflight fee rates do not have a set expiration date and remain in effect until notice of new rates is published and the new rates are effective. Consequently, the NPRM was not released one month prior to the expiration date of these fee rates. J. ARC Data Transparency Lufthansa, British Airways and IATA commented that the ARC was not provided with relevant information such as staffing levels, labor costs, actual and projected traffic growth, and efficiency measures, to be able to accurately determine the cost-based user fee. They stated that without this information it is impossible to accurately determine cost based charges. The FAA does not concur that information relevant to overflight fees was kept from the ARC. The FAA provided detailed responses to ARC questions in 2013. Moreover, during the ARC meetings, the FAA provided the following relevant information to ARC members:Number of airports providing service for approach and departure services Difference between lower and higher level sectors IFR flights operating from these airports Inclusion and exclusion in cost allocation for enroute Stable and decreasing expenses from 2010 to 2013 Specific FAA initiatives to improve efficiency Classification of flight miles for IFR and VFR traffic Detailed description and breakout of overhead costs, staffing levels, and capital expenditure Methodology for overflight fee calculation Results of sequestration on ATO costs Current rates and collection data for overflight fees Use of overflight fee collections Cost Accounting System cost of service documents Enroute and oceanic flight miles 2013 President's Budget (budget in effect when the ARC met) 2013 Senate Appropriations Bill Detailed summary of FAA budget breakdown Detailed summary specific to FAA operating budget Detailed summary specific to FAA capital programs Detailed summary specific to FAA NextGen programs Detailed summary specific to FAA NextGen Research, Engineering & Development Air Traffic Controller Workforce headcount, hires, and attrition System wide Traffic and Controller Trends The data stated above as well as responses to the ARC's questions include the details to accurately determine cost based fee charges. K. Guam and San Juan Costs and Miles Exclusion Lufthansa noted FAA's proposal in the NPRM to exclude enroute Guam and San Juan costs from total FAA costs. Lufthansa noted that while it did not disagree with the exclusion in principle, it did not see in the NPRM how the exclusion would impact cost base, traffic, and fees. Lufthansa then questioned why this change and others in the NPRM had not been brought to the attention of the ARC. The FAA response is as follows: As an initial matter, the ARC concluded business on February 14, 2014, when it issued its recommendations. It was not until August 28, 2015, however, that FAA announced in the NPRM that it was proposing to exclude Guam and San Juan costs from total FAA costs. As a result, this change could not have been brought before the ARC, which was terminated 18 months prior to the time that the NPRM was issued. Costs: Guam and San Juan facilities are being excluded from the enroute costs to be consistent with Honolulu. This determination was made after reviewing the ARC recommendations. As a result, the FAA enroute costs have decreased. Traffic Mileage: The enroute miles associated with Honolulu and oceanic miles for Guam were double-counted when presented to the ARC as they are also counted as part of the Oakland oceanic airspace. It was determined that the mileage was to be removed for these facilities. As a result, the total flight miles (GCD-nm) for enroute and oceanic were lower. Net Impact: With the decrease in costs and flight miles for enroute, the per 100nm fee decreased. On the oceanic side, the costs remained un-changed while the flight miles decreased, resulting in an increased per 100 nm fee. This change was not brought to the attention of the ARC before the publication of the NPRM because, at the time of the change, the FAA had already received the ARC's recommendations. Table 4--Impact of the Guam and San Juan Change ------------------------------------------------------------------------ Prior to Guam and Post Guam and San San Juan change Juan change ------------------------------------------------------------------------ Enroute ------------------------------------------------------------------------ FAA Cost.......................... $4,645,629,212 $4,597,808,058 Total Flight Miles (GCD-nm)....... 7,504,243,185 7,445,668,883 Rate Prior to Change (/100nm)..... $61.91 $61.75 ------------------------------------------------------------------------ Oceanic ------------------------------------------------------------------------ FAA Cost.......................... $184,391,603 $184,391,603 [[Page 85849]] Total Flight Miles (GCD-nm)....... 708,610,831 695,620,413 Rate After Change (/100nm)........ $26.02 $26.51 ------------------------------------------------------------------------ Enroute fees are $61.75 per 100 nautical miles (based on FY13 cost recovery) and oceanic fees are $26.51/100 nautical miles (based on FY13 cost recovery). L. Weight-Based Fee Rates Thirteen individuals stated that it is not fair that small planes are charged the same fee rate as large commercial planes. They suggested that a tiered rate be charged on only U.S.-registered aircraft with a not-to-exceed amount depending upon the aircraft total gross weight similar to landing fees at larger airports or that the rate be based on the number of seats on the plane. The FAA does not concur that the fee rates should be charged based on weight or the number of seats on the aircraft. As noted above, the FAA is required to collect overflight fees from any person who transits US airspace and neither takes off or lands. 49 U.S.C. 45301(a); 14 CFR part 187, App. B. The statutory requirement is that the overflight fees be ``reasonably related to the Administration's costs, as determined by the Administrator, of providing the services rendered.'' 49 U.S.C. 45301(b). No distinction is made in the law between types of aircraft, aircraft weight, or number of seats. In addition, VFR aircraft utilizing flight following services are provided similar service as IFR traffic. They are both charged overflight fees. M. General Aviation Excluded From the Aviation Rulemaking Committee One individual stated that general aviation was not represented in the ARC, which was established to examine overflight fees and provide the FAA recommendations on future overflight fee rates. The 2013 ARC inadvertently did not include representatives from general aviation because historically, members of this ARC and its predecessors were primarily composed of the parties from the extensive 1997-2003 overflight fees litigation--the Air Transport Association of Canada and seven international air carriers. Representatives from general aviation were not parties to the litigation. Membership of the 2013 ARC appears to have been an outgrowth of the 2008 overflight fees ARC, which appears to have been an outgrowth of the 2004 ARC on overflight fees. According to the August 26, 2009 ARC Report, ``[a]s part of the settlement with the litigating carriers, the FAA agreed to the creation of the ARC, which was to consist of FAA and industry representatives working to examine in depth the FAA's methodology for overflight fees and to recommend whether it should be modified.'' Despite the fact that general aviation was not represented on the ARC, general aviation was provided an opportunity to review and comment on the final rule. Twenty-five of the 74 comments that the FAA received in response to the NPRM were filed by advocates of general aviation. As noted above, the general aviation commenters raised the issue that the $250 overflight fee billing threshold had not been raised while the fee rate had been raised. As a result, flights that were not getting billed in previous years because they were below the $250 threshold amount were now receiving a bill. As noted, the FAA concurred with the general aviation commenters that billing threshold should be increased. In consideration of the comments, the FAA will be increasing the minimum threshold from $250 to $400 as part of this rulemaking. N. General Aviation Visual Flight Rules Lufthansa, Air Canada, NACC and IATA asked for further clarification on the timeline of VFR flights being included in the calculation of overflight fees. Additionally, three individuals stated that because VFR traffic neither requires nor receives the same level of service as IFR traffic, VFR traffic should be charged less or excluded from the overflight fees requirement. VFR traffic utilizing flight following services are already included in the total mileage. Hence, there is no need for a timeline. In order to provide VFR flight following services, air traffic control generates a ``flight plan'' within FAA systems that is captured in the TFMS. This allows the aircraft call-sign (typically tail number for VFR flights) to be displayed and tracked against the discrete beacon code assigned by air traffic control. Non-discrete beacon codes (e.g., 1200) are not provided by TFMS and therefore not captured in the overflights data. These VFR flights would not be assessed an overflight fee. This is consistent with the recommendation. Air traffic control actively monitors and controls VFR flight following aircraft providing them with updates and guidance when necessary. VFR aircraft utilizing flight following are provided similar service as IFR traffic. O. Great Circle Distance Lufthansa, Air Canada, IATA and NACC commented on the use of great circle distance for calculating the nautical mile distance