Projected Rates and Charges Analyses for Airline Negotiations

Ricondo & Associates, Inc. (R&A) prepared this document for the stated purposes as expressly set forth herein and for the sole use of the Commonwealth Ports Authority and its intended recipients. The techniques and methodologies used in preparing this document are consistent with industry practices at the time of preparation. Ricondo & Associates, Inc. is not registered as a municipal advisor under Section 15B of the Securities Exchange Act of 1934 and R&A does not provide financial advisory services within the meaning of such Act.

Projected Rates and Charges Analyses for Airline Negotiations Commonweal th Ports Author i ty

Sa ipan Internat ional A i rport , Rota Internat iona l A i rport , T in ian Internat iona l A i rport

PREPARED BY :

RICONDO & ASSOCIATES, INC. 105 East Fourth Street , Suite 1700

Cincinnati, OH 45202

(513) 651-4700 (phone)

(513) 412-3570 (facsimile)

PRELIMINARY DRAFT Page 1 of 28 PREPARED ON 11/04/2015

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EXHIBIT 2

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1.1 Introduction

This document has been created to expedite the process of negotiating a new Airline-Airport Use and Lease Agreement (New Agreement) between Commonwealth Ports Authority (the Authority) and the airlines serving Saipan International Airport, Rota International Airport, and Tinian International Airport (collectively known as “the Airport System”). This document is for discussion purposes only. Neither the Authority nor any of the airlines will be bound by any of the provisions of this document until a mutually acceptable, comprehensive written Agreement has been fully negotiated, executed and delivered. Airlines that execute the Agreement will be known as Signatory Airlines (Airlines). This document presents projected airlines rates and charges resulting from the operation of the Airports by the Authority. The projected airline rates and charges methodology presented herein is based on the provisions and articles in the Agreement and incorporates the estimated rates and charges impacts associated with both the day-to-day operations of the Airports, as well as undertaking capital projects during the time period covered in this document.

Included in this document are revenues and expenses for Fiscal Year (FY) 2016 Budget and Projected FY 2017 through FY 2020 (the Projection Period). The Authority’s FY is the twelve-month period ending September 30th in each year. These projections are based on a review of historical financial operations, estimated future aviation activity levels, discussions with Authority staff and the impacts of the projected Capital Improvement Program (CIP). This report also includes estimated airlines rates and charges, airline cost per enplanement, Airport cash flow, and debt service coverage for the Series A 1998 bonds.

The Authority is proposing, through the rates and charges formulas presented herein, a business agreement with the Airlines that is primarily “compensatory” in nature. It is recognized by the Authority that, with the current financial circumstances in which the Airlines are operating, along with transitioning to operating and maintaining a new airport facility, the business arrangement should reflect the fact that both the Airlines and the Authority are working together to provide adequate facilities at the Airports that do not create an unreasonable burden to the Airlines financially. The proposed business arrangement includes the following key elements.

A “cost center residual” landing fee rate for the Airfield Cost Center using total landed weight as the divisor.

A “cost center compensatory” average terminal rental rate for the Terminal Cost Center using total rentable square feet as the divisor.

Cost centers have been developed that are consistent with industry practices.

As a result of these assumptions and other described later in this report, the projected impacts to the Airlines for Budget FY 2016 and the Projection Period under the proposed Agreement are shown in Table 1.


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(Fiscal Year Ending September 30)

Estimated Budget

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Old Methodology Rates:

Facility Service Charges

Saipan Main Terminal:Signatory - Per Enplaned Passenger $9.07Nonsignatory - Per Enplaned Passenger (150%) $13.61Signatory - Per Deplaned Passenger $2.20Nonsignatory - Per Deplaned Passenger (150%) $3.30

Saipan Commuter Terminal:Signatory - Per Enplaned Passenger $3.35Nonsignatory - Per Enplaned Passenger (125%) $4.19

Rota:Signatory - Per Enplaned Passenger $4.95Nonsignatory - Per Enplaned Passenger (150%) $6.19

Tinian:Signatory - Per Enplaned Passenger $4.95Nonsignatory - Per Enplaned Passenger (150%) $6.19

Landing Fee

Saipan Main Terminal:Signatory $2.02Nonsignatory (150%) $3.03

Saipan Commuter Terminal:Signatory $1.40Nonsignatory (125%) $1.75

Rota:Signatory - Commuter $1.06Nonsignatory (125%) - Commuter $1.33

Tinian:Signatory - Commuter $1.06Nonsignatory (125%) - Commuter $1.33

Debt Service Coverage 2.26

Cost Per Enplanement $14.90

New Methodology Rates:

Terminal Rental Rate

Average Rental Rate (per square foot) $41.24 $42.89 $44.66 $46.44 $48.33

Saipan Main:Average Signatory Rental Rate (per square foot) $44.40 $46.18 $48.08 $50.00 $52.03Average Nonsignatory Rental Rate - 125% (per square foot) $55.50 $57.72 $60.10 $62.50 $65.04

Saipan Commuter: 50% DISCOUNTAverage Signatory Rental Rate (per square foot) $22.20 $23.09 $24.04 $25.00 $26.02Average Nonsignatory Rental Rate - 125% (per square foot) $27.75 $28.86 $30.05 $31.25 $32.52

Rota: 50% DISCOUNTAverage Signatory Rental Rate (per square foot) $22.20 $23.09 $24.04 $25.00 $26.02Average Nonsignatory Rental Rate - 125% (per square foot) $27.75 $28.86 $30.05 $31.25 $32.52

Tinian: 50% DISCOUNTAverage Signatory Rental Rate (per square foot) $22.20 $23.09 $24.04 $25.00 $26.02Average Nonsignatory Rental Rate - 125% (per square foot) $27.75 $28.86 $30.05 $31.25 $32.52

Landing Fee

Average Landing Fee $2.18 $2.25 $2.32 $2.39 $2.47

International Landing Fee $2.28 $2.35 $2.42 $2.50 $2.58

Commuter / Rota / Tinian Landing Fee $1.71 $1.76 $1.82 $1.88 $1.93Nonsignatory Landing Fee (125%) $2.73 $2.81 $2.90 $2.99 $3.09

Per Use Fee

Per Use Fee - Ticket Counters and Queuing $52.99 $55.10 $57.38 $59.67 $62.09

Per Use Fee - Holdrooms/Gates $185.80 $193.22 $201.19 $209.23 $217.72

Debt Service Coverage 1.92 1.84 1.81 1.79 1.75

Cost Per Enplanement $12.59 $12.95 $13.35 $13.74 $14.14

Source: Commonwealth Ports Authority and Ricondo & Associates, Inc.

Prepared by: Ricondo & Associates, Inc.

Table 1 Rates and Charges Summary

PROJECTED


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The remainder of this document is presented under the following headings:

Financial Structure Activity Projections Terminal Space Debt Service PFC Revenue Operating Expenses Non-Aviation Revenues Airline Rates and Charges

1.2 Financial Structure

Expenses, Debt Service and Capital Expenditures of the Authority are categorized into Cost Centers. The Authority utilizes the cost center structure described below, which is consistent with industry standards.

The Authority has identified the following Direct Cost Centers:

Airfield. The Airfield cost center includes the portion of the Airports provided for the landing, taking off, and taxiing of aircraft, including runways, taxiways, approach and runway protection zones, safety areas, infield areas, landing and navigational aids, and land areas required by or related to aeronautical use of the Airports.

Main Terminal. The Main Terminal cost center includes the Saipan International Airport main terminal passenger building and associated curbside entrance areas and adjoining landscaped areas. This cost center also includes the aircraft aprons at the Main Terminal.

Commuter Terminal. The Commuter Terminal cost center includes the Commuter Terminal building and associated curbside entrance areas, and aircraft aprons at the Commuter Terminal.

Rota Terminal. The Rota Terminal cost center includes the Rota Terminal building, associated curbside entrance areas, and aircraft aprons at the Rota Terminal.

Tinian Terminal. The Tinian Terminal cost center includes the Tinian Terminal building, associated curbside entrance areas, and aircraft aprons at the Tinian Terminal.

Indirect Cost Centers have expenditures that will be allocated to Direct Cost Centers:

ARFF. The ARFF cost center includes all aircraft rescue and firefighting functions of the Airport System.

Security. The Security cost center includes all functions of the Airport System related to security. Administrative. The Administrative cost center includes the administrative functions of the Airport

System.


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For 2016, Operating Expenses in indirect cost centers will be allocated on the following basis.

Allocation of Indirect Operating Expenditures

Budget PROJECTED

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Allocation % for Saipan ARFF Operating Expenses:

Main Terminal 39% 39% 39% 39% 39%

Commuter Terminal 5% 5% 5% 5% 5%

Airfield 56% 56% 56% 56% 56%

Total 100% 100% 100% 100% 100%

Allocation % for Saipan Security Operating Expenses:

Main Terminal 75% 75% 75% 75% 75%


Airfield 20% 20% 20% 20% 20%

Total 100% 100% 100% 100% 100%

Allocation % for Saipan Administrative Operating Expenses: 1/

Main Terminal 78% 78% 78% 78% 78%


Airfield 18% 18% 18% 18% 18%

Total 100% 100% 100% 100% 100%

1/ The Administrative Cost Center is allocated to Direct Cost Centers based on each Direct Cost Center's proportionate share of expenses after allocation of ARFF and Security indirect operating expenses.

Source: Commonwealth Ports Authority


ARFF and Security Cost Centers are allocated at each airport based on an approximation of effort expended in each Direct Cost Center and are consistent with industry standards. It is the intent of the Authority to review these allocations periodically throughout the term of the Agreement to ensure that expenses are properly allocated to the appropriate Direct Cost Centers. The Administrative Cost Center is allocated to Direct Cost Centers based on each Direct Cost Center’s proportionate share of expenses after allocation of ARFF and security indirect operating expenses.

1.3 Activity Projections

Table 2 presents projected enplanements and landed weights for the Airports for the Projection Period.


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(Fiscal Year Ending September 30)Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Enplanements:

Saipan:

CO/AM Airlines 4,500 4,545 4,590 4,636 4,682Dynamic Airlines 0 0 0 0 0Delta Air Lines 88,133 89,014 89,904 90,803 91,711Asiana Airlines 178,233 180,015 181,815 183,633 185,470Pacific Orient, Inc. 670 676 683 690 697Pacific Airport 0 0 0 0 0China Eastern Airlines 57,563 58,139 58,720 59,307 59,900Oren Air 0 0 0 0 0Sichuan Airlines 86,223 87,085 87,956 88,835 89,724Vladivostok Airlines 0 0 0 0 0Jeju Airlines 78,895 79,684 80,481 81,286 82,099Miscellaneous Airlines 263 265 268 271 273Cape Air 35,477 35,832 36,190 36,552 36,918Star Marianas 35,372 35,726 36,083 36,444 36,808Arctic Circle 638 645 651 658 664Freedom Air 0 0 0 0 0

Total 565,966 571,625 577,342 583,115 588,946

Rota:

Freedom Air 0 0 0 0 0Arctic Circle 619 625 632 638 644Star Marianas 4,790 4,838 4,887 4,936 4,985CO/AM Airlines 1,313 1,326 1,339 1,353 1,366

Cape Air 2,579 2,604 2,630 2,657 2,683

Total 9,301 9,394 9,488 9,583 9,679

Tinian:

Freedom Air 0 0 0 0 0Star Marianas 30,170 30,471 30,776 31,084 31,395Miami Air International 0 0 0 0 0Miscellaneous Airlines 328 332 335 338 342

Total 30,498 30,803 31,111 31,422 31,736

Total Enplanements 605,765 611,822 617,941 624,120 630,361



Table 2 Activity (Page 1 of 2)

PROJECTED


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FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Landed Weight (000 lbs):

Saipan:

CO/AM Airlines 4,610,206 4,656,308 4,702,871 4,749,899 4,797,398Dynamic Airlines 0 0 0 0 0Delta Air Lines 159,939,156 161,538,548 163,153,933 164,785,472 166,433,327Asiana Airlines 294,440,856 297,385,265 300,359,117 303,362,708 306,396,335Pacific Orient, Inc. 12,513,026 12,638,156 12,764,538 12,892,183 13,021,105Pacific Airport 0 0 0 0 0China Eastern Airlines 79,453,508 80,248,043 81,050,524 81,861,029 82,679,639Oren Airlines 0 0 0 0 0Sichuan Airlines 128,924,561 130,213,806 131,515,944 132,831,104 134,159,415Micronesian Air 8,113,584 8,194,720 8,276,667 8,359,433 8,443,028Jeju Airlines 74,838,334 75,586,717 76,342,584 77,106,010 77,877,070Miscellaneous Airlines 2,973,157 3,002,889 3,032,918 3,063,247 3,093,879Vladivostok Airlines 0 0 0 0 0Cape Air 36,996,381 37,366,345 37,740,008 38,117,408 38,498,582Star Marianas 71,225,846 71,938,105 72,657,486 73,384,061 74,117,901Arctic Circle 1,293,931 1,306,871 1,319,939 1,333,139 1,346,470Freedom Air 0 0 0 0 0

Total 875,323 884,076 892,917 901,846 910,864

Rota:

Freedom Air 0 0 0 0 0Arctic Circle 1,293,931 1,306,871 1,319,939 1,333,139 1,346,470Star Marianas 12,696,185 12,823,147 12,951,378 13,080,892 13,211,701CO/AM Airlines 1,773,156 1,790,888 1,808,796 1,826,884 1,845,153Miscellaneous Airlines 1,456,420 1,470,984 1,485,694 1,500,551 1,515,556Micronesian Air Cargo Services 5,781,814 5,839,633 5,898,029 5,957,009 6,016,579Cape Air 4,528,678 4,573,965 4,619,705 4,665,902 4,712,561

Total 27,530 27,805 28,084 28,364 28,648

Tinian:

Freedom Air 0 0 0 0 0Star Marianas 61,889,568 62,508,464 63,133,548 63,764,884 64,402,533Miami Air International 0 0 0 0 0Miscellaneous Airlines 15,150 15,302 15,455 15,609 15,765Micronesian Air Cargo 1,130,794 1,142,102 1,153,523 1,165,058 1,176,708

Total 63,036 63,666 64,303 64,946 65,595

Landed Weight by Airport:

Total Landed Weight 965,888 975,547 985,303 995,156 1,005,107



PROJECTED

Table 2 Activity (Page 2 of 2)


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The activity projections have been developed for all airlines and the main assumptions are:

Enplanements. The enplanements are projected to grow by 1.0 percent annually throughout the Projection Period.

Landed Weights. The landed weights are projected to grow by 1.0 percent annually throughout the Projection Period.

1.4 Terminal Space

Total terminal space differentiated into airline preferential space, airline joint use space, other rentable space and non-rentable space for each airport.

The other rentable space includes concessions, Federal Inspections Services (FIS), Transportation Security Administration (TSA), U.S. Customs and Border Protection (CBP), other miscellaneous rentable and Authority administrative space. Joint Use space is allocated to Airlines based on each Airline’s percentage of enplanements.

The following Tables 3A-3D present terminal space for the Airport System:

1.5 Debt Service

Debt service consists of projected debt service on the Airport’s Series A 1998 bond. Table 4 presents the projected debt service at the Airports from FY 2016 throughout the Projection Period. Debt service at the Airports is expected to remain level at approximately $1.4 million throughout the Projection Period.

1.6 Passenger Facility Charge (PFC) Revenue

Table 5 presents estimated PFC Revenue at the Airport System for the Projection Period. The Authority collects the maximum rate of $4.50 per enplanement and under FAA regulation is able to keep $4.39 per enplaned passenger after a $0.11 per enplanement administrative fee is paid. Historically, the Airport System has eligible enplanements of approximately 90.0 percent of total enplanements.

CPA has authority to pay 30.2 percent of annual Debt Service and coverage payments from PFC revenues based on 1998 PFC-eligible projects. Total PFC Revenue to be used for debt service between FY 2016 and FY 2020 is approximately $500 thousand per year. The remaining PFC revenues received annually reimburse CPA for PFC-eligible projects originally funded with CPA funds.


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FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Airline Rentable Space (square feet):

Leased Preferential Space

Ground Floor - Leased Airline Ticket Counters 2,799 2,799 2,799 2,799 2,799Ground Floor - Leased Airline Ticket Offices 5,303 5,303 5,303 5,303 5,303Ground Floor - Leased Ticket Queuing / Lobby 18,107 18,107 18,107 18,107 18,107Second Floor - Area A Airline Offices Leased 2,385 2,385 2,385 2,385 2,385

Total Leased Preferential Space 28,594 28,594 28,594 28,594 28,594

Unleased Preferential Space

Second Floor - Area A Airline Offices Space 1,200 1,200 1,200 1,200 1,200Ground Floor - Ticket Counters 0 0 0 0 0Ground Floor - Queuing / Lobby 0 0 0 0 0Second Floor - Holdroom B Gate #1 6,109 6,109 6,109 6,109 6,109Second Floor - Holdroom B Gate #2 6,109 6,109 6,109 6,109 6,109Second Floor - Holdroom B Seating Area 0 0 0 0 0

Total Unleased Preferential Space 13,418 13,418 13,418 13,418 13,418

Total Preferential Space 42,012 42,012 42,012 42,012 42,012

Joint Use Space

Basement - BHS 12,179 12,179 12,179 12,179 12,179Ground Floor - Area B Baggage Claim 5,354 5,354 5,354 5,354 5,354Ground Floor - Arrivals Corridor Secure Circulation 28,700 28,700 28,700 28,700 28,700Second Floor - Holdroom B Gate #3 6,109 6,109 6,109 6,109 6,109Second Floor - Holdroom B Gate #4 6,109 6,109 6,109 6,109 6,109Second Floor - Holdroom A Gate #5 6,380 6,380 6,380 6,380 6,380Second Floor - Holdroom A Gate #6 6,380 6,380 6,380 6,380 6,380

Total Joint Use Space 71,210 71,210 71,210 71,210 71,210

Total Airline Rentable Space 113,222 113,222 113,222 113,222 113,222

Other Rentable Space

Ground Floor - ATM 144 144 144 144 144Ground Floor - Pacific Airport Services Offices 2,104 2,104 2,104 2,104 2,104Ground Floor - Pacific Oriental Inc. Offices 1,300 1,300 1,300 1,300 1,300Ground Floor - CPA AOA 2,456 2,456 2,456 2,456 2,456Ground Floor - TSA Offices 2,790 2,790 2,790 2,790 2,790Ground Floor - DFS 1st Floor Storage 17,000 17,000 17,000 17,000 17,000Ground Floor - Area B Concessions 2,667 2,667 2,667 2,667 2,667Ground Floor - Area B Customs 5,354 5,354 5,354 5,354 5,354Ground Floor - CBP 12,884 12,884 12,884 12,884 12,884Second Floor - TSA Screening 2,335 2,335 2,335 2,335 2,335Ground Floor - Ramp to TSA Screening Checkpoint 4,636 4,636 4,636 4,636 4,636Second Floor - Holdroom A Concessions 3,091 3,091 3,091 3,091 3,091Second Floor - Area A Office Space 6,479 6,479 6,479 6,479 6,479Second Floor - Area B Office Space 3,372 3,372 3,372 3,372 3,372Second Floor - Holdroom B Seating Area 6,500 6,500 6,500 6,500 6,500Second Floor - Concessions Space 18,142 18,142 18,142 18,142 18,142Second Floor - Concessions Other Rentable Space 20,070 20,070 20,070 20,070 20,070

Total Other Rentable Space 111,324 111,324 111,324 111,324 111,324

Total Rentable Space (square feet) 224,546 224,546 224,546 224,546 224,546

Non Rentable Space

Basement - Mechanical 821 821 821 821 821Ground Floor - Ticketing Restrooms 1,000 1,000 1,000 1,000 1,000Ground Floor - Customs/Baggage Claim Restroom 500 500 500 500 500Ground Floor - Arrivals Restrooms 500 500 500 500 500Ground Floor - Storage under Seating Area 6,500 6,500 6,500 6,500 6,500Ground Floor - Employee Exit from CBP 2,400 2,400 2,400 2,400 2,400Ground Floor - Other / Mechanical 11,929 11,929 11,929 11,929 11,929Second Floor - Holdroom A Restroom 500 500 500 500 500Second Floor - Holdroom B Restroom 500 500 500 500 500Second Floor - Secure Area 1,200 1,200 1,200 1,200 1,200

