SUPPLEMENTARY INFORMATION:

List of Abbreviations and Acronyms Frequently Used in This Document

AIP-Airport Improvement Program

ALP-Airport Layout Plan

CBI-Confidential Business Information

CFR-Code of Federal Regulations

DOT-U.S. Department of Transportation

FAA-Federal Aviation Administration

FOIA-Freedom of Information Act

ICAO-International Civil Aviation Organization

IRFA-Initial Regulatory Flexibility Analysis

NEPA-National Environmental Policy Act

NOI-Notice of Intent

NPIAS-National Plan of Integrated Airport Systems

NPRM-Notice of Proposed Rulemaking

OIG-Office of Inspector General

OMB-Office of Management and Budget

PFC-Passenger Facility Charge

RFA-Regulatory Flexibility Act

RIA-Regulatory Impact Analysis

SBA-Small Business Administration

U.S.C.-United States Code

I. Authority for This Rulemaking

FAA's authority to issue rules on aviation safety is found in 49 U.S.C. 106, which describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of FAA's authority. Formerly, 49 U.S.C. 106(g) outlined the duties and powers of the FAA Administrator. The FAA Reauthorization Act of 2024 reserved 49 U.S.C. 106(g) and revised section 106(f) to include the Administrator's duties and powers; therefore, in this SNPRM, FAA revised the affected authority citations by citing to section 106(f) instead of section 106(g).

This rulemaking is issued under the authority described in subtitle VII, part A, subpart I, section 40117. Under that section, FAA is charged with prescribing regulations to impose a PFC to finance eligible airport-related projects. This regulation is within the scope of that authority.

This rulemaking is also promulgated pursuant to 49 U.S.C. 106(f), 40117, 40116, 47106, 47107, 47111, 47114-47116, 47139, 47524, and 47526.

Finally, this rulemaking is issued pursuant to sections 713, 743, 775, 776, and 782 of the FAA Reauthorization Act of 2024 (the 2024 Act), Public Law 118-63 (May 16, 2024).

II. Executive Summary

A. Overview of the SNPRM

The 2024 Act modified a number of provisions impacting the PFC program regulations. As such, this SNRPM proposes changes to 14 CFR part 158 and certain proposals made in the September 2023 NPRM to align with the 2024 Act's new requirements. Specifically, these proposals address: PFC turnback reductions; two new PFC-eligible projects; restrictions on PFC-eligible projects; FAA's timeline for review and acknowledgement of NOI submissions; PFC streamlining review eligibility; and PFC submittal requirements.

B. Statement of the Problem

The purpose of this SNPRM is to propose changes to the PFC regulations to address requirements enacted by the ( printed page 69512) 2024 Act. These changes supersede certain proposals included in the NPRM titled “Update and Clarification of the Passenger Facility Charge Regulations” published on September 27, 2023.^[1] Further, the 2024 Act requires changes to additional part 158 regulations that the NPRM did not propose to amend. As such, FAA could not address these new provisions in the final rule resulting from the NPRM, as they require notice and comment as mandated by the Administrative Procedure Act (5 U.S.C. 553).

C. Summary of the Costs and Benefits

This SNPRM proposes changes to the PFC regulations to incorporate sections 713, 743, 775, 776, and 782 of the 2024 Act.

FAA examined the SNPRM proposals and identified one that would benefit public agencies that control approximately 138 small-, medium-, and large-hub airports. Specifically, these public agencies would continue using the streamlined application process, shortening FAA's review period from 120 days to 60 days, as outlined in PFC Update 73-20, until the effective date of this final rulemaking. FAA recognizes these gains in efficiency and faster service time to the affected public agencies; however, these benefits, which would continue to accrue to those public agencies, are not quantified or monetized.

FAA also evaluated the cost impact on stakeholders involved in this SNPRM, which includes the public agencies and FAA. FAA determined that the SNPRM changes would have no additional cost impacts to public agencies and FAA.

III. Background

On September 27, 2023, FAA published a notice of proposed rulemaking (NPRM) titled “Update and Clarification of the Passenger Facility Charge Regulations” in the Federal Register .^[2] In the NPRM, FAA proposed to amend PFC regulations found in part 158 to implement changes to a congressionally mandated pilot program simplifying the process for public agencies controlling commercial service airports to obtain FAA authority to impose and use PFCs to fund airport development projects. The NPRM was in response to the congressional mandates found in the FAA Reauthorization Act of 2018 (the 2018 Act).^[3] The comment period for the NPRM closed on November 27, 2023 and FAA received six comments.

