Air Carrier Association of American and Air Transportation Association of America

OST-2007-29341 - Petition for Declaratory Order Regarding Tinicum Township Ordinance No. 2007-809

September 24, 2007

Petition for Declaratory Order - Bookmarked - 260 Pages

The Air Transportation Association of America, Inc. and the Air Carrier Association of America, Inc. jointly and on behalf of themselves and their passenger and cargo member airlines, hereby respectfully petition the Department to issue a ruling regarding the new "privilege fee" imposed by the Township of Tinicum, Delaware County, Pennsylvania on aircraft landing at Philadelphia International Airport. The Department should find that the Landing Fee - which is based on the same "maximum landed weight" methodology utilized by airport operators across the country to charge landing fees for use of runways - is not authorized by, and is in fact prohibited by the Anti-Head Tax Act, currently codified at 49 U.S.C. § 40116.

Landing fees are the prerogative of airport sponsors. A political subdivision that neither owns nor operates an airport cannot require carriers to pay money to the town in order to land aircraft at that airport, even if part of the airport lies within its borders. The Anti-Head Tax Act allows states and towns to levy only certain taxes on carriers. But nothing in the Act - including the limitation provision of subsection 40116(c) - authorizes a municipal government that neither owns nor operates an airport from imposing a landing fee on an airline, at least where, as here, the revenue is not "wholly utilized for airport or aeronautical purposes."

There is no precedent for what Tinicum is attempting to do to the airlines at Philadelphia International Airport. If Tinicum is successful and allowed to impose its "privilege fee," it will create a model for cities and towns across the United States to raise revenue on the backs of airlines and their customers. There is no telling how much financial damage will be inflicted of airlines, but the precedent it would set would be disastrous. If permitted to stand, Tinicum's Landing Fee, and others that will surely follow at other airports around the country, will irreparably harm the national air transportation system and impede the free flow of interstate commerce. The Department should act quickly and forcefully exercise its pre-eminent authority to ensure that these unacceptable consequences never occur.

Counsel: ATA, David Berg, 202-626-4100, dberg@airlines.org and ACAA, Edward Faberman, 202-719-7420, efaberman@acaa1.com

September 27, 2007

Additional Exhibit

Exhibit D - Reply Brief in Support of Defendant Frontier Airlines, Inc.'s Motion to Dismiss or Stay Action Pending Administrative Review. Dated September 24, 2007.

Counsel: ATA, David Berg, 202-626-4100, dberg@airlines.org and ACAA, Edward Faberman, 202-719-7420, efaberman@acaa1.com

October 3, 2007

Opposition of IATA

IATA fully supports the opposition to this unwarranted and unlawful fee raised by the Air Transport Association of America, Inc. and the airlines operating at PHL in the Petition for Declaratory Order filed with the DOT on September 24, 2007, and in the litigation pending before the U.S. District Court for the Eastern District of Pennsylvania.

Currently airports, responsible for the actual operation and safety of the facilities, are bound by federal statutes, policies and grant assurances they made to the Federal Aviation Administration in exchange for receipt of federal funding, all of which place significant limits on the amount the airports can charge airlines for landing fees and other facilities and services. If the Township's fee was to remain in place, it would significantly increase the cost of operation for airlines and eventually their passengers at PHL, without adding any infrastructure or contribution to safety and operational efficiency at the Airport. We are equally concerned that allowing this fee to stand could set a dangerous precedent for U.S. and international airlines both in the U.S. and around the world.

Counsel: IATA, Douglas Lavin, 202-628-9292

October 9, 2007

Plaintiff's Answering Brief in Opposition to Motion to Dismiss or Stay of Additional Defendants - Bookmarked - 20 MB

The plain meaning of subsection (c) of 49 U.S.C. § 40116 grants Tinicum authority to impose the Privilege Tax upon the Defendants. Defendants, however, ignore the plain meaning of the Act, and instead, resort to a discussion of the prior codification of 49 U.S.C. § 40116(c) - - § 1513(f); the summary portion of a Congressional Committee Report regarding that prior codification; and "technical corrections" proposed, but never passed, by a subsequent session of Congress regarding 49 U.S.C. § 40116(c). Rather than apply the plain meaning of § 40116(c), Defendants ask the Court to "rewrite" the statute to purportedly correct a scrivener's error that Congress allegedly meant to correct, but did not. Defendants find support for their arguments in everything but the plain text of the current version of § 40116(c).