Total Non Rentable Space 25,850 25,850 25,850 25,850 25,850

Total Terminal Area (square feet) 250,396 250,396 250,396 250,396 250,396



Tabel 3A Saipan Main Terminal by Space Type

PROJECTED


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FY 2016 FY 2017 FY 2018 FY 2019 FY 2020


Leased Preferential Space:

Ticket Counters 102 102 102 102 102Ticket Offices 546 546 546 546 546Bag Makeup 246 246 246 246 246

Total Leased Preferential Space 894 894 894 894 894

Unleased Preferential Space:

Ticketing Counters 102 102 102 102 102Ticket Offices 481 481 481 481 481Bag Makeup 369 369 369 369 369

Total Unleased Preferential Space 952 952 952 952 952


Airline Joint Use Space

Holdrooms / Common Area 5,118 5,118 5,118 5,118 5,118




Restaurant 925 925 925 925 925Snack Bar 111 111 111 111 111

Total Other Rentable Space 1,036 1,036 1,036 1,036 1,036


Non Rentable Space

Restrooms 574 574 574 574 574

Total Non Rentable Space 574 574 574 574 574

Total Useable Space 8,573 8,573 8,573 8,573 8,573

Non Useable Space

Meter. Room 90 90 90 90 90Electrical Room 154 154 154 154 154

Total Non Useable Space 244 244 244 244 244

Total Terminal Space (square feet) 8,817 8,817 8,817 8,817 8,817



Table 3B Saipan Commuter Terminal by Space Type

PROJECTED


SMA App. 233


FY 2016 FY 2017 FY 2018 FY 2019 FY 2020



Ticket Counters 435 435 435 435 435Ticket Offices 440 440 440 440 440Bag Makeup 562 562 562 562 562

Total Leased Preferential Space 1,437 1,437 1,437 1,437 1,437






Baggage Claim 1,301 1,301 1,301 1,301 1,301Queuing Area 1,670 1,670 1,670 1,670 1,670Unclaimed Baggage Space 141 141 141 141 141Holding Room 1,789 1,789 1,789 1,789 1,789




Unidentified Rentable Space 234 234 234 234 234Customs Border Patrol 1,594 1,594 1,594 1,594 1,594TSA Passenger Screening 498 498 498 498 498TSA Cargo Screening 843 843 843 843 843Customs Border Patrol 1,897 1,897 1,897 1,897 1,897Immigration Space 279 279 279 279 279Restaurant 1,414 1,414 1,414 1,414 1,414Snack Bar 441 441 441 441 441Ports Police 314 314 314 314 314TSA STO 606 606 606 606 606

Total Other Rentable Area 8,120 8,120 8,120 8,120 8,120

Total Rental Space (square feet) 15,195 15,195 15,195 15,195 15,195

Non-Rentable Space

PAD Space 67 67 67 67 67Hall Space 78 78 78 78 78X-Ray 0 0 0 0 0Storage Space 42 42 42 42 42Stairs 328 328 328 328 328Men's Restroom Space 709 709 709 709 709Women's Restroom Space 618 618 618 618 618Toil Restroom 0 0 0 0 0Janitor's Closet 107 107 107 107 107Electrical Room 170 170 170 170 170Mechanical Space 1,000 1,000 1,000 1,000 1,000

Total Non-Rentable Space 3,119 3,119 3,119 3,119 3,119

Total Rota Terminal Space (square feet) 18,314 18,314 18,314 18,314 18,314



Table 3C Rota Airport Terminal by Space Type

PROJECTED


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FY 2016 FY 2017 FY 2018 FY 2019 FY 2020



Check In Space 284 284 284 284 284Check In Offices 422 422 422 422 422Baggage Ready Space 173 173 173 173 173

Total Leased Preferential Space 879 879 879 879 879




Total Preferential Space 879 879 879 879 879


Holdroom 1,527 1,527 1,527 1,527 1,527Arrival Area 1,827 1,827 1,827 1,827 1,827




Unidentified Space 263 263 263 263 263Holdroom Areas 150 150 150 150 150Concession Space 516 516 516 516 516Administration Space 460 460 460 460 460Security Space 175 175 175 175 175Unoccupied Office Space (IMG) 98 98 98 98 98Check-In Area 749 749 749 749 749

Total Other Rentable Area 2,411 2,411 2,411 2,411 2,411


Non-Rentable East Wing Space: 1/

Airline 1 Space 151 151 151 151 151Airline 2 Space 138 138 138 138 138Airline 3 Space 153 153 153 153 153Check In Space 406 406 406 406 406Baggage Screening Area 779 779 779 779 779VIP Lounge 538 538 538 538 538Men's Restroom Space 267 267 267 267 267Women's Restroom Space 270 270 270 270 270Corridor 4,363 4,363 4,363 4,363 4,363Concessions 419 419 419 419 419Holdroom 6,850 6,850 6,850 6,850 6,850Mechanical Space 361 361 361 361 361Janitor's Closet 69 69 69 69 69Electrical Room 247 247 247 247 247PAT DN 66 66 66 66 66IMG Space 131 131 131 131 131Office 272 272 272 272 272

Total Non-Rentable East Wing Space 15,480 15,480 15,480 15,480 15,480

Non-Rentable West Wing Space:

Customs Area Office 2/ 197 197 197 197 197Customs Broder Patrol 2/ 1,780 1,780 1,780 1,780 1,780Baggage Area 2/ 1,330 1,330 1,330 1,330 1,330X-Ray 235 235 235 235 235Hall Space 165 165 165 165 165PAT DN 117 117 117 117 117Men's Restroom Space 353 353 353 353 353Women's Restroom Space 346 346 346 346 346Toil Restroom 122 122 122 122 122

Total Non-Rentable West Wing Space 4,639 4,639 4,639 4,639 4,639

Total Non-Rentable Space 20,119 20,119 20,119 20,119 20,119

Total Tinian Terminal Space (square feet) 26,763 26,763 26,763 26,763 26,763

1/ Tinian east wing terminal identified as non-rentable until end of construction.

2/ Customs Area Office, Customs Border Patrol, and Baggage Area space is identified as non-rentable space but may be used if international fligh



Table 3D Tinian Airport Terminal by Space Type

PROJECTED


SMA App. 235


Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Debt Service:

1998 A Series $1,386,250 $1,380,156 $1,391,250 $1,379,531 $1,375,313Less: Capitalized Interest 0 0 0 0 0

Total Debt Service $1,386,250 $1,380,156 $1,391,250 $1,379,531 $1,375,313

Percent Allocation by Cost Center:

Saipan International Airport:

Main Terminal Building 47% 47% 47% 47% 47%Commuter Terminal Building 1% 1% 1% 1% 1%Airfield 29% 29% 29% 29% 29%

Total Saipan projects 78% 78% 78% 78% 78%

Rota International Airport:

Terminal Building 19% 19% 19% 19% 19%Airfield 3% 3% 3% 3% 3%

Total Rota projects 22% 22% 22% 22% 22%

Tinian Airport:

Terminal Building 0% 0% 0% 0% 0%Airfield 1% 1% 1% 1% 1%

Total Tinian projects 1% 1% 1% 1% 1%

Total Airport Projects 100% 100% 100% 100% 100%

Debt Service by Cost Center:


Main Terminal Building $653,840 $650,965 $656,198 $650,671 $648,681Commuter Terminal Building 12,793 12,736 12,839 12,731 12,692Airfield 408,508 406,712 409,981 406,528 405,284

Total Saipan Debt Service $1,075,140 $1,070,414 $1,079,018 $1,069,929 $1,066,657


Terminal Building $267,928 $266,750 $268,894 $266,629 $265,814Airfield 35,127 34,973 35,254 34,957 34,850

Total Rota Debt Service $303,055 $301,723 $304,148 $301,586 $300,664

Tinian Airport:

Terminal Building $0 $0 $0 $0 $0Airfield 8,055 8,020 8,084 8,016 7,991

Total Tinian Debt Service $8,055 $8,020 $8,084 $8,016 $7,991

Airport:

Terminal Building $934,560 $930,452 $937,931 $930,031 $927,186Airfield 451,690 449,704 453,319 449,501 448,126

Total Airport Debt Service $1,386,250 $1,380,156 $1,391,250 $1,379,531 $1,375,313



Table 4A Debt Service

PROJECTED


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Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Table 4B Debt Service

PROJECTED

PFC Eligible Debt Service & Coverage by Cost Center:


Terminal 5.9% $102,783 $102,331 $103,153 $102,284 $101,972Airfield 19.0% 328,494 327,050 329,679 326,902 325,902

Total Saipan Debt Service 24.9% $431,277 $429,381 $432,832 $429,186 $427,874



Total Rota Debt Service 4.9% $85,458 $85,082 $85,766 $85,044 $84,784

Tinian Airport:

Terminal 0.0% $0 $0 $0 $0 $0Airfield 0.4% 6,575 6,546 6,599 6,543 6,523

Total Tinian Debt Service 0.4% $6,575 $6,546 $6,599 $6,543 $6,523

Airport:


Total Airport Debt Service 30.2% $523,309 $521,009 $525,197 $520,773 $519,180

Net Debt Service by Cost Center:


Main Terminal Building $551,057 $548,635 $553,045 $548,386 $546,709Commuter Terminal Building 12,793 12,736 12,839 12,731 12,692Airfield 80,014 79,662 80,302 79,626 79,382

Total Saipan Debt Service $643,863 $641,033 $646,186 $640,743 $638,783


Terminal $211,143 $210,214 $211,904 $210,119 $209,477Airfield 6,455 6,426 6,478 6,423 6,404

Total Rota Debt Service $217,597 $216,641 $218,382 $216,543 $215,880

Tinian Airport:

Terminal $0 $0 $0 $0 $0Airfield 1,480 1,474 1,485 1,473 1,468

Total Tinian Debt Service $1,480 $1,474 $1,485 $1,473 $1,468

Airport:

Terminal $774,992 $771,586 $777,788 $771,236 $768,878Airfield 87,948 87,562 88,266 87,522 87,254

Net Debt Service $862,941 $859,147 $866,053 $858,758 $856,132




SMA App. 237


Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Enplanements 605,765 611,822 617,941 624,120 630,361Eligible Enplanements (90%) 90% 547,546 553,021 558,551 564,137 569,778

PFC Revenue per Enplanement $4.50 $4.50 $4.50 $4.50 $4.50 $4.50Administrative Fee $0.11 $0.11 $0.11 $0.11 $0.11 $0.11

PFC Revenues $2,403,726 $2,427,763 $2,452,040 $2,476,561 $2,501,326Interest Revenues 1.5% 18,028 18,208 18,390 18,574 18,760

Adjusted PFC Revenues $2,421,753 $2,445,971 $2,470,431 $2,495,135 $2,520,086

Starting Balance $0 $0 $0 $0 $0Deposit: Revenues 2,421,753 2,445,971 2,470,431 2,495,135 2,520,086Expend: PFC Debt Service & Coverage 523,309 521,009 525,197 520,773 519,180Reimburse CPA for PAYG Projects 1,898,444 1,924,962 1,945,234 1,974,362 2,000,906Ending Balance $0 $0 $0 $0 $0



PROJECTED

Table 5 PFC Revenues


SMA App. 238

1.7 Operating Expenses and Capital Expenditures

Tables 6A and 6B present Operating Expenses and Capital Expenditures at the Airport System for the Projection Period. Operating Expenses at the Airport System are expected to increase at a compound annual growth rate of 4.5 percent through the Projection Period. Capital Expenditures at the Airport System are expected to increase at a compound annual growth rate of 3.0 percent through the Projection Period.

1.8 Non-Aviation Revenues

Table 7 presents Non-Aviation Revenue at the Airport System for the Projection Period. Non-Aviation Revenue includes revenues from cargo landing fees and facility rentals, hangers rentals, fuel flowage fees, FBO rentals, rental car contracts, concessions, other ground transportation fees, investments earnings, and miscellaneous other revenues.

Non-Aviation Revenue at the Airport System is expected to increase at a compound annual growth rate of 2.7 percent through the Projection Period, based on inflationary impacts and enplanement growth.

1.9 Airline Rates and Charges

Rates will be calculated for the Terminal and Airfield at the Airports. The airlines rates and charges presented in these analyses for FY 2016 though the Projection Period reflect the proposed methodology described earlier in this report. The proposed methodology is described in more detail below.

The components of the total requirement for the terminal rental rate and landing fee include the following:

Operating Expenses. Includes the Operating Expenses (direct and allocated indirect) attributable to the specific rate-setting area.

Debt Service. Includes the portion of Total Debt Service attributable to the specific rate-setting area. Debt Service Coverage. Includes 25 percent of Total Debt Service attributable to the specific rate-

setting area. Capital Equipment. Includes the capital Equipment attributable to the specific rate-setting area.

1.9.1 LANDING FEE

A residual calculation for the Landing Fee is presented in Table 8. The Total Airfield Requirement is equal to the sum of the previously described components for the Airfield Cost Center. Nonsignatory landing fees,1 fuel flowage revenues, and PFC revenues eligible for Debt Service and Coverage attributable to the Airfield are

1 Projections assume all airlines are Signatory.


SMA App. 239


Budget CAGR

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 2016-2020

Operating Expenses by Type of Expense :

Salaries and Wages $4,701,045 $4,912,592 $5,133,659 $5,364,673 $5,606,084 4.5%Benefits 619,098 646,958 676,071 706,494 738,286 4.5%Staff Training 95,000 99,275 103,742 108,411 113,289 4.5%Travel 98,050 102,462 107,073 111,891 116,926 4.5%Professional Services/Consulting/Audit Services 72,000 75,240 78,626 82,164 85,861 4.5%Contractual Services 1,228,323 1,283,598 1,341,359 1,401,721 1,464,798 4.5%Insurance 777,143 812,114 848,659 886,849 926,757 4.5%Board Expense 24,050 25,132 26,263 27,445 28,680 4.5%Legal Services 95,000 99,275 103,742 108,411 113,289 4.5%Promotion 24,100 25,185 26,318 27,502 28,740 4.5%Repairs and Maintenance 606,721 634,023 662,555 692,369 723,526 4.5%Supplies and Materials 609,100 636,510 665,152 695,084 726,363 4.5%Fuel 423,800 442,871 462,800 483,626 505,389 4.5%Subscription 4,900 5,121 5,351 5,592 5,843 4.5%Membership Dues 6,500 6,793 7,098 7,418 7,751 4.5%Advertising 14,000 14,630 15,288 15,976 16,695 4.5%Communication 76,850 80,308 83,922 87,699 91,645 4.5%Postage 4,500 4,703 4,914 5,135 5,366 4.5%Utilities 1,860,000 1,943,700 2,031,167 2,122,569 2,218,085 4.5%

Total Operating Expenses $11,340,180 $11,850,488 $12,383,760 $12,941,029 $13,523,376 4.5%

Operating Expenses by Cost Center (Before Allocating Indirect) :

Terminal $3,381,395 $3,533,557 $3,692,567 $3,858,733 $4,032,376 4.5%Airfield 0 0 0 0 0 N/AAircraft Rescue & Fire Fighting 2,180,505 2,278,628 2,381,166 2,488,318 2,600,293 4.5%Administrative 1,991,815 2,081,447 2,175,112 2,272,992 2,375,277 4.5%Security 1,328,599 1,388,385 1,450,863 1,516,152 1,584,378 4.5%

Total Operating Expenditures - All Cost Centers $8,882,314 $9,282,018 $9,699,708 $10,136,195 $10,592,324 4.5%

Operating Expenses by Airport (After Allocation of Indirect Expenses) :

Saipan:

Main Terminal $7,113,275 $7,433,372 $7,767,874 $8,117,428 $8,482,713 4.5%Commuter Terminal 337,540 352,729 368,602 385,189 402,522 4.5%Airfield 1,623,470 1,696,526 1,772,869 1,852,648 1,936,018 4.5%

Total Saipan Airport Operating Expenses $9,074,284 $9,482,627 $9,909,345 $10,355,266 $10,821,253 4.5%

Rota Airport:

Terminal $842,019 $879,910 $919,506 $960,884 $1,004,123 4.5%Airfield 171,136 178,837 186,885 195,295 204,083 4.5%

Total Rota Airport Operating Expenses $1,013,155 $1,058,747 $1,106,391 $1,156,178 $1,208,206 4.5%

Tinian Airport:

Terminal $969,188 $1,012,801 $1,058,377 $1,106,004 $1,155,775 4.5%Airfield 283,553 296,313 309,647 323,581 338,142 4.5%

Total Tinian Operating Expenses $1,252,741 $1,309,114 $1,368,024 $1,429,585 $1,493,917 4.5%

Airport:

Terminal $9,262,022 $9,678,813 $10,114,359 $10,569,505 $11,045,133 4.5%Airfield 2,078,159 2,171,676 2,269,401 2,371,524 2,478,243 4.5%

Total Operating Expenses $11,340,180 $11,850,488 $12,383,760 $12,941,029 $13,523,376 4.5%



Table 6A Operating Expenses

PROJECTED


SMA App. 240

(Fiscal Year Ending September 30)Budget CAGR

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 2016-2020

Capital Expenditures by Airport:


Main Terminal $184,662 $190,202 $195,908 $201,785 $207,838 3.0%Commuter Terminal 9,719 10,011 10,311 10,620 10,939 3.0%Airfield 0 0 0 0 0 N/AAircraft Rescue & Fire Fighting 72,253 74,420 76,653 78,952 81,321 3.0%Administrative 6,539 6,735 6,937 7,145 7,359 3.0%Security 25,724 26,495 27,290 28,109 28,952 3.0%

Total Saipan International Airport Operating Expenses $298,896 $307,862 $317,098 $326,611 $336,410 3.0%


Terminal $1,431 $1,474 $1,518 $1,564 $1,611 3.0%Airfield 0 0 0 0 0 N/AAircraft Rescue & Fire Fighting 0 0 0 0 0 N/AAdministrative 0 0 0 0 0 N/ASecurity 0 0 0 0 0 N/A

Total Rota International Airport Operating Expenses $1,431 $1,474 $1,518 $1,564 $1,611 3.0%

Tinian Airport:

Terminal $24,434 $25,168 $25,923 $26,700 $27,501 3.0%Airfield 0 0 0 0 0 N/AAircraft Rescue & Fire Fighting 0 0 0 0 0 N/AAdministrative 0 0 0 0 0 N/ASecurity 0 0 0 0 0 N/A

Total Tinian Operating Expenses $24,434 $25,168 $25,923 $26,700 $27,501 3.0%

Airport System:

Main Terminal $210,527 $216,843 $223,348 $230,049 $236,950 3.0%Commuter Terminal 9,719 10,011 10,311 10,620 10,939 3.0%Airfield 0 0 0 0 0 N/AAircraft Rescue & Fire Fighting 72,253 74,420 76,653 78,952 81,321 3.0%Administrative 6,539 6,735 6,937 7,145 7,359 3.0%Security 25,724 26,495 27,290 28,109 28,952 3.0%

Total Operating Expenses $324,761 $334,504 $344,539 $354,875 $365,522 3.0%



Table 6B Capital Expenditures

PROJECTED


SMA App. 241

(Fiscal Year Ending September 30)Budget 2016-2020

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 CAGR

Non-Aviation Revenue:

