On April 10, 2024, the United States Environmental Protection Agency (EPA) issued a pre-publication version of its final rule establishing nationwide drinking water standards for some per- and polyfluoroalkyl substances (PFAS) under the federal Safe Drinking Water Act (SDWA).  The long-anticipated rule marks the first binding federal regulatory standard for PFAS, a group of thousands of man-made chemical compounds widely used since the mid-Twentieth Century in myriad products and processes that are now known to contribute to adverse health impacts and some cancers.  Public drinking water systems nationwide who will have to comply with the new rule over the next several years, and other entities that may face scrutiny as potential sources of PFAS contamination found in drinking water supplies, should take note of this important development in PFAS regulation.  The final rule will take effect 60 days after its publication in the Federal Register (it has not yet been published).  A pre-publication version of the final rule is available here. Given the scope of the rule, its anticipated costs and the emerging nature of the science of potential health impacts, legal challenges are certain to follow.

Federal Standards for PFAS in Drinking Water

EPA has studied PFAS for years but, until now, has left the imposition of regulatory standards to states.  Currently about half of states regulate PFAS in some manner.  Regulating PFAS nationwide via public drinking water standards has been a goal of EPA for many years and is a cornerstone of the Biden Administration’s PFAS Strategic Roadmap.  EPA announced its proposed rule in March of 2023 (for a summary of that proposal, see here).  After considering 120,000 comments on the proposed rule from stakeholders and engaging with the water sector and state regulators, a year later, EPA has issued a final rule.

The final rule will regulate PFOA and PFOS, the two most well-known and widely used PFAS, as individual contaminants, each with a regulatory limit called a Maximum Contaminant Level (MCL) of 4 parts per trillion (ppt) in public drinking water systems throughout the country.  The rule establishes a binding MCL of 10 ppt for three additional PFAS (PFNA, PFHxS, and HFPO-DA). HFPO-DA is commonly known as “GenX.”  Additionally, EPA will regulate mixtures of four PFAS (PFHxS, PFNA, HFPO-DA, and PFBS), which are prone to co-occur in drinking water, through a Hazard Index MCL.  EPA states that mixtures of different chemicals can elicit adverse health effects, even when individual chemicals are present at “safe” levels.  A Hazard Index MCL, which is calculated by adding the ratio of the water sample concentration to a Health-Based Water Concentration, is intended to address the adverse health effects associated with mixtures that include two or more of the four PFAS above.  Rule opponents claim EPA is over-estimating the risks posed by these compounds.

These standards are striking in their stringency.  To provide a sense of scale, 1 ppt is the equivalent of one drop of ink in twenty Olympic-sized swimming pools.  The low regulatory standards reflect EPA’s determination that some PFAS, like PFOA and PFOS, have detrimental health impacts at any measurable level, and that exposure to other PFAS are associated with a range of adverse health effects.  Indeed, as part of the final rule establishing MCLs, EPA is setting non-enforceable health-based goals called Maximum Contaminant Level Goals (MCLGs) of 0 ppt for PFOA and PFOS and 10 ppt for PFNA, PFHxS, and HFPO-DA.  EPA has indicated it would have preferred a lower MCL for PFOA and PFOS, but 4 ppt is the lowest concentration to which laboratories can reliably measure, and therefore, is the lowest regulatory standard feasible. 

Summary of Regulatory Levels in Final Rule

Implementation Timeline & Methods

Within three years of rule promulgation (i.e., 2024-2027), regulated public water systems must complete initial monitoring for regulated PFAS.  Three to five years following rule promulgation (i.e., 2027-2029), these public water systems must publish the results of their initial monitoring in a Consumer Confidence Report (CCR), also known as an Annual Water Quality Report, begin regular monitoring for compliance and publication of monitoring results, and provide public notice for monitoring and testing violations.  Starting five years after rule promulgation (i.e., beginning in 2029), public water systems must comply with all MCLs and provide public notification for any MCL violations. The rule provides mandatory exposure notification language that must be included in CCRs for MCL violations of each PFAS.

The final rule does not specify how water systems remediate water supplies that exceed the MCLs.  EPA designated four Best Achievable Technologies (BAT) that are technologically feasible for treating drinking water for the six PFAS: granular activated carbon (GAC), anion exchange resins (AIX), and high-pressure membranes (i.e., nanofiltration (NF) and reverse osmosis (RO)). This BAT designation is merely informational, and using BAT is not required.  Nonetheless, EPA indicated that the efficacies of these treatment technologies are supported by their histories of full-scale use as documented in the Best Achievable and Small System Compliance for Per- and Polyfluoroalkyl Substances (PFAS) in Drinking Water document (USEPA, 2024), information in the rule preamble, and public comments containing full-scale data and case studies, e.g., the 45 military installations that have treated PFAS.  Additionally, water systems may, in some cases, close contaminated wells or obtain new, uncontaminated sources.  Of course, both PFAS remediation and obtaining new water supplies can be costly undertakings.  Therefore, these providers will need to consider site-specific circumstances as well as technical, economic, and local regulatory considerations when choosing a compliance technology and approach.

Changes from the Proposed Rule

The MCL of 4 ppt for PFOA and PFOS and the approach for a hazard index for four other compounds (PFHxS, PFNA, HFPO-DA, and PFBS) did not materially change from the proposed rule to the final rule, but other aspects of EPA’s proposal did evolve.  The final rule now includes MCLs for PFHxS, PFNA, and HFPO-DA, which were not in the draft rule text.  In addition, EPA extended the compliance deadline for achieving MCLs to five years instead of the proposed three years, giving public water systems more time to plan, fund, and construct capital improvements necessary to meet the standards.  EPA also added flexibility on PFAS monitoring, allowing a decrease in monitoring frequency from quarterly to annually or triennial, if monitoring results support a reduction in frequency.

Impacts on Public Water Systems

The final rule requires public water systems nationwide to monitor for the regulated PFAS, notify the public if PFAS levels exceed their respective MCLs.  If the MCLs are exceeded, public water systems must reduce PFAS concentrations below the MCLs.  Thus, public drinking water systems nationwide will have to implement programs for monitoring, notification, and, if necessary, PFAS remediation.  EPA estimates that 6-10% of the 66,000 public drinking water systems in the country subject to the rule will have to take action to reduce PFAS because of the rule, and that the annual cost will be around $1.5 billion.  EPA estimates the benefits are in the order of $1.5 billion and that around 100 million Americans will have improved drinking water as a result of the rule, preventing 9,600 deaths and reducing cases of serious illness by approximately 30,000.  Critics of the rule claim the actual costs will be much higher and the benefits much lower. 

There is some funding and technical assistance available for public water systems, especially for small, disadvantaged, and rural communities.  The Bipartisan Infrastructure Law (BIL) dedicates $9 billion for investment in communities that have drinking water impacted by PFAS and other emerging contaminants.  Note that $1 billion of these funds can be allocated to private well owners that have adverse PFAS impacts.  The BIL also allocates $12 billion more generally for drinking water improvements.  EPA’s Water Technical Assistance team has resources to help communities identify water challenges, develop plans to address them, build technical, managerial, and financial capacity, and develop application materials to access water infrastructure funding.

Impacts on Other Entities

Entities, both private and public, that may be sources of PFAS contamination can expect that the new standards will increase both regulatory and public scrutiny and the likelihood of legal claims.  Such entities may include private manufacturers of PFAS, manufacturers of products that contain PFAS, and/or industries that have historically used PFAS in certain processes (i.e., textiles, petroleum refining, semiconductors, metal working).  Affected entities also include public entities that may not have been responsible for generating PFAS but may now have PFAS contamination on their property or within their control.  Municipalities, for instance, may have PFAS in their solid waste landfills due to leaching of PFAS from consumer products.  Water utilities or water purveyors may have PFAS accumulated in their water supplies due to releases from multiple sources.  Commercial services airports, which had long been required by the Federal Aviation Administration to use and discharge PFAS-containing fire-fighting foam, may find PFAS contamination on or emanating from their properties, even if they historically complied with all applicable laws and regulations.

Whether fairly or unfairly, PFAS sources, both public and private, will be in the crosshairs of regulators and the public alike if testing reveals PFAS in public drinking water supplies and communities work to identify where the PFAS originated.  The notice requirements triggered by this rule is likely bring even more attention these compounds, particularly given their ubiquitous nature.  This scrutiny, in turn, could result in greater regulatory enforcement and/or private party lawsuits, even in advance of other pending rulemakings discussed in more detail below.

Big Picture Take-Aways

After years of states leading the charge on PFAS regulation, EPA has stepped into the arena and established binding drinking water standards for some PFAS.  This rule may be just the tip of the iceberg for federal regulation of PFAS via the SDWA, as there are thousands of different PFAS compounds, and EPA is already in the process of testing water systems for more PFAS beyond those covered in this rule.  Further, regulation under the SDWA is just one of the ways EPA plans to address PFAS.

Simultaneous with issuing this rule, though separate from the establishment of drinking water standards, EPA is in the process of finalizing another significant PFAS rulemaking: its designation of PFOA and PFOS as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund).  See KKR’s alert on that topic here.  That final rule, expected later this year, will expand EPA’s authority to investigate and remediate sites with PFAS contamination and create liability for various entities deemed responsible for PFAS releases.  EPA is also evaluating whether to regulate PFAS under the Resource Conservation and Recovery Act and considering guidance on PFAS enforcement.  

Just days ago, on April 9, 2024, EPA released a revised non-binding Interim Guidance on Destroying and Disposing of Certain PFAS and PFAS-Containing Materials That Are Not Consumer Products for public comment.  This interim guidance is an update over a prior non-binding interim guidance document the agency published in 2020.  It provides current information on options for PFAS destruction and disposal and encourages managers of PFAS and PFAS-containing waste to use destruction and disposal technologies that have a lower potential for releasing PFAS to the environment.  Recommended technologies are: underground injection in permitted Class I non-hazardous industrial or hazardous waste injection wells, landfilling at permitted hazardous waste landfills, and thermal treatment in permitted hazardous waste combustors.  The guidance provides an in-depth discussion of these and other destruction and disposal strategies, including emerging technologies.  The discussion may be helpful for managers trying to select a disposal strategy.  For instance, EPA provides advice on what type of landfill a manager should select for PFAS disposal depending on the state of the waste (solid, liquid, or gas) and its characteristics (i.e., whether the PFAS species in the waste are soluble, volatile, oxidizable, or biodegradable).  It identifies certain disposal technologies that might be most appropriate for certain products, such as liquid AFFF concentrate that many airports will be looking to dispose of as they switch to fluorine free fire-fighting foams (underground injection control or thermal treatment).  EPA notes throughout the guidance where uncertainties remain regarding effective PFAS treatment and disposal.  An update to this non-binding, interim guidance is expected within the next three years.  

* * *

Kaplan Kirsch & Rockwell regularly counsels clients, both public and private, on regulatory compliance, emerging contaminants, and strategies to reduce environmental liability.  For more information about PFAS, the proposed rule, or how PFAS regulation or liability may impact your organization, please contact Thomas A. Bloomfield, Polly B. Jessen, Sara V. Mogharabi, or Timothy Roth.

The Federal Transit Administration (FTA) issued a Final Rule amending 49 C.F.R.  Part 673, which governs Public Transportation Agency Safety Plans (PTASPs), on April 11, 2024.  The Final Rule implements changes to safety planning required by the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law.  FTA has adopted the new regulations with limited substantive changes since it issued its Notice of Proposed Rulemaking (NPRM), notably eliminating independent requirements regarding a proposed safety risk reduction program and clarifying certain procedures involving the new Safety Committee and the Accountable Executive.

The most novel change to Part 673 is the addition of two new sections intended to foster cooperation between labor and management in safety planning.  The provisions set out different requirements for agencies depending on whether they serve large urbanized areas.  Agencies serving smaller areas must develop their PTASPs in cooperation with frontline transit worker representatives and describe that cooperation in their PTASPs.  Agencies serving large areas are required to convene a body made up of an equal number of representatives of frontline transit workers (selected by unions where they exist) and management: a Safety Committee.

The Safety Committee’s role is partially, but not fully, advisory.  The Committee is responsible for reviewing and approving the PTASP, setting annual safety performance targets, identifying safety deficiencies, and identifying risk-based mitigations that the agency should implement or that may be ineffective, inappropriate, or not implemented as intended.  If the Committee recommends a safety risk mitigation and the agency’s Accountable Executive—defined in the Final Rule as the single person with the ultimate responsibility for carrying out the PTASP—decides not to implement the mitigation, the Accountable Executive must prepare a written statement explaining their decision and present it to the Safety Committee and the agency’s Board of Directors. 

The Final Rule also revises the requirements for PTASPs in large urbanized areas, in part to accommodate the new Safety Committee regulations.  Such PTASPs must include what are effectively bylaws for the Safety Committee, such as procedures for developing meeting agendas and accessing technical experts.  The Final Rule also adds a requirement that PTASPs include a safety risk reduction program for transit operations that addresses vehicular and pedestrian safety events involving transit vehicles and assaults on transit workers—both of which are referenced in the IIJA—and safety performance targets designated by the Safety Committee.  The agency has also made adjustments to other sections of Part 673 to reflect the existence of the Safety Committee and the requirement to consider its recommendations. 

Elsewhere, the Final Rule requires agencies, in identifying hazards and mitigation measures, to consider infectious disease exposure data from public health authorities and data from state safety oversight agencies.  Agencies must also include de-escalation training and safety concern identification training in their safety training programs.  Finally, the Final Rule also extends the applicability of Part 673 to reach all agencies that operate rail fixed guideway systems, even if they only receive formula funds for rural areas or transportation for seniors and those with disabilities.

If you have questions about the Agency Safety Plan regulations, please contact Ayelet Hirschkorn, Suzanne Silverman, Charles Spitulnik, Christian Alexander, or Grant Glovin.

The Federal Railroad Administration (FRA) issued a Final Rule on April 2, 2024 setting forth a general rule that railroads must operate with two crewmembers. The FRA has made several revisions since it issued its Notice of Proposed Rulemaking (NPRM) in July 2022, including some in response to comments from passenger rail operators. The Final Rule will be effective 60 days after publication in the Federal Register for passenger rail service; the rule will likely be published imminently, putting the effective date sometime in early June. For freight service, different provisions take effect at different times; specific dates vary based on the class of the operator.

As in the Proposed Rule, the key portion of the Final Rule is its two-person requirement, which governs all railroads unless an exception applies. The Final Rule lists several such exceptions. Those relevant to passenger rail include (1) rapid transit operations in urban areas that are temporally separated from conventional rail operations and are subject to a State Safety Oversight Agency and a Public Transportation Agency Safety Plan, and (2) passenger trains with approved passenger train emergency preparedness plans under 49 C.F.R. Part 239. There are also exceptions for certain tourist trains, certain slow-moving unit freight trains, and legacy one-person crews on Class II and III railroads (subject to notice requirements and the adoption of certain operating rules). On other lines, railroads may petition for special approval to operate one-person service.

FRA’s Federal Register notice responds to the thousands of comments it received, including comments from the two transit authorities whose operations would not have met the requirements in the Proposed Rule (Utah Transit Authority (UTA) and the Denver Regional Transportation District (RTD)), the American Public Transportation Association, and the Commuter Rail Coalition. Each of those parties submitted comments arguing that UTA’s and RTD’s operations, although classified as one-person operations under the proposed rule, did not need additional approvals because they had already received sufficient review under the Part 239 emergency preparedness planning process. FRA agreed and accordingly added a provision permitting legacy one-person train operations where the operator has an approved emergency preparedness plan. However, FRA rejected the suggestion to amend its definition of “train or yard crew” so that UTA and RTD’s operations would meet the two-crewmember requirement.

In response to comments from other stakeholders, FRA made several other changes to the rule. The agency extended compliance dates and amended the procedure for risk assessments of one-person operations. For freight operators, FRA moved away from a blanket prohibition on the transportation of hazardous materials by one-person service and instead decided to permit it under limited circumstances on Class II and III railroads. FRA also responded to comments by clarifying the effect of the rule in the Federal Register notice. Most notably, the agency made clear its expectation that the two-crewmember requirement will create a nationwide standard and preempt state laws governing crew size, aside from those that cover “essentially local” (and not statewide) hazards. FRA also defined the term “one-person train crew” to mean that only one person is assigned to the train and performs the duties of both the locomotive engineer and the conductor, or that only the locomotive engineer travels on the train while the train is moving.

If you have questions about the crew size rule, please contact Ayelet Hirschkorn, Suzanne Silverman, Charles Spitulnik, Christian Alexander, or Grant Glovin.

The Federal Transit Administration (FTA) issued a Notice of Proposed Rulemaking on March 25, 2024, that proposes new regulations governing rail transit roadway worker protection (RWP). The regulations would require rail transit agencies that are part of the state safety oversight program under 49 C.F.R. Part 674 to plan for and implement an RWP program that complies with minimum standards and program elements. The program would reach transit workers whose duties involve inspection, construction, maintenance, repairs, or safety on or near the roadway or right-of-way with the potential of fouling a track (defined under the proposed regulations as placing the worker’s self or equipment in a position that a moving vehicle or on-track equipment could strike either). If adopted, the regulations will replace the currently voluntary standards and will be codified in a new Part 671 in Title 49 of the Code of Federal Regulations.

The NPRM explains that FTA, after a review of safety events, concluded that current safety programs are too weak to protect against roadway worker fatalities and injuries. The regulations build off that review, recommendations from the National Transportation Safety Board (NTSB), submission in response to a request for information published in September 2021, and voluntary RWP standards developed in a collaboration between FTA and the American Public Transportation Association (APTA). Those processes identified particular safety problems that the regulations seek to address. 

As drafted, the regulations would require rail transit agencies to adopt and implement an RWP program. The program would include certain minimum program elements, including:

• The designation of a roadway worker in charge for each roadway work group;
• Job safety briefings, to be delivered by the roadway worker in charge before a roadway worker group fouls a track and to include certain minimum elements;
• A prohibition on lone workers fouling the track outside of certain limited circumstances;
• The use of redundant protections; and
• A RWP training program, subject to certain content and timing requirements.

These policies would be adopted into agency safety plans. Agencies would also need to develop certain procedures that would dictate methods for:

• Accessing the track zone;
• Providing ample time (defined as the time necessary to clear a track zone or reach a place of safety 15 seconds before a rail transit vehicle moving at the maximum authorized speed on the track could reach the worker’s location);
• Determining appropriate sight distance the length of track visible to a roadway worker);
• Providing job safety briefings whenever a rule violation is observed;
• Providing transit workers the right to challenge and refuse an assignment based on safety concerns (a “good faith safety challenge”);
• Reporting unsafe acts, unsafe conditions, and near-misses on the roadway;
• Training workers to understand and comply with the RWP program.

Each agency would document its program in an RWP manual, which would describe the program elements and the required procedures, include a track access guide, and document the training, qualification, and supervision required for workers to access the track zone. Agencies would be required to update the manual at least every two years. State Safety Oversight Agencies (SSOAs) would be required to review and approve each agency’s RWP manual and program elements, to update their Program Standards in light of the RWP program, and to audit agencies annually for compliance with their RWP programs and to analyze their effectiveness.

The regulations also stress redundant protection. Agencies would be prohibited from using individual rail transit vehicle detection — in which a lone worker visually detects approaching vehicles or equipment — as the only form of protection. Each agency would instead be required to use its existing Safety Management System to establish physical or procedural redundant protections consistent with its Agency Safety Plans and each agency’s SSOA’s Program Standard. An agency would need to provide redundant protections specific to the category of work a given roadway worker was performing. SSOAs would also be authorized to require that agencies implement alternate redundant protections.

FTA projects that the regulations would result in $14.2 million in annual benefits due to a reduction of 1.4 fatalities and 3.9 injuries per year. That is balanced against $2.0 million in projected start-up costs and $11.3 million in projected ongoing annual costs, due primarily to redundant worker protections and training. FTA selected its regulations from a pool of three options because it prevented more roadway worker injuries and fatalities while maintaining net positive benefits.

The regulations are authorized by 49 U.S.C. § 5329(b), which directs FTA to create and implement a national public transportation safety plan containing minimum safety standards. Agencies and SSOAs would be permitted to implement additional or more stringent standards.

Interested parties are invited to comment on the regulations. Comments can be submitted to docket number FTA-2023-0024 on regulations.gov, and are due May 24, 2024. The NPRM is published at 89 Fed. Reg. 20605 (Mar. 25, 2024).

If you have questions about the RWP regulations, please contact Ayelet Hirschkorn, Suzanne Silverman, Charles Spitulnik, Christian Alexander, or Grant Glovin.

Kaplan Kirsch & Rockwell is pleased to announce three attorneys have been selected for inclusion to the 2024 Colorado Super Lawyers^® list.

2024 Colorado Super Lawyers:

• Polly B. Jessen  Environmental 
• Peter J. Kirsch  Aviation and Aerospace
• Lori J. Potter  Environmental

Super Lawyers^® utilizes a rigorous selection process based on peer nominations and independent research evaluating 12 indicators of peer recognition and professional achievement. This multi-phase process ensures that all Super Lawyers lists provide users with a credible, comprehensive list of outstanding attorneys in the state. Only the top 5 percent of outstanding lawyers in Colorado are rated by Super Lawyers.

On Monday, January 29, 2024, the Colorado Supreme Court put an end to the years-long dispute between Adams County, Colorado and the City and County of Denver (“Denver”) over alleged noise violations from Denver International Airport (“DEN”) when it dismissed an Adams County lawsuit as barred by the statute of limitations and reversed a multi-million-dollar judgment against Denver.  Kaplan Kirsch & Rockwell represented Denver in the litigation in the trial court and Colorado Court of Appeals and as co-counsel in the Colorado Supreme Court.

The case arose from a 1988 agreement between Adams County and Denver that led to the creation of DEN and required Denver to report noise levels from aircraft using DEN at a number of locations surrounding the airport.  Although Adams County knew as soon as DEN opened in 1995 that Denver was using a noise modeling system to fulfill that obligation, Adams County waited until 2018 to challenge the nose modeling system in court, claiming that Denver was instead required to use a microphone-based noise monitoring system.  At trial, Denver argued that Adams County waited too long to file its suit, but the trial court ruled in Adams County’s favor, awarding $33.5 million in liquidated damages plus interest.  The Colorado Court of Appeals affirmed the trial court judgment, but the Colorado Supreme Court reversed, holding that because Adams County knew that Denver was using a noise modeling system in 1995, the three-year statute of limitations for breach of contract claims began to run at that time, and Adams County’s 2018 complaint challenging the noise modeling system was time-barred.  The court reversed the judgment against Denver and dismissed Adams County’s complaint.

Kaplan Kirsch & Rockwell is proud to have played a role bringing this case to a successful conclusion on behalf of Denver.

The Colorado Supreme Court’s opinion, City & County of Denver v. Board of County Commissioners of Adams County, 2024 CO 5, can be found here .

The United States Patent and Trademark Office (“USPTO”) has announced a formal tribal consultation and requested written comments with the stated purpose of informing federal engagement with the World Intellectual Property Organization (“WIPO”) on the protection of the Genetic Resources (“GRs”), Traditional Knowledge (“TK”), and Traditional Cultural Expressions (“TCE”) of Indigenous Peoples across the world. Established in 2000, the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge, and Folklore (“IGC”) has undertaken text-based negotiations of an international legal instrument for the protection of TK, TCE, and GRs. WIPO just announced that it will host a Diplomatic Conference at its Geneva headquarters from May 13-24, 2024 that will serve as the final stage of these negotiations before the adoption of this international legal instrument.

As a result, USPTO has proposed to consult with tribal stakeholders through a series of webinars for federally recognized Tribal Nations and their proxies and a separate webinar series for state recognized Tribes and other Tribal members, Native Hawaiians, and intertribal associations.  The webinar for federally recognized Tribal Nations occurred on January 17, 2024. In addition to these webinars, the USPTO seeks written comments regarding specific questions as set forth in the notice. Responses to comments are due on Friday, February 23, 2024.

Notably, the USPTO is also seeking comments and answers to specific questions from the public on these same negotiations and topics.  The questions posed appear to be targeted at pharmaceutical and technology companies who regularly seek protection of intellectual property in areas that may encompass TK, TCE, and GRs. Thus, Tribal Nations are strongly encouraged to respond to the USPTO even if the response is geared toward general comments about the consultation process as a whole instead of answering the specific questions posed. 

How to Participate in the Discussion Surrounding Indigenous Intellectual Property

Tribal Nations can participate in this discussion in several ways:

1. Attend the tribal consultation webinars by registering HERE. (Please note that some of the sessions may have already occurred).

• Submit comments in response to the USPTO’s request by Friday, February 23, 2024.

• Apply for accreditation to participate as an observer of the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge, and Folklore.

Please contact Nicole Grigg (ngrigg@kaplankirsch.com), Matthew Adams (madams@kaplankirsch.com), or Sara Dutschke (sdutschke@kaplankirsch.com for additional information or to discuss how we may assist in your Nation’s participation in the USPTO’s tribal consultation process and/or in the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge, and Folklore.

The Federal Aviation Administration (FAA) published a notice announcing the finalization of FAA’s Policy Regarding Processing Land Use Changes on Federally Acquired or Federally Conveyed Airport Land (the “Policy”). The new Policy is available here. The Policy addresses how the FAA will review and approve sponsor requests to make land use changes involving non-aeronautical and mixed use of airport property as well as “interim uses of the land that contribute to the financial self-sufficiency of the airport.”

FAA published a draft Policy in September 2022 and received comments from airport sponsors, industry groups and airport consultants. While the final Policy responds to some sponsor concerns, the final Policy leaves many of the commentors’ questions unaddressed. More significantly, the final Policy is newly expanded to apply to “interim uses of the land that contribute to financial self-sufficiency of the airport” with no new definition or explanation of the implications of this addition. The FAA’s stated purpose in adopting the Policy is to “simplify the procedures required to make a land use change and to protect airport land by limiting the use of releases to the actual sale or disposal of airport property.” However, the Policy does not appear to achieve that objective since it both allows considerable agency staff discretion on a case-by-case basis and has the potential to fundamentally change the way that the FAA considers and approves sponsor requests for non-aeronautical development.

Applicability. While the Policy is entitled “Policy Regarding Land Use Changes on Federally Acquired or Federally Conveyed Airport Land,” the actual text indicates that its application is both more narrow and more broad. Specifically, FAA clarifies that the Policy does not apply to aeronautical and airport purposes land uses and to land acquired for noise compatibility purposes.  Notwithstanding those limitations, just as with the draft of the Policy, the Policy is not limited to property in which there is a federal financial interest.  Footnote 7 in the Policy explicitly states that the Policy applies in all situations “where a land use impacts the safe and efficient operation of aircraft or safety of people and property on the ground related to aircraft operations” regardless of whether the subject property was acquired with federal assistance.  In effect, the Policy applies “[w]hen the FAA retains approval authority over a proposed land use change” (i.e., after application of Section 163 of the FAA Reauthorization Act of 2018).

FAA clarifies that the Policy is not retroactive. It will not apply to land that FAA has previously released for non-aeronautical use under a Letter of Release or a Deed of Release. The Policy nevertheless states that existing interim or concurrent use approvals will be subject to review under the Policy when those approvals expire.

When Approval is Required; Types of Land Uses. The final Policy retains the four originally-proposed types of uses of airport property, but amends and adds additional clarification to these definitions. New language adopted after the draft Policy is shown in italics below. These definitions are critical for determining whether the FAA approval will be required.

Of note, a critical change is the addition of the phrase “land that may be needed in the future for an aeronautical purpose and revenue from an interim use of the land contributes to the financial self-sufficiency of the airport” to the definition of “Airport Purpose.” As discussed in more detail below, the Policy does not provide clear explanation for this addition, which could lead to confusion.

Approval Process. Under the new Policy, sponsors must now formally request approval for a change in land use and must obtain written approval or consent for all affected property. The final Policy newly directs that a sponsor’s request must include:

• Relevant documentation on the property and its manner of acquisition;
• A description of the current use of the property;
• The current and future aeronautical demand of the airport and the relevant property; and
• The proposed use of the property, including the proposed length of the use.

When determining whether a land use is non-aeronautical or mixed-use, the FAA “will review the primary purpose of the requested use rather than examining each individual component of the request as aeronautical or non-aeronautical.” If the FAA determines that the proposal involves a non-aeronautical or mixed use, it will consider whether to approve the request based on “the obligating documents, the current and future aeronautical need for the property, and the requested land use.”

The Policy does not provide a timetable for agency review.  The FAA also indicates that the written approvals and consents issued under this Policy are not a final agency actions subject to judicial review; FAA declined to provide a process for appeal of agency decisions.

Time-Limited Approvals; NEPA Implications. An important change from the draft Policy is that FAA approval of, or consent to, a non-aeronautical or mixed-use land use may not always be limited to the duration of a specific lease term (instead the duration of approvals “will be dependent upon the circumstances at the airport.”)  Rather, approval will be subject to district office discretion and will depend on the circumstances at the airport and may be permitted for the duration of the proposed use. However, all approvals must state that the land will be returned to aeronautical use at the end of the approved period.

This new approval process reflects two key changes to existing procedures. First, the Policy expressly states that the interim and concurrent use process set forth in FAA Order 5190.6B is superseded. This is a significant change from previous practice, in which the FAA sometimes approved more open-ended concurrent or interim land uses and did not always require any reassessment of its approval actions for renewals of leases. Second, the Policy announces that FAA will only release federal obligations when an airport sponsor plans to sell airport land. Thus, the prior practice of allowing a permanent redesignation of land to non-aeronautical use will no longer be an available option.

Finally, the final Policy expressly declines to answer the question of whether or not the new FAA approvals are federal actions that that would be subject to the National Environmental Policy Act (“NEPA”) environmental review process.  On its face, however, the new approvals and consents appear to fit the definition of “federal actions” subject to NEPA. FAA’s failure to address this issue will create extraordinary complexity for sponsors in the near term until the agency opines formally on: (1) whether these approvals are subject to NEPA review; and (2) if so, what level of NEPA review is required. 

Open Questions and Issues. While the final Policy resolves some of the questions raised in comments to the September 2022 draft, it unfortunately leaves many questions unanswered and even adds some additional uncertainty. For example:

• It is not clear how the Policy will dovetail (if at all) with the FAA’s existing Section 163 determination process. The Policy makes no specific mention of that existing process, and it remains to be seen whether the FAA will seek to combine the consideration of its approval authority and its actual approval into one streamlined application. It appears, however, that the intent of the Policy is to apply to all airport property – regardless of its funding source – if such property remains subject to FAA jurisdiction under Section 163.
• It is not clear how the Policy will apply in practice to non-aeronautical or “mixed-use” land uses that are already in effect. The Policy states that it is not retroactive, but that existing interim/concurrent use approvals will be reviewed under the Policy “when the existing approval expires.” In practice this will not be easy to determine. The Policy itself states that FAA does not “approve” leases. Because approvals of interim or concurrent leases in the past have not always expressly included an expiration date, it will be difficult for sponsors to identify the point at which existing uses become future “changes in land uses” that are subject to the Policy.
• The Policy provides no explanation for how to interpret or apply the new reference to “interim uses of land that contribute to the financial self-sufficiency of the airport” – which now require FAA written approval or consent.
• The language in the Policy is not consistent in explaining whether FAA’s intent is to regulate the land itself, the use of the land, specific projects, or some combination of the three. This becomes particularly difficult to interpret for complex airport projects that may involve multiple parcels that were acquired in different manners, that involve multiple types of “uses,” and, for ongoing projects, that are in the process of receiving various approvals.
• The agency has apparently decided not to provide definitive or rigid direction or guidance to the Airport District Offices on implementation of the Policy.  Instead, the Policy repeatedly indicates that implementation or interpretation will subject to coordination between sponsors and their ADO.  This decision to allow considerable local staff flexibility will undoubtedly lead to different application of the Policy amongst ADOs.

For more information or advice on how the new Policy may affect specific airport uses or projects, please contact Peter J. Kirsch, Catherine M. van Heuven, or Nicholas M. Clabbers.

On December 7, 2023, the FAA issued its final Policy on Air Carrier Incentive Programs (the “Policy”).  The Final Policy constitutes the FAA’s most comprehensive policy statement regarding Air Carrier Incentive Programs (“ACIPs”), superseding the Air Carrier Incentive Program Guidebook that the FAA issued in 2010.  Airport sponsors should consult the Final Policy when preparing new ACIPs or addressing ACIP issues.  

By their nature, ACIPs provide more favorable economic treatment to air carriers providing “new service” at an airport than those providing “existing service.”  The Policy is intended to provide guidance to airport sponsors on those circumstances where the FAA will consider an ASIP to comply with an airport sponsor’s obligation to avoid unjust discrimination among aeronautical users of an airport, the unlawful diversion of airport revenue, and other obligations. 

Relative to prior policy and the version of the Policy initially proposed by the FAA, the new Policy provides airport sponsors with some increased flexibility in implementing ACIPs:

• The FAA defines “new service” eligible for incentives as including “a significant increase in capacity” on existing service to a given destination.  The Policy does not define “significant increase,” explicitly leaving that determination to each airport sponsor’s discretion.  This approach allows airport sponsors to continue to incentivize increased frequencies or upgauging, provided the overall result is a “significant increase” in capacity, but may not be the only incentive offered by an airport sponsor.
   
• The Policy permits sponsors to incentivize seasonal service (defined as nonstop service offered for less than seven months per calendar year) for up to three years.  Incentives available for year-round service to new destinations remain limited to two years, or one year if the incentive is made available only to new entrant carriers.
   
• Budget-constrained airport sponsors may limit an incentive to only the “first carrier to establish service” to a given market, provided that the airport sponsor provides at least 30 days’ public notice about any such limitations.
   
• The FAA continues to prohibit the use of airport revenue for airline subsidies, such as a minimum revenue guarantee; however, the Policy allows an airport sponsor to provide limited technical assistance and advice to another entity administering such subsidy programs that are funded with non-airport revenue.  Non-airport funds may not be comingled with airport revenue and airport staff’s role must be strictly advisory in nature.
   
• To the extent an incentive program includes marketing support, airport sponsors may now pay marketing expenses directly to the provider or reimburse a carrier for such marketing expenses, after receiving sufficient documentation of the expenses.  This is a reversal of the FAA’s historical requirement that airport sponsors only contract directly with marketing providers, which all commenters generally opposed.
   
• Airport sponsors may offer per-passenger or per seat-mile incentives, provided such incentives would not result in the improper subsidy of an air carrier (i.e., the incentives cannot exceed the amount of fees that would otherwise be incurred by the carrier).

Despite this added flexibility, the Policy also imposes new procedural requirements and constraints on the permissible scope and implementation of ACIPs:

• The FAA “expects” (but does not specifically require) an airport sponsor to provide effective notice about the availability of an ACIP, such as by posting on its website, at least 30 days before entering into an agreement with a carrier.  