On the other hand, Tinicum's interpretation of § 40116(c) is supported by the plain meaning of the Act and respects Congress' decision to grant authority to states and political subdivisions to impose taxes upon an aircraft that, pursuant to § 40116(c): "takes off or lands in the State or political subdivision as part of the flight."

This situation calls into focus basic principles of the separation of powers in our American government. The judicial branch of government should not abdicate its role to the executive branch of government, through the DOT, to determine what the legislative branch intended. This is not an issue of the DOT implementing Congressional intent. This case requires the judicial branch lo first interpret the statute at issue, before the DOT can enforce it.

Counsel: Fox Rothschild, Francis Pileggi, 302-655-3667, fpileggi@foxrothschild.com

Order 2007-10-10
OST-2007-29341 - Petition for Declaratory Order Regarding Tinicum Township Ordinance No. 2007-809

Issued October 11, 2007 | Served October 16, 2007

Order Instituting Proceeding

Many portions of Philadelphia International Airport's terminals and runways are located within the boundaries of Tinicum Township, Delaware County, Pennsylvania. On June 18, 2007, Tinicurn Township enacted an Ordinance imposing a Privilege Fee of three cents per thousand pounds maximum landed weight on aircraft users landing on the PHL runways located within the Township. The Ordinance, know as the Tinicum Township Privilege Fee Ordinance, No. 2007-809, became effective on July 18.

On September 24, the Air Transport Association and the Air Carrier Association of America jointly filed, on behalf of themselves and their passenger and cargo member airlines, a petition with the Department for a declaratory order that the privilege fee is not authorized by and is prohibited by the Anti-Head Tax Act, 49 U.S.C. 40116.

On October 3, the International Air Transport Association filed a letter supporting the petition. IATA asserts that the AHTA does not permit non-proprietor, local authorities to impose taxes on airline operations at an airport. IATA also declares that the privilege fee violates the Policies and Principles that are part of the Chicago Convention of the International Civil Aviation Organization to which the United States is a signatory State, and which permit the imposition of charges only for services and functions provided for civil aviation operations. IATA states that it is concerned that allowing the privilege fee to stand could set a precedent for US. and international airlines both in the U.S. and elsewhere around the world.

We have decided to address the dispute between the carriers and the Township by instituting a proceeding to rule on the federal and international legal questions raised by the imposition of the privilege fee by the Township on airlines operating at PHL. While we prefer a local solution to the issue, negotiations have given way to litigation, A ruling by us should resolve the litigation issues.

We want to give all interested parties an opportunity to present their views on these issues. We are serving this Order on counsel to those parties that have contacted us, those involved in the litigation in the United States District Court for the Eastern District of Pennsylvania, as well as all airlines serving the Philadelphia International Airport, and the City of Philadelphia.

We are establishing a schedule for interested parties to submit their views to enable us to issue an opinion soon. We ask interested parties to submit their views to us within two weeks of the date of the Order. We will consider reply comments submitted within one week of the due date for the original submissions.

By: Andrew Steinberg

October 16, 2007

Reply Brief of Frontier Airlines in Support of Additional Airline Defendants' Motion to Dismiss or Stay Action Pending Administrative Review - US District Court for The Eastern District of Pennsylvania

In arguing that its privilege fee is authorized by the plain language of 49 U.S.C. § 40116(c), Plaintiff insists that the Court disregard the original language of its predecessor statute, 49 U.S.C. App. § 1513(f). However, Plaintiff ignores, much less tries to rebut, the Supreme Court's pronouncement that "Under established canons of statutory construction, it will not be inferred that Congress, in revising and consolidating the laws, intended to change their effect unless such intention is clearly expressed." Finley v. United States, 490 U.S. 545, 554 (1989) (emphasis added).

Plaintiff cites to no evidence of a clearly expressed intention on the part of Congress to substantively amend 49 U.S.C. App. § 1513 when it was re-codified as 49 U.S.C. § 40116. To the contrary, there is overwhelming evidence - all of which Plaintiff chooses to ignore - that Congress did not intend for its re-codification of the Anti-Head Tax Act in 1994 to substantively change any provisions of the statute including, without limitation.