Bus & Taxi Permits (Ground Transportation) $230,866 $236,638 $242,554 $248,617 $254,833 2.5%Space Rental 3,024 3,160 3,302 3,451 3,606 4.5%Office Space Rental 267,454 279,489 292,066 305,209 318,944 4.5%Warehouse Rental 234,600 245,157 256,189 267,718 279,765 4.5%Incinerator - Non-Airline 21,500 22,468 23,479 24,535 25,639 4.5%Public Parking Fee - Commuter 0 0 0 0 0 N/APublic Parking Fee - Main Terminal 76,500 0 0 0 0 -100.0%Prime Concessionaire - Duty Free Shop 2,870,123 2,927,525 2,986,076 3,045,797 3,106,713 2.0%Restaurant 136,585 139,419 142,312 145,267 148,283 2.1%Rent A Car 198,428 214,362 231,811 250,925 271,869 8.2%Advertising 140,343 144,535 148,853 153,299 157,879 3.0%Vending Machine 1,200 1,224 1,248 1,273 1,299 2.0%Bank of Guam- ATM 1,200 1,224 1,248 1,273 1,299 2.0%Currency Exchange 7,200 7,200 7,200 7,200 7,200 0.0%Finger Printing 11,535 11,650 11,767 11,885 12,003 1.0%Ground Lease 27,466 28,757 30,108 31,523 33,005 4.7%Ground Rental 759,945 795,640 833,012 872,140 913,106 4.7%Badges and Citation 32,160 32,810 33,473 34,149 34,839 2.0%Misc Income 5,150 5,250 5,352 5,456 5,562 1.9%ARFF Training Fees 40,000 40,800 41,616 42,448 43,297 2.0%Restaurant Aviation 736,527 758,623 781,381 804,823 828,968 3.0%

Non-Aviation Revenue $5,837,805 $5,931,929 $6,109,047 $6,292,989 $6,484,110 2.7%

Non-Aviation Revenue by Airport:

Saipan $5,694,001 $5,783,277 $5,955,363 $6,134,080 $6,319,776 2.6%Rota 90,526 93,818 97,242 100,804 104,511 3.7%Tinian 53,279 54,834 56,442 58,104 59,823 2.9%

Total Non-Aviation Revenues $5,837,805 $5,931,929 $6,109,047 $6,292,989 $6,484,110 2.7%



PROJECTED

Table 7 Non-Aviation Revenues


SMA App. 242


Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Airfield Expenses:

Operating Expenses $2,078,159 $2,171,676 $2,269,401 $2,371,524 $2,478,243Debt Service 451,690 449,704 453,319 449,501 448,126Debt Service Coverage 112,922 112,426 113,330 112,375 112,032

Total Airfield Expenses $2,642,771 $2,733,806 $2,836,050 $2,933,400 $3,038,400

Less:Nonsignatory Landing Fees $0 $0 $0 $0 $0Fuel Flowage 172,326 177,496 182,821 188,306 193,955PFC Revenues for Debt Service & Coverage 363,741 362,143 365,053 361,979 360,872

Subtotal Airfield Revenues $536,068 $539,639 $547,874 $550,284 $554,826

Net Airfield Requirement $2,106,703 $2,194,167 $2,288,175 $2,383,116 $2,483,574

Landed Weight:

Saipan Main Terminal Landed Weight 802,803 810,831 818,939 827,128 835,400Saipan Commuter Terminal Landed Weight 72,520 73,245 73,977 74,717 75,464Rota Landed Weight 27,530 27,805 28,084 28,364 28,648Tinian Landed Weight 63,036 63,666 64,303 64,946 65,595

Total Landed Weight 965,888 975,547 985,303 995,156 1,005,107

Landing Fees:

Average Landing Fee $2.18 $2.25 $2.32 $2.39 $2.47

International Landing Fee $2.28 $2.35 $2.42 $2.50 $2.58

Commuter / Rota / Tinian Landing Fee $1.71 $1.76 $1.82 $1.88 $1.93

Landing Fee Revenues:

International Landing Fees $1,828,166 $1,904,066 $1,985,645 $2,068,033 $2,155,209Commuter / Rota / Tinian Landing Fees 278,537 290,101 302,531 315,083 328,365

Total Landing Fees $2,106,703 $2,194,167 $2,288,175 $2,383,116 $2,483,574



PROJECTED

Table 8 Calculation of Landing Fees


SMA App. 243

deducted to yield the Airfield Requirement. Dividing the Airfield requirement by the total landed weight yields the International Landing Fee. The Landing Fee is differentiated so that the Landing Fee for the Commuter Airfield, Rota Airfield, and Tinian Airfield is 25 percent less than the landing fee for the Main Terminal.

1.9.2 TERMINAL RENTAL RATE

A compensatory calculation for the Terminal Rental Rates is presented in Table 9A. The Terminal Requirement is equal to the sum of the previously described components for the Main Terminal Cost Center, Commuter Terminal Cost Center, Rota Terminal Cost Center and Tinian Terminal Cost Center less PFC revenues eligible for Debt Service and Coverage attributable in the Main Terminal Cost Center, Commuter Terminal Cost Center Rota Terminal Cost Center and Tinian Terminal Cost Center. Dividing the Terminal Requirement by the total rentable space in the terminal building yields the Average Terminal Rental Rate. The Average Terminal Rental Rate is then differentiated so that the terminal rental rate for Saipan Main Terminal is twice the terminal rental rate for the Commuter Terminal, Rota Terminal and Tinian Terminal. Nonsignatory airlines will be charged a 25 percent premium above the Signatory Airline rental rates at each respective airport.

Tables 9B-9D provide detail of joint use space at the Airport System allocated based on airlines proportionate enplanements.

1.9.3 PER USE FEES

A Per Use Fee has been developed for Saipan Main Terminal to appropriately charge airlines utilizing shared space within the Main Terminal Building. Ticket Counters/Queuing Space and Holdrooms/Gates that can be utilized by more than one airline will collect use fees based on turns operated by the airlines. A calculation for the Per Use Fees at the Saipan Main Terminal is presented in Table 10.

The average leased airline space used for the Ticket Counters/Queuing Space - Per Use Fee is the sum of the total ticket counters space and the total queuing space (ticketing lobby area) divided by the total number of ticket counters in the terminal building. The Average Terminal Rental Rate is applied to the Average Leased Ticket Counter/Queuing Space to calculate the annual cost of average ticket counter/queuing space. The Per Use Fee is equal to the annual cost of average ticket counter/queuing space divided by the days of the year, divided by the average turns per day.

The Holdrooms/Gates – Per Use Fee equals the average Holdroom B gate size multiplied by the Average Terminal Rental Rate, divided by the days of the year and the average turns per day.

1.9.4 CASH FLOW AND COST PER ENPLANEMENT

Table 11 presents the Cash Flow, Coverage Calculation and Cost Per Enplanement at the Airports.


SMA App. 244


Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Terminal Expenses:

Operating Expenses $9,262,022 $9,678,813 $10,114,359 $10,569,505 $11,045,133Debt Service 934,560 930,452 937,931 930,031 927,186Debt Service Coverage 233,640 232,613 234,483 232,508 231,797Capital Equipment 220,246 226,854 233,659 240,669 247,889

Total CPA Expenses $10,650,468 $11,068,731 $11,520,432 $11,972,713 $12,452,005

Less:PFC Revenues for Debt Service & Coverage $159,568 $158,866 $160,143 $158,795 $158,309

Terminal Requirement $10,490,900 $10,909,865 $11,360,289 $11,813,918 $12,293,697

Total CPA Terminal Rentable Space (square feet) 254,384 254,384 254,384 254,384 254,384

Average Rental Rate (per square foot) $41.24 $42.89 $44.66 $46.44 $48.33

Total CPA Leased Terminal Space 116,386 116,386 116,386 116,386 116,386

Total Terminal Airline Rental Revenue $4,799,813 $4,991,498 $5,197,577 $5,405,122 $5,624,631

Terminal Rental Rates

Saipan Main:Average Signatory Rental Rate (per square foot) $44.40 $46.18 $48.08 $50.00 $52.03Average Nonsignatory Rental Rate - 125% (per square foot) $55.50 $57.72 $60.10 $62.50 $65.04

Saipan Commuter: 50% DISCOUNTAverage Signatory Rental Rate (per square foot) $22.20 $23.09 $24.04 $25.00 $26.02Average Nonsignatory Rental Rate - 125% (per square foot) $27.75 $28.86 $30.05 $31.25 $32.52

Rota: 50% DISCOUNTAverage Signatory Rental Rate (per square foot) $22.20 $23.09 $24.04 $25.00 $26.02Average Nonsignatory Rental Rate - 125% (per square foot) $27.75 $28.86 $30.05 $31.25 $32.52

Tinian: 50% DISCOUNTAverage Signatory Rental Rate (per square foot) $22.20 $23.09 $24.04 $25.00 $26.02Average Nonsignatory Rental Rate - 125% (per square foot) $27.75 $28.86 $30.05 $31.25 $32.52

Signatory Airline Leased Space:

Saipan Main:Preferential Space 28,594 28,594 28,594 28,594 28,594Joint Use Space 71,210 71,210 71,210 71,210 71,210

Total Saipan Main Signatory Airline Leased Space 99,804 99,804 99,804 99,804 99,804

Saipan Commuter:Preferential Space 894 894 894 894 894Joint Use Space 5,118 5,118 5,118 5,118 5,118

Total Saipan Commuter Signatory Airline Leased Space 6,012 6,012 6,012 6,012 6,012

Rota:Preferential Space 1,437 1,437 1,437 1,437 1,437Joint Use Space 4,901 4,901 4,901 4,901 4,901

Total Rota Signatory Airline Leased Space 6,338 6,338 6,338 6,338 6,338

Tinian:Preferential Space 879 879 879 879 879Joint Use Space 3,354 3,354 3,354 3,354 3,354

Total Tinian Signatory Airline Leased Space 4,233 4,233 4,233 4,233 4,233

Signatory Airline Revenues by Leased Space at the Airport System:

Saipan Main:Preferential Space Revenue $1,269,677 $1,320,383 $1,374,896 $1,429,797 $1,487,863Joint Use Space Revenue 3,161,982 3,288,259 3,424,018 3,560,743 3,705,349

Total Saipan Main Airline Rental Revenue $4,431,659 $4,608,642 $4,798,914 $4,990,540 $5,193,212

Saipan Commuter:Preferential Space Revenue $19,837 $20,630 $21,481 $22,339 $23,246Joint Use Space Revenue 113,629 118,167 123,045 127,959 133,155

Total Saipan Commuter Airline Rental Revenue $133,466 $138,796 $144,527 $150,298 $156,402

Rota:Preferential Space Revenue $31,897 $33,170 $34,540 $35,919 $37,378Joint Use Space Revenue 108,811 113,157 117,828 122,533 127,510

Total Rota Airline Rental Revenue $140,708 $146,327 $152,368 $158,452 $164,887

Tinian:Preferential Space Revenue $19,515 $20,295 $21,133 $21,976 $22,869Joint Use Space Revenue 74,465 77,439 80,636 83,856 87,261

Total Tinian Airline Rental Revenue $93,980 $97,733 $101,768 $105,832 $110,130

Airport System Airline Rental Revenue:

Saipan Main Airline Terminal Rental Revenues $4,431,659 $4,608,642 $4,798,914 $4,990,540 $5,193,212Saipan Commuter Airline Terminal Rental Revenues 133,466 138,796 144,527 150,298 156,402Rota Airline Terminal Rental Revenues 140,708 146,327 152,368 158,452 164,887Tinian Airline Terminal Rental Revenues 93,980 97,733 101,768 105,832 110,130

Total Terminal Airline Rental Revenue $4,799,813 $4,991,498 $5,197,577 $5,405,122 $5,624,631



PROJECTED

Table 9A Calculation of Average Terminal Rental Rate


SMA App. 245


FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Calculation of Joint Use Space:

Enplanements by Airline:

CO/AM Airlines 4,500 4,545 4,590 4,636 4,682Dynamic Airlines 0 0 0 0 0Delta Air Lines 88,133 89,014 89,904 90,803 91,711Asiana Airlines 178,233 180,015 181,815 183,633 185,470Pacific Orient, Inc. 670 676 683 690 697Pacific Airport 0 0 0 0 0China Eastern Airlines 57,563 58,139 58,720 59,307 59,900Oren Air 0 0 0 0 0Sichuan Airlines 86,223 87,085 87,956 88,835 89,724Vladivostok Airlines 0 0 0 0 0Jeju Airlines 78,895 79,684 80,481 81,286 82,099Miscellaneous Airlines 263 265 268 271 273Cape Air 35,477 35,832 36,190 36,552 36,918Freedom Air 0 0 0 0 0


Percent of Total Enplanements:

CO/AM Airlines 1% 1% 1% 1% 1%Dynamic Airlines 0% 0% 0% 0% 0%Delta Air Lines 17% 17% 17% 17% 17%Asiana Airlines 34% 34% 34% 34% 34%Pacific Orient, Inc. 0% 0% 0% 0% 0%Pacific Airport 0% 0% 0% 0% 0%China Eastern Airlines 11% 11% 11% 11% 11%Oren Air 0% 0% 0% 0% 0%Sichuan Airlines 16% 16% 16% 16% 16%Vladivostok Airlines 0% 0% 0% 0% 0%Jeju Airlines 15% 15% 15% 15% 15%Miscellaneous Airlines 0% 0% 0% 0% 0%Cape Air 7% 7% 7% 7% 7%Freedom Air 0% 0% 0% 0% 0%

Total 100% 100% 100% 100% 100%

Joint Use Space Allocated by Enplanement Market Share

CO/AM Airlines 605 605 605 605 605Dynamic Airlines 0 0 0 0 0Delta Air Lines 11,842 11,842 11,842 11,842 11,842Asiana Airlines 23,949 23,949 23,949 23,949 23,949Pacific Orient, Inc. 90 90 90 90 90Pacific Airport 0 0 0 0 0China Eastern Airlines 7,735 7,735 7,735 7,735 7,735Oren Air 0 0 0 0 0Sichuan Airlines 11,586 11,586 11,586 11,586 11,586Vladivostok Airlines 0 0 0 0 0Jeju Airlines 10,601 10,601 10,601 10,601 10,601Miscellaneous Airlines 35 35 35 35 35Cape Air 4,767 4,767 4,767 4,767 4,767Freedom Air 0 0 0 0 0




PROJECTED

Tabel 9B Saipan Main Terminal Joint Use Space


SMA App. 246


FY 2016 FY 2017 FY 2018 FY 2019 FY 2020



Star Marianas 35,372 35,726 36,083 36,444 36,808Arctic Circle 638 645 651 658 664



Star Marianas 98% 98% 98% 98% 98%Arctic Circle 2% 2% 2% 2% 2%

Total 100% 100% 100% 100% 100%


Star Marianas 5,027 5,027 5,027 5,027 5,027Arctic Circle 91 91 91 91 91


Source: Commonwealth Ports Authority and Ricondo & Associates, Inc.Prepared by: Ricondo & Associates, Inc.

Tabel 9C Saipan Commuter Terminal Joint Use Space

PROJECTED


SMA App. 247


FY 2016 FY 2017 FY 2018 FY 2019 FY 2020



Arctic Circle 619 625 632 638 644Star Marianas 4,790 4,838 4,887 4,936 4,985CO/AM Airlines 1,313 1,326 1,339 1,353 1,366Cape Air 2,579 2,604 2,630 2,657 2,683



Arctic Circle 7% 7% 7% 7% 7%Star Marianas 52% 52% 52% 52% 52%CO/AM Airlines 14% 14% 14% 14% 14%Cape Air 28% 28% 28% 28% 28%

Total 100% 100% 100% 100% 100%


Arctic Circle 326 326 326 326 326Star Marianas 2,524 2,524 2,524 2,524 2,524CO/AM Airlines 692 692 692 692 692Cape Air 1,359 1,359 1,359 1,359 1,359




Tabel 9D Rota Terminal Joint Use Space

PROJECTED


SMA App. 248


FY 2016 FY 2017 FY 2018 FY 2019 FY 2020






Freedom Air 0% 0% 0% 0% 0%Star Marianas 99% 99% 99% 99% 99%Miami Air International 0% 0% 0% 0% 0%Miscellaneous Airlines 1% 1% 1% 1% 1%

Total 100% 100% 100% 100% 100%






Tabel 9D Tinian Terminal Joint Use Space

PROJECTED


SMA App. 249


Budget

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Calculation of Per Use Fees:

Per Use Fee - Ticket Counters and Queuing

Ground Floor - Total Ticket Counter Space (square feet) 2,799 2,799 2,799 2,799 2,799Ground Floor - Total Airline Queuing Space (square feet) 18,107 18,107 18,107 18,107 18,107

Total Leased Airline Ticket Counter and Queuing Space (square feet) 20,906 20,906 20,906 20,906 20,906

Divided by Total Number of Ticket Counters 12 12 12 12 12Average Leased Ticket Counter Space (square feet) 1,742 1,742 1,742 1,742 1,742

Average Terminal Rental Rate - Saipan Main $44.40 $46.18 $48.08 $50.00 $52.03

Cost of Average Ticket Counters and Queuing Space $77,359 $80,448 $83,769 $87,114 $90,652Divided by 365 365 365 365 365 365Divided by Average Turns Per Day 4 4 4 4 4

Per Use Fee - Ticket Counters and Queuing $52.99 $55.10 $57.38 $59.67 $62.09

Total Per Use Operations 11 11 11 11 12

Per Use Fees - Ticket Counters and Queuing $589 $618 $650 $683 $718

Per Use Fee - Holdrooms/Gates

Second Floor - Average Holdroom B Gate Size (square feet) 6,109 6,109 6,109 6,109 6,109

Average Terminal Rental Rate - Saipan Main $44.40 $46.18 $48.08 $50.00 $52.03

Total Cost of Shared Holdrooms/Gates $271,262 $282,095 $293,741 $305,471 $317,876Divided by 365 365 365 365 365 365Divided by Average Turns Per Day 4 4 4 4 4

Per Use Fee - Holdrooms/Gates $185.80 $193.22 $201.19 $209.23 $217.72

Total Per Use Operations 11 11 11 11 12

Per Use Fees - Holdrooms/Gates $2,064 $2,168 $2,280 $2,395 $2,517

Total Per Use Fees $2,653 $2,786 $2,930 $3,078 $3,235



Table 10 Calculation of Per Use Fees - Saipan Main Terminal

PROJECTED


SMA App. 250


FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Aviation Revenues:

Landing Fees $2,106,703 $2,194,167 $2,288,175 $2,383,116 $2,483,574Terminal Rental Revenues - Main Terminal 4,431,659 4,608,642 4,798,914 4,990,540 5,193,212Terminal Rental Revenues - Commuter Terminal 133,466 138,796 144,527 150,298 156,402Terminal Rental Revenues - Rota 140,708 146,327 152,368 158,452 164,887Terminal Rental Revenues - Tinian 93,980 97,733 101,768 105,832 110,130Per Use Fees 2,653 2,786 2,930 3,078 3,235Parking 10,200 10,506 10,821 11,146 11,480Incinerator 526,000 541,780 558,033 574,774 592,018Triturator 6,600 6,798 7,002 7,212 7,428Fuel Flowage 172,326 177,496 182,821 188,306 193,955

Total Aviation Revenues $7,624,295 $7,925,032 $8,247,361 $8,572,754 $8,916,321

Airport Non-Aviation Revenue 5,837,805 5,931,929 6,109,047 6,292,989 6,484,110

Total Aviation and Non-Aviation Revenues $13,462,100 $13,856,962 $14,356,407 $14,865,743 $15,400,431

Interest Income $17,001 $17,001 $17,001 $17,001 $17,001PFC Revenues Available for Debt Service & Coverage 523,309 521,009 525,197 520,773 519,180

Total Revenues $14,002,411 $14,394,972 $14,898,605 $15,403,517 $15,936,613Less: Operating Expenses $11,340,180 $11,850,488 $12,383,760 $12,941,029 $13,523,376Debt Service 1,386,250 1,380,156 1,391,250 1,379,531 1,375,313

Net Remaining Revenues $1,275,981 $1,164,327 $1,123,595 $1,082,956 $1,037,924

Total Revenues $14,002,411 $14,394,972 $14,898,605 $15,403,517 $15,936,613Operating Expenses 11,340,180 11,850,488 12,383,760 12,941,029 13,523,376

