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FAA Issues Policy on Governance and Sponsorship Disputes

The Federal Aviation Administration (FAA) announced a new policy on June 1 entitled Evaluating Disputed Changes of Sponsorship at Federally Obligated Airports, intending to clarify the Agency’s role in addressing the politically-sensitive issues concerning airport governance and the transfer of an airport’s operational control to a new entity.  Owing to increased recognition of an airport’s role in enhancing and sustaining state and regional economic growth, airports such as Charlotte Douglas and Jackson-Medgar Wiley Evers have found themselves embroiled in controversy over their operational control.  The FAA’s Policy largely reflects the positions it had developed in being called upon to resolve similar disputes in the past. The Policy reaches more than only controversial sponsorship transfers.  It requires state or local governments seeking to alter “airport ownership, sponsorship, governance, or operations,” to first consult with the current airport sponsor and obtain its consent with respect to the proposed change.  Where the airport sponsor consents to a proposed change, the FAA’s role in effectuating the transfer will proceed as it traditionally has: FAA will independently evaluate whether the new sponsor possesses the capability and expertise to assuming all grant assurances and responsibility for safety compliance and, if not, work with the parties to resolve any concerns or deny the transfer request.  Where the airport sponsor does not consent to the proposed change, however, the Policy requires the parties to “resolve” any disputes before submitting an application to the FAA.  The Policy provides that FAA will not “accept” an application and commence its evaluation until it is provided with a “legally definitive resolution” of any underlying dispute, which may be in the form of “a legally-binding agreement . . . or a final, non-reviewable legal decision.”  The Policy also encourages state and local governments to engage the FAA for technical assistance early in the process of planning for changes to airport ownership, sponsorship, governance, or operations, and notes that such changes may require the new sponsor to reimburse the prior sponsor for investments that have not been fully realized, consistent with the FAA’s Policy and Procedures Concerning the Use of Airport Revenue.