The Tinicum privilege fee is barred by subsections 40116(b), (d) and (e) of the AHTA. The privilege fee violates subsection 40116(b) because it is an improper tax or fee on "the transportation of an individual traveling in air commerce" and/or "the sale of air transportation." In addition, subsection (d)(2)(A)(iv) is violated because the privilege fee unlawfully discriminates against airlines in that it is charged "exclusively upon" airlines and revenues from the fee are not "wholly utilized for airport or aeronautical purposes." And, subsection (e)(2) is violated because the fee is a "landing fee" not being charged by the owner or operator of the airport. Nothing in subsection (c) overcomes these statutory prohibitions by independently authorizing the Tinicum privilege fee.

However, even assuming that there was a legitimate issue as to the meaning of the language in subsection 40116(c), this question is definitively answered by the legislative history set forth in pages 11-21 of the Frontier Reply Brief, which demonstrates that neither subsection (c) not its predecessor (49 U.S.C. App. § 1513(f)) were ever intended to authorize a tax not otherwise provided for in law.

Defendants ask that the Court grant the Defendants' motions to dismiss the First Amended Complaint or, alternatively, that the Court stay this case pending the outcome of the DOT proceeding in Tinicum Township Privilege Fee Proceeding, Docket OST-2007-29341.

Counsel: Schnader Harrison, Denny Shupe, 215-751-2000

October 29, 2007

Comments of the City of Philadelphia - Bookmarked - With Exhibits

The Department must declare the so-called "Privilege Fee" Ordinance enacted by Tinicum Township unlawful under federal law. The Tinicum Ordinance is clearly inconsistent with by federal law, infringes upon the City's proprietary powers and contractual rights, destabilizes the fee and cost structure under which airlines and airports have managed their affairs and relationships for decades, and threatens a deleterious impact on airport economics and air commerce in this region.

The issue here is whether the Department will sanction Tinicum's misapplication of subsection (c) of the Anti-Head Tax Act to arrogate to itself a power it does not possess and wholly abrogate numerous prohibitions against the imposition of landing fees by local municipalities; or instead preserve the nation's time-tested and well-established system of allocating airport costs among air carriers to defray the costs of aviation operations. The law, facts and legislative history all unequivocally establish that the subject ordinance violates federal law.

Counsel: City Law Department, Daniel Cantu-Hertzler, 215-683-5061

October 29, 2007

Reply of Tinicum Township - Bookmarked - 20MB

The plain meaning of subsection (c) of 49 U.S.C. § 40116 grants Tinicum authority to impose the Privilege Tax upon Petitioners' member airlines. Tinicum's imposition of the Privilege Tax is consistent with federal law and international laws, including the Chicago Convention.

Petitioners contend that Tinicum does not have authority to impose the Privilege Tax. However, they ignore the plain meaning of the Act, and instead, resort to a lengthy discussion of the prior codification of 49 U.S.C. § 40116(c) -- § 1513(f); the summary portion of a Congressional Committee Report regarding that prior codification; and ''technical corrections" proposed, but never passed, by a subsequent session of Congress regarding 49 U.S.C. § 40116(c). Rather than apply the plain meaning of § 40116(c), Petitioners ask the DOT to "rewrite" the statute to purportedly correct a scrivener's error that Congress allegedly meant to correct, but did not. Petitioners find support for their arguments in everything but the plain text of the current version of § 40116(c).

On the other hand, Tinicum's interpretation of § 40116(c) is supported by the plain meaning of the Act and respects Congress' decision to grant authority to states and political subdivisions to impose taxes upon an aircraft that, pursuant to § 40116(c): "takes off or lands in the State or political subdivision as part of the flight."

Counsel: Fox Rothschild, Francis Pileggi, 302-654-7444

October 30, 2007

Joint Comments of the Air Transport Association of America, the Air Carrier Association of America and the Regional Airline Association

ATA, ACAA and RAA, on behalf of their member airlines, respectfully request that the DOT grant their Petition for Declaratory Order and rule that the Tinicum privilege fee is preempted and prohibited by federal law.