The 2024 Act renamed the title of 49 U.S.C. 40117(l) from “Pilot Program for Passenger Facility Charge Authorizations” to “Passenger Facility Charge Streamlining.” This change does not affect PFC program implementation and establishes that the PFC streamlining process is no longer a pilot program.

Need for Supplemental Notice of Proposed Rulemaking (SNPRM)

The 2024 Act passed on May 16, 2024, which was before FAA published a final rule for the September 2023 NPRM. The 2024 Act included several sections addressing elements of the PFC program. In some instances, such as what types of projects FAA may object to in terms of the PFC streamlining process, the 2024 Act conflicted with the NPRM's proposal and, therefore, requires FAA to put forth new proposals to reflect the 2024 Act's provisions. In other instances, the 2024 Act impacts PFC regulations not contemplated by the NPRM.

IV. Discussion of Supplemental Proposals

In this SNPRM, FAA proposes to:

• change PFC turnback reductions,
• add two new PFC eligible projects,
• remove restrictions to PFC eligible projects,
• update FAA's timeline for review and acknowledgement for NOI submissions,
• change PFC streamlining review eligibility, and
• amend PFC submittal requirements.

FAA also notes in this SNPRM that FAA uses both “notice of intent” (NOI) and “PFC streamlining” when referring to the accelerated PFC review process. With respect to the PFC program, “NOI” is the document submitted by the public agency notifying FAA of the intent to impose, use, or both impose and use PFC revenue. “PFC streamlining” is the process or procedures used to review PFC NOI submittals in an expedited manner within 60 days, versus the 120 days specified in 49 U.S.C. 40117(c)(4).

A. PFC Turnback Reductions

Prior to enactment of the 2024 Act, under 49 U.S.C. 47114(f), medium- and large-hub airports collecting at a PFC level of $3 or less were subject to a 50 percent reduction of their Airport Improvement Program (AIP) apportioned funds. Medium or large airports collecting at a PFC level greater than $3 were subject to a 75 percent reduction of their AIP apportioned funds.

The 2024 Act decreased these percentages from 50 percent for medium- and large-hub airports collecting at a level of $3 or less and 75 percent for medium- and large-hub airports collecting at a PFC level greater than $3 to 40 percent and 60 percent, respectively.^[4] The 2024 Act also created a new criterion to determine when a small-hub, transitioning to a medium- or large-hub airport, qualifies for a turnback against the airport's apportionment.^[5 6] The new criterion is that an airport must be designated as a medium- or large-hub airport for three consecutive years before a turnback can be applied. For example, a small-hub airport that becomes a medium- or large-hub must remain a medium- or large-hub airport for three years in order for the new criterion to take effect. Accordingly, FAA proposes to amend §§ 158.93 and 158.95 to align the regulatory text with the new statutory requirements.

B. Two New PFC Eligible Projects

The 2024 Act added two new types of projects FAA should consider as eligible airport-related projects.^[7] First, the 2024 Act established eligibility for projects “at a small hub airport for a noise barrier where the day-night average sound level from commercial, general aviation, or cargo operations is expected to exceed 55 decibels as a result of new airport development.” ^[8] Second, the 2024 Act added projects that replace “existing workspace elements (including any associated in-kind facility or equipment within or immediately adjacent to a terminal development or renovation project at such airport) related to the relocation of a Federal agency on airport grounds due to such terminal development or renovation project for which development costs are eligible costs under this section.” ^[9]

FAA interprets the second new project type to include projects related to the relocation of a Federal agency's existing workspace due to an eligible airport development project. The in-kind replacement of that Federal agency's affected workspace elements is now eligible for PFCs. For example, if a terminal development project, funded by PFCs, impedes (by means of physical ( printed page 69513) interference) existing Transportation Safety Administration (TSA) workspace elements, this may force the relocation of the workspace elements. The replacement of these workspace elements would be eligible for PFCs.^[10]

Accordingly, FAA proposes amending § 158.15(b) to add (b)(10) and (11) to add these two new eligible project types.

C. Restrictions to PFC Eligible Projects

The 2024 Act amended 49 U.S.C. 47139 to repeal emission credit requirements for certain PFC-eligible projects.^[11] Specifically, section 47139 now allows airports to receive emission credits even when they are outside of a nonattainment or maintenance area. As a corollary to that revision, the Act also revised the definition of “airport development” under 49 U.S.C. 47102(3)(K) and (L) to no longer require otherwise eligible airport low emissions projects to be located in air quality nonattainment or maintenance areas. The existing language in § 158.15(b)(8)(i) and (ii) cross-references “airport development” projects (as defined under the new definition in section 47102). As a result, FAA proposes to align the proposed regulatory text with this statutory change by modifying § 158.15(b) to remove the paragraphs referencing those emissions credit requirements. As a result, FAA proposes to remove the following text from existing § 158.15(b): “(8) If the airport is in an air quality nonattainment area (as defined by section 171(2) of the Clean Air Act (42 U.S.C. 7501(2)) or a maintenance area referred to in section 175A of such Act (42 U.S.C. 7505a), and the project will result in the airport receiving appropriate emission credits as described in 49 U.S.C. 47139, a project for:”.

Accordingly, under this proposal, projects that would convert vehicles and ground support equipment powered by a diesel or gasoline engine to low-emission technology or acquire low-emission technology vehicles or ground support equipment remain PFC-eligible at any covered airport, as set forth in 49 U.S.C. 40117(a)(3)(A). These two remaining provisions would be renumbered as § 158.15(b)(8) and (9) from § 158.15(b)(9) and (10), respectively.

D. FAA's Timeline for Review and Acknowledgement of NOI Submissions

Prior to the 2018 Act, NOIs were submitted by public agencies controlling non-hub airports to FAA for review, and FAA was required to issue an acknowledgment or objection within 30 days of that submission. The NPRM issued on September 27, 2023 retained the 30-day deadline for acknowledgement or objection.

Subsequently, the 2024 Act extended FAA's acknowledgement and objection period for NOI submissions from 30 days to 60 days.^[12] However, the 2024 Act failed to make the corresponding amendment to the paragraph on the authority to impose a charge in section 40117(l)(5). Said provision states: “Unless the Secretary objects within 30 days after receipt of the eligible agency's notice, the eligible agency is authorized to impose a [PFC] in accordance with the terms of its notice under this subsection.” ^[13] These two provisions do not align.

It would be administratively difficult and inefficient to manage the PFC program with two different deadlines: a 60-day deadline for FAA to authorize or object to the imposition of PFCs and a 30-day deadline for an eligible Agency to impose a PFC. It would also be nonsensical to develop a program where public agencies could begin imposing PFCs after 30 days of submitting a NOI with the possibility that FAA may object to the NOI within 60 days would create a procedural and administrative burden for both public agencies and air carriers.^[14]

For example, under section 40117(l)(5), a public agency may submit a notice of intent to impose and use PFC funds on a project. If FAA does not object within 30 days, the public agency would be authorized to impose, or impose and use, PFC money on that project. Under § 158.43, the public agency, once authorized, notifies air carriers of the latter's obligation to collect PFCs for remittance to the public agency beginning on the charge effective date. However, under section 40117(l)(4)(A), FAA may complete its review and issue an objection after 30 days but within 60 days. If that occurs, the eligible agency is not and never was allowed to impose and use PFC funds for the project. The eligible agency would then be required to return any PFC funds collected and spent for that project to the air carriers, who would then be responsible for refunding passengers.

To spare all entities from unnecessary administrative burden and to avoid any unauthorized collection of PFC funds, FAA proposes in this rulemaking that the 60 days FAA has to issue an objection to a proposed PFC project is also the same length of time that must elapse before an eligible agency is authorized to impose a PFC absent FAA's objection. This proposal is contained in § 158.32(a).

With the additional 30 days, FAA will have the ability to consider complex projects submitted under the NOI process that FAA previously did not have the ability to consider in a 30-day window. Complex projects typically include non-standard projects with multiple components and involve the movement of passengers and baggage. The more components included in a project, the more variables, details, prorations, calculations, and eligibility determinations must be completed. Comparatively, less complex projects include single components, do not involve the movement of passengers and baggage, and are typically prescribed in FAA design and safety standards.^[15] More complex projects require extensive review on the part of FAA to assess the proposal adequately to make a final determination. The 60-day time frame affords FAA more time to review complex projects under the streamlined procedures.

FAA acknowledges that the statutory language in section 40117(l)(5) would, on its own, allow for a public agency to begin imposing fees within 30 days of submission, regardless of FAA action. However, as mentioned above, to avoid administrative waste for the public agencies, air carriers, and FAA, FAA believes it is necessary to align the time period in which a public agency may impose a PFC with the time FAA has to complete a review of the NOI, as extended in the 2024 Act. The FAA recognizes that if it were to adopt a final rule that would allow for the inefficient situation described above, FAA would also need to establish clear requirements on how unauthorized funds must be refunded from both the public agency to the air carrier and from the air carrier to passengers. FAA would expect that ( printed page 69514) these requirements would include relatively short deadlines for both refunds, as these funds were not legally authorized, and that they must be refunded in dollars, especially to passengers ( i.e., not credits or miles). FAA requests comment on this proposal and whether imposing a consistent 60-day timeframe for both FAA objection and the authorization to begin collecting PFCs would lead to results not discussed in this SNPRM.