used in the overflight fee rate calculation. They stated that great circle distance was not part of the ARC agenda, nor was it discussed in terms of calculating overflight fees and stress the importance of ensuring the adoption of great circle distance be revenue neutral to the FAA. Further, they ask that a clearly defined GCD catalogue be published and consulted with airline users before it takes effect and that the FAA provide examples of same-route cost comparisons between great circle distance, as proposed, versus cost data (via the Cost Accounting System) and air traffic data (from TFMS). The FAA has not changed the application of great circle distance within overflights. The great circle distance methodology is the same as used in the previous rulemaking (2011 Final Rule) with no change to the way the fees are generated. The formula in the rule was rewritten to enhance clarity and transparency concerning how the fees are assessed. Since the great circle distance use and methodology remains the same, FAA has determined there is not a need to consult with the airline users before taking effect (since it has already been in effect), nor is there a need for a great circle distance catalogue to be published. P. Regulatory Costs on Small Entities According to IATA, the NPRM indicates that there were 469 domestic operators (mostly small entities) that overflew U.S. controlled airspace in FY 2013. The NPRM provided assurances that the rulemaking would not have a significant economic impact on small entities (estimated at an average increase of $36.50 per operation). In its comments, IATA asked for further detail [[Page 85850]] as to the air traffic control services rendered to these domestic operators: ``how much they cost and (most importantly) who is covering those costs.'' IATA stated that its members should not be required to cover the costs incurred by these domestic operators. The FAA concurs that IATA members are not and will not be assessed costs incurred by domestic operators. Any aircraft that overflies U.S. controlled airspace will be charged the same overflight fee, calculated based on systemwide cost and traffic, regardless if it is a domestic US or foreign operator. Regardless of the level of exception, which is applied to both domestic and foreign carriers, operator origin does not affect overflight fee billings. Q. Meaning of $250 Billing Threshold Language One individual commented that the NPRM's ``wording of Section 187.55(b) changes the wording in the current rules from a prohibition on the FAA sending an invoice when monthly fees are below the threshold to a statement that the FAA will send an invoice when monthly fees are above the threshold.'' The commenter further stated that, if strictly interpreted, this would allow the FAA ``to send invoices when fees are below the threshold at its discretion'' and would require invoices ``when fees are above the threshold.'' The commenter advised that this would be ``opposite to the original meaning,'' and recommended that ``the prohibition on below-threshold invoices should be restored as this appears unintentional. If intentional, the FAA has offered no justification for the change as would be required by the rulemaking process.'' The current regulatory provision addressing invoicing of overflight fees includes billing and states that the FAA will send an invoice to each user that is covered by this appendix when fees are owed to the FAA. If the FAA cannot identify the user, then an invoice will be sent to the registered owner. No invoice will be sent unless the monthly (based on Greenwich Mean Time) fees for service equal or exceed $250. Users will be billed at the address of record in the country where the aircraft is registered, unless a billing address is otherwise provided. (14 CFR part 187, appendix B, paragraph (f)(1).) Under this provision, if the overflight fee amount owed is less than $250, no invoice will be sent and no billing results. Overflight fees are only assessed when the invoice amount is $250 or more. In the NPRM, FAA suggested regulatory text that would replace the language in appendix B relating to invoicing. (The NPRM proposed to remove and reserve appendix B). (80 FR 52217, 52224 (Aug. 28, 2015).) The FAA does not agree that the change in wording would permit the agency to issue invoices for fees when the fee amount is below the $250 threshold. The FAA also does not agree with the comment that the change would be ``opposite to the original meaning.'' As adopted in this final rule, the proposed language in section 187.55 makes no substantive change. It does nothing different than the existing appendix B provision. In both cases, the FAA will send an invoice if fees are owed. In both cases, if the fees equal or exceed $400, as adjusted from $250 based on the comments received, the FAA will send an invoice. If the fees are less than $400, as adjusted from $250 based on the comments received, then the FAA will not send an invoice and no fees will be owed for the services rendered. As indicated in the NPRM, the FAA proposed this change and others as ``organizational changes to part 187 to clarify the overflight fee requirements.'' 80 FR 52220. The NPRM proposed no substantive changes to the current regulatory provision addressing invoicing of overflight fees found in appendix B, paragraph (f)(1). ``The proposed billing and payment procedures in new Sec. 187.55 are unchanged from those in existing Appendix B.'' 80 FR 52220. V. Summary of Regulatory Text Changes The changes to the existing regulatory text made pursuant to this final rule generally reflect ``organizational changes to part 187 to clarify the overflight fee requirements.'' 80 FR 52220. The FAA has revised the authority citation for part 187 to reflect current law. In Sec. 187.1, ``Scope,'' the FAA has removed the duplicate reference to Appendix A, removed the reference to Appendix B because Appendix B is being removed, and added 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 has added a new Sec. 187.3, ``Definitions,'' section to the rule, which revises four existing definitions from former Appendix B and adds a new definition for ``great circle distance'' consistent with the FAA's method used for calculating overflight fees. The FAA has added a new Sec. 187.51, ``Applicability of overflight fees,'' in which subparagraph (a) specifies who must pay an overflight fee. The FAA has added a new subparagraph (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. The FAA has added a new Sec. 187.53, ``Calculation of overflight fees,'' which in subparagraph (a) retains the formula for calculating overflight fees from the former Appendix B but also clarifies the explanation of calculating that fee. Subparagraph (b) addresses how miles flown through each segment of airspace will 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. Subparagraph (c) includes a table providing the rate for each 100 nautical miles flown through enroute or oceanic airspace. Subparagraph (d) provides the mathematical formula for the total overflight fee. Subparagraph (e) states that the FAA will review the rates described in this section at least once every 2 years and will adjust them to reflect current costs and volume of services provided. In Sec. 187.55, ``Overflight fees billing and payment procedures,'' are unchanged from those in former Appendix B. VI. Regulatory Notices and Analyses A. Regulatory Evaluation Changes to Federal regulations must undergo several economic analyses. First, Executive Orders 12866 and 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, this 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 [[Page 85851]] 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 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 final rule. In conducting these analyses, FAA has determined that this final rule: (1) Has benefits that justify its costs, (2) is not an economically ``significant regulatory action'' as defined in section 3(f) of Executive Order 12866, (3) is not ``significant'' as defined in DOT's Regulatory Policies and Procedures; (4) will not have a significant economic impact on a substantial number of small entities; (5) will not create unnecessary obstacles to the foreign commerce of the United States; and (6) will not impose an unfunded mandate on state, local, or tribal governments, or on the private sector by exceeding the threshold identified above. These analyses are summarized below. DOT Order 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 to 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 final rule. The reasoning for this determination follows. This rule will institute a 3-year phase-in of rate increases for oceanic and enroute overflights, with rates per 100 nautical miles increasing in three 12-month intervals 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 rate of $26.51 for oceanic services, reached at the end of the third 12-month interval, is derived from the FAA's FY 2013 total cost of providing these services ($184,391,603) divided by the total nautical miles (695,620,413 nm) flown by operators (overflights and non-overflights) in oceanic airspace. An analogous calculation is made to obtain the third 12-month interval rate of $61.75 for enroute services ($4,597,808,058/7,445,668,883 nm). These higher rates based on FY 2013 unit costs will allow the FAA to move closer to full cost recovery of air traffic control services already being provided to operators. Tables 5 and 6 show estimates of the increase in overflight fees for domestic operators and foreign operators for the three 12-month intervals, using FY 2013 overflight mileage totals, thus assuming no annual