Landing fees are the prerogative of airport sponsors. A political subdivision that neither owns nor operates an airport cannot require carriers to pay money to the town in order to land aircraft at that airport, even if part of the airport lies within its borders. The Anti-Head Tax Act allows states and towns to levy only certain taxes on carriers to the extent not contrary to other provisions in the Act and federal law. But nothing in the Act - including the limitation provision of subsection 40116(c) - authorizes a municipal government that neither owns nor operates an airport from imposing a landing fee on an airline, at least where, as here, the revenue is not "wholly utilized for airport or aeronautical purposes."

There is no precedent for what Tinicum is attempting to do to the airlines at Philadelphia International Airport. If Tinicum is successful and allowed to impose its "privilege fee," it will create a model for cities and towns across the United States to raise revenue on the backs of airlines and their customers. There is no telling how much financial damage will be inflicted on airlines, but the precedent it would set would be disastrous. If permitted to stand, Tinicum's privilege fee, and others that will surely follow at other airports around the country, will irreparably harm the national air transportation system and impede the free flow of interstate commerce. The Department should act quickly and forcefully exercise its pre-eminent authority to ensure that these unacceptable consequences never occur.

Counsel: David Berg, 202-626-4234, dberg@airlines.org for ATAA / Roger Cohen, 202-367-1170, cohen@raa.org for RAA / Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com for ACAA / Sheppard Mullin, Roy Goldberg, 202-218-0000, rgoldberg@sheppardmullin.com for ATAA and Frontier

October 30, 2007

Comments of Airports Council International - North America

ACI-NA asserts that the Tinicum Township Privilege Fee, which requires aircraft users to pay a landing fee for the use of the Philadelphia International Airport (an airport that the Township neither owns nor operates), is contrary to Federal law. ACI-NA is very concerned that other non-proprietor jurisdictions across the United States would impose similar fees on aircraft operations if the Township's fee is permitted to remain in effect. These fees are not reinvested to improve and maintain the infrastructure and operation of an airport but are siphoned to the general fund of non-proprietor jurisdictions. Neither the airlines nor the passengers receive any benefit from these fees.

We urge the Department to find that the fee imposed by Tinicum Township is unlawful; to support the airline defendants in their litigation with the Township; and to take such other action as may be necessary to invalidate the Township's ordinance.

By: President, Gregory Principato

November 6, 2007

Comments of Airports Council International-North America

On behalf of its members, which include Philadelphia International Airport, ACI-NA reiterates the importance of the Department finding the fee imposed by Tinicum Township unlawful; of the Department supporting the airline defendants in their litigation with the Township; and of the Department taking such other action as may be necessary to invalidate the Township's ordinance.

ACI-NA fully supports the well reasoned comments filed by The City of Philadelphia with the Department on October 29th.

Counsel: James Briggs

November 6, 2007

Joint Reply of the Air Transport Association of America, the Air Carrier Association of America and the Regional Airline Association - Bookmarked

Tinicum's assertion that it is free to charge a landing fee surcharge on aircraft that use PHL runways is contrary to the overriding purpose behind the Anti-Head Tax Act, which was to avoid "a hodgepodge of Balkanized assessments and levies against non-resident travelers whose business or leisure takes them across State lines." If Tinicum is allowed to charge airlines for the "privilege" of using an airport within its jurisdiction, it can be assumed that similar communities throughout the United States will mimic Tinicum and require airlines to pay to use airport runways within their jurisdiction, despite the fact that they neither own nor operate the airport. This phenomenon will produce precisely the type of "Balkanization" of fees and assessments that Congress sought to outlaw with the Anti-Head Tax Act.

Tinicum's privilege fee also violates generally recognized principles of international law relating to charges imposed on airlines for use of airports. Tinicum does not provide 'civil aviation operations" to the airlines at PHL and, therefore, is not able to impose airport-type charges on those carriers. Furthermore, airport users should be charged only the cost of providing the airport facilities and services, ICAO Principles § 21. However, Tinicum does not incur any costs for the operation of PHL and, therefore, should not be imposing fees on airlines at that airport.