Net Revenues $2,662,231 $2,544,484 $2,514,845 $2,462,488 $2,413,237

Debt Service $1,386,250 $1,380,156 $1,391,250 $1,379,531 $1,375,313

Debt Service Coverage 1.92 1.84 1.81 1.79 1.75

Cost Per Enplanement:

Total Landing Fees $2,106,703 $2,194,167 $2,288,175 $2,383,116 $2,483,574Total Terminal Rental Revenues 4,799,813 4,991,498 5,197,577 5,405,122 5,624,631Total Per Use Fees 2,653 2,786 2,930 3,078 3,235Parking 10,200 10,506 10,821 11,146 11,480Incinerator 526,000 541,780 558,033 574,774 592,018Triturator 6,600 6,798 7,002 7,212 7,428Fuel Flowage 172,326 177,496 182,821 188,306 193,955

Total Aviation Revenues $7,624,295 $7,925,032 $8,247,361 $8,572,754 $8,916,321


Cost Per Enplanement $12.59 $12.95 $13.35 $13.74 $14.14

Source: Commonwealth Ports Authority


Table 11 Cash Flow, Coverage Calculation, Cost Per Enplanement

PROJECTED


SMA App. 251

Exhibit CPA-9

SMA App. 252

1

UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

WASHINGTON, DC ________________________________

Star Marianas Air, Inc., Complainant,

v. FAA Docket No. 16-18-01

Commonwealth Ports Authority, Respondent. ________________________________

FINAL AGENCY DECISION

I. INTRODUCTION This matter is before the Federal Aviation Administration (FAA) Associate Administrator for Airports on an Appeal filed by Star Marianas Air, Inc. (Star Marianas or Complainant). The Complainant challenges the findings of the Director’s Determination (DD). [FAA Exhibit 2, Item 1]. On May 5, 2020, the Director of Airport Compliance and Management Analysis (Director) concluded that the Commonwealth Ports Authority (Respondent or Ports Authority/Authority) was not in violation of 49 U.S.C. § 47107(a) and its Federal obligations under Grant Assurance 1, General Federal Requirements; Grant Assurance 22, Economic Nondiscrimination; Grant Assurance 23, Exclusive Rights; Grant Assurance 24, Fee and Rental Structure; and Grant Assurance 25, Airport Revenues. On Appeal, Star Marianas argues that the Director erred in his findings and conclusions and asks that, “the Associate Administrator issue an order (1) requiring the Authority to provide airside access to Star Marianas at the Rota terminal, (2) requiring the Authority to provide Star Marianas with an annual accounting of its costs attributable to Star Marianas based on reasonable charges; (3) denying the Authority future federal AIP grants and suspending current grant fund payments for 6 months or until the violations alleged herein are rectified…; and (4) requiring Ports Authority, within 20 days of the Associate Administrator’s order to submit a corrective action plan demonstrating how it intends to eliminate the violations.” [FAA Exhibit 2, Item 2, p. 13]. The Ports Authority in its reply to the appeal asserts that the record clearly supports the Director's findings and that DD should be affirmed. [FAA Exhibit 2, Item 5, p. 12]. The Associate Administrator reexamined the record, including the DD; the administrative record; and the pleadings, and affirms the DD.

SMA App. 253

2

II. PARTIES TO THE COMPLAINT

A. Complainant

Star Marianas is a corporation incorporated in the Commonwealth of the Northern Mariana Islands (CNMI). It operates as an FAA certificated air carrier conducting scheduled and on-demand passenger and cargo operations between the islands of Tinian, Rota, Saipan, and Guam. [FAA Exhibit 1, Item 1, p. 2]. Star Marianas operates twelve aircraft – 7 single-engine and 5 multi-engine aircraft. [FAA Exhibit 1, Item 1, p. 2, and Item 19].

B. Respondent The Authority is an autonomous, public CNMI Corporation. It is the owner, operator, and sponsor of the CNMI public airports, including Saipan International Airport, Rota International Airport, and Tinian International Airport [FAA Exhibit 2, Item 1, FAA Exhibit 1, Item 1, p. 2]. These airports were developed using FAA Airport Improvement Program (AIP) grants, authorized by the Airport and Airway Improvement Act of 1982, as amended, Title 49 U.S.C. § 47101, et seq. Since 1982, the Authority has accepted more than $246,470,368. The most recent AIP grants were in 2019. [FAA Exhibit 2, Item 1, FAA Exhibit 1, Item 24, Item 25, and Item 26].

III. SUMMARY OF THE DIRECTOR’S DETERMINATION The Director found that Star Marianas provided evidence of alleged past inaccurate settlements from Fiscal Year (FY) 2009-2014 related to its anti-head tax claims under Grant Assurance 1. The Director found no violation since the FAA only considers current compliance with a sponsor’s Federal obligations, and the Ports Authority had taken action to update its annual rates and charges in a timely manner. The Director found that Star Marianas alleged, but did not provide any substantive or persuasive evidence to support its allegations of any current Grant Assurance 22 violation. [FAA Exhibit 2, Item 1, pgs. 12-15]. The Director found that the Authority provides Star Marianas reasonable access to the airport under the existing federal requirements. The Director found that Star Marianas failed to show which carrier obtained an exclusive right under Grant Assurance 23 that Star Marianas alleged it was denied. The Director also found that Star Marianas failed to provide any substantive detailed financial evidence to support its allegation under Grant Assurance 24 of an unreasonable amount of surplus funds to cover the capital and operating costs and unreasonable reserves for the airports system. Additionally, the record did not identify any misuse of airport revenue for non-airport purposes, and the allegations under Grant Assurance 25 were dismissed. [FAA Exhibit 2, Item 1, pgs. 15-18].

SMA App. 254

3

PROCEDURAL HISTORY On February 2, 2018, Star Marianas filed an Amended Complaint against the Authority. [FAA Exhibit 2, Item 1, FAA Exhibit 1, Item 1]. On June 22, 2018, the Ports Authority filed an Answer to the Amended Complaint. [FAA Exhibit 2, Item 1, FAA Exhibit 1, Item 6]. On May 5, 2020, the Director issued the DD. [FAA Exhibit 2, Item 1]. On June 3, 2020, the Complainant appealed the DD. [FAA Exhibit 2, Item 2]. On August 10, 2020, the Authority filed a Reply to Complainant’s Appeal. [FAA Exhibit 2, Item 5]. On August 31, 2020, Star Marianas filed a Surreply and Motion for Leave to File Surreply Brief. [FAA Exhibit 2, Item 6]. On September 8, 2020, the Authority filed an Opposition to Complainant’s Surreply and Motion for Leave to File Surreply Brief. [FAA Exhibit 2, Item 7].

IV. APPEALING THE DIRECTOR’S DETERMINATION

A party adversely affected by the DD may file an appeal with the Associate Administrator within 30 days after the date of service of the initial determination [14 CFR § 16.33(c)]. The review is limited to an examination of the DD and the administrative record upon which such determination was based. The Associate Administrator does not consider new allegations or issues on appeal unless finding good cause to do so. On appeal, the Associate Administrator will consider (1) whether the findings of fact are supported by a preponderance of reliable, probative, and substantial evidence contained in the record; (2) whether the conclusions were made in accordance with law, precedent, and policy; (3) whether there are questions on appeal that are substantial; and (4) whether any prejudicial errors occurred. [14 CFR § 16.33(e) & (f)].

V. ISSUES ON APPEAL

Star Marianas argues that the Director erred by not considering issues other than whether the Ports Authority violated AHTA1 when providing an analysis of Grant Assurance 1, General Federal Requirements. [FAA Exhibit 2, Item 2, p. 2]. Star Marianas claims the Director relied on descriptions and methodologies provided by Ports Authority that do not exist. In addition, Star Marianas continues to object to terms of the airline use agreement it signed with the Ports Authority and raises new issues on Appeal. [FAA Exhibit 2, Item 2, p. 12]. Star Marianas essentially asks the Associate Administrator to do two things: (1) require the Authority to provide airside access to Star Marianas at the Rota terminal, and (2) require the Authority to provide Star Marianas with an annual accounting of its costs attributable to Star Marianas based on reasonable charges. Additionally, Star Marianas asks that the Associate Administrator to deny the Ports Authority future Federal AIP grants and suspend current grant fund payments for 6 months or until the violations alleged herein are rectified; and requiring the Authority to submit a corrective action plan demonstrating how it intends to eliminate the violations. [FAA Exhibit 2, Item 2, p. 13].

1 AHTA means Anti Head Tax Act.

SMA App. 255

4

The Associate Administrator identified the following issues to be reviewed on Appeal: Issue 1 - Whether Director erred by not considering allegations other than a potential violation of the Anti-Head Tax Act under Grant Assurance 1, General Federal Requirements. Issue 2 - Whether the Director erred by not finding that the Ports Authority violated Grant Assurance 22, Economic Nondiscrimination. Issue 3 - Whether the Director erred in not finding that the Ports Authority violated Grant Assurance 23, Exclusive Rights, by failing to grant permission to enplane passengers from the Rota Terminal. [FAA Exhibit 2, Item 2, pgs. 1, 7, and 10, respectively]. PRELIMINARY ISSUE Star Marianas presented several new issues and allegations in its Appeal and Motion for Leave. The Associate Administrator is addressing this in detail below.

A. New Allegations by Star Marianas

Star Mariana states it “will point out that Ports Authority has taken no action to update its annual rates. The rates remain the same as they have always been.” Star Marianas also states, “The last audited statement Star Marianas could find was for FY 2017, signed on January 18, 2019…” Star Marianas submitted a copy of this audit. [FAA Exhibit 2, Item 2, p. 6]. Star Marianas also argues that draft documents prepared by consultants on rates and charges for airline negotiations were never implemented by the Ports [FAA Exhibit 2, Item 2, p. 4]. Star Marianas also states, “Since October 2018, Star Marianas has been operating out of a 40’ temporary storage container with no restrooms or water…Nevertheless, Ports Authority continues to charge Star Marianas both [Passenger Facility Charges (PFCs )] and [Airline Use Agreement (AUA)] rental charges at the same rate, without change, despite the deteriorating circumstance.” [FAA Exhibit 2, Item 2, pgs. 6-7].

B. Ports Authority Position on New Allegations The Ports Authority argues that Star Marianas raises new allegations on Appeal. The allegations are: (1) The Ports Authority has not implemented the proposed rates and charges methodology discussed in the DD, and (2) the Ports Authority has not conducted year end settlements on rates and charges since FY 2016.

SMA App. 256

5

The Ports Authority argues that Star Marianas has made no attempt to comply with 14 CFR § 16.33(f) to support these new allegations and they must be rejected, stating:

Even if Star Marianas had complied with Section 16.33(f), the new allegations have no merit…the only reason the Ports Authority continues to use the rates and charges methodology in the AUA is because Star Marianas has repeatedly refused to sign a new operating agreement that incorporates the proposed rates and charges methodology…. By rejecting the proposed operating agreement and opting to continue operating under the AUA, Start Marianas has re-affirmed its voluntary acceptance of the terms of the AUA. [FAA Exhibit 2, Item 5, pgs. 7-8].

The Ports Authority also adds:

…with respect to year-end settlements, those are governed by the AUA, which allows the Ports Authority to extend the current annual airline rates and charges until it is recalculated for the next fiscal year, and then provides credit or refunds the airlines if it was overcharged. [DD, p. 13; FAA Ex. 1, Item 1, Ex. C. pp. 28-29]. Because of this, any issues about the timing of the year-end settlements are a contract dispute that cannot be adjudicated in a Part 16. [FAA Exhibit 2, Item 5, p. 8].

The Ports Authority states that Star Marianas has been operating out of a temporary storage container ever since the former commuter terminal at the Saipan International Airport was largely destroyed by Super Typhoon Yuta in October 2018. Typhoon Yuta caused substantial damage to the wiring in the former commuter terminal, making it unsafe for use. The Ports Authority states it has provided portable toilets at the temporary container site for Star Marianas and recently installed a sink. The Ports Authority additionally states it is working on a design for reconstruction of the former commuter terminal. [FAA Exhibit 2, Item 5, p. 9].

C. Associate Administrator’s Analysis of New Issues on Appeal

The FAA’s process for accepting a new issue or evidence in an appeal or reply to an appeal is stated in 14 CFR § 16.33(f) (1-3): Any new issues or evidence presented in an appeal or reply will not be considered unless accompanied by a petition and good cause found as to why the new issue or evidence was not presented to the Director. Such a petition must:

(1) Set forth the new matter; (2) Contain affidavits of prospective witnesses, authenticated documents, or both, or

an explanation of why such substantiation is unavailable; and (3) Contain a statement explaining why such a new issue or evidence could not have

been discovered in the exercise of due diligence prior to the date on which the evidentiary record closed.

The Ports Authority is correct in its analysis that Star Marianas has failed to meet the conditions of 14 CFR § 16.33 in order to submit new allegations on appeal.

SMA App. 257

6

Star Marianas is attempting to supplement the record on appeal with an audit signed in January 2019, but makes no statement to explain why this document was not submitted prior to the issuance of the DD. Star Marianas failed to provide good cause for the Associate Administrator to consider this new information and the related new rates and charges allegations on appeal. For these reasons, the audit exhibit and related rates and charges allegations comprising new evidence will not be considered in this appeal. The Associate Administrator finds good cause to consider new information on appeal related to Super Typhoon Yuta. Under this issue, Star Marianas argues that the Ports Authority continues to charge it both PFCs and AUA rental charges at the same rate despite deteriorating circumstances caused by the impact of Typhoon Yuta. [FAA Exhibit 2, Item 2, p. 7]. The Associate Administrator notes that Article 10, Damage or Destruction of Leased Premises, in the AUA agreed to by both parties, identifies the remedies available in the event of damages. The AUA identifies a number of damage scenarios depending on the type of leasehold (Preferential Use, Common Use, and Non-Exclusive, as described in Article 2 of the agreement). [FAA Exhibit 2, Item 1, FAA Exhibit 1, Item 1, Exhibit C]. It is incumbent upon both parties to determine the extent of the damage and the appropriate resolution under the terms of the AUA. As noted above, the Ports Authority is taking action to resolve the issues caused by Typhoon Yuta and has identified steps it has taken and will take. The Associate Administrator finds that the Ports Authority is acting in compliance with its grant assurances and dismisses the new allegations related to the temporary facilities. Motion for Leave Star Marianas filed a Surreply and Motion to File a Surreply Brief on August 31, 2020. Star Marianas asserts in its Surreply that, “new events and evidence have transpired between Star Marianas' filing of the Amended Complaint on February 2, 2018, and the Director's Determination filed on May 5, 2020.” In addition, Star Marianas asserts there were a “series of communications between Star Marianas and the Ports Authority from June 22, 2020, to August 13, 2020, regarding the Ports Authority's Fiscal Year 2021 Budget.” [FAA Exhibit 2, Item 6]. The Ports Authority submitted an Opposition to Complainant’s Surreply and Motion for Leave to File Surreply Brief on September 8, 2020, and claims that the Associate Administrator should deny Star Marianas's Motion for leave to file its Surreply. The Ports Authority asserts that Star Marianas admits that the new allegations and evidence were either (1) available to file with their administrative appeal, or (2) offered in support of Star Marianas's misguided attempts to improperly use the Part 16 process to adjudicate contract disputes and gain leverage in contract negotiations.” [FAA Exhibit 2, Item 7]. Part 16 is an expedited procedure that provides only for an Appeal and a Reply. [See 14 CFR §16.33]. However, the Part 16 process does permit a party to seek application for an order or ruling not otherwise specifically provided for in this Part by motion per §16.19.

SMA App. 258

https://1.next.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000547&cite=14CFRS16.33&originatingDoc=I93bfc64ff80711dbb92c924f6a2d2928&refType=LQ&originationContext=document&transitionType=DocumentItem&contextData=(sc.Search)


7

The appellate record consisting of the Appeal and the Reply to the Appeal is deemed complete in accordance with 14 CFR §16.33. The Associate Administrator finds no good cause justifying why new evidence that was available in advance of the DD was not presented to the Director. Other information submitted by Star Marianas that relates to conduct that postdates the filing of the appeal is outside the scope of review here. Accordingly, the Motion for Leave to File a Surreply is denied.

VI. ANALYSIS AND DISCUSSION

Issue 1 -Whether Director erred by not considering allegations other than a potential violation of the Anti-Head Tax Act under Grant Assurance 1, General Federal Requirements.

A. Star Marianas Position on Issue 1

Star Marianas claims on Appeal that it asserted in its Complaint that the Ports Authority “violated Grant Assurance 1, General Federal Requirements, by imposing unreasonable and excessive charges on a per passenger basis without a maximum limitation based on: fair market value; the Ports Authority’s operational costs; and the weight of Star Marianas landed aircraft.” Star Marianas further claims on appeal that it also alleged that the Ports Authority was imposing fees or head charges on individuals traveling in air commerce contrary to 49 U.S.C. § 40116(b). [FAA Exhibit 2, Item 2, pages 1-2]. On appeal, Star Marianas alleges that the Director only considered, within this section of the determination, the Complainant’s allegation that the Ports Authority violated AHTA. [FAA Exhibit 2, Item 2, p. 2]. Star Marianas also claims on appeal that the Director stated, “Star Marianas expanded from a cargo carrier to provide passenger services at Saipan in 2009. This is factually incorrect. Star Marianas was initially certificated as an on demand air carrier on April 1, 2009.” [FAA Exhibit 2, Item 2, p. 2]. In addition, Star Marianas states that contrary to the findings of the Director, “Ports Authority does not apply the compensatory method and instead continues to use the existing [Airline Use Agreement (AUA)], ARTICLE 7: CHARGES AND FEES. Also, the Director relies on descriptions and methodologies provided by Ports Authority that do not exist.” [FAA Exhibit 2, Item 2, p. 5].

B. Ports Authority Position on Issue 1

In its Reply to the Appeal, the Ports Authority states,

Star Marianas purports to appeal three issues in the DD: (1) whether the Ports Authority violated Grant Assurance 1, General Federal Requirements; (2) whether the Ports Authority violated Grant Assurance 22, Economic Nondiscrimination; and (3) whether the Ports Authority violated Grant Assurance 23, Exclusive Rights. The appeal itself, however, is incoherent and fails to meet the appellant's duty to direct the Associate Administrator to specific errors of applicable law and fact in the DD. Instead, Star Marianas repeats its prior, scattershot arguments while adding new, unsubstantiated allegations without making any effort to comply with the strict requirements of 14 CFR §

SMA App. 259


8

16.33(f) for the introduction of new issues or evidence. This failure to meet the threshold requirements for a pPart 16 appeal leaves the Associate Administrator with no choice but to deny the appeal. [FAA Exhibit 2, Item 5, pgs. 1-2].

The Ports Authority also argues,

“Star Marianas concedes that the method provided for in the AUA does not violate the AHTA. Instead, Star Marianas broadly argues that the Ports Authority is not complying with the requirements in Article 7 of the AUA, without explaining how the alleged failure to follow the AUA resulted in violations of the AHTA or the Ports Authority’s grant assurances…The Director’s Determination unequivocally affirmed the decision of the HON ADO that the per passenger charge assessed under the AUA does not violate the AHTA…Star Marianas fails to point to any specific error of law or fact that would warrant a different conclusion by the Associate Administrator.” [FAA Exhibit 2, Item 5, pgs. 4-5].

C. Associate Administrator’s Analysis of Issue 1

A review of the DD shows that the Director parceled out the various rates and charges allegations to specific issues to be analyzed under the applicable grant assurance. In so doing, the Director undertook an analysis of allegations of whether the Ports Authority violated the AHTA in his analysis under Grant Assurance 1. Relatedly, the Director examined issues related to unreasonable and excessive charges raised by Star Marianas as violations of Grant Assurance 1 under Grant Assurance 22. The Associate Administrator notes that in an effort to properly allocate the issues to the correct Grant Assurances, the Director stated:

“…because Star Marianas made these same or similar allegations under other claims in their Amended Complaint the Director would only consider Complainant’s allegation that Ports Authority violated AHTA in this section. The Director will address all other repeated claims in more applicable sections in this determination. [FAA Exhibit 2, Item 1, p. 11].