growth. As the tables show, the present value (at a 7 percent discount rate) in 2013 dollars of the projected fee increases through the third 12-month interval--when the full increase in rates will have taken place--is $141,888 for domestic operators and $9,560,692 for foreign operators. The updated fee rates will 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 5--Domestic Operators--Overflight Fees ---------------------------------------------------------------------------------------------------------------- Domestic Operators Current Year 1 Year 2 Year 3 ---------------------------------------------------------------------------------------------------------------- Oceanic Fees (per 100 nm)....................... $21.63 $23.15 $24.77 $26.51 Oceanic Billings w/o Final Rule................. 528,616 528,616 528,616 528,616 Oceanic Billings w/Final 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 Final Rule................. 634,376 634,376 634,376 634,376 Enroute Billings w/Final 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 6--Foreign Operators--Overflight Fees ---------------------------------------------------------------------------------------------------------------- Foreign Operators Current Year 1 Year 2 Year 3 ---------------------------------------------------------------------------------------------------------------- Oceanic Fees (per 100 nm)....................... $21.63 $23.15 $24.77 $26.51 Oceanic Billings w/o Final Rule................. 28,072,427 28,072,427 28,072,427 28,072,427 Oceanic Billings w/Final 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 the effective date of the rule at a 7% discount rate.\3\ 4. Fees are slightly overstated in that we do not account for the fact that under the old rule operators incurring a bill of less than $250 were not charged, and under the new rule operators incurring a bill of less than $400 will not be charged. Over the 3-year period, FY2013-FY2015, monthly fees of less than $250 were small, constituting between 0.3% and 0.4% of annual total fees, and monthly fees of between $250 and $400 were smaller, constituting between 0.2% and 0.3% of annual total fees. B. Regulatory Flexibility Determination The Regulatory Flexibility Act of 1980 (Pub. L. 96-354, subsection (b)) (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 [[Page 85852]] 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. --------------------------------------------------------------------------- \3\ Office of Management and Budget, Circular A-94, ``Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs,'' October 29, 1992, p. 8. --------------------------------------------------------------------------- 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 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. While the FAA did not receive comments on the regulatory flexibility analysis, the FAA did receive comments from 25 individuals and from AOPA, an industry group representing small entities. They commented that the overflight fees should not be applied to general aviation aircraft and that the fees went up but the $250 threshold was not changed. The FAA notes that Congress did not differentiate between general aviation and commercial aviation in the overflight fee statute. AOPA commented that with the fee increase users were now paying fees when they exceeded the $250 threshold. In response, the FAA has raised the threshold to $400 in this final rule. We ranked in descending order all 469 domestic operators based on their overflight fees for fiscal year 2013 and found that the 14 top ranked operators accounted for more than 40% of that year's total domestic overflight fees. Of these 14 operators we identified 4 as small entities (using a size standard of 1,500 or fewer employees) and found all of them to have an increase in overflight fees as a percentage of annual revenues to be less than 1 percent. 4 5 We believe this rule does not impose a significant economic impact on those small entities. --------------------------------------------------------------------------- \4\ Employment and revenue data is from www.Manta.com. \5\ Since our overflight fees by operator include both enroute and oceanic overflights, we first calculate the weighted average percentage increase in fees from the final rule, which we find to be 14.95%. To assess the economic impact on any one U.S. operator, we then multiply the operator's 2013 operating fees by 14.95% to estimate the increase in that operator's fees as a result of the final rule. We then divide this estimate by the operator's annual revenue to assess the impact of the final rule on the operator. --------------------------------------------------------------------------- Therefore, as provided in section 605(b), the head of the FAA certifies that this rulemaking will not result in a significant economic impact on a substantial number of small entities. 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 rule primarily affects foreign commercial operators. The recovery of costs of providing air navigation services is consistent with ICAO standards and international practice. Foreign operators will 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 will be charged in the same manner. Accordingly, the FAA does not believe this rule will 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 $155.0 million in lieu of $100 million. This 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 International Civil Aviation Organization 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 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 recommendations, the FAA consulted with system users prior to proposing the overflight fee update. 80 FR 52217 (August 28, 2015). Additionally, the FAA invited comments on the proposal as part of its rulemaking process, which permitted participation by all interested parties. G. Environmental Analysis FAA Order 1050.1F 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 [[Page 85853]] categorical exclusion identified in paragraph 5-6.6f and involves no extraordinary circumstances. VII. Executive Order Determinations A. Executive Order 13132, Federalism The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. The agency has determined that this action will 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, will not have Federalism implications. B. Executive Order 13211, Regulations That Significantly Affect Energy Supply, Distribution, or Use The FAA analyzed this final 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 will not be a ``significant energy action'' under the executive order and will 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 will have no effect on international regulatory cooperation. VIII. Additional Information A. Availability of Rulemaking Documents An electronic copy of rulemaking documents may be obtained from the Internet by-- Searching the Federal eRulemaking Portal (http://www.regulations.gov); Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies or Accessing the Government Publishing Office's Web page at http://www.fdsys.gov 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, notice, or amendment number of this rulemaking. All documents the FAA considered in developing this final rule, including economic analyses and technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced above. B. Comments Submitted to the Docket Comments received may be viewed by going to http://www.regulations.gov and following the online instructions to search the docket number for this action. Anyone is able to search the electronic form of all comments received into any of the FAA's dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). C. Small Business Regulatory Enforcement Fairness Act The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document may contact its local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. To find out more about SBREFA on the Internet, visit http://www.faa.gov/regulations_policies/rulemaking/sbre_act/. List of Subjects in 14 CFR Part 187 Administrative practice and procedure, Air transportation. The Amendment In consideration of the foregoing, the Federal Aviation Administration amends 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 new 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 Sec. 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. [[Page 85854]] (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 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 ------------------------------------------------------------------------ January 1, 2017 to January 1, 2018...... 58.45 23.15 January 1,2018 to January 1, 2019....... 60.07 24.77 January 1, 2019 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 $400. (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 November 7, 2016. Michael P. Huerta, Administrator. [FR Doc. 2016-28589 Filed 11-28-16; 8:45 am] BILLING CODE 4910-13-P
![Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Rules and Regulations 85843
(i) Parts Installation Prohibition collection is 2120–0056. Public reporting for DEPARTMENT OF TRANSPORTATION
As of the effective date of this AD, no this collection of information is estimated to
person may install a replacement P/N 97867– be approximately 5 minutes per response, Federal Aviation Administration
1 or P/N 97867–3 hydraulic hose assembly including the time for reviewing instructions,
on an airplane, unless the hydraulic hose completing and reviewing the collection of 14 CFR Part 187
assembly is a serviceable part as defined in information. All responses to this collection
paragraph (h) of this AD. of information are mandatory. Comments [Docket No.: FAA–2015–3597; Amdt. No.