Counsel: David Berg, 202-626-4234, dberg@airlines.org for ATAA / Roger Cohen, 202-367-1170, cohen@raa.org for RAA / Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wileyrein.com for ACAA / Sheppard Mullin, Roy Goldberg, 202-218-0000, rgoldberg@sheppardmullin.com for ATAA and Frontier

November 12, 2007

Surreply Comments of Respondent Tinicum Township

Similar to past submissions, Petitioners reiterate that the Department of Transportation should ignore the plain language of subsection (c) of 49 U.S.C. 40116, and instead conclude that Congress made a scrivener's error in enacting that section. Petitioners give new meaning to the concepts of tautology and redundancy, but repetition gives no greater force to their argument, that can be summarized as follows: "Instead of reading the statute, listen to what we will tell you Congress intended to write."

However, Petitioners are unable to point to any evidence for their interpretation of subsection (c). Rather, they would have the DOT search everywhere the current version of the Act for its meaning-including amendments that were proposed but never passed by a subsequent session of Congress regarding 40116(c). Petitioners turn the relevant burden on its head-asserting that Tinicum must prove that the version of 40116(c) -- 49 U.S.C. 1513(f) -- does not apply.

On the other hand, Tinicum's imposition of the tax enacted by Ordinance No. 2007-809 complies with the Act based upon established principles of statutory construction. Moreover, the Privilege Tax complies with international law. Petitioners' self-serving argument that allowing the Privilege Tax to stand will lead to a "parade of horribles" across the country is at best conjectural. In the thirteen years since the current version of 49 U.S.C. 40116(c) was enacted, such a result has not occurred. Thus, the DOT should limit its interpretation to the existing statute enacted by Congress and the limited issue before it, as opposed to the hypothetical doomsday predicted by Petitioners but which is not ripe for decision.

Counsel: Fox Rothschild, Francis Pileggi, 302-355-3667, fpileggi@foxrothschild.com

Order 2008-3-18
OST-2007-29341 - Petition for Declaratory Order Regarding Tinicum Township Ordinance No. 2007-809

Issued March 19, 2008 | Served March 24, 2008

Declaratory Order - Bookmarked

We have carefully considered the claims by the Township that the Anti-Head Tax Act authorizes it to impose taxes or fees on airlines landing at the Airport’s runways within its jurisdiction.

We find that the Township’s privilege fee is prohibited under the provisions of the Anti-Head Tax Act. The AHTA prohibits a state or political subdivision from imposing a charge on an individual traveling in air commerce, on the transportation of such an individual, on the sale of air transportation, or on the gross receipts from that air commerce or transportation. The privilege fee is a prohibited charge since it is based on the maximum landed weight of the aircraft, which in turn relates to the number of seats on the airplane. The privilege fee, accordingly, amounts to a prohibited landing fee because it imposes a charge indirectly on an individual traveling in air commerce, or a charge on the transportation of an individual traveling in air commerce, in connection with the landing of aircraft.

We further find that the AHTA prohibits the Township from imposing the landing fee, because only a state or political subdivision that owns or operates an airport may impose on aircraft operators a (reasonable) landing fee for the use of its airport. We also find that the privilege fee is not authorized by subsection (c) of § 40116, pertaining to flight takeoff or landing requirements for state or political subdivision taxation on commercial aircraft.

Finally, we find that the privilege fee is not within the permissible category of taxes that may be imposed by a state or political subdivision, including net income taxes, property taxes, franchise taxes, and sales or use taxes on the sale of goods and services.

In reaching this conclusion, we do not find that the privilege fee, as imposed on cargo aircraft, is a prohibited charge under the AHTA because it is not imposed on an individual traveling in air commerce or on the transportation of such an individual. 3 Additionally, the privilege fee does not constitute a prohibited charge on the sale of air transportation, under the AHTA, because it is not imposed in connection with the sale of a ticket or waybill. We nevertheless find the privilege fee unlawful as applied to cargo aircraft because the fee constitutes an impermissible landing fee and otherwise is not authorized by the aviation statutes.

Consequently, we may not allow the Township to impose what effectively amounts to a landing fee surcharge on users of PHL, because the rights that those users otherwise may invoke under § 47129 to contest the reasonableness of the fee would be foreclosed.

By: Michael Reynolds