Under this review, the Director first examined the rates and charges background and methodology to ascertain whether the charges were illegal under the AHTA. The record shows that the Ports Authority hired consultants who prepared a proposed methodology for the Ports Authority that showed that the rates and charges formula were primarily ‘compensatory.’ [FAA Exhibit 2, Item 1, pgs. 11-13]. As stated above, Star Marianas claimed the Ports Authority does not apply a compensatory method in rate setting under its AUA. If the Director inadvertently misstated the Ports Authority’s rate setting methodology under the AUA, it is harmless error since both compensatory and residual rate setting methodologies are acceptable. In addition, airport sponsors frequently adopt rate-setting systems that employ elements of both approaches under a hybrid methodology.

SMA App. 260

9

The Director correctly noted that, “Under 49 U.S.C. § 47129, the FAA may only determine whether a fee is reasonable or unreasonable. FAA may not set the level of the fee…”2 [FAA Exhibit 2, Item 1, p. 13]. It is important to recognize that per 49 U.S.C. § 47129(e), complaints about the reasonableness of a fee set by agreement filed by a party to the agreement setting the disputed fee will not be considered by the Department of Transportation. Therefore, when considering such a dispute, FAA’s role is to determine whether the airport proprietor is in compliance with its grant obligations and statutory obligations relating to airport fees. [Policy Regarding Airport Rates and Charges (Rates and Charges Policy), 78 Fed. Reg. 55330, 55332 (September 10, 2013)]. The Director noted that a properly formulated rates and charges methodology does not constitute an illegal head tax. “Based on the descriptions of the methodologies provided by the Ports Authority, the Director finds that Star Marianas has not provided persuasive evidence showing how the Ports Authority rates and charges assessed for each cost center and common use area was, or currently is, a violation of the AHTA.” [FAA Exhibit 2, Item 1, p. 13]. On appeal, Star Marianas has reiterated information available in its amended complaint and the Director’s findings. Essentially, Star Marianas is restating its position as identified in its amended complaint without clearly identifying how the Director erred in his findings. [FAA Exhibit 2, Item 2, pgs. 1-6]. Nonetheless, the Associate Administrator appreciates Star Marianas clarifying that it was initially certificated as an on demand air carrier on April 1, 2009, and not a cargo carrier. Any statement by the Director that confused Star Marianas’s initial status is harmless and does not rise to the level of a reversible error. The Associate Administrator finds that after a review of the record that the conclusions in the DD were made in accordance with law, precedent, and policy. The Director did not err in his analysis of the AHTA and the rate setting methodology used by the Ports Authority. Moreover, the Associate Administrator finds that the Director correctly identified and analyzed the allegations of a violation of the AHTA under Grant Assurance 1, and concluded there was no violation. On appeal, Star Marianas has not identified how the Director erred in this conclusion, but simply objects to the conclusion.

2 Section 47129 authorizes the Department of Transportation to review the reasonableness of airport fees charged to air carriers, upon a complaint or request for determination and a finding of a significant dispute, and directs the publication of policies or guidelines for determining reasonable fees and development of expedited hearing procedures to resolve airport fee disputes. The Department’s procedures applicable to a proceeding concerning airport fees are contained in Subpart F, Title 14 CFR §§ 302.601-302.609

SMA App. 261

10

Issue 2 - Whether the Director erred by not finding that the Ports Authority violated Grant Assurance 22, Economic Non-discrimination.

A. Star Marianas Position on Issue 2 On appeal, Star Marianas argues that the Ports Authority charges are beyond what is permitted in the AUA and Airport Rules and Regulations and that these charges were imposed after it started passenger services. Star Marianas argues that the Ports Authority's retroactive charges are unreasonable because Star Marianas cannot recoup the additional costs from the passengers when Ports Authority delayed its calculations for the prior years, in violation of the AUA. Additionally, Star Marinas claims that the Ports Authority's non-compliance with Section 7.05 does not allow Star Marianas to ensure that Ports Authority fees are based on Ports Authority's operational expenses. Further, on appeal, Star Marianas asserts it is not able to be competitive with other air carriers, and thus, the Ports Authority is economically discriminating against Star Marianas. [FAA Exhibit 2, Item 2, pgs. 7-8].

B. Ports Authority Position on Issue 2 In its reply to the appeal, the Ports Authority claims it made the airport available to Star Marianas on fair and reasonable terms and without unjust economic discrimination in accordance with Grant Assurance 22. [FAA Exhibit 2, Item 5, p. 5].

Specifically the Ports Authority stated,

Star Marianas’s Appeal merely restates the allegations made in their amended complaint that were rejected by the Director and fails to demonstrate that the Director’s findings were unsupported or in error. Fundamentally, Star Marianas’s rates and charges allegations present a contract dispute over the interpretation of various sections of the AUA. Those allegations must be rejected because contract disputes cannot be adjudicated in a Part 16.” [FAA Exhibit 2, Item 5, p. 6].

The Ports Authority also states that:

At its root, Star Marianas’s complaint has always been and remains a dispute over the interpretation of the AUA. These include allegations the Ports Authority is not complying with the requirements of Article 7 of the AUA, that the Ports Authority’s rates and charges are unreasonably high, that the Ports Authority is unreasonably imposing retroactive charges, that the Ports Authority’s imposition of fees is not related to operating costs, and that the landing fees are unreasonable. This litany of allegations related to the AUA are a contract dispute that cannot be adjudicated through a Part 16 and must be rejected by the Associate Administrator as the basis for a Part 16 appeal. [FAA Exhibit 2, Item 5, pgs. 6-7].

The Ports Authority notes that Director found “Star Marianas made allegations in its amended complaint but it did not provide the Director with any substantive or persuasive evidence to support its allegations of any current Grant Assurance 22 violation. Part 16 provides that the

SMA App. 262

11

burden of proof is on the complainant to show noncompliance with an Act or any regulation, order, agreement or document of conveyance issued under the authority of an Act.” [FAA Exhibit 2, Item 1, p. 15].

C. Associate Administrator’s Analysis of Issue 2 As with Issue 1, Star Marianas has not put forth cogent arguments indicating where and how the Director erred in his analysis of the allegations under Grant Assurance 22. The Associate Administrator agrees with the Ports Authority that the gravamen of this complaint is Star Marianas’s objections to the terms of its airline use agreement. The Ports Authority is correct that contract disputes cannot be adjudicated in a Part 16. The FAA does not arbitrate or mediate negotiations through a formal Part 16 complaint process. Nor does the FAA enforce contract terms between parties to an agreement. Rather, the FAA enforces contracts between an airport sponsor and the Federal government. [See AmAv v. Maryland Aviation Administration, FAA Docket No. 16-05-12, (March 20, 2006) (Director’s Determination).] Unreasonable and unjustly discriminatory terms in a contract might be reviewable under a Part 16, but that has not been demonstrated here. These issues are clearly a contract dispute with Star Marianas and the Ports Authority over an agreement signed by both parties. Star Marinas is essentially rearguing the issues identified and examined in the Determination. The fact that the Ports Authority has a methodology that Star Marinas does not agree with does not mean it violates Grant Assurance 22. Star Marianas is a signatory to an agreement with the Ports Authority and must take its objections of the lease terms and the rates and charges directly to the Ports Authority for resolution in the absence of evidence that the Ports Authority is acting in violation of its Grant Assurances. A Part 16 proceeding is not intended to provide a mechanism for adjudicating the respective rights of the parties to a fee dispute. See Rates and Charges Policy, at page 55332. The Associate Administrator finds no evidence presented on Appeal sufficient to overturn or remand the DD. The Director’s findings are affirmed. Issue 3 - Whether the Director erred in not finding that the Ports Authority violated Grant Assurance 23, Exclusive Rights, by failing to grant permission to enplane passengers from the Rota Terminal.

A. Star Marianas Position on Issue 3

On appeal, Star Marianas continues to object to enplaning its passengers and cargo at the west end in the Rota Terminal. Star Marianas reiterates its claim that the Ports Authority granted special rights or privileges to other air carriers and has denied this same right to Star Marianas. Star Marianas states, “two (2) years after the cessation of TSA, Star Marianas, now the only carrier serving Rota, is still required to board through the arrival area at the Rota Terminal.” [FAA Exhibit 2, Item 2, pgs. 11-12].

SMA App. 263

12

B. Ports Authority Position on Issue 3

In its Reply to the Appeal, the Ports Authority asserts it has not granted an exclusive right. The Ports Authority asserts that Star Marianas continues to fail to show what exclusive right has been conferred on another airline that Star Marianas has been denied. [FAA Exhibit 2, Item 5, pgs. 9-10]. The Ports Authority identified several efforts it claims it made to accommodate Star Marianas in the terminal:

The Ports Authority spent thousands of dollars on the office renovation, the location of which provides counter-to-ramp access at the Benjamin T. Manglona Airport on Rota. The renovations have been completed for two years and Star Marianas has not moved in despite repeated communications from the Ports Authority's Rota Airports Manager that the office is ready…” The Ports Authority recommended that Star Marianas move into the already existing former Freedom Air office, which was available and had access to the airside already. In December 2019, Star Marianas indicated that it was ready to make the move. Since December 2019, the Ports Authority has contacted Star Marianas on several occasions to discuss the move and received the response that Star Marianas would first contact their service provider and then provide updates to the Ports Authority. The Rota Airport Manager spoke to Star Marianas's Frankie Muna as recently as June 3, 2020, and again, on July 29, 2020, to Jose Cruz to inform Star Marianas that the office space is ready and that Star Marianas needs to contact their internet service provider, if it is seeking internet access at that new office space…” [FAA Exhibit 2, Item 5, pgs. 11-12].

The Ports Authority claims it “has made, and continues to make, reasonable efforts to accommodate Star Marinas’ request for terminal space with direct access to the ramp…” [FAA Exhibit 2, Item 5, p. 12].

C. Associate Administrator’s Analysis of Issue 3 In the Determination, the Director reviewed the allegation that the Ports Authority provided exclusive airside access to other airlines at the Rota Terminal while requiring Star Marinas to enplane cargo and passengers though the main terminal building. [FAA Exhibit 2, Item 1, p. 15]. The Director found that “Star Marianas failed to show which carrier had obtained an exclusive right that Star Marianas itself was denied.” [FAA Exhibit 2, Item 1, p. 16]. Star Marianas has not identified another similarly situated user that has been granted an exclusive right. There is no evidence presented by Star Marianas that the Ports Authority is denying access to the terminal or granting an exclusive right In fact, it is apparent the Authority is seeking to accommodate Star Marianas with direct counter to ramp access, but Star Marianas has not accepted the accommodation to date. The Associate Administrator is not persuaded that Star Marianas is being denied access to the airport in violation of Grant Assurance 23, Exclusive

SMA App. 264

13

Rights, or that Star Marianas has been denied an aeronautical opportunity offered to another entity. The DD is affirmed.

VII. FINDINGS AND CONCLUSION The Associate Administrator’s role in this appeal is to determine whether the Director erred in findings of fact or conclusions of law in issuing the Director’s Determination. The Associate Administrator finds no error by the Director in the Director’s Determination. Specifically, upon appeal of a Part 16 Director’s Determination, the Associate Administrator must determine whether (a) the findings of fact made by the Director are supported by a preponderance of reliable, probative; and substantial evidence, (b) each conclusion of law is made in accordance with applicable law, precedent, and public policy; (c) are the questions on appeal substantial; and (d) have any prejudicial errors occurred. [14 CFR § 16.33(e)].

In arriving at a final decision in this appeal, the FAA has reexamined the record, including the Director’s Determination, the administrative record supporting the Director’s Determination, the appeal, and papers submitted by the parties, and applicable law and policy. Based on this reexamination, the Associate Administrator for Airports finds that the Director’s Determination is supported by a preponderance of reliable, probative, and substantial evidence and is consistent with applicable law, precedent, and the FAA policy. The appeal does not advance persuasive arguments sufficient to reverse any portion of the Director’s Determination. The Director’s Determination is affirmed. This decision constitutes a final decision of the Associate Administrator pursuant to 14 CFR § 16.33.

SMA App. 265

14

ORDER

ACCORDINGLY, it is hereby ORDERED that (1) the Director’s Determination is Affirmed, and (2) the Appeal is dismissed pursuant to 14 CFR § 16.33. All other Motions not specifically granted herein are DENIED

RIGHT OF APPEAL

A party to this decision disclosing a substantial interest in the Final Decision and Order of the Federal Aviation Administration may file a petition for review pursuant to 49 U.S.C. § 46110, in the United States Court of Appeals for the District of Columbia Circuit or in the Court of Appeals of the United States for the Circuit in which the person resides or has its principal place of business. The petition must be filed no later than 60 days after a Final Decision and Order has been served on the party. [14 CFR Part 16 § 16.247(a)].

_________________________________ ___________________________

D. Kirk Shaffer Date Associate Administrator for Airports

SMA App. 266

15

FAA EXHIBIT 2 FINAL AGENCY DECISION INDEX OF ADMINISTRATIVE RECORD

FAA Docket 16-18-01

Item 1 – Director’s Determination, dated May 5, 2020. Item 2 – Notice of Appeal and Brief of Star Marianas, Inc., dated June 3, 2020. Item 3 – Unopposed Motion of the Commonwealth Ports Authority for an Extension of Time to file a response to Notice of Appeal, dated June 10, 2020. Item 4 - Order Extending Time for the Commonwealth Ports Authority to file its response to the Notice of Appeal, dated July 7, 2020. Item 5 – Commonwealth Ports Authority’s Reply to Complainant’s Appeal, dated August 10, 2020. Item 6 – Star Marianas, Inc.’s Surreply and Motion for Leave to File Surreply Brief, dated August 31, 2020. Item 7 – Commonwealth Ports Authority’s Opposition to Complainant’s Surreply and Motion for Leave to File Surreply Brief, dated September 8, 2020. Item 8 - Order Extending Time for the Final Agency Decision to December 20, 2020, dated November 9, 2020.

SMA App. 267

Exhibit CPA-10

SMA App. 268

SMA App. 269

SMA App. 270

Exhibit CPA-11

SMA App. 271

COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS SAIPAN, TINIAN, ROTA and NORTHERN ISLANDS

*********************************************************************

COMMONWEALTH REGISTER

VOLUME 43 NUMBER 06

JUNE 28, 2021 .............................................................................. ·

SMA App. 272


VOLUME 43 NUMBER 06 JUNE 28, 2021

TABLE OF CONTENTS

ADOPTED REGULATIONS

Public Notice of Certification and Adoption of Regulations Commonwealth Healthcare Corporation .............................................••

Amended Public Notice f Certification and Adoption of Regulations Northern Marianas Housing Corporation .....•..................•••...•....•.........

Public Notice of Certification and Adoption of Regulations Department of Lands and Natural Resources .................•.......••.••...•........

PROPOSED REGULATIONS

Public Notice of Proposed Amendments to NMIAC Chapter 15-10 to Create Incentives for Building Redevelopment and Stormwater Management Bureau of Environmental and Coastal Quality Office of the Governor .....................•.......•........................•.......••......•

Public Notice of Proposed Amendments to the NMIAC 1 5-1 0 To Specify the Location of Public Hearings Bureau of Environmental and Coastal Quality Office of the Governor ...........•...•...............•................••..............•......

Public Notice of Proposed Amendments to the Airport Rules and Regulations Commonwealth Ports Authority ..................•.......................................

ORDERS

Labor Case No. Subject: In the Matter of:

Department of Labor

1 7-001 Order of Dismissal Edren Dizon v. Imperial Pacific International (CNMI), LLC

046395

046398

046696

046705

046719

046730

046824

SMA App. 273


Department of Labor

PUA Case No. Subject: In the Matter of:

Department of Labor

PUA Case No. Secretary Appeal No. Subject: In the Matter of: Department of Labor


Department of Labor

Labor Case No. Subject: In the Matter of: Department of Labor


Department of Labor


Department of Labor


Department of Labor

1 8-007 Order of Dismissal Yi-Jo Chang v. Imperial Pacific International (CNMI), LLC

20-0033 Administrative Order Franklin Joel Rios Cruz v. CNMI Department of Labor, Division of Employment Services-PUA

20-0043 Administrative Order Elina Gharti Chhetri v. CNMI Department of Labor, Division of Employment Services-PUA

21-035 Order of Dismissal Chun Li v. Garilo Francis D. Gamab Dba Design Flower & Gift Shop

2 1 -036 Order of Dismissal Chun Li v. Jenny N. Deleon Guerrero

21-0044 Administrative Order Soawanee N. Witer v. CNMI Department of Labor, Division of Employment Services-PUA •........••.......•..•...•......•.•.........••••............••••

2 1 -0079 Administrative Order Patrick M. Takai v. CNMI Department of Labor, Division of Employment Services-PU A ...•.......••......•••...•......•...............................

2 1 -0 1 01 Administrative Order Michael M. Williams v. CNMI Department of Labor, Division of Employment Services-PUA ............•.......•..•.............•••.......•........•.......

11

046825

046826

046836

046846

046849

046852

046862

046863

SMA App. 274


Department of Labor


Department of Labor


Department of Labor


Department of Labor


Department of Labor


Department of Labor

2 1 -0 1 07 Administrative Order Richer Phan Ta v. CNMI Department of Labor, Division of Employment Services-PUA

2 1 -0 1 08 Administrative Order Wayne James Aldan v. CNMI Department of Labor, Division of Employment Services-PUA

2 1 -0 1 09 Administrative Order Ella Stephanson v. CNMI Department of Labor, Division of Employment Services-PUA

2 1 -0 1 1 0 Administrative Order Alex S. Aldan, Jr. v. CNMI Department of Labor, Division of Employment Services-PUA

2 1 -0 1 2 1 Administrative Order Elvie C. Palomares v. CNMI Department of Labor, Division of Employment Services-PUA

2 1 -0 1 25 Administrative Order Arnold Romolor v. CNMI Department of Labor, Division of Employment Services-PUA ..................•...........................•••.....•..•....••

III

046868

046876

046877

046887

046893

046894

SMA App. 275

Commonwealth Ports Authority Fr,lIll j " . (1 C . Add/Sdip_1I1 Inlt'rn.ltinnal Airpllrl

1'0 I-«. l\ S O I U5S - SA1 PA\J · �W·%95{l I'lulIle: (670) 2.17·65UO/OI Fe! ': (670) 21-l-5%2:

E-Nlilll Addfl'SS: cr,I"ldmin",l,lplinllll.com \<Vcp<;itc: htlr'�:/ /nllHipnrts.llllll

PUBLIC NOTICE

Proposed Amendments to the Airport Rules and Regulations of the Commonwealth Ports Authority

The Executive Director of the Commonwealth Ports Authority ("CPA") hereby notifies the public that the Commonwealth Ports Authority intends to promulgate amendments to its Airport Rules and Regulations.

INTENDED ACTION TO ADOPT THESE PROPOSED AMENDMENTS TO THE AI RPORT RULES AND REGULATIONS OF THE COMMONWEALTH PORTS AUTHORITY: Notice is hereby given pursuant to I CMC § 9 1 04(a) of the Administrative Procedure Act that the Commonwealth Ports Authority intends to promulgate the fol lowing additional section to its Airport Rules and Regulations.

