News & Publications

Airport Law Alert No. 14 – Special Alert

After four years and twenty-three extensions, Congress has passed—and the President has signed—the FAA Reauthorization, known as the "FAA Modernization and Reform Act of 2012."

Many in the airport community may not have focused on, or may have forgotten, the size and scope of the legislation and all that is at stake, besides funding levels.  The legislation contains over 200 separate provisions and will change federal law in ways that will directly and indirectly affect airports for at least the next four years.  Congressional direction will require the FAA to initiate new rulemakings, change the schedule and approach to pending rulemakings, develop new reports and studies, amend the Grant Assurances, and change several orders and guidance documents.  In short, the new legislation will cause changes within the FAA as well as at airports.

Below is a short summary of just a few of the changes that will be made by this new legislation.  We strongly encourage you to take the time to review the legislation in detail.  Please contact us to help identify potential impacts on your airport.  You can find the Conference Report containing the final language here.

The FAA Modernization and Reform Act of 2012: A Summary of Changes

Passenger Facility Charge (PFC):  H.R. 658 does not include an increase in the PFC, and therefore the cap remains at $4.50 for the four-year duration of the bill.  This is doubly damaging because there is no immediate relief for airports and because the next opportunity to increase or eliminate the cap will not come around for another several years.

Airport Improvement Program (AIP) Funding:  AIP is funded at $3.35 billion for each of fiscal years 2012 through 2015 (§ 101).  This is good news for airports, since many feared a small or large reduction in authorized funding.  However, actual funding levels will be determined year by year via appropriations bills.

Noise Land:  The law will expand the permissible uses of the federal government’s share of noise land disposal proceeds, giving airports greater flexibility to use the money for projects at the airport rather than return it to the Trust Fund (§ 135).  The law also provides that leasing noise land does not constitute disposal, and that revenues from the lease may be used for an airport development project.  This increased flexibility will benefit airports working to address the management and disposal of noise land, which has been the subject of controversy for several years.

Through-the-Fence Agreements:  Authorizes and conditions through-the-fence agreements from residential property at General Aviation airports (§ 136).  This change appears contrary to a March 2011 revision to the Grant Assurances and FAA policy, and should prompt the FAA to amend the Grant Assurances and revisit its policy statement.

Airport Privatization Pilot Program:  Increases the number of airports that can participate in the airport privatization pilot program from five to ten (§ 156).  Currently, four out of five slots are taken.  The Conference Report excludes other reforms to the privatization pilot program advanced by the House.  It is uncertain whether increasing the number of slots, without other reforms, will boost interest in the pilot program.

Safety Management Systems (SMS):  Provides that SMS data is exempt from disclosure under the Freedom of Information Act (§ 310).  This is an important protection and should reduce at least some of the opposition to the implementation of SMS at airports, which is the subject of a pending rulemaking.

Emergency Contingency Plans:  Requires commercial airports to submit emergency contingency plans to DOT within 90 days of enactment.  The plans must describe how the operator will provide for:  (1) the deplanement of passengers; (2) the sharing of facilities and gates; and (3) a sterile area for passengers that have not yet cleared customs (§ 415).  DOT's own rulemaking initiative for irregular operations did not impose this requirement, and instead placed much of the responsibility for planning on air carriers.

Essential Air Service Program (EAS):  Authorizes funding at $143 million for FY 2012; $118 million for FY 2013; $107 million for FY 2014; $93 million for FY 2015; and caps eligibility to those communities that are currently in the program (§§ 422 and 428).  Recall that the future of the EAS program was in doubt, since some members of Congress questioned the continuing need for – and wisdom of – the program, and that the controversy surrounding EAS led in part to the FAA shutdown.  The law allows EAS to continue, at least for the next four years.

NextGen Implementation:  The legislation contains several provisions to expedite the development of NextGen technologies and new flight procedures.  Of particular interest to airports, the legislation exempts the establishment of NextGen flight procedures in some instances from environmental review (§ 213), and, for other NextGen initiatives, gives airports the ability to pay for preparation of environmental review documentation (§ 503).

Stage II Aircraft Phase-Out:  Prohibits the operation of Stage II jet aircraft after December 31, 2015, except for operations outside the contiguous 48 states and certain temporary operations (§ 506).  Although the General Aviation community vigorously opposed Stage II restrictions in the past, this provision was remarkably non-controversial, and now provides certainty as to when the approximately 1,000 Stage II jet aircraft will need to be retired.

Aircraft Departure Queue Management Pilot Program:  Establishes a pilot program at no more than five public-use airports to test air traffic flow management tools, methodologies, and procedures that will allow air traffic controllers to reduce the length of ground holds and idling time for aircraft. No more than $2.5 million may be spent at any one airport in the program (§ 507).  This is one of several environmental initiatives that should yield positive results both for environmental performance and reducing congestion and delay.

Increasing the Energy Efficiency of Airport Power Sources:  Requires DOT to establish a program to encourage airport sponsors to assess the airport’s energy requirements and identify opportunities to increase energy efficiency.  Grants may be made to an airport that complete an assessment to acquire or construct equipment to increase energy efficiency (§ 512).  Energy consumption already has been the subject of extensive review, and this program should reinforce existing efforts to reduce consumption.

Airport Security Screening Opt-Out:  Requires TSA to approve or deny, within 120 days, an application received by an airport to participate in the Security Screening Partnership Program.  TSA is required to approve an application if it determines that the approval will not compromise security or have a detrimental effect on the cost-efficiency or effectiveness of security screening at the airport (§ 830).  TSA is also required, within 60 days of denying an application, to provide the airport with reasons for the denial and recommendations on how to address them.  This provision reflects Congressional displeasure with the manner in which TSA has been processing applications to opt out of TSA screening.