187–36]
(j) Reporting Requirements concerning the accuracy of this burden and
At the applicable time specified in suggestions for reducing the burden should RIN 2120–AK53
paragraph (j)(1) or (j)(2) of this AD, submit a be directed to the FAA at: 800 Independence
report of the results (including no findings) Ave. SW., Washington, DC 20591, Attn: Update of Overflight Fee Rates
of the inspection required by paragraph (g) of Information Collection Clearance Officer,
AGENCY: Federal Aviation
this AD. Send the report to Fokker Services AES–200.
B.V., Technical Services, Service Administration (FAA), Department of
Engineering, P.O. Box 1357, 2130 EL (l) Related Information Transportation (DOT).
Hoofddorp, The Netherlands, email Refer to Mandatory Continuing ACTION: Final rule.
technicalservices@fokker.com. The report Airworthiness Information (MCAI) European
must include the type of damage found and Aviation Safety Agency (EASA) SUMMARY: This final rule updates
airplane flight cycles and also any no Airworthiness Directive 2015–0077, dated existing overflight fee rates using Fiscal
findings. Year (FY) 2013 FAA cost accounting
May 6, 2015, for related information. This
(1) If the inspection was done on or after and air traffic activity data. Overflight
the effective date of this AD: Submit the MCAI may be found in the AD docket on the
Internet at http://www.regulations.gov by fees are charges for aircraft flights that
report within 30 days after the inspection.
(2) If the inspection was done before the searching for and locating Docket No. FAA– transit U.S.-controlled airspace, but
effective date of this AD: Submit the report 2016–6895. neither land in nor depart from the
within 30 days after the effective date of this United States. Overflight fee rates were
(m) Material Incorporated by Reference last updated in 2011. As a result, the
AD.
(1) The Director of the Federal Register FAA is not recovering the full cost of
(k) Other FAA AD Provisions
approved the incorporation by reference the services it provides. The FAA is
The following provisions also apply to this (IBR) of the service information listed in this increasing the rates for enroute and
AD: paragraph under 5 U.S.C. 552(a) and 1 CFR
(1) Alternative Methods of Compliance oceanic overflights based on Fiscal Year
part 51. (FY) 2013 cost and air traffic activity
(AMOCs): The Manager, International
Branch, ANM–116, Transport Airplane (2) You must use this service information data. The FAA is phasing in this rate
Directorate, FAA, has the authority to as applicable to do the actions required by increase over 3 years in equal
approve AMOCs for this AD, if requested this AD, unless this AD specifies otherwise. percentage terms. This is a less
using the procedures found in 14 CFR 39.19. (i) Fokker Service Bulletin SBF28–32–164, burdensome approach than the
In accordance with 14 CFR 39.19, send your dated January 14, 2015. alternative of phasing in the new rates
request to your principal inspector or local (ii) Fokker Service Bulletin SBF100–32– in equal absolute terms, and is the same
Flight Standards District Office, as 166, dated January 14, 2015. methodology used in the previous
appropriate. If sending information directly (3) For service information identified in
to the International Branch, send it to ATTN: rulemaking. Finally, the FAA is making
this AD, contact Fokker Services B.V., several organizational and clarifying
Tom Rodriguez, Aerospace Engineer, Technical Services Dept., P.O. Box 1357,
International Branch, ANM–116, Transport revisions to the overflight fee
2130 EL Hoofddorp, the Netherlands; requirements.
Airplane Directorate, FAA, 1601 Lind
Avenue SW., Renton, WA 98057–3356; telephone +31 (0)88–6280–350; fax +31
(0)88–6280–111; email technicalservices@ DATES: This rule is effective January 1,
telephone 425–227–1137; fax 425–227–1149.
Information may be emailed to: 9-ANM-116- fokker.com; Internet http:// 2017.
AMOC-REQUESTS@faa.gov. Before using www.myfokkerfleet.com. ADDRESSES: For information on where to
any approved AMOC, notify your appropriate (4) You may view this service information obtain copies of rulemaking documents
principal inspector, or lacking a principal at the FAA, Transport Airplane Directorate, and other information related to this
inspector, the manager of the local flight 1601 Lind Avenue SW., Renton, WA. For final rule, see ‘‘How to Obtain
standards district office/certificate holding information on the availability of this Additional Information’’ in the
district office. material at the FAA, call 425–227–1221. SUPPLEMENTARY INFORMATION section of
(2) Contacting the Manufacturer: For any (5) You may view this service information
requirement in this AD to obtain corrective this document.
that is incorporated by reference at the
actions from a manufacturer, the action must FOR FURTHER INFORMATION CONTACT:
National Archives and Records
be accomplished using a method approved Aleksandra Damsz, Financial Analyst,
by the Manager, International Branch, ANM– Administration (NARA). For information on
Office of Financial Analysis, AFA–400,
116, Transport Airplane Directorate, FAA; or the availability of this material at NARA, call
Federal Aviation Administration, 800
the European Aviation Safety Agency 202–741–6030, or go to: http://
Independence Avenue SW.,
(EASA); or Fokker B.V. Service’s EASA www.archives.gov/federal-register/cfr/ibr-
Washington, DC 20591; telephone (202)
Design Organization Approval (DOA). If locations.html.
approved by the DOA, the approval must 267–8055; email aleksandra.damsz@
Issued in Renton, Washington, on faa.gov.
include the DOA-authorized signature.
(3) Reporting Requirements: A federal September 15, 2016.
SUPPLEMENTARY INFORMATION:
agency may not conduct or sponsor, and a Suzanne Masterson,
I. Executive Summary
jstallworth on DSK7TPTVN1PROD with RULES
person is not required to respond to, nor Acting Manager, Transport Airplane
shall a person be subject to a penalty for Directorate, Aircraft Certification Service. On August 28, 2015, the FAA
failure to comply with a collection of
information subject to the requirements of
[FR Doc. 2016–28341 Filed 11–28–16; 8:45 am] published the notice of proposed
the Paperwork Reduction Act unless that BILLING CODE 4910–13–P rulemaking (NPRM), Update of
collection of information displays a current Overflight Fee Rates (80 FR 52217). This
valid OMB Control Number. The OMB rulemaking updates the existing
Control Number for this information overflight fees (last updated in a 2011
VerDate Sep<11>2014 14:25 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1](https://thefederalregister.org/doc/81_FR_86072/page/1.svg)
![Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Rules and Regulations 85845
were below the threshold are now FAA concurs that the overflight fee Overflight fee rates (per 100 nautical
receiving a bill. Commenters also asked billing threshold should be increased. In miles) in the August 2001 final rule
that the threshold be increased to $450 consideration of the comments, the FAA were $33.72 for enroute and $18.94 for
and that the amendment should provide has analyzed the minimum threshold oceanic and the rule included a
for automatic adjustments to correspond for overflight billings and has decided to minimum billing threshold of $250. The
with future increases in overflight fees increase this minimum threshold from NPRM proposed the following rates over
rates. $250 to $400 as part of this rulemaking. a 3 year period:
TABLE 2—PROPOSED ENROUTE AND OCEANIC FEE RATES
Enroute rate Oceanic rate
Revision date (per 100 nm) (per 100 nm)
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
This final rule adopts the rates as of the United States government or of a system users, including overflight
proposed. The rates under this final rule foreign government that neither take off users’’. 80 FR at 52218. While combined
are 83% higher for enroute and 40% from, nor land in, the United States.’’ control facilities may handle a mix of
higher for oceanic as compared with the Similarly, under the FAA’s Fee Terminal and Enroute aviation traffic,
rates in the 2001 final rule ($33.72 for Regulation, 14 CFR part 187, App. B, this is not an issue because 49 U.S.C.
enroute and $18.94 for oceanic). The any person who conducts a flight 45301, as noted above, does not
minimum billing threshold of $250 has through U.S.-controlled airspace that distinguish or exempt general aviation
been updated to account for the does not include a landing or takeoff in users from the fees.
percentage growth in the fee rates, the United States must pay a fee for the
C. General Aviation Charged for Same
resulting in a threshold of $457.81 for FAA’s rendering or providing certain
Day Fuel Stops
enroute and $349.92 for oceanic. A services, including but not limited to
weighted average of the two rates is then the following: Air traffic management; AOPA and 32 individuals (25 of
calculated using actual FY 2014 enroute communications; navigation; radar whom were part of a form letter
and oceanic miles to calculate the surveillance, including separation campaign) stated that the FAA’s
updated billing threshold of $400. services; flight information services; proposal would impose overflight fees
procedural control; and emergency on U.S. registered general aviation
B. Excluding General Aviation operations that land in or depart from
services and training.
AOPA and 67 individuals (25 of Consistent with the statutory and the United States but also make
whom were part of a form letter regulatory requirements, the FAA is intermediate stops enroute due to the
campaign) commented that U.S. general required to collect overflight fees from aircraft’s limited range or human
aviation should be exempt from paying any person who transits US airspace physiological needs. AOPA provided an
overflight fees. These commenters stated and neither takes off or lands in the example as follows:
that Congress did not intend to impose United States. Neither the statute nor [A]n aircraft departs from an airport in
overflight fees on general aviation when the regulation permit the FAA to Florida destined for the Dominican Republic
it granted FAA authority to establish exclude general aviation operators or to in the Caribbean, but stops enroute at Nassau
overflight fees. consider whether one aviation user to refuel before continuing on to the
Commenters also stated that charging group utilizes air traffic control services Dominican Republic that same day. While
general aviation traffic does little to overflight fees will not be assessed for the
more than another. Additionally, there
first leg of the flight between Florida and the
recover air traffic control costs and is no statutory or regulatory exception to fuel stop in Nassau, overflight fees under the
general aviation traffic should not be the overflight fee requirement when NPRM will be assessed for the second leg of
burdened with overflight fees since they persons covered by the requirement pay the flight between the fuel stop and the
are an existing active consumer of fuel fuel or other related aviation taxes. Dominican Republic. In comparison, a non-
and other taxes which fund FAA and With regard to enroute Guam and San stop flight between Florida and the
aviation services. Juan costs and miles being excluded, the Dominican Republic would not result in any
Further, commenters stated their view FAA has determined that the NPRM overflight fees.
that because the FAA excluded enroute incorrectly stated that the combined The commenters also noted that when
Guam and San Juan costs from total enroute Guam and San Juan control general aviation is charged for same-day
costs in the NPRM, that FAA therefore facilities ‘‘may handle a mix of general fuel stops, a significant amount of time
acknowledged that these fees should not and commercial aviation traffic.’’ The is wasted in working with the FAA to
apply to U.S. general aviation traffic. FAA had intended to state that these get these charges reversed.
The FAA notes that Congress did not control facilities ‘‘may handle a mix of The FAA emphasizes that overflight
differentiate between general aviation terminal and enroute aviation traffic.’’ fees are assessed based on an evaluation
and commercial aviation in the This correction does not impact the of each flight. During the evaluation
jstallworth on DSK7TPTVN1PROD with RULES
overflight fees statute. Title 49 U.S.C. underlying analysis. process, each flight is reviewed to
45301 (a) states that ‘‘[t]he Overflight fees are assessed on all consider whether an intermediate stop
Administrator shall establish a schedule traffic types with the exceptions noted for fuel has occurred. A flight is not
of new fees, and a collection process for in the August 28, 2015 NPRM, which considered to be an overflight (i.e.,
such fees, for . . . [a]ir traffic control stated that ‘‘The FAA’s costs used for triggering an overflight fee) if it departs
and related services provided to aircraft this fee calculation are total costs or lands in the United States and the
other than military and civilian aircraft because the services provided benefit all FAA can determine that an intermediate
VerDate Sep<11>2014 14:25 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1](https://thefederalregister.org/doc/81_FR_86072/page/3.svg)
![85846 Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Rules and Regulations
stop for fuel occurred. In that case, no land from an airport located in the providing air traffic control and related
fee is assessed. The amount of time on United States. Again, intermediate fuel services to these operations.
the ground at an intermediary location stops that are of a short duration can be Commenters pointed out that the ARC
is considered when making the considered part of an overall flight that noted that the amount recovered for
determination. originates or departs from a United non-overflight 2 services has remained
States location. unchanged, while overflight fees have
D. Compromising Safety
E. Cost Recovery Rate Increase continued to rise at a steady pace over
AOPA and 6 individuals stated that the same period. IATA stated that
by failing to recognize the limitations of In the NPRM, the FAA asked for insufficient data has been provided to
most general aviation aircraft, the comments on whether it should justify FAA’s claim that under the ARC
proposed rule may encourage non-stop expedite the increase of overflight fee proposal, ‘‘the FAA would have
flights to or from U.S. airports in order rates to achieve full cost recovery. recovered slightly less than 60% for
to avoid overflight fees, even though an IATA, NACC, Lufthansa, Air Canada enroute and 50% for oceanic of the total
intermediate fuel stop would increase and British Airways opposed an increase between FY 2015 rates (based
the safety of the operation or is expedited increase to enable cost on FY 2008 costs) and rates using FY
otherwise physiologically necessary. recovery and suggested that the 2013 data.’’
Commenters argued that this is not in overflight fee rates be frozen at their Second, these commenters asserted
the best interest of safety. One present level until the ARC is re- that it is difficult to allocate overhead
commenter stated that to avoid the fees convened and a new proposal for the costs in a fair and justifiable manner to
‘‘[t]he pilots will not use air traffic rate increases is discussed and agreed the air navigation cost base, specifically
services. They will not travel, or travel upon. Air Canada noted that the Air to the cost base of overflight charges.
unsafely, perhaps to the point of turning Transport Agreement between Canada They asserted that this is because,
off transponders. And with this will and the United States states that user contrary to most other air navigation
cause preventable accidents.’’ charges must be ‘‘just, reasonable, and service providers around the world, the
As previously stated, overflight fees not unjustly discriminatory.’’ FAA does not exclusively provide air
are assessed based on an evaluation of The FAA has reviewed the feedback
traffic control services and hence,
each flight. A flight is not considered to on expediting the increase in overflight
according to Air Canada, there is a
be an overflight if it departs or lands in fee rates for cost recovery and has
fundamental problem with the FAA’s
the United States. This can include decided to proceed with the rate
‘‘organizational structure and
intermediate stops for fuel. increases proposed in the NPRM
Additionally, as discussed previously, complexity and the size of the overhead
without expediting them. Congress has
the FAA is raising the minimum billing cost.’’
directed the FAA to establish and The FAA notes the cost base concerns
threshold from $250 to $400 as part of maintain overflight fees ‘‘reasonably
this rulemaking action. This will raised by Lufthansa, Air Canada, and
related to the Administration’s costs.’’ IATA are not accurate. The
provide for air traffic control services in To retain the cost-based relationship,
many instances without the pilot methodology for estimating the fee is
that means the FAA must periodically the same one used in the FY 2011 Final
necessarily incurring any cost. review and revise its overflight fee rates,
Discussion of turning off transponders Rule to which the ARC had agreed.
and that is why the FAA is now Since the original issuance of the
is an unlikely scenario and an proceeding to the final rule to impose
unnecessary action. Use of a Final Rule relating to overflight fees in
the fee rates proposed in the NPRM. The August 2001, the statutory standard for
transponder in and of itself will not FAA believes that fees ‘‘reasonably
generate user fees. User fees are based the fees was relaxed by Congress to
related to the Administration’s costs’’ provide that the fees need to be
on the filing of a flight plan and would necessarily be ‘‘just, reasonable,
receiving air traffic control services such ‘‘reasonably related’’ to costs. This is in
and not unjustly discriminatory,’’ under contrast to the previous standard in
as flight following or instrument flight the Transport Agreement. In addition,
rules separation services. A discrete effect at the time of the issuance of the
the overflight fees are not unjustly original Interim Final Rule in August
transponder code would also need to be discriminatory because they are
assigned to the aircraft. One could 2000. That standard provided that the
assessed only on aircraft flights that fees needed to be ‘‘directly’’ related to
continue to use the transponder without transit U.S.-controlled airspace, but
incurring any cost, such as squawking the FAA’s costs of providing the air
neither land in nor depart from the traffic control and related services.
1200, indicating a Visual Flight Rules United States. Both foreign and
(VFR) operation without necessarily The FAA continues to use the same
domestic operators are charged in the methodology for calculating the fee rates
receiving air traffic control services. same manner. Those aircraft that do not
A desire to reduce or minimize the as was used in the 2011 update. The
transit U.S.-controlled airspace pay no overflight fee rate is calculated by
dollar cost associated with any flight fee.
does not alleviate a pilot from the duties dividing total ATO costs by the total
and responsibilities associated with F. Marginal Allocation flight miles. The rate calculation
acting as pilot in command. The pilot in Lufthansa, Air Canada, and IATA methodology is used separately for both
command is the final authority and commented on the issue of the cost base enroute and oceanic cost and mile data
ultimately responsible for the used for the fee calculation and stated to derive the overflight fee rate for
operational safety of that flight. Pilots two concerns: enroute and oceanic. ATO costs and
avoiding necessary fuel stops and/or The first comment on marginal cost flight miles used in this calculation are
jstallworth on DSK7TPTVN1PROD with RULES
turning off transponders to avoid air allocation stated generally is that costs system totals and not related only to
traffic control services and fees will for services neither used nor required by overflights. Therefore, there is no need
likely jeopardize the safety of that flight overflights should be removed from the to exclude any costs from the cost base.
and create unnecessary risk. The cost base. The commenters also 2 ‘‘Non-overflight services’’ refers to services
overflight fee must be considered part of expressed concern that the level of provided by the FAA to aircraft that do land in or
the planning and associated cost of any overflight fees goes beyond that which takeoff from the United States, and operate in U.S.
flight, where a pilot does not take off or is reasonably related to costs for airspace under the direction of the FAA.
VerDate Sep<11>2014 14:25 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1](https://thefederalregister.org/doc/81_FR_86072/page/4.svg)
![Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Rules and Regulations 85847
The FAA and ARC proposals are both recommended that a new ARC be re- have recovered slightly less than 60%
based on FY 13 actual rates. The convened to determine the need for for enroute and 50% for oceanic of the
difference in methodology is that the updates after that period. Under the total increase between FY 2015 rates
FAA proposed a 3 year compounded ARC’s proposal therefore, the FAA (based on FY 2008 costs) and rates using
annual growth rate (CAGR) phased-in would recover less than the FY13 levels. FY 2013 data,’’ the FAA provides the
over 3 years. The ARC proposal is based In response to IATA’s statement that following details (per 100 nautical
on a 5 year CAGR that only includes 3 the FAA has not provided the data to miles):
years of phase-in. After year 3 the ARC support its claim that ‘‘the FAA would
TABLE 3—COST RECOVERY COMPARISON
Enroute Oceanic
FAA Rate—FY 2008 Cost Recovery ....................................................................................................................... $56.86 $21.63
FAA Rate—FY 2013 Cost Recovery ....................................................................................................................... 61.75 26.51
FAA Increase ........................................................................................................................................................... 4.89 4.88
ARC Final Proposed Rate ....................................................................................................................................... 59.75 24.09
ARC Increase .......................................................................................................................................................... 2.89 2.46
ARC Proposed Increase as % of FAA Increase ..................................................................................................... 60% 50%
Inclusion of overhead is a commonly operations in the National Airspace Lufthansa also commented that it is
accepted practice in fee setting, is System. Lufthansa suggested freezing unacceptable for the FAA to simply
consistent with generally accepted the overflight fee rates at their current qualify services as ‘‘de minimis’’
accounting principles, and is a level and ‘‘reconsider the whole without providing any details and
specifically allowable element of cost question of overflight fees.’’ justification. According to Lufthansa,
under Office of Management and Budget The issue of FAA’s operational costs, ‘‘[t]he NPRM on overflight fees is about
(OMB) Circular No. A–25 on User and the rate at which they may increase, facts and data and transparency of these.
Charges as well as International Civil is outside the scope of this rulemaking. The term[] ‘‘de minimis’’ is a
Aviation Organization’s (ICAO’S) Under the statutory requirement, qualification, but not a quantification,
Policies on Charges for Airports and Air overflight fees must be ‘‘reasonably and is not appropriate or acceptable in
Navigation Services. In addition, the related to the Administration’s costs, as this context.’’
same Act of Congress that changed the The FAA does not agree that costs
determined by the Administrator, of
above fee setting standard from relating to flow control should be
providing the services rendered.’’ 49
‘‘directly’’ to ‘‘reasonably related’’ also removed from the enroute cost base. The
U.S.C. 45301(b)(1). Neither the FAA
gave the Administrator sole and final Traffic Management Unit personnel at
traffic forecast nor cost targets are used
discretion in the determination of FAA the enroute centers are responsible for
in the fee calculation, but rather fees are
costs. 49 U.S.C. 45301(b)(1). Again, the the safe and efficient flow of all traffic,
calculated based on actual cost and
methodology used for determining including overflights, in their airspace,
miles.
overhead also remains unchanged from and it would be neither reasonable nor
the FY2011 Final Rule and is based on H. Overflight Fee Calculation Cost Base practicable for the FAA to attempt to
FAA’s Cost Accounting System. sort out and exclude the portion of such
Lufthansa, IATA and Air Canada costs solely attributed to overflights.
G. FAA Costs commented on the cost base used for the Moreover, air traffic flow management
Lufthansa, Air Canada, NACC and overflight fee rate calculation. Lufthansa is a specifically allowable item for cost
IATA commented on the issue of and Air Canada both asserted that Air recovery under ICAO’s Policies on
increasing FAA costs. They expressed Route Traffic Control Center’s Charges for Airports and Air Navigation
concern over the steady pace at which (ARTCC’s) have staff dedicated to Services (ICAO Document 9082).
FAA operational costs continue to rise manage, organize and optimize traffic While it is true that there are low
and their impact on overflight fees. approaching major airports in activity airports and airfields that are
Industry partners are expected to metropolitan areas. These working not served by a TRACON or an air traffic
embark on cost control and cost positions and all associated costs are control tower, and that in these
reduction efforts and the FAA is urged included in the cost base for enroute, as instances the air traffic control services
to commit to a cost efficiency target that the traffic concerned is still hundreds of are provided by enroute controllers, the
remains below inflation. Also, IATA miles away from the respective level of such activity is sufficiently low
expressed disagreement with the NPRM TRACON. As part of the enroute cost that it does not require increased
stating that the FAA ‘‘believes base, the costs are partly paid for by staffing. See 76 FR 43114–43115 (July
forecasting based on projected traffic is overflight fees. However, according to 20, 2011).
more appropriate than using arbitrary the commenters, overflying traffic does
cost targets’’ and stated that it has found not require those services and hence, I. Failed ARC Process
that unanticipated and untimely these costs should be excluded from the British Airways, Air Canada,
economic occurrences can significantly cost base used for the rate calculation. Lufthansa, IATA and NACC expressed
jstallworth on DSK7TPTVN1PROD with RULES
impact forecast-based traffic projections, IATA also reiterated that the ARC disappointment that the FAA has
resulting in inaccurate accounting of recommended that the costs for services chosen to dismiss the ARC’s
traffic demand, business plans, required not used by overflights (e.g., flow recommendations and stated that they
resources, and funding streams. As an control into major airports and approach viewed the ARC process as failed. They
example, over the past several years, the services at airports and airfields not stated concern that the FAA’s proposed
FAA forecast has consistently served by a TRACON) be removed from rule included several new
overestimated the growth projections for the cost base. methodologies for which there had not
VerDate Sep<11>2014 14:25 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1](https://thefederalregister.org/doc/81_FR_86072/page/5.svg)
![Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Rules and Regulations 85849
TABLE 4—IMPACT OF THE GUAM AND SAN JUAN CHANGE—Continued
Prior to Guam and Post Guam and
San Juan change San Juan change
Total Flight Miles (GCD-nm) ........................................................................................................................ 708,610,831 695,620,413
Rate After Change (/100nm) ....................................................................................................................... $26.02 $26.51
Enroute fees are $61.75 per 100 have been an outgrowth of the 2004 would not be assessed an overflight fee.
nautical miles (based on FY13 cost ARC on overflight fees. According to the This is consistent with the
recovery) and oceanic fees are $26.51/ August 26, 2009 ARC Report, ‘‘[a]s part recommendation.
100 nautical miles (based on FY13 cost of the settlement with the litigating Air traffic control actively monitors
recovery). carriers, the FAA agreed to the creation and controls VFR flight following
of the ARC, which was to consist of aircraft providing them with updates
L. Weight-Based Fee Rates and guidance when necessary. VFR
FAA and industry representatives
Thirteen individuals stated that it is working to examine in depth the FAA’s aircraft utilizing flight following are
not fair that small planes are charged methodology for overflight fees and to provided similar service as IFR traffic.
the same fee rate as large commercial recommend whether it should be
planes. They suggested that a tiered rate O. Great Circle Distance
modified.’’
be charged on only U.S.-registered Despite the fact that general aviation Lufthansa, Air Canada, IATA and
aircraft with a not-to-exceed amount was not represented on the ARC, general NACC commented on the use of great
depending upon the aircraft total gross aviation was provided an opportunity to circle distance for calculating the
weight similar to landing fees at larger review and comment on the final rule. nautical mile distance used in the
airports or that the rate be based on the Twenty-five of the 74 comments that the overflight fee rate calculation. They
number of seats on the plane. FAA received in response to the NPRM stated that great circle distance was not
The FAA does not concur that the fee were filed by advocates of general part of the ARC agenda, nor was it
rates should be charged based on weight aviation. As noted above, the general discussed in terms of calculating
or the number of seats on the aircraft. aviation commenters raised the issue overflight fees and stress the importance
As noted above, the FAA is required to that the $250 overflight fee billing of ensuring the adoption of great circle
collect overflight fees from any person threshold had not been raised while the distance be revenue neutral to the FAA.
who transits US airspace and neither fee rate had been raised. As a result, Further, they ask that a clearly defined
takes off or lands. 49 U.S.C. 45301(a); 14 flights that were not getting billed in GCD catalogue be published and
CFR part 187, App. B. The statutory previous years because they were below consulted with airline users before it
requirement is that the overflight fees be the $250 threshold amount were now takes effect and that the FAA provide
‘‘reasonably related to the receiving a bill. As noted, the FAA examples of same-route cost
Administration’s costs, as determined concurred with the general aviation comparisons between great circle
by the Administrator, of providing the commenters that billing threshold distance, as proposed, versus cost data
services rendered.’’ 49 U.S.C. 45301(b). should be increased. In consideration of (via the Cost Accounting System) and
No distinction is made in the law the comments, the FAA will be air traffic data (from TFMS).
between types of aircraft, aircraft increasing the minimum threshold from The FAA has not changed the
weight, or number of seats. In addition, $250 to $400 as part of this rulemaking. application of great circle distance
VFR aircraft utilizing flight following within overflights. The great circle
N. General Aviation Visual Flight Rules distance methodology is the same as
services are provided similar service as
IFR traffic. They are both charged Lufthansa, Air Canada, NACC and used in the previous rulemaking (2011
overflight fees. IATA asked for further clarification on Final Rule) with no change to the way
the timeline of VFR flights being the fees are generated. The formula in
M. General Aviation Excluded From the included in the calculation of overflight the rule was rewritten to enhance clarity
Aviation Rulemaking Committee fees. Additionally, three individuals and transparency concerning how the
One individual stated that general stated that because VFR traffic neither fees are assessed. Since the great circle
aviation was not represented in the requires nor receives the same level of distance use and methodology remains
ARC, which was established to examine service as IFR traffic, VFR traffic should the same, FAA has determined there is
overflight fees and provide the FAA be charged less or excluded from the not a need to consult with the airline
recommendations on future overflight overflight fees requirement. users before taking effect (since it has
fee rates. VFR traffic utilizing flight following already been in effect), nor is there a
The 2013 ARC inadvertently did not services are already included in the total need for a great circle distance catalogue
include representatives from general mileage. Hence, there is no need for a to be published.
aviation because historically, members timeline. In order to provide VFR flight
of this ARC and its predecessors were following services, air traffic control P. Regulatory Costs on Small Entities
primarily composed of the parties from generates a ‘‘flight plan’’ within FAA According to IATA, the NPRM
the extensive 1997–2003 overflight fees systems that is captured in the TFMS. indicates that there were 469 domestic
litigation—the Air Transport This allows the aircraft call-sign operators (mostly small entities) that
jstallworth on DSK7TPTVN1PROD with RULES
Association of Canada and seven (typically tail number for VFR flights) to overflew U.S. controlled airspace in FY
international air carriers. be displayed and tracked against the 2013. The NPRM provided assurances
Representatives from general aviation discrete beacon code assigned by air that the rulemaking would not have a
were not parties to the litigation. traffic control. Non-discrete beacon significant economic impact on small
Membership of the 2013 ARC appears to codes (e.g., 1200) are not provided by entities (estimated at an average
have been an outgrowth of the 2008 TFMS and therefore not captured in the increase of $36.50 per operation). In its
overflight fees ARC, which appears to overflights data. These VFR flights comments, IATA asked for further detail
VerDate Sep<11>2014 14:25 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1](https://thefederalregister.org/doc/81_FR_86072/page/7.svg)
![85854 Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Rules and Regulations
(d) Fees for overflights through U.S.- rate in paragraph (c) of this section by (b) Distance flown through each
controlled airspace covered by a written the total number of nautical miles flown segment of Enroute or Oceanic airspace
FAA agreement or other binding through each segment of Enroute is based on the great circle distance
arrangement are charged according to airspace divided by 100 (because the (GCD) from the point of entry into U.S.-
the terms of that agreement or Enroute rate is expressed per 100 controlled airspace to the point of exit
arrangement unless the terms are silent nautical miles). from U.S.-controlled airspace based on
on fees. (2) Oceanic fee. The Oceanic fee is FAA flight data. Where actual entry and
calculated by multiplying the Oceanic exit points are not available, the FAA
§ 187.53 Calculation of overflight fees. rate in paragraph (c) of this section by
will use the best available flight data to
(a) The FAA assesses a total fee that the total number of nautical miles flown
calculate the entry and exit points.
is the sum of the Enroute and Oceanic through each segment of Oceanic
calculated fees. airspace divided by 100 (because the (c) The rate for each 100 nautical
(1) Enroute fee. The Enroute fee is Oceanic rate is expressed per 100 miles flown through Enroute or Oceanic
calculated by multiplying the Enroute nautical miles). airspace is:
Time period Enroute rate Oceanic rate
January 1, 2017 to January 1, 2018 ....................................................................................................................... 58.45 23.15
January 1,2018 to January 1, 2019 ........................................................................................................................ 60.07 24.77
January 1, 2019 and Beyond .................................................................................................................................. 61.75 26.51
(d) The formula for the total overflight Issued under authority provided by 49 security through lawful international
fee is: U.S.C. 106(f) and 45302, in Washington, DC, trade and policy. FDA is a Partner
on November 7, 2016. Government Agency (PGA) for purposes
Rij = E*DEij/100 + O*DOij/100 Michael P. Huerta, of submission of import data in ACE. As
Where: Administrator. of July 23, 2016, ACE became the sole
Rij = the total fee charged to aircraft flying [FR Doc. 2016–28589 Filed 11–28–16; 8:45 am] EDI system authorized by CBP for entry
between entry point i and exit point j. BILLING CODE 4910–13–P of FDA-regulated articles into the
DEij = total distance flown through each United States. We also updated certain
segment of Enroute airspace between sections of FDA regulations related to
entry point i and exit point j. DEPARTMENT OF HEALTH AND imports. This rule will facilitate
DOij = total distance flown through each HUMAN SERVICES effective and efficient admissibility
segment of Oceanic airspace between review by the Agency and protect public
entry point i and exit point j. Food and Drug Administration health by allowing FDA to focus its
E and O = the Enroute and Oceanic rates, limited resources on those FDA-
respectively, set forth in paragraph (c) of 21 CFR Parts 1, 1005, and 1271 regulated products being imported or
this section. offered for import that may be
[Docket No. FDA–2016–N–1487]
associated with a greater public health
(e) The FAA will review the rates RIN 0910–AH41 risk.
described in this section at least once
every 2 years and will adjust them to Submission of Food and Drug DATES: This rule is effective December
reflect the current costs and volume of Administration Import Data in the 29, 2016.
the services provided. Automated Commercial Environment
ADDRESSES: For access to the docket to
§ 187.55 Overflight fees billing and AGENCY: Food and Drug Administration, read background documents or
payment procedures. HHS. comments received, go to https://
ACTION: Final rule. www.regulations.gov and insert the
(a) The FAA will send an invoice to docket number found in brackets in the
each user when fees are owed to the SUMMARY: The Food and Drug heading of this final rule into the
FAA. If the FAA cannot identify the Administration (FDA, the Agency, or ‘‘Search’’ box and follow the prompts,
user, then an invoice will be sent to the we) is issuing a final rule/regulation to and/or go to the Division of Dockets
registered owner. Users will be billed at establish requirements for the electronic Management, 5630 Fishers Lane, rm.
the address of record in the country filing of entries of FDA-regulated 1061, Rockville, MD 20852.
where the aircraft is registered, unless a products in the Automated Commercial
billing address is otherwise provided. Environment (ACE) or any other FOR FURTHER INFORMATION CONTACT:
electronic data interchange (EDI) system With regard to the final rule: Ann M.
(b) The FAA will send an invoice if
authorized by the U.S. Customs and Metayer, Office of Regulatory Affairs,
the monthly (based on Universal
Border Protection Agency (CBP), in Food and Drug Administration, 10903
Coordinated Time) fees equal or exceed
order for the filing to be processed by New Hampshire Ave., Bldg. 32, Rm.
$400.
CBP and to help FDA in determining 4338, Silver Spring, MD 20993–0002,
(c) Payment must be made by one of
jstallworth on DSK7TPTVN1PROD with RULES
admissibility of that product. ACE is a 301–796–3324,
the methods described in § 187.15(d). Ann.Metayer@fda.hhs.gov.
commercial trade processing system
Appendix B to Part 187—[Removed and operated by CBP that is designed to With regard to the information
Reserved] implement the International Trade Data collection: FDA PRA Staff, Office of
System (ITDS), automate import and Operations, Food and Drug
■ 5. Remove and reserve Appendix B to export processing, enhance border Administration, Three White Flint
Part 187. security, and foster U.S. economic North, 10A63, 11601 Landsdown St.,
VerDate Sep<11>2014 14:25 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1](https://thefederalregister.org/doc/81_FR_86072/page/12.svg)
Document Created: 2016-11-29 00:33:22
Document Modified: 2016-11-29 00:33:22
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This rule is effective January 1, 2017. | |
| 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] | |
| FR Citation | 81 FR 85843 | |
| RIN Number | 2120-AK53 | |
| CFR Associated | Administrative Practice and Procedure and Air Transportation |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR