[Federal Register Volume 75, Number 241 (Thursday, December 16, 2010)]
[Notices]
[Pages 78798-78799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31614]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Docket No. FAA-2010-1220]
Airport Improvement Program: Proposed Changes to Benefit Cost
Analysis (BCA) Threshold
AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).
ACTION: Notice of Availability of Draft Guidance and Request for
Comments.
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SUMMARY: The Federal Aviation Administration (FAA) is issuing this
Notice to advise that FAA has developed draft guidance modifying its
policy requiring benefit cost analyses (BCA) for capacity projects when
applying for Airport Improvement Program (AIP) grants for capacity
projects at the discretion of the Secretary of Transportation. This
modification proposes to raise the threshold at which BCAs are
required, from $5 million to $10 million in AIP Discretionary funds.
FAA invites airport sponsors and other interested parties to
comment on the draft guidance. FAA will consider these comments in
promulgating final BCA guidance for airport sponsors.
DATES: Send your comments on or before January 31, 2011. The FAA will
consider comments received on the proposed policy guidance. Any
necessary or appropriate revision to the guidance resulting from the
comments received will be adopted as of the date of a subsequent
publication in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Dennis Walsh, Financial Analysis and
Passenger Facility Charge Branch (APP-510), Room 619, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591;
[[Page 78799]]
telephone: (202) 493-4890, e-mail: [email protected]. A draft
Program Guidance Letter is available on-line at http://www.faa.gov/airports/aip/bc_analysis/. In addition, hard copies can be reviewed at
Room 619, Federal Aviation Administration, 800 Independence Avenue,
SW., Washington, DC 20591.
Comments Invited: ADDRESSES: You may send comments [identified by
Docket Number FAA-2010-1220] using any of the following methods:
Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your
comments electronically.
Mail: Docket Operations, U.S. Department of
Transportation, West Building, Ground Floor, Room W12-140, Routing
Symbol M-30, 1200 New Jersey Avenue, SE., Washington, DC 20590.
Fax: 1-202-493-2251.
Hand Delivery: To Docket Operations, Room W12-140 on the
ground floor of the West Building, 1200 New Jersey Avenue, SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. For more information, see the Privacy Act discussion in the
SUPPLEMENTARY INFORMATION section of this document.
Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time or to Room W12-140 on the ground
floor of the West Building, 1200 New Jersey Avenue, SE., Washington,
DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.
SUPPLEMENTARY INFORMATION: Title 49 U.S.C. Section 47115(d) specifies
that, in selecting projects for discretionary grants to preserve and
enhance capacity at airports, the Secretary must consider the benefits
and costs of the projects. In 1994, FAA established its policy on
Benefit Cost Analysis (BCA) requirements for airport capacity projects;
factors leading to these requirements included:
a. The need to improve the effectiveness of Federal airport
infrastructure investments in light of a decline in Federal AIP
budgets;
b. Issuance of Executive Order 12893, ``Principles for Federal
Infrastructure Investments'' (January 26, 1994);
c. Guidance from Congress citing the need for economic airport
investment criteria; and
d. Statutory language from 1994 included in Title 49 U.S.C. Section
47115(d) specifies that in selecting projects for discretionary grants
to preserve and enhance capacity at airports, the Secretary shall
consider the benefits and costs of the projects (See 49 U.S.C. 47115.
Discretionary Fund).
The FAA implemented the BCA policy to include this requirement for
capacity projects at all categories of airports in order to limit FAA's
risks when investing large amounts of discretionary funds. The FAA uses
the conclusions reached in the BCA review to determine policy and
funding decisions on possible future Federal investments.
In 1997, FAA implemented a new BCA policy which transferred the
responsibility of preparing the BCA from FAA to the sponsor. In
addition, the policy lowered the dollar threshold from $10 million in
AIP Discretionary funds (established in 1994) to $5 million, citing
three reasons related to Executive Order 12893, technical feasibility
of lowering the threshold and workload considerations.
The change to the $5 million threshold was made policy in 1997 and
formalized in a 1999 Federal Register notice, Federal Aviation
Administration Policy and Final Guidance Regarding Benefit Cost
Analysis (BCA) on Airport Capacity Projects for FAA Decisions on
Airport Improvement Program (AIP) Discretionary Grants and Letters of
Intent (LOI), 64 FR 70107 (December 15, 1999).
Since 1997, policy has required sponsors to conduct BCAs for
capacity projects for which more than $5 million in AIP Discretionary
funding will be requested. In developing the draft guidance increasing
the threshold, FAA reviewed the reasons why the BCA threshold amount
was lowered in 1997 and concluded that the previous reasons do not
present a sufficient basis to warrant maintaining the $5 million level
threshold today.
FAA has gained valuable experience assessing the implementation of
the policy and the need to further clarify the threshold requirements
for BCA. The $5 million threshold has remained unchanged for over 13
years while the cost of construction has risen significantly. A
construction cost of $5 million in 1997 was equivalent to $9.8 million
in July 2008. The $5 million threshold has required both FAA and
sponsors of non-primary and non-hub primary airports to devote
substantial financial and staff resources in preparing and evaluating
BCAs for relatively small projects with readily apparent capacity
benefits.
Based on the increase in construction costs, FAA has concluded that
$10 million in AIP Discretionary funds is the appropriate threshold for
fiscal year 2011 and beyond. Further explanation for this conclusion is
detailed in the draft PGL. Under the draft guidance, the BCA threshold
is being increased to $10 million, the FAA would retain the right to
require a BCA for any capacity project, in order to evaluate the
reasonableness of project costs relative to project benefits.
Additionally, FAA is inviting airport sponsors and other interested
parties to comment on the new $10 million threshold for which a BCA
must be performed.
Issued in Washington, DC on December 8, 2010.
Frank San Martin,
Manager, Airports Financial Assistance Division.
[FR Doc. 2010-31614 Filed 12-15-10; 8:45 am]
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