TERMS, SUBSTANCE, AND DESCRIPTION OF THE SUBJECTS AND ISSUES INVOLVED: These proposed regu lations amend the Airport Rules and Regulations of the Commonwealth Ports Authority to establish a new rate methodology for air carriers operating at CPA airports. These proposed regulations, among other things, redefine and provide additional defin i t ions of terms used throughout § 40- 1 0. 1 ; amend § 40- 1 0. 1 -740 by providing general provisions regarding the use of CPA airports, the requirements to occupy and use airline assigned areas, and information regarding and governing CPA's "Letters of Authorization," airlines' privi leges, uses, and rights, the accommodation of other airlines, and airport system security; adds § 40- 1 0 . 1 -742, which provides rules governing airl ines' assigned areas; adds § 40- 10. 1 -743, which provides regulations regarding the operation and maintenance responsibil ities of CPA and the airl ines; adds § 40- 1 0 . 1 -744, which governs the obligations of the airl i nes; amends § 40- 1 0. 1 -745, which adds indemni fication provisions and revises i nsurance requirements; adds § 40- 10 . 1 -746, which states the rights and privi leges reserved by CPA; adds § 40- 1 0. 1 -747, which provides the procedure to be fol lowed when damage or destruction occurs to an A irl ines' Assigned Area; adds § 40- 1 0. 1 -748, which provides general conditions regarding the environment, including groundwater and solid and hazardous waste; amends § 40- 1 0. 1 -750 Surety Bond; adds § 40- 1 0. 1 -75 1 , which governs Air l ines' and CPA's property rights upon termination; adds § 40- 1 0 . 1 -752, which, among other things, requires compliance with CPA's Rules and Regulations and provides nondiscrimination requirements; amends § 40- 1 0. 1 - 1 20 I by providing terms regarding aiI'I ine fees and charges; amends § 40- 1 0. 1 - 1 205 Landing Fees; adds § 40- 1 0. 1 - 1 206, which provides rental charges for use of CPA Terminals; removes §§ 40- 1 0. 1 - 1 2 1 0, 1 2 1 5 , 1 220, which provided terms regarding public apron and operational area charges, departure faci l ity service charges, and international arrival fac i l i ty service charges; removes § 40- 1 0. 1 - 1 230(b)( 2) , which provided an exception to in-transit passenger service charge to airlines that executed CPA operating agreements; updates the amount and terms of the Fuel Flowage Fee, and Ground Handling Permit Fees, and the Passenger Fac i l ity Charges; adds § 40- 1 0. 1 - 1 256, which provides terms regarding other CPA Fees and Charges; adds § 40- 10. 1 - 1 257, which provides provisions regarding the

COMMONWEALTH REGISTER VOLU M E 43 N U M BER 06 J U N E 28, 2021 PAGE 046730

SMA App. 276

amendment of fees and charges; adds § 40- 1 0. 1 - 1 258, which requires Airl ines to submit reports to CPA; and amends § 40- 1 0. 1 - 1 260 in regard to the payment of charges.

AUTHORITY: The substance of the fol lowing proposed amendments, which implements the new rate methodology for the use of CPA airports, has been previously approved by the CPA Board of Directors. The substance of these proposed amendments was included in the Airport System Operat ing Agreement, and on May 27, 202 1 , the CPA Board of Directors, through Resolution No. 202 1 -05, authorized the publication of these proposed amendments. Thus, these proposed amendments are for publication in the Commonwealth Register for Notice and Comment pursuant to the Admin istrative Procedure Act and for approval by the Attorney General pursuant to I CMC § 2 1 53(e) . The Commonwealth Ports Authority has the authority to promulgate these regulations pursuant to 2 CMC § 2 1 22.

DIRECTIONS FOR FILING AND PUBLICATION: These Proposed Regulations sha l l be publ ished in the Commonwealth Register in the section on Proposed and Newly Adopted Regulations, I CMC § 9 1 02(a)( I ) , and posted in convenient places in the civic center and in local governments in each senatorial district, both in English and in the principal vernacular. I CMC § 9 1 04(a)( I ) .

TO PROVIDE COMMENTS: Persons or entit ies wishing to submit comments must do so in writ ing to Mr. Christopher S . Tenorio, Executive Director, CPA, by means of one of the following: Emai l , fax, mai l or hand-del i very to the CPA Administrative Office located on the Second Floor of the Francisco C. AdaiSaipan International Airport with the subject l i ne "Comments on Proposed Airport Rules and Regulations."

Commonwealth Ports Authority P.O. Box 50 1 055 Saipan, MP 96950

Tel. (670) 237-6500/650 I Fax: (670) 234-5962

Emai l : cpa.admin @pticom.com

All written comments shal l be submitted �Al.Q ays after publ ication of this notice.

Submitted by:

Recei ved by:

Fi led and Recorded by:


,

S . TENORIO Executive Di rector, CPA

--� MATILDA ROSARIO S

Con monwealth Registrar

Date

Date

0& ·25"- c9..0;)'/ Date

VOLU M E 43 N U M BER 06 J U N E 28, 2021 PAGE 046731

SMA App. 277

Commonwealth Ports Authority fr'H1�·i<;t.:o C Ad d /S.lipan ln tprn,ltion.ll Ai rpllrt

PO BOX 5UI 05S· SAI PAN - M I' · 9tl950 Phone; (670) 2..17-6500/01 F,\),: (670) 21-1--5%2

E-Mdi l Addrf'5� : Cp,1.,Klmin(!l3cti\'Om.L:om vVebsitc: http:;:// cnmiptl rt:; . ' lll1\

NUTISIAN PUPBLIKU

I Manmaproponi na Amenda para i Areklamentu yan Regulasion i PIasa gi Commonwealth Ports Authority

I Eksakatibu Direktot gi Commonwealth Ports Authority ("i CPA") ha infotma guini i pupbl iku na i intensiona i Commonwealth Ports Authority para u pupbl ika i amenda siha gi iyon Areklamentu yan Regulasion i Piasa.

I AKSION NI MA'INTENSIONA PARA U ADA.PTA ESTI I MANMAPROPONI NA AMENDA SIHA PARA I AREKLAMENTU Y AN REGULASION I PLA.SA GI COMMONWEALTH PORTS AUTHORITY: I nutisia guini muna'i sigun para I CMC § 9 1 04(a) gi Akton "Administrati ve Procedure" na i Commonwealth Ports Authority ha intensiona para u pupblika i tinattiyi na dinaI1lia na seksiona para iyon Areklamentu yan Regulasion i Piasa.

I TEMA, SUSTA.NSIA, YAN I DISKRIPSION I SUHETU NI MASUMA.RIA YAN ASUNTU NI TINEKKA: Esti i manmaproponi na regulasion siha inamenda i Areklamentu yan Regulasion i Piasa gi Commonwealth Ports Auhtority para u establesi nuebu na "rate methodology" para i kinalamtin i "air carriers" gi p lasan CPA siha. Esti i manmaproponi na regulasion siha yan otru siha, ha ta'iun dumifina yan pribebeni defin is ion nu usun i palabra g i todu § 40- 1 0. 1 ; amend a § 40- 1 0. 1 -740 ni prinibebeni henerat na "provision" put i usun nu plasan i CPA, i d in im[tnda siha para u ma'ukupa yan usa i "airline" ni ma'asikna na aria siha, yan imfotmasion put yan i gumubiebietnan i CPA na "Kattan Auturisasion," "airlines' privileges," in isa siha, yan diretchu, i "accommodation" nu otru "airl ines," yan sikurid[rt sisteman plasan"; suma § 40- 1 0. 1 -742, ni ha pribebeni areklamentu n i gumubiebietna i ma'asikna arian "airl ines ' ; suma i § 40- 1 0. 1 -743, ni ha pribebeni regulasion siha put i kinalamtin yan inadahin na responsibi l id[rl nu CPA yan i "airlines"; suma § 40- 1 0 . 1 -744, ni ha gubietna i ubl igasion i "air l ines"; inamenda § 40- 10 . 1 -745, ni ha suma i "indemnification provisions" yan rinib isa i dinimandan insurance siha; suma § 40-10 . 1 -746, n i ha sangan i diretchu yan prib i lehu n i marisetba n i CPA; suma § 40- 1 0. 1 -747, n i ha pribebeni i manera n i para u mat[rttiyi an diriiu 0 sino distruktu s inisedi gi Asikna na Arian "Airl ines ' ; suma § 40- 1 0. 1 -748, ni ha pribebeni heneri'rt na kundision siha put i uriya, kuntodu "groundwater" yan "sol id" yan "hazardous waste"; inamenda § 40- 1 0. 1 -750 "Surety Bond"; suma § 40- 1 0. 1 -75 1 , ni ha gubietna "Airlines'" yan i diretchun propiedi\t i CPA gi t i tmina; suma § 40-10 . 1 -752, n i , yan otru siha, d im[tnda parehu yan i Areklamentu yan Regulasion i CPA yan pribeni "nondiscrimination" na dinimanda siha; inamenda § 40- 1 0. 1 - 1 20 I ni para u pribebeni tema siha put i apas "airline" yan i ginagaogao na apas siha; i namenda § 40- 1 0 . 1 - 1 205 "Landing Fees"; suma § 40- 1 0. 1 - 1 206, ni ha pribebeni ginagaog[1O na apas atkilon para isan nu CPA 'Terminals"; na'suha §§ 40- 1 0. 1 - 1 2 1 0, 1 2 1 5 , 1 220, ni ha pribebeni tema siha put i "apron" pupbliku yan "operational area" na ginagaogao na apas siha� i g inagaogao na apas siha para sitbisiull fasi l idat hinanao, yan i ginagaogao [rpas siha para sitbisiun fas i l idat intetnasionat finattu; na'suha § 40-10 . 1 - 1 230(b ) (2) , ni ha prinibeniyi kuenta para g inagaogao na apas sitnisiun "in-transit" pasaheru para "airlines" ni ha "executed CPA operating" na kuntrata siha; na' nuebu i tutat yan teman i Apas

COMMONWEALTH REGISTER VOLUM E 43 N U M BER 06 J U N E 28, 2021 PAGE 046733

SMA App. 278

"Fuel Flowage", yan Apas "Ground Handl i ng Permit", yan i GinagaogilO na Apas Fas i l iditt Pasaheru s iha; suma § 40- 1 0. 1 - 1 256, ni ha pribebeni tema put otru Apas yan Ginagaogao na Apas i CPA; suma § 40- 1 0. 1 - 1 257, n i ha pribebeni "provisions" put i amendan nu apas yan i ginagaogao na apas siha; suma § 40- 1 0. 1 - 1 258, ni ha d imill1da i "Airl ines" para u na'halum ripot para i CPA; yan inamenda § 40- 1 0. 1 - 1 260 put para i apasin i g inagaogao na apas siha.

ATURIDA T: I "substance" nu i t inatt i t iyi na manmaproponi na amenda s iha, ni umimp l imenta i nuebu na "rate methodology" para i isan nu plasan CPA, ginen maninaprueba gi ma'pus n i Kuetpun Direktot i CPA. I "substance" nu esti na manmaproponi na amend a siha g inen ma' ingklusu gi halum "Airport System Operating" na Kuntr:lta, yan gi Mayu 27,202 1 , i Kuetpun Direktot i CPA, ginen "Resolution No. 202 1 -05", ha aturisa i pupblikan nu esti i manmaproponi na amenda siha. Pues, esti i manmaproponi na amenda siha para pupblikasion gi halum Rehislran Commonwealth para i Nutisia yan Upifion sigun para i Akton Administrative Procedure yan para inaprueba ni i Henerat Abugadu sigun para I CMC § 2 1 53(e) . I Commonwealth Ports Authority gai aturidat para u pupblika esti siha na regulasion sigun para 2 CMC § 2 1 22.

DIREKSION PARA U MAPO'LU YAN PUPBLIKASION: Esti i Manmaproponi na Regulasion siha debi na u mapupblika gi halum Rehistran Commonwealth gi halum seksiona ni Manmaproponi yan i Mannuebu na Manma' adapta na Regulasion s iha, I CMC § 9 1 02(a)( I ), ya u mapega halum g i kumbinienti na lugat gi halum civic center yan g i halum ufisinan gubietnamentu gi kada distritun senadot, parehu Ingl is yan i prinsipiil na l i ngguahin nalibu. I CMC § 9 1 04(a) ( I ) .

PARA U MAPRIBENIYI UPINON SIHA: I petsona s iha pat atyu i malagu muna'halum upinon siha debi di u macho'gui gi t inigi ' para gualll as S inot Christopher S. Tenorio, Eksakatibun Direktot, CPA, gi LII1U na tinattiyi na manera: Email , fax, mail 0 sino intrega hiHum gi Ufisinan Atministradot i CPA ni gaigi gi S igundu na B ib ienda gi pliisan Francisco C. Ada/Saipan international yan i suhetu na ray a "I Upiiion siha gi Manmaproponi na Areklamentu yan Regulasion i Piasa."

Commonwealth Ports Authority P.O. Box 50 1 055 Saipan, MP 96950

Tel . (670) 237-6500/650 I Fax: (670) 234-5962

Emai l : cpa.admi n @pticom.com

Todu i t in ig i ' na upinon siha debi na u fanh m 30 dihas dispues di pupbl ikasion nu esti na nutisia.

N ina'hiilum as:

Rinis ibi as:


CHRISTOPHER . TENORIO Eksakatibun Direktot, CPA

MATiLDA ROSAR10 Ispisiat na Ayudanti para i Atministrasion

Fetcha

Fetcha

VOLUME 43 N U MBER 06 J U N E 28, 2021 PAGE 046734

SMA App. 279

Pine ' lu yan ninota as: ,� ,, �� :lo III Fetcha

S igun i 1 CMC § 2 1 53 (e) yan i 1 CMC § 9 104(a)(3) i manmaproponi na regulasion siha ni maiiechettu guini ni manmaribisa yan manma' aprueba kumu fotma yan sufisienti ligat ginin i Abugadu . nerat CNMI yan debi na u mapupblika, 1 CMC § 2 1 53(f).

Abugadu Henerat

COMMONWEALTH REG ISTER VOLU M E 43

c;W�?t Fetcha

NUMBER 06 J U N E 28, 2021 PAGE 046735

SMA App. 280

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ARONGORONGOL TOULAP

Pommwol Liiwel ngem Alh�ghul me Mwoghutughutul Plaasa me Commonwealth Ports Authority

Executive Director-il Commonwealth Ports Authority ("CPA") e aronga toulap bwe Commonwealth Ports Authority re mangemangi l reel rebwe arongawow l i iwel kka ngali A l h!ghul me Mw6ghutughutul Plaasa.

MA.NGEMA.NGIL MWOGHUT REEL REBWE ADOPTAALI POMMWOL LIIWEL NGA.L I ALLEGHUL ME MWOGHUTUGHUTUL PLAASA ME COMMONWEALTH PORTS AUTHORITY: Arongorong yeel e is i is iwow sangi I CMC § 9 1 04(a) reel Administrative Procedure Act iye Commonwealth Ports Authority re mangemangil rebwe aronga reel tal i l ikka e amwirimwirit iw ngali A l ieghCd me Mw6ghutughutCd Plaasa.

KKAPASAL, AUTOL, ME WEEWEL IKKA E SCHUULONG IGHA: Pommwol mw6ghutughut kkal e l i iwel i A l leghli l me Mw6ghutughutul Commonwealth Ports Authority igha e it itl iw ffel "rate methodology" ngali alongal "air carriers" me plaasal CPA. Pommwol mw6ghutughut kkal, 1161 akbiaw kkosas, e ffeeru sefaal iy weewel me ayoora maas weewel reel kkapas ikka e 10 reel alongal § 40- 10 . 1 ; l i iwel i § 40- 1 0. 1 -740 iye e ayoorai "general provisions" ikka e ssCd ngali yaayal plaasal CPA, "requirements to occupy" me yaay,\1 "airl ine assigned areas", me arongorong ikka e ssCd ngal i lemelemil aar CPA "Letlers of Authorization", "airl ines' privi leges", yaayal, me weel, le liyal akkaaw "airlines", me "airport system security; aschuulong § 40- 1 0. 1 -742, iye e ayoorai alieghCd "airlines' assigned areas"; aschuulong § 40- 1 0. 1 -743, iye e ayoorai mw6ghutughut ikka e ssC d ngali mw6ghutughutCd me ammwel i l CPA me aar "airlines"; aschuulong 40- 1 0. 1 -744, iye e ayoorai lemelemil "airl i nes"; I i iwel i § 40- 1 0. 1 -745, i ye e schuulong "indemni fication provision" me ffeeru sefaal iy "i nsurance requirements"; aschuulong § 40- 1 0. 1 -746. lye e apasa bwe weel me "privi leges" sangi CPA; aschuulong § 40- 1 0. 1 -747, iye e ayoorai mw6ghutughut iye rebwe attabweey ngare eyoor "damage or destruction" ngali "Air l ines' Assigned Area"; aschuulong § 40- 1 0. 1 -748, iye e ayoorai "general conditions" ikka e ssul ngal i le l iyal, e bwal schuulong "groundwater" me "solid and hazardous waste"; l i iwel i § 40- 1 0. 1 -750 "Surety Bond"; aschuulong § 40- 1 0. 1 -75 1 , iye e lemelemi aar Air l ines me CPA wee I reel faluw atol "termination"; aschuulong § 40- 10 . 1 -752, iye, 1161 akbiaw kkosas, ebwe yoor abwungubwung fengal me A l leghul me Mw6ghutughutul me e ayoora "nondiscrimination requrements"; l i iweli § 40- 1 0. 1 - 1 20 I reel igha ebwe ayoora kkapasal "air l ine fees and charges"; l i iweli � 40- 1 0 . 1 - 1 205 "Landing Fees"; aschuulong § 40- 1 0. 1 - 1 206, iye e ayoorai "rental charges" ngali yMiyal CPA 'Terminals"; s i iwel i §§ 40- 1 0. 1 - 1 2 1 0, 1 2 1 5 , 1 220, iye e ayoorai kkapasal "public apron" me "operational area charges", "departure fac i l ity service charges", me "international arrival fac i l ity service charges"; s i iwel i § 40- 1 0. 1 - 1 230(b)(2), iye e ayoorai "exception" ngali "in-transit passenger service charge" ngali "airlines that executed CPA operating agreements"; rebwe aghatchu kkapasal "Fuel Flowage Fee"; me "Ground Handling Permit Fees", me "Passenger

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Fac i lity Charges"; aschuulong § 40- 1 0 . 1 - 1 256, iye e ayoorai kkapasal "CPA Fees and Charges"; aschuulong § 40- 1 0. 1 - 1 257, iye e ayoorai pay ngali l i iwel i l 6bw6ssul me ghumwaar; aschuulong § 40- 1 0. 1 - 1 258; iye e mwuschel bwe Airl ines rebwe isi isi long repoot ngali CPA; l i iwel i § 40- 1 0. 1 -1 260 iye e ssul ngal i 6bw6ssul ghumwaar.

BW ANGIL: Autol pommwol l i iwe l ikka e amwirimwiritiw, iye e ayoorai rfel mw6ghutughutu l "rate methodology" ngali yMiyal plaasal CPA, iye ra atirowa sangi CPA Board-il Directors. Ebwal schuulong 1161 autol pommwol l i iwel 1161 Aiport System Operating Agreement, me w661 Ghuuw 27, 202 1 , CPA Board-il Directors, sangi Resolution No. 202 1 -05, iye eyoor bwangil reel akkateewowul pommwol l i iwel kkal. Me, ebwe akkateewow pommwol l i iwel kkal me 1161 Commonwealth Register ngal i Arongorong me Kkapas sangi Administrative Procedure Act me ebwe atirow sangi Soulemelemil Al legh Lapalap s<ing i I CMC § 2 1 53(e) . Eyoor bwangil Commonwealth Ports Authority reel rebwe arongawow mw6ghutughut kkal sangi 2 CMC § 2 1 22 .

AFAL REEL AMMWELIL M E AKKATEEWOWUL: Ebwe akkateewow Pommwol Mw6ghutughut kkal me 1 16 1 Commonwealth Register 1161 tal i l Pommwol me Hel Mw6ghutughut ikka ra Ad6ptaali, I CMC 9 1 02(a)( I ) , me ebwe appascheta 1 161 c iv ic center me bwal 1 161 bwulasiyol gobetnameento 1 161 senatorial district, fengal reel English me mwal iyaasch. I CMC § 9 1 04(a)( I ) .

REEL ISIISILONGOL KKAPAS: Sch66 kka ngare aramas ikka re tipiili rebwe isi isi long kkapas rebwe isch ngali Mr. Christopher S . Tenorio, Executive Director, CPA, inamwo Emai l , fax, mail ngare bwughil6 CPA Administrative Office iye e 10 Second Floor me Francisco C. Ada/Saipan International Airport me ebwe 10 w661 subject l ine bwe "Comments on Proposed Airport Rules and Regulations."

Commonwealth Ports Authority P.O. Box SO I 055 Saipan, MP 96950

Tel . (670) 237-6500/650 1 Fax: (670) 234-5962 Emai l : cpa.admin @pticom.com

Ebwe toolong alongal ischi l kkapas 1161 el i ig iri l aal akkateewow arongorong yeel.

!saliyalong:

BwughiyaJ:

Ammwel i l :


&(('6/ �( Raal

Executive Director, CPA

---::;-----.. MA TILDA ROSARIO Special Assistant nga l i Administration

Con monwealth Registrar

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Sangi 1 CMC § 2 1 53 (e) me 1 CMC § 9 1 04(a)(3) pommwol mwoghutughut ikka e appasch ra takkal amwuri fischiiy me aa atirow bwe aa lleghlo reel ffeeru l me legal sufficiency sangi

Sou leme . mi l Al legh Lapa lapa l CNM I me ebwe akkateewow. 1 CMC § 21S3(f) .

Soulemelemil Allegh Lapalap

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TITLE 40: COMMONWEALTH PORTS AUTHORITY

SUBCHAPTER 40-10.1 AIRPORT RULES AND REGULATIONS

Part 001 General Provisions § 40- 1 0. 1 -00 1 Authority § 40- 10. 1 -005 Purpose § 40- 10. 1 -0 1 0 Definitions

Part 100 General Operational Rules and Regulations § 40- 10. 1 - 1 0 1 General Rules § 40- 10. 1 - 105 Compliance with Rules and Regulations § 40- 1 0. 1 - 1 10 Commercial Activity § 40- 10. 1 - 1 1 5 Sightseeing § 40- 10. 1 - 1 20 Parking and Storage of Aircraft § 40- 10. 1 - 1 25 Storage of Cargo, Etc. § 40- 1 0. 1 - 1 30 Use of Operational Areas § 40- 10. 1 - 1 35 Payment of Charges § 40- 10. 1 - 140 Commercial Photography

Part 200 Operation of Vehicles § 40- 10. 1 -20 1 Required Licenses § 40- 10. 1 -205 Obeying S ignals and Orders § 40- 1 0. 1 -2 10 Speed Limits § 40- 10. 1 -2 1 5 Vehicles Within Operational Areas § 40- 10. 1 -220 Responsibility in Cases of Accidents § 40- 10. 1 -225 Right-of-way § 40- 1 0. 1 -230 Parking § 40- 10. 1 -235 Taxicab Operations and Pennits § 40- 10. 1 -240 Attire for Taxicab Operators and Related Matters § 40- 10. 1 -245 Permit Required for Vehicle Rental Service § 40- 10. 1 -250 Group Transportation Permits § 40- 10. 1 -255 Implementing Rules

Part 300 General Operation on Public Aircraft Area § 40- 1 0. 1 -30 1 Identification

§ 40- 10. 1 -305 Enplaning or Deplaning Passengers § 40- 10. 1 -3 1 0 Safety of Aircraft Operation § 40- 10. 1 -3 1 5 Deviation from Rules

Part 400 Taxiing Rules § 40- 10. 1 -40 1 Taxiing and Ground Rules

Part 500 Traffic Pattern, Landing

and Takeoff § 40- 1 0. 1 -50 1 Left-hand Traffic § 40- 1 0. 1 -505 Ceiling Limitations § 40- 10. 1 -5 1 0 General Traffic Rules § 40- 1 0. 1 -5 1 5 Helicopter Operations Rules

Part 600 Operations

Rules for Ground

§ 40- 1 0. 1 -60 1 Engine Run-up Restrictions § 40- 1 0. 1 -605 Aircraft Parking § 40- 10. 1 -6 1 0 Area for Repairs § 40- 1 0. 1 -6 1 5 Runway Area Restrictions § 40- 1 0. 1 -620 Overparking of Aircraft on Apron § 40- 10. 1 -625 Power-in, Push-out of Aircraft § 40- 10. 1 -630 Running of Engines During Operations § 40- 10. 1 -635 Flight Service Station

Part 700 Conditions of Use of Airport § 40- 1 0. 1 -70 1 Public Apron and Aircraft Parking Area Use § 40- 10. 1 -705 Departing Passenger Restrictions § 40- 10. 1 -7 10 Arriving Passenger Restrictions § 40- 10. 1 -7 1 5 Transit Passenger Restrictions

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§ 40- 1 0. 1 -720 Restrictions on Purchase of Aviation Fuels § 40- 1 0. 1 -725 Cargo Operations § 40- 1 0. 1 -730 Ground Handling Services § 40- 1 0. 1 -735 Security Screen ing § 40- 1 0. 1 -740 Use Regulations for Airl i ne Use/Operatil1g AgreemeAtOperations § 40- 1 0. 1 -742 Airl i ne Assigned Areas § 40- 1 0. 1 -743 Operation & Maintenance § -10- 1 0. 1 -744 Obl igat ion of Airl ine §_ -40- 1 0. 1 -745 Indemnification and

Insurance § 40- I O. I -746 Ri ghts and Pri v i leges Reserved bv Authority § 40- 1 0. 1 -747 Damage or Destruction of Assigned Area § 40- 1 0. 1 -748 Environment § 40- 1 0. 1 -750 Surety Bond § 40- 1 0. 1 -75 1 Property Rights Upon Termination § 40- 1 0. 1 -752 General Provisions § 40- 1 0. 1 -755 Notice of Airl i ne Schedule Changes

Part 800 Conduct of the Public § 40- 1 0. 1 -80 I Obstruction of Publ ic Use § 40- 10 . 1 -805 Restricted Areas § 40- 1 0. 1 -8 1 0 Entrance Into Publ ic Areas § 40- 1 0. I -S I 5 S igns and Advertisements § 40- I O. 1 -820 Sol ici t ing of Funds § 40- 1 0. 1 -825 Sel l ing, Sol ici t ing, and Entertaining § 40- 1 0. 1 -830 Loitering § 40- 1 0. 1 -835 Gambling § 40- 1 0. 1 -840 Disorderly Conduct § 40- 1 0. 1 -845 Preservation of Property § 40- 1 0. 1 -850 Disposition of Waste Articles § 40- 1 0. 1 -855 Pets § 40- 1 0. I -S60 Other Animals § 40- 1 0. 1 -865 Sanitary Care § 40- 1 0. I -S70 Penalties

Part 900 Use of Particular and Designated Areas § 40- 1 0. 1 -90 I Areas Designated for Speci fic Uses § 40- 1 0. 1 -905 Personnel Authorized to Use Areas § 40- 1 0. 1 -9 1 0 Compliance with Rules and Regulations

Part 1000 Safety Provisions § 40- 1 0. 1 - 1 00 I Dangerous Acts § 40- 1 0. 1 - 1 005 Smoking § 40- 1 0. 1 - 1 0 1 0 Explosives § 40- 1 0. 1 - 1 0 1 5 Use of Fire Extinguishers § 40- 1 0. 1 - 1 020 Storage of Inflammable Materials § 40- 1 0. 1 - 1 025 Lubricating Oi Is § 40- 1 0. 1 - 1 030 Fire Apparatus § 40- 1 0. 1 - 1 035 Fuel Handl ing while Engines Are Running § 40- 1 0. 1 - 1 040 Proper Grounds § 40- 1 0. 1 - 1 045 Distance from Bu i ldings § 40- 1 0. 1 - 1 050 Required § 40- 1 0. 1 - 1 055 Are Aboard § 40- 1 0. 1 - 1 060 Aircraft § 40- 1 0. 1 - 1 065 § 40- 1 0. 1 - 1 070 Aircraft § 40- 1 0. 1 - 1 075 Spi l lage § 40- 1 0. 1 - I 080 Safety Provisions

Fire Extinguishers

When Passengers

Smoking Near

Start ing Engines Cleaning of

Fuel and Oi I

En forceillent of

Part 1 1 00 - Miscellaneous Provisions § 40- 1 0. 1 - 1 1 0 I Conformance with U.S. Regulations § 40- 1 0. 1 - 1 1 05 Reckless Operation

Careless or

§ 40- 1 0. 1 - 1 I 1 0 Safety of the Publ ic

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§ 40- 1 0. I - I I 1 5 Lost and Found Articles § 40- l 0. 1 - 1 1 20 Observance Rules and Regulations § 40- 1 O. I - l 1 25 Penalties

or

Part 1 200 - Schedule of Fees and Charges § 40- 1 0. 1 - 1 20 1 Airline Fees fef Non signalory Carriersand Charges Methodology § 40- 1 0. 1 - 1 205 Landing Fees § 40- 10. 1 -1210 Publ ie Arran and

Operalional Area Charge 1 206 Terminal Rentals

§ �O 10.1 1215 Derarlure Faeilily Ser ... iee Charge (DFSC) § �O 10.1 1210 InlemaliOlwl Arrival Faeilit)' Sen'iee CHarge § 40- 1 0. 1 - 1 225 Aircraft Parking Charge § 40- 10. 1 - 1 230 In-transit Passenger Service Charge

Subchapter Authority: 2 CMC § 2 1 220).

§ 40- 1 0. 1 - 1 235 § 40- 1 0. 1 - 1 240 § 40- 1 0. 1 - 1 245 Permit Fee § 40- 1 0. 1 - 1 250 § 40- 1 0. 1 - 1 255 Charge,; Charges § 40- 1 0. 1 - 1 256 Charges § 40- 1 0. 1 - 1 257 Fees and Charges § 40- 1 0. 1 - 1 258 § 40- 1 0. 1 - 1 260 Charges

Catering Fee Fuel Flowage Fee Ground Handling

Ground Rent Passenger Faci l ity

Other Fees and

Amendment of

Airl ine Reports Payment of

§ 40- 1 0. 1 - 1 265 Surcharges on Airline Tickets Prohibited § 40- 1 0. l - I 270 Taxicab Operator Permit Fee § 40- 1 0. 1 - 1 27 5 § 40- 1 0. 1 - 1 280 Schedule

Public Parking Fee Miscel laneous Fee

Subchapter History: Amdts Adopted 42 Corn. Reg. 4406) (SepL. 28. 2020): Amcils Proposed 42 COIll . Reg. 43527

(May 28. 2020): Amdts Adopted 39 Com. Reg. 39592 (Apr. 28. 20 1 7) ; Amdts Proposed 38 Com. Reg. 39040 (Dec. 28. 2( 1 6); Amdts Adopted :\9 Com. Reg. 392 1 6 (Feb. 28. 20 1 7 ); Amdts Proposed 38 Com. Reg. 39062 (D�c. 28. 20 1 6) : Amdts EI1lLrgcIH.:Y .10 Com. Reg. 285 1 9 (June 27, 2008) (c flt.:ctivc for 1 20 days from lUll!,; :l. 2008): Amdts Adopted 26 Com. Reg. 2 1 7 1 0 (Jan. 22. 2004): Amdts Proposed 25 Com. Reg. 2 1 465 (Nov. 1 7 . 20m): Amdts Adopted 23 Com. Reg. 1 8385 (Sept. 24, 200 1 ); Amdts Proposed 23 Com. Reg. 1 7826 (Apr. 23. 2001 ) : Amdts Adopted 23 Com. Reg. 1 7842 (Apr. 23. 2(01 ): AnKhs Proposed 23 Com. Reg. 1 7 6 1 4 (Jan. 1 9, 200 1 ) : Amdts Adopted 2 1 Com. Reg. 1 6855 (July 23. 1 999): Amdts Proposed 2 1 Com. Reg. 1 6779 (May 1 9. 1 999): Amdts Adopted 2 1 Com. Reg. 1 680:\ (June 23, 1 999): Amdts Proposed 2 1 Com. Reg. 1 6693 (Apr. 1 9, 1 999): Amdts Proposed 20 Com. Reg. 1 6 1 1 0 (Sept. 1 5 . 1 998);* AnKhs Adopted 1 9 Com. Reg. 1 5 3 8 1 (May 1 5 . 1 997): AnKhs Proposed 1 9 Com. Reg. 1 4878 (Jan. 1 5 . 1 997): Amdts Adopted 1 6 Com. Reg. 1 1 809 (Mar. 1 5 , 1 994): Amdts Proposed 1 6 Com. Reg. 1 1 68 1 (Feb. 1 5. 1 994): Adopted 1 4 Com. Reg. 9534 (Aug. 1 5 . 1 992): Proposed 1 4 Com. Reg. 9079 (Mar. 1 5 . 1 992) .

*A notice of adoption for thl: 1 998 proposed amendments was never published.

COlllmission COIll IllI..! IlI: On May 1 2 . 2008. Governor Benigno R. Filial issued Executive Order No. 2008-3 (Reorganization Plan No. 1 or 2008). In Executive Oreler No. 2008-3. Governor Filial al located CPA \0 the Orrice or the Governor. 30 Com. R. 28757 (September 25. 2008). On May 1 3 . 2008. Governor Fitial signed ExecLitive Order No. 2008-4 and declared a stalL' of emergency " dul: 10 the inability or [CPA I 10 avoid technical defau lt on Ihc March I , 1 998 incknlun: on the CPA Airport Revellue Bonds." 30 Com. Reg. 28760 (September 25, 2008). On May 1 3 , 2008. Governor Filial issued Executive Oreler No. 2008-5 (Reorganization Plan No. 2 of 2008). In Execlit ive Order No. 2008-5. Governor Filial superseded Executive Onkr No. 2008-03. 30 Com. Reg. 28762 (September 25. 2008). On June 1 2. 2008. Governor Fitial issued Executive Order No. 2008-6. which renewed the declaration of a state of disaster set forth in Executive Order No. 2008-4. 30

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Com. Reg. 28765 (September 25, 2008). On July 1 4, 2008, Governor Fitial issued Executive Order No. 2008-7, declared that a state of emergency sti l l existed "[u] ntil a sufficient number of the appointments [on the board of directors of CPA] have been made and consented to by the Senate ." On August 1 3 , 2008, Governor Fitial issued Executive Order No. 2008- 1 1 , which renewed the declaration of a state of disaster set forth in Executive Order No. 2008-7 . 30 Com. Reg. 28779 (Sept. 2008). On September 3, 2008, Governor Fitial issued Executive Order No. 2008- 1 2, which terminated the declaration of a state of disaster set forth in Executive Order No. 2008-7. 30 Com. Reg. 28782 (Sept. 2008) .

PL 2-48, the "Commonwealth Ports Authority Act," codified as amended at 2 CMC § § 2 1 0 1 -2 1 90, took effect October 8, 1 98 1 . It was based on the "Mariana Islands Airport Authority Act" enacted by the Congress of Micronesia as PL 6-58 . See the commission comment to 2 CMC § 2 1 0 1 . PL 2-48 created the Commonwealth Ports Authority to implement its provisions and operate the ports of the Commonwealth . See 2 CMC §§ 2 1 2 1 -22. Transition provisions of PL 2-48 provided for the transfer of the Mariana Islands Airport Authority to the newly created Commonwealth Ports Authority. See 2 CMC § § 2 1 8 1 , et seq.

Executive Order 94-3 (effective August 23, 1 994), reprinted in the commission comment to 1 CMC § 200 1 , reorganized the Commonwealth government executive branch, changed agency names and official titles and effected numerous other revisions. Executive Order 94-3 § 304(a) al located the Commonwealth Ports Authority to the Department of Public Works for purposes of administration and coordination . PL 1 1 - 1 09 (effective December 2 1 , 1 999) vacated section 304(a) in its entirety and reenacted and reinstated all provisions of 2 CMC, division 2, chapter 1 , 2 CMC §§ 2 1 0 1 -2 1 90, in effect immediately prior to the effective date of Executive Order 94-3 . PL 1 1 - 1 09 §§ 2(b) and 4.

The Commonwealth Ports Authority Act contains special provisions related to rules and regulations. See 2 CMC § § 2 1 4 1 -2 1 46.

The precursor to the Commonwealth Ports Authority with regard to airport regulation in the Commonwealth was the Mariana Islands Airport Authority (MIAA). The MIA A published several amendments to earlier Trust Territory airport rules and regulations as fol lows:

Amdts Proposed 3 Com. Reg. 1 233 (May 20, ( 98 1 ) (amending earlier regulations); Amdts Proposed 1 Com. Reg. 375 (July 1 6, 1 979);* Adopted 1 Com. Reg. 53 (Nov. 1 6, 1 978); Proposed I Com. Reg. 39 (Oct. 1 6, 1 978) (amending earlier regulations promulgated by the Trust Territory of the Pacific Islands government).

*A notice of adoption for the July 1 979 proposed amendments was never published. The MIAA May 1 98 1 proposed amendments were adopted by the Commonwealth Ports Authority in 1 983.

After i ts creation in 1 98 1 , the Commonwealth Ports Authority continued to amend the existing regulations as follows:

Amdts Adopted 1 2 Com. Reg. 7 1 99 (July 1 5 , 1 990); Amdts Proposed 1 2 Com. Reg. 687 1 (Apr. 1 5 , 1 990); Amdts Adopted 1 0 Com. Reg. 5433 (Jan 1 8 , ( 988) ; Amdts Proposed 9 Com. Reg. 5279 (Nov. 1 5 , ( 987); Amdts Adopted 9 Com. Reg. 4923 (Apr. 1 5 , 1 987); Amdts Proposed 9 Com. Reg. 49 1 1 (Feb. 1 7, ( 987); Amdts Proposed 8 Com. Reg. 4834 (Dec . 1 6, ( 986); * Amdts Adopted 8 Com. Reg. 4392 (June 3 , ( 986) ; Amdts Proposed 8 Com. Reg. 4328 (Apr. 1 8, 1 986); Amdts Adopted 7 Com. Reg. 4 1 57 (Dec. 1 7, 1 985); Amdts Proposed 7 Com. Reg. 4 1 53 (Nov. 20, ( 985) ; Adopted Amdts 6 Com. Reg. 2863 (June 15, ( 984) ; Amdts Proposed 6 Com. Reg. 2742 (May 1 5 , 1 984) ; Amdts Adopted 6 Com. Reg. 2745 (May 15 , 1 984) ; Amdts Proposed 6 Com. Reg. 2707 (Apr. 1 5 , 1 984); Amdts Adopted 6 Com. Reg. 27 1 0 (Apr. 1 5 , 1 984) ; Amdts Proposed 6 Com. Reg. 2566 (Feb. 1 5 , 1 984); Amdts Adopted 5 Com. Reg. 2479 (Oct. 20, ( 983) ; Amdts Proposed 5 Com. Reg. 2 1 65 (May 27, ( 983); Amdts Proposed 4 Com. Reg. 1 745 (Dec. 1 0, ( 982); Amdts Proposed 3 Com. Reg. 1 233 (May 20, 1 98 1 ) (proposed by the MIAA); Amdts Adopted 4 Com. Reg. 1 753 (Dec. 1 0, ( 982); Proposed Amdts 4 Com. Reg. 1 453 (May 24, 1 982).

* A notice of adoption for the December 1 986 proposed amendments was never published.

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Thl! COllllllonwealth PUrlS Authority published a complete revision of the Airport Rules and Regulations in I LJ92. The history sections in th is subchapter date from that publication and adoption.

On May 12 . 2008. Governur Benigno R. Filial issued Executive Order No. 2008-3 (Reorganization Plan No. I or 20(8). In Executive Order No. 2008-3. Governor Filial allocated CPA to the Office or the Governor. 30 Com. R. 28757 (September 25. 2008). On May 1 3, 2008, Governor Fitial signcd Executive Order No. 2008-4 and declared a state of emergency " due to the inability of [CPA I to avoicl technical default on the March I , 1 998 indenture on the CPA Airport Revenue Bonds," 30 Com. Reg. 28760 (September 25. 2008). O n May 1 3. 2008. Governor Filial issued Execlitive Order No. 2008-5 (Reorgan ization Plan No. 2 of 2008). I n Executive Order No. 2008-5. Governor Fitial superseded Executive Order No. 2008-03. 30 Com. Reg. 28762 (September 25. 2008). On June 1 2. 2008, Governor Fitial issUl:d Executive Order No. 2008-6. which renewed the declaration of a state of disaster set forth in Executive Order No. 2008-4. 30 Com. Reg. 28765 (September 25. 2008). On July 1 4. 2008. Governor Fitial issued Executive Order No. 2008-7. declared that a state or emergency s t i l l existed " [ulnti l a sufficient number of the appointments [on the board of directors of CPA I have been made and consentl!d to by the Senate." On August 1 3. 2008. Governor Fitial issued Executive Order No. 2008- 1 1 . which rl!ncwcd the declaration of a state of disaster set forth in Executive Order No. 2008-7. 30 Com. Reg. 28779 (Sept. 2008). On Septemher 3 . 2008, Governor Fitial issued Executive Order No. 2008- 12 . which terminated the declaration of a state of disaster set forth in Executive Order No. 2008-7. 30 Com. Reg. 28782 (Sept. 2008).

Part 001 - General Provisions

§ 40-10.1-001 Authority

The rules and regulations in this subchapter are promulgated by the Commonwealth Ports Authority in accordance with 2 CMC § 2 1 22U ) and shall have the force and effect of law.

Modi ried. I CMC § 3806(d), ( I).

History: Adopted 14 Com. Reg. 9534 (Aug. 15, 1 992): Proposed 14 Com. Reg. 9079 (Mar. 15, 1 992).

§ 40-10.1-005 Purpose

The purpose of this subchapter is to provide for and to insure the orderly, safe, and sanitary operation of airports i n the Commonwealth of the Northern Mariana Islands under the j urisdiction and control of the Commonwealth Ports Authority. The effecti ve date of Ihe 202 1 amendmenls to Subchapter 40- 1 0. 1 . Part 00 I . Part 700. and Part 1 200 shal l be OClober I . ?O? I .

Modiried. I CMC § 3806(d).

History: Adopted 14 Com. Reg. 9534 (Aug. 1 5 . 1 992): Proposed 14 Com. Reg. 9079 (Mar. 1 5 , 1 992).

§ 40-10. 1-010 Definitions

The fol lowing terms, as used in this subchapter, shall have the fol lowing meanings :

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(a) (a) " Affi l iated Airline Company" shal l mean any Air Transportation Company that is regarded or appears to operate as a related entity and is now or hereafter ( I ) a subsidiary of Airl ine, (2) owned i n whole or i n part by Airl ine or its parent company. (3) owns Airline i n part. or (4) so affi liated with Airline or its parent company by virtue of a code sharing agreement and in any case shal l have been designated in writ ing by Airl ine as an Afril iated Airline Company. Airl ine shall be responsib le for and unconditionally guarantees the payment of rentals. fees. and charges. including Passenger Faci l i ty Charges by i ts Affi l iated Airl i ne Company. An Affi l iated Airl ine Company hosted by Airl ine wi l l pay rates. fees. and charges at the rate charged to Airl i ne .

(b) "Air Transportation Business" shal l mean that business operated by an Air l ine for the commercial transportation by air of persons. property. mai l . parcels. and cargo at one or more of the A irports.

(c) "Air Transportation Company" shall mean a legal enti ty engaged in the business of scheduled or non-scheduled commercial transportat ion by air of person. property, mail. parcels. and cargo and authorized by the Authority to conduct such business at one or more of the Airports.

(d) "Aircraft" shal l mean and include any and al l contrivances, now or hereafter used for the navigation of or fl ight i n air or space, including, but not l imited to, airplanes, airships, dirigibles, hel icopters, g l iders, amphibians, and seaplanes.

( I ) (9) "AlIthority"Airfic ld" shall mean AlithorityLanding Area and the Ramp Area of an .

the COFTlFTloAwealth Port:;

(I) " Airfield Cost and Revenue Center" shal l inc lude a l l Capital Charges. a l l direct and indirect Operation and Maintenance Expenses. and Revenues for an Airport Airfield as may be revised from time to t ime.

(g) "Airline" shal l mean all pllbliely owned airportsan Air Transportat ion Company. including any Affi l iates of Airl ine. engaged in the COFTlIllOAwealth of the NonherA MariaAa IslaAds, together ''''ith all related f'aeilities. On Saipan tllis iAeIHde�; Sai[3an IAternatioAal Airport, fOlTnerl), kAown as "Isley Field." OA Tinian itbusiness of scheduled or nonscheduled commercial transportation by air of persons, properLv. cargo, or mail .

( h) "Airl ine Assigned Area or Assigned Area" shal l mean West Tinian Intemalional Air[3ort. On Rota itthose areas in a Terminal the Authori ty has l icensed for use by an Airl ine as Preferential Use Premises or Common Use Premises, or l icensed for use by Airl ines on a per use basis.

© 1010 by The Commonwealth Law Revision Commission (Sept. 28. 2020) Jl:.Jgc 6 or 85


SMA App. 289


(i) " Airl ine Supported Arca," shall mean the RBt-rr-direct and indircct Opcration and Maintenance Expenses and Capital Charges charged to thc Airfield Cost and Revenue Center and the Terminal Cost and Revcnuc Center.

(il " Airport" shall mcan an Authority owned Airport within the Ai rport System. including Francisco C Ada/Saipan International A i rport. Benjamin Taisacan Manglona International Airport. Tin ian International Airporto-Gtl, Pagan il !;Iwll mean IRe Pagan Airj'J8nAirport together with a l l appurtcnances thercto. structures. bu i ldings. fixtures. and a l l tangible personal property now or hereaftcr owned. leased. or operated by the Authori ty.

(k) (El) "A i rport Rules and Regulations" shal l mean the rule, and regulations as set forth in Northern Mariana Islands Administrat i vc Code ( N M lAC) Subchapter 40- 1 0. I and subsequent amendments thereto.

(I) "Airport System" shal l mcan a l l A i rports owned and operated by the Authority and which includes Francisco C Ada/Saipan International A i rport. Benjamin Taisacan Manglona international A i rport. and Tinian International A i rport . together with a l l appurtenances thereto. structures. bui ldings, fixtures. and a l l tangible personal property now or hcreafter owned. leased. or operated by the Authori ty.

(m) "Authority" shall mean the Commonwealth Ports Authority. a publ ic corporation created. organized and exist i ng under Tit lc 2, Scction 2 1 0 I et seq . . Commonwealth Code. Commonwealth of the Northcrn Mariana Islands.

(n) " Bond Rcsolution" shall mean Resolution No. 02-98. dated March 4, 1 998. as supplemented and amended from time to t ime authorizing thc issuancc by thc Authority of Bonds or other "nancing obli gations with respect to the A i rport Systcm or any successor resolution. indenture. or trust agreemcnt.

(0) " Bonds" shal l mean any bonds or othcr financ ing instrument or obl i gation of the Authority. other than Subordinatcd Bonds. issued for the purposes of improv ing the Airport System. a l l pursuant to the Bond Resolution.

(p) " Capital Charges" shall mcan with respcct to any Fiscal Year. the sum of Debt Scrvice (exclusive of capi tal izcd i ntcrest) and Othcr Dcbt Service payable by Authority in that Fiscal Year: plus Debt Service Covcragc.

(q) "Common Use Formula" shal l mcan that formula which prorates one hundred percent ( 1 00%) of the cost of a scrv ice or space wi thin a Terminal based on the ratio of each Scheduled Air Carrier' s Enplancd Passengers using the service or space at an Airport during the month. to the total of a l l Enplaned Passengers using the service or space at an Airport during the month. Notwithstanding the foregoing. Authority shal l . after completion of any promotional offering. adjust thc computation to renect enplanements of additional Scheduled A i r Carriers at an Airport or af'ler the deletion of a Scheduled Air Carrier at an A i rport.

10 2020 by Thl! Commonwealth Law Revision Commission (S!.!pl. 28, 2020)

COMMONWEALTH REGISTER VOLU M E 43 NUMBER 06 J U N E 28, 2021 PAGE 046745

SMA App. 290


(r) " Coml11on Use Premises" shall mean space managed bv Authority that may be made avai lable to Air l ine from t ime to t ime for use in common with other airl i nes. as assigned bv the Executive Director. subject to the Airport Rules and Regulations .

(s) " Cost and Revenue Centers" shal l mean those areas of functional activ i t ies of an Airport used for the purposes of account ing for Revenues. Operation and Maintenance Expenses. and Capital Charges.

(t) " Cost Centers" shal l mean those areas or functional act i vi t ies of an Airport used for the purposes of account i ng for Operation and Maintenance Expenses and Capital Charges.

(u) "Debt Service" shal l mean with respect to any series of Bonds. the total. as of any particular date of computation and for any particular period or year. of the aggregate amount required pursuant to the Bond Resolution to be deposited during such period or year in the Bond Fund.

(v) " Debt Service Coverage" shal l mean one hundred and twenty-five percent ( 1 25%) of the debt service payable in each Fiscal Year as stated i n Section 6. 1 1 of the Bond Indenture (adjusted as mav be permitted under the Bond Indenture).

(w) "Deplaned Passenger" shall mean any passenger di sembarking an aircraft at a Terminal. i ncluding any such passenger that shal l subsequent ly board another aircraft of the same or a di fferent Air Transportat ion Company or the same aircraft. previously operating under a di fferent n ight number.

(x) " Enplaned Passenger" shall mean any passenger boarding an aircraft at a Terminal. including any such passenger that previously d isembarked from another aircraft of the same or a di fferent Air Transportation Company or from the same aircraft. previously operating under a different n ight number.

(y) "Executive Director" shall mean the Executive Director of the Authority or his duly authorized representati ve.

(z) (e) "Extraordinary Coverage Protection" shal l mean the requ irements set forth i n Section § 40- 1 0 . 1 - 1 20 1 .

(aa) "FAA" shall mean the Federal Aviation Administrat ion. or i ts authorized successors.

(bb) " Federal Aviation Regulations" shal l mean the United States Federal Aviation Regulations, as currently amended, and promulgated by the United States Federal Aviation Administration.

ID 2020 by Tht! ConHllonwcallh Law R",vision Commission ( Sept. 28. 2020)

COMMONWEALTH REGISTER VOLU M E 43 NUM BER 06

I'age 8 of 85

J U N E 28, 2021 PAGE 046746

SMA App. 291


(cc ) (f) "Fiscal Year"' shall mean the annual account i n g period of the Authority ror i ts general accounting pU lposes which is the period or twelve consecutive months. ending with the last dav or September of any year.

(dd) "Fuel handling" shall mean the transportation, del ivery, fuel ing, and draining of fuel or fuel waste products.

( ee) (g) "Fuel storage area" shal l mean and i nclude any portions of the airport designated temporari ly or permanently by the Authority as areas i n which gasoline or any other type of fuel may be stored, i ncluding but not l im i ted to, gasol ine tank farms and bulkheads, piers, or wharves at which fuel is loaded.

( fD (h) " General Aviation" shal l mean al l phases or aviation other than mi l i tary aviation and scheduled or non-scheduled commercial air carrier operations.

( gg) " General Aviation Operator" shall mean a Person conduct ing ci vi l av iation operations other than scheduled or non-scheduled Air Transportation Companies.

(hh) "Hazardous Material " sha l l mean: ( I ) any oil petroleum products, Ilammable substances, explosives, radioact ive materials, hazardous wastes or substances, toxic wastes or substances or any other wastes, material s or pol lutants which pose a hazard to the Ai rport Svstem premises or to the safety and/or health of persons on or about the Ai rport System and/or cause an Airl i ne Assigned Area to be in violation of federal, Commonwealth, or local laws governing or regulati ng hazardous material s: (?) asbestos i n any form, urea formaldehyde foam insulation , transformers or other equipment which contains dielectric Ilu id contain ing regulated levels of polychlorinated biphenyls, or radon gas: (3) any chemical, material or substance derined as or included in the defini t ion of " hazardous substances" , "hazardous waste", " hazardous material" , "extremel y hazardous waste" , " restricted hazardous waste", "toxic substance" or s imi lar words under any applicable local, Commonweal th, or federal laws, or any regulations promulgated pursuant thereto, i ncluding, but not l imi ted to: the Comprehensive Environmental Response, Compensation Act of 1 980 (CERCLA), as amended, 42 U .S.c. §§ 960 1 et seq: the Hazardous Materials Transportation Act. as amended, 49 U .S.c. §§ 5 1 0 1 , et . seq, : the Federal Water Pol lu t ion Control Act (CW A), 33 U.s.c. §§ 1 25 1 eL seq. : the Resource Conservation and Recovery Act (RCRA), as amended, 42 U.s.c. §§ 690 1 eL seq.: the Toxic Substances Control Act (TSCA), as amended, 1 5 U .S .c. §§ 260 1 et . seq: or defined by the US DOT Pipel ine and Hazardous Materials safety admin i n 49 Code of Federal Regulations (CFR) 1 72. 1 0 I . Also applicable are the Commonweal th or the Northern Mariana Islands (CN M I) BECQ Harmful Substance & Hazardous Waste Regulations: Pesticide and Used Oi l Regulations: Storage Tanks: Aboveground & U nderground Regulations and Sol id Waste Management Regulat ions: (4) any other chemical. material or substance, exposure to which is prohibi ted, l imited or regulated by government authority, and which may pose a hazard to the health and safety of occupants of the Ai rport System, and or to any person entering upon the A irport System or adjacent property: andlor (5) any other chemical, material or substance which may pose a hazard to the environment or persons.

ID 2020 by The COlllmonwealth Law Revision Commission (Sept. 28, 2020)

COMMONWEALTH REGISTER VOLU M E 43 NUMBER 06 J U N E 28, 2021 PAG E 046747

SMA App. 292


(i i) " Indenture'" shal l mean that certain bond indenture dated March I . 1 998 authoriling the issuance of $20.050.000.00 Senior Series A. A i rport System Revenue Bonds. authorized by the Bond Resolution. and successor indentures.

(iD "Landing Area" shall mean those portions of an Ail])ort provided for the landing. taking off. and taxi i ng of aircraft. includ ing without l imi tation. approach and turning zones. av iation or other easements. runways. tax iways. runway and tax iway l ights. and other appurtenances i n connect ion therewi th.

(kk) "Landing Fee" shal l mean a fee expressed in tenths of a cent per thousand pounds of the Maximum Gross Landed Weight of each type of Air l ine's aircraft and shall be mult ipl ied by the total of al l Maximum Gross Landed Weight for all Revenue Landings of each type of aircraft landed at the Airport System by Air l ine .

(II) ' "Leiter of Authorization" shall mean a leiter i ssued by the Authority which constitutes a permit by the Authority authorizing an A i r Transportation Company with the requis i te federal regulatory approvals to conduct Ai r Transportat ion Business at an Ai rport or Airports and to use and occupy certain premises at an Airport or Ail])orts in compl iance with the terms of the A irport Rules and RegUlat ions.

(mm) "Maintenance and Operation Expenses" shal l mean " Maintenance and Operation Expenses" as defined in the Indenture i ncluding the current expenses, paid or accrued. of operation . maintenance. and ordinary current repairs of an Airport and shal l i nc lude. without l imit ing the generality of the foregoing. insurance premiums. administrative expenses of the Authori ty relat ing sole ly to said Airport. including engineering. architectural . legal. consultants. and accounting fees and expenses as shal l be in accordance with sound accounting practice. "Maintenance and Operation Expenses" shall not include any a l lowance for depreciation or renewals or replacements or obsolescence of capital assets of the Authori ty. or any operation and maintenance expenses of Spccial Purpose fac i l i t ies bui ldings where the lessees thereof are ob l igated to pay such operation and maintenance expenses.

(nn) " Maximum Gross Landed Weight" shal l mean the maximum gross certificated landing weight i n one-thousand-pound units for which each aircraft operated at an Airport by Airl ine as certi ficated by the FAA or its successor.

(00) " Net Requi rement" shal l mean. with respect to a Terminal, the d irect and indi rect Maintenance and Operation Expenses for said Terminal and reserves required by the Indenture. plus i ts proportional share of Capital Charges. less reimbursements; with respect to an Airfield. the direct and indirect Maintenance and Operation Expenses for the A i rfield and reserves therefore . plus the proportional share of Capital Charges.

(pp) "Operational arenArea" shal l mean any place on tAe airportan Airport not leased or demised to anyonea Person for exclusive use, and not a public area, highway, or public vehicular area; but SAHlI. Operational Areas include ffle...runways, public taxiways, J*!hli€ ramp nns apron arens, pusl ieRamp Areas, Publ ic cargo ramp and apron areas, pub I ic

(j) 2020 b y The Comillonwealth Law Revision COlllmission (Sep" 28. 2020)

COMMONWEALTH REGISTER VOLU M E 43 N U M BER 06

Page 1 0 01' 85

J U N E 28, 2021 PAGE 046748

SMA App. 293


aircraft parking and storage areas, Hns fuelTerminul Aircraft Aprons. and Fuel storage areas.

(i) "OperatioAal agreement" sAali meaA aA airliAe Wee agreemeAt eAteres iAto By the Authority HAS ,m airerHfI operator.

(gg) (j) "Operator" shal l mean the owner of an ai rcraft or any person who is using an aircraft for the purpose of operation by himself or his agents.

(1'1') (Ii) "Other Debt Service" shall mean any principal . interest. premium. and other fees and amounts. e i ther paid or accrued. on Other Indebtedness of Authority.

(ss) " Other I ndebtedness" shal l mean any debt incurred by Authori ty for Airport System purposes that is outstanding and not authent icated and del ivered under and pursuant to the Indenture.

(ll) " Passenger Faci l i ty Charge" or "PFC" shall mean the fees authori zed by 49 U .S.c. 40 1 1 7 and regulated by 1 4 CFR Part 1 58 as such statute and regulat ions currently exi st or as they may be amended.

Cuu) "Per Use Fee" shall mean a charge assessed bv the Authority for each use of an unassigned ai rcraft gate faci l i ty and / or an unassigned ticket counter for a period not to exceed two (2) hours. The gate faci l ity includes holdroom. loading bridge. pre-conditioned air. and 400 Hertz (Hz) power systems. A t icket counter shal l i nc lude one 2-posit ion t icket counter. Per Use Fees sha l l not apply to the use of gate faci l i t ies or ticket counters that are included in an Ai r Transportat ion Company's Preferential Use Premises pursuant to a Leller of Authorizat ion issued by the Authority. The locat ion of an ai rcraft gate faci l ity and / or t icket counter wi l l be assigned by the Executive Director and wi l l be cont i ngent upon the size of the aircraft operat ing at the Airport.

(vv) "Permission" or "permit" shal l mean permission granted by the Executive Director un less otherwise herein specifical l y provided. "Permission" or "permit" whenever required by this chapter shall always mean written permission, except that verbal permission i n specific instances may be granted under special circumstances where the obtaining of written permission would not be practicable .

(ww) (I) "Person" shal l mean any individual, firm, partnership, co-partnership, corporation, trust assoc iation, or company ( including any assignee, receiver, trustee, or s imi lar representatives thereof) or the Un i ted States of America, any state or political subdivision thereof, any foreign government, or the United Nations.

(m) "Airport Rule!; ans RegUlations" shall mean the rule!; ans regUlations 111 this suseRHpter anE! !;uB!;equent HAleAEil11ents tHereto.

([) 2020 by The Commonwealth Law Revision COlllmission (Sept. 28. 2020) I'age I I of 85


SMA App. 294

Documents

Projected Rates and Charges Analyses for Airline Negotiations