In addition, in the NPRM, FAA proposed to create § 158.31 to include regulations for reviews of NOIs. In § 158.31, as proposed in the NPRM, FAA proposed that a public agency would be notified within 30 days by FAA if a project is ineligible for the NOI procedure. Due to changes stemming from the 2024 Act discussed above, FAA modifies § 158.31(a) as proposed in the NPRM to remove the 30-day timeframe for FAA to notify a public agency if a project is ineligible for the NOI procedure.

E. PFC Streamlined Review Eligibility

The 2024 Act established the circumstances under which FAA may or may not object to PFC streamlining.^[16] FAA proposes to amend §§ 158.30 and 158.31 by inserting the allowed and prohibited criteria into these sections.

The NPRM proposed to mirror the policy found in PFC Update 73-20. However, the 2024 Act modified the list of projects ineligible for PFC streamlining found in PFC Update 73-20 and proposed by FAA in the NPRM. This proposal reflects those changes.

The following paragraphs contain a detailed description of the proposals in these two areas.

i. Prohibited Objection, Allowed Objection, and Objected

FAA proposes to align the projects eligible for PFC streamlining with the 2024 Act. Specifically, the 2024 Act created “allowed” and “prohibited” objections for the NOI process. FAA notes that “objection” for the purposes of PFC streamlining differs from an “objection” under the PFC application process. Discussion of the various forms of “objection” continues in the following sections.

ii. Objection to Notice of Intent or Application

FAA's objection to a public agency availing itself of the NOI process differs from an objection to a PFC application. A project in which FAA is allowed to object to the use of the NOI process may proceed to the traditional PFC application process for further review. FAA may object to the application should the application not meet the criteria of the PFC program. FAA is not proposing to change existing eligibility criteria for PFC applications.

Currently, FAA is following PFC Update 73-20 as required by the 2024 Act until the effective date of this final rulemaking. PFC Update 73-20 provides internal guidance on processing applications to impose only, use only, or impose and use PFCs received from small-, medium-, and large-hub airports. PFC Update 73-20 identifies projects that are ineligible for the streamlined process, and the 2024 Act incorporated most of these into the “Allowed” objections described in this SNRPM. FAA does not propose to change its current process except to incorporate “prohibited” and “allowed” sections as described in Section E (iii) and (iv) of this SNPRM.

To distinguish those PFC projects acknowledged under the NOI process from projects approved under the traditional PFC application method found and subject to 49 U.S.C. 46110 as a final agency determination, FAA uses the PFC project statuses to issue a determination on the NOI process only. These three statuses are “Acknowledged,” “Partially Acknowledged,” and “Objected.”

“Objected” is a project status used to reflect FAA's rejection of the imposition of a PFC for a project through NOI or in response to the NOI not following the process of 49 U.S.C. 40117(l). FAA will continue to object to a project that is not eligible because it is not an “eligible airport-related project” as defined by 49 U.S.C. 40117(a)(3). FAA will also continue to object to NOIs, in their entirety, that do not meet the statutory requirements of 49 U.S.C. 40117(l)(2) and (3) as in proposed § 158.32.

iii. Prohibited Objection

Under the 2024 Act, “prohibited objections” now limit FAA's ability to exclude certain types of projects from consideration in the PFC streamlining process. The 2024 Act states that FAA “may not object to an eligible airport-related project that received Federal financial assistance for airport development, terminal development, airport planning, or for the purposes of noise compatibility, if the Federal financial assistance and passenger facility charge collection (including interest and other returns on the revenue) do not exceed the total cost of the project.” ^[17] As such, any AIP or other airport grant with an eligible airport-related project that receives an FAA airport grant must be considered for review through the PFC streamlining process. Eligible airport-related projects that receive an FAA airport grant would still need to comply with the requirements of the PFC program to be eligible for PFC streamlining, including such PFC project requirements as objectives, consultation, Airport Layout Plan (ALP), National Environmental Policy Act (NEPA), airspace, detailed project costs, competition plan, and noise.^[18] FAA proposes to amend part 158 by adding § 158.31(a)(2) for criteria allowing proposed projects to follow the NOI process consistent with the Act.

iv. Allowed Objection

Per the 2024 Act, FAA may now object to the acceptance of certain projects under the PFC streamlining process. The 2024 Act classified these types of projects as “allowed objection.” This list conflicts with the list of eight types of projects ineligible for PFC streamlining found in the NPRM,^[19] which mirrors those found in PFC Update 73-20. The eight types of projects in the NPRM included: (1) Significant policy precedent; (2) Significant legal issues; (3) Significant controversy, as evidenced by significant opposition to FAA's proposed action by the applicant or other airport authorities, airport users, Federal, State, or local agencies, elected officials, or communities; (4) Multimodal projects; (5) Significant airport noise, access, or revenue diversion issues, including compliance with 49 U.S.C. 47521 and 49 U.S.C. 47111(e); (6) Debt Service on otherwise ineligible projects; (7) Blending of two or more PFC decisions to obtain a uniform collection level; and (8) Terminal building projects in excess of $25 million, except stand-alone passenger boarding bridges.

The Act incorporated most of these types of projects into the list of allowed objections. However, due to the requirements of the 2024 Act, FAA is no longer proposing to object to the use of the PFC streamlining process for projects involving debt service on otherwise ineligible projects; blending of two or more PFC decisions to obtain a uniform collection level; and terminal building projects in excess of $25 million, except stand-alone passenger ( printed page 69515) boarding bridges, as proposed in the NPRM.

FAA proposes to amend § 158.31 to incorporate allowed objections under the 2024 Act. The six allowed objections to PFC streamlining are: (1) establishes significant policy precedent; (2) raises significant legal issues; (3) garners significant controversy, as evidenced by significant opposition to the proposed action by the applicant or other airport authorities, airport users, governmental agencies, elected officials, or communities; (4) raises significant revenue diversion, airport noise, or access issues, including compliance with section 47111(e) or subchapter II of chapter 475; (5) includes multimodal components; or (6) serves no aeronautical purpose. Allowed objections one through five were previously proposed in similar form in the NPRM and are reproposed in this SNPRM without change.

The 2024 Act created a new type of classification under which FAA may object to including a project under the PFC streamlining process. The new objection covers projects that serve no aeronautical purpose.^[20] These projects may require additional information on a case-by-case basis, if the project otherwise meets the requirements of the PFC program, to determine eligibility. FAA proposes amending § 158.3 to include a definition for “no aeronautical purpose” applicable only to part 158. FAA defines “no aeronautical purpose” for the purposes of the PFC program as any project located on the airport that is not directly related to the safe and efficient operation of aircraft, nor directly related to the movement of passengers and baggage.

FAA also recognizes that this new objection may overlap with the types of projects that are ineligible for PFCs and do not serve an aeronautical purpose. Such projects may include: decorative landscaping, sculptures, works of art, cell phone waiting lots, or roads to non-aeronautical areas or facilities.

F. PFC Submittal Requirements

The 2018 and 2024 Acts placed limitations on FAA's authority to review and approve ALPs.^[21]

The information obtained from an ALP is vital for FAA to review a proposed construction project adequately. Prior to the 2018 and 2024 Acts, all proposed PFC construction projects were required to be depicted on an FAA-approved ALP before FAA approved PFC use.^[22]

The changes introduced by the 2018 and 2024 Acts limited instances in which FAA may require an ALP approval for proposed construction projects included within a PFC application or NOI. Details of these instances are codified in 49 U.S.C. 47107(x), and FAA is proposing changes to the PFC regulations to align with the change in statute. Under section 47107(x)(1), FAA may only review and approve or disapprove certain portions of an ALP.^[23] And under section 47107(x)(2), FAA is prohibited from indirectly regulating or placing conditions on any project that would be reflected in an ALP but is not subject to FAA ALP approval.^[24] In response to these statutory requirements, FAA is proposing to revise §§ 158.25(c) and 158.30(c), as explained below.

Under § 158.25(c), to determine eligibility, FAA proposes requiring the description and a drawing depicting the location of a PFC-funded proposed project for projects required to be shown on an ALP but not requiring FAA review and approval.^[25] FAA also proposes revising § 158.25(c)(1)(ii)(A) and (c)(2)(iv)(A) so that the language is uniform with this proposal. The proposed revision to those paragraphs adds “and requiring FAA review and approval” after “For projects required to be shown on an ALP”. Similarly, under § 158.30(c), FAA proposes requiring a description and a drawing depicting the location of a proposed project for projects required to be shown on an ALP but not requiring FAA review and approval. As with § 158.25(c)(1)(ii)(A) and (c)(2)(iv)(A), for projects required to be shown on an ALP and requiring FAA review and approval, FAA proposes requiring the ALP depicting the project has been approved by FAA and the date of such approval.

These proposed changes, in response to section 47107(x)(2), will help ensure that FAA does not indirectly regulate projects that Congress has exempted from FAA ALP review and approval under section 47107(x)(1). At the same time, the proposed changes to §§ 158.25(c) and 158.30(c) will help FAA fulfill its statutory duties to ensure PFC eligibility and justification of a proposed project.^[26] Projects that are not depicted on an ALP remain unaffected by these proposed revisions.

FAA invites comments on the proposed revisions to §§ 158.25(c) and 158.30(c).

V. Regulatory Notices and Analyses

A. Regulatory Evaluation

Executive Order (E.O.) 12866 (“Regulatory Planning and Review”) and E.O. 13563 (Improving Regulation and Regulatory Review”) require agencies to regulate in the “most cost-effective manner,” to make a reasoned determination that “the benefits of the intended regulation justify its costs,” and to develop regulations that “impose the least burden on society.” The Office of Management and Budget has determined that this proposed rule is not a significant regulatory action as defined in section (3)(f)(1) of E.O. 12866.

This proposed rule, if finalized as proposed, is expected to be an E.O. 14192 deregulatory action.

1. Need for the Regulation

The SNPRM would amend the PFC regulations to incorporate sections 713, 743, 775, 776, and 782 of the Act.

FAA proposes in this SNPRM changes to: PFC turnback reductions; add two new PFC eligible projects; restrictions to PFC eligible projects, FAA's timeline for review and acknowledgement of NOI submissions; PFC streamlining review eligibility; and PFC submittal requirements. As noted above, these changes supersede certain proposals in the NPRM.

2. Baseline for the Analysis

The baseline for this analysis remains the same as presented in the 2023 NPRM. Five major sources of airport capital development funding are (1) the AIP; (2) PFCs imposed pursuant to Federal law; (3) tax-exempt bonds; (4) State and local grants; and (5) airport operating revenue from tenant lease and ( printed page 69516) other revenue-generating activities, such as landing fees.^[27]

The AIP has been providing Federal grants for airport development and planning since the passage of the Airport and Airway Improvement Act of 1982 (Pub. L. 97-248). AIP funding is usually spent on projects that support aircraft operations, such as runways, taxiways, aprons, noise abatement, land purchase, and safety or emergency equipment. The funds obligated for AIP are drawn from the Airport and Airway Trust Fund, which is supported by a variety of aviation user fees and fuel taxes.

Airports use different combinations of these sources to support various needs depending on the individual airport's financial situation and the type of project being considered. Smaller airports, such as those that primarily serve general aviation activities, including private and charter operations, are much more dependent on AIP to meet their capital needs. Larger airports are much more likely to issue tax-exempt bonds or finance capital projects with the proceeds of PFCs.

The PFC program was established in 1990. It was modified in 2005 to institute a pilot program for non-hub airports to streamline the application process in order for them to access the PFC revenues more efficiently and rapidly. The streamlined application process ensures the non-hub airports' PFC applications be treated as a NOI with FAA review and acknowledgment within 30 days instead of issuing a final decision approving or disapproving the application, in whole or in part, in 120 days.

PFC Update 73-20, published in January 2020, gave notice that FAA would review and acknowledge all allowed PFC applications received from small-, medium-, or large-hub airports within 30 days using streamlined procedures. Then, the 2024 Act changed the time allowed for FAA to review and acknowledge notices of intent to 60 days for all eligible airports. This SNPRM proposes to codify this significant statutory change into FAA's part 158 regulations.

According to FAA's National Plan of Integrated Airport Systems (NPIAS), which details the amounts and types of airport development eligible for Federal funding under the AIP over the next five years, there are nearly 3,300 public-use airports within the national airport system. The 2025-2029 NPIAS ^[28] published on October 28, 2024 identified 252 non-hub, 74 small-hub, 33 medium-hub, and 31 large-hub airports in addition to 2,910 other public-use airports.

This SNPRM would affect approximately 138 small-, medium-, and large-hub airports. As explained in the preceding paragraphs, proposed changes do not concern either the 2,910 other airports that do not use PFC revenues or the 252 non-hub airports that are currently benefiting from the streamlined application process over the last two decades.

3. SNPRM Benefits and Costs

FAA examined the SNPRM changes and identified one provision that would benefit approximately 138 small-, medium-, and large-hub airports. Specifically, these airports would continue to use the streamlined application process, shortening FAA's final decision approving or disapproving the application, in whole or in part, in 120 days to a review and acknowledgment period in 60 days, as outlined in PFC Update 73-20, until the effective date of this final rulemaking. FAA recognizes these gains in efficiency and faster service time to the affected airports; however, these benefits, which would continue to accrue to those airports, are not quantified or monetized. See Table 1 below for a comparison of the NPRM and the SNPRM provisions as well as the SNPRM economic impacts.

5. Regulatory Alternatives

This rulemaking proposes amendments to the PFC regulations to address statutorily mandated program changes, program oversight improvements, and minor administrative changes, such as removing or correcting obsolete references.

As noted above, FAA is proposing to align the time period in which a public agency may impose a PFC with the time FAA has to complete review of the NOI. FAA believes that such an approach not taken would likely lead to administrative and procedural costs for potential refunds that are likely to outweigh the benefits of public agencies being able to impose fees a few weeks earlier than under the proposed rule. FAA requests comment on this proposal and whether imposing a consistent 60-day timeframe for both FAA objection and the authorization to begin collecting PFCs would lead to costs not considered here. There are no other legally supportable regulatory alternatives to implementing the statutory requirements for the proposed changes. The alternative to rulemaking would be to leave the existing system of FAA orders, guidance, and policy documents in place. However, this is untenable long-term, as such decentralized program requirements and guidance hinder FAA's ability to ensure compliance and transparency. Further, this approach would leave PFC program regulations in place that are not aligned with the 2024 Act, creating potential regulatory ambiguity and inconsistency.

B. Regulatory Flexibility Determination

The Regulatory Flexibility Act (RFA) of 1980,^[29] as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ^[30] and the Small Business Jobs Act of 2010,^[31] requires Federal agencies to consider the effects of the regulatory action on small businesses and other small entities and to minimize any significant economic impact. The term “small entities” comprises small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

FAA identified approximately 138 airports that are owned and operated by both small and non-small entities. In order to estimate the number of small entities, FAA used the Table of Size Standards ^[32] issued by the Small Business Administration (SBA) for the North American Industry Classification System (NAICS) and found two NAICS codes that these airports would fall under: 488111 (Air Traffic Control) and 488119 (Other Airport Operations). SBA's size standards generally define small businesses based on the number of employees or annual receipts. For these two NAICS codes, the size standard is established as $35 million ( i.e., entities with annual receipts under $35 million are qualified as small businesses).

Using the U.S. Census data for 488111 and 488119 NAICS codes,^[33] FAA estimated that, except for 13 airports reporting over $35 million annual revenue, the remaining 125 airports are classified as small entities.

FAA did not identify any economic impacts on small entities that would be affected by the SNPRM. Therefore, FAA proposes to certify that the SNPRM will not have a significant economic impact on a substantial number of small entities. FAA welcomes comments on the basis for this certification.

C. International Trade Impact Assessment

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. ( printed page 69519) 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. FAA has assessed the effect of this SNPRM and determined that its purpose is to ensure the safety of U.S. civil aviation. Therefore, this SNPRM is in compliance with the Trade Agreements Act.

D. Unfunded Mandates Assessment

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or Tribal government or the private sector to incur direct costs without the Federal Government having first provided the funds to pay those costs. FAA determined that the proposed rule would not result in the expenditure of $193,000,000 or more ($100,000,000 adjusted for inflation using the most current Implicit Price Deflator for the Gross Domestic Product) by State, local, or Tribal governments, in the aggregate, or the private sector, in any one year.

E. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 ^[34] requires that FAA consider the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act,^[35] an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid Office of Management and Budget (OMB) control number.

FAA has determined that there would be no new information collection associated with this SNPRM. The Office of Management and Budget (OMB) previously approved FAA to collect such information under the provisions of the Paperwork Reduction Act of 1995 ^[36] via OMB Control Number 2120-0557. As provided in agency guidance regarding 14 CFR 158.25(b)(6), there should be a detailed description of the project, sufficient so a person not familiar with the airport can understand the project. A sketch of the location of the work should be done, if necessary.

On November 22, 2021, OMB approved a revision of FAA's previously approved information collection. That revision reflected changes in the estimated burden resulting from the 2018 Act and FAA's implementation of PFC Update 73-20. Although this rulemaking proposes to codify these changes into the regulations, there are no new information collection actions resulting directly from this rulemaking action.

F. International Compatibility

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

G. Environmental Analysis

The Department has analyzed the environmental impacts of this SNPRM pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.). FAA has determined that this rule is categorically excluded pursuant to FAA Order 1050.1G. Categorical exclusions are categories of actions that the agency has determined normally do not significantly affect the quality of the human environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See DOT Order 5610.1D § 9. In analyzing the applicability of a categorical exclusion, the agency must also consider whether extraordinary circumstances are present that would warrant the preparation of an EA or EIS. Id. § 9(b). This rulemaking, which proposes to amend portions of 14 CFR part 158, is categorically excluded pursuant to appendix B-2.6(f) of FAA Order 1050.1G: “Regulations, standards, and exemptions (excluding those that if implemented may cause a significant impact on the human environment).” FAA does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

VI. Executive Order Determinations

A. Executive Order 13132, Federalism

FAA has analyzed this proposed rule under the principles and criteria of E.O. 13132, Federalism. FAA has determined that this action would not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, would not have federalism implications.

B. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments

Consistent with E.O. 13175, Consultation and Coordination with Indian Tribal Governments,^[37] and FAA Order 1210.20, American Indian and Alaska Native Tribal Consultation Policy and Procedures,^[38] FAA ensures that Federally Recognized Tribes (Tribes) are given the opportunity to provide meaningful and timely input regarding proposed Federal actions that have the potential to affect uniquely or significantly their respective Tribes. At this point, FAA has not identified any unique or significant effects, environmental or otherwise, on tribes resulting from this proposed rule.

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

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

D. Executive Order 13609, Promoting International Regulatory Cooperation

E.O. 13609, Promoting International Regulatory Cooperation, 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. FAA has analyzed this action under the policies and agency responsibilities of E.O. 13609 and has determined that this action would have no effect on international regulatory cooperation. ( printed page 69520)

VII. Additional Information

A. Comments Invited

FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. FAA also invites comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.

FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, FAA will consider all comments it receives on or before the closing date for comments. FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. FAA may change this proposal in light of the comments it receives.

B. Confidential Business Information

Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this SNPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this SNPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this SNPRM. Submissions containing CBI should be sent to the person in the FOR FURTHER INFORMATION CONTACT section of this document. Any commentary that FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

C. Electronic Access and Filing

A copy of the NPRM, this SNPRM, all comments received, any final rule, and all background material may be viewed online at www.regulations.gov using the docket number listed above. A copy of this proposed rule will be placed in the docket. Electronic retrieval help and guidelines are available on the website. It is available 24 hours each day, 365 days each year. An electronic copy of this document may also be downloaded from the Office of the Federal Register's website at www.federalregister.gov and the Government Publishing Office's website at www.govinfo.gov. A copy may also be found at FAA's Regulations and Policies website at www.faa.gov/​regulations_​policies.

Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW, Washington, DC 20591, or by calling (202) 267-9677. Commenters must identify the docket or notice number of this rulemaking.

All documents FAA considered in developing this proposed rule, including economic analyses and technical reports, may be accessed in the electronic docket for this rulemaking.

D. Small Business Regulatory Enforcement Fairness Act

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. 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 www.faa.gov/​regulations_​policies/​rulemaking/​sbre_​act/​.

The Proposed Amendment

For the reasons discussed in the preamble, the Federal Aviation Administration proposes to amend chapter I of title 14, Code of Federal Regulations. The proposed amendments include only those proposed in this SNPRM and do not account for the proposals originally put forth in the related NPRM. Upon resolution of public comments on this proposal, the Federal Aviation Administration will combine unaltered proposals established in the NPRM and the SNRPM in a final rule. The proposed amendments are as follows:

1. The authority citation for part 158 is revised to read as follows:

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

2. Amend § 158.3 by inserting definition for “No aeronautical purpose” to read as follows:

3. Amend § 158.15 by revising paragraph (b)(8) and adding paragraphs (b)(9), (b)(10), and (b)(11) to read as follows:

4. Revise § 158.21 to read as follows:

5. Amend § 158.25 by revising (c)(1)(i), (c)(1)(ii), and (c)(2)(iv) to read as follows:

6. Amend § 158.30 by:

a. Revising paragraph (c)(1)(ii); and

b. Adding paragraphs (c)(1)(ii)(A) through (D).

The revisions and addition read as follows:

7. Amend § 158.31 by adding paragraphs (a)(1) and (a)(2) to read as follows:

8. Add § 158.32 to read as follows:

9. Amend § 158.93 by revising paragraph (a) to read as follows:

10. Revise § 158.95 to read as follows:

91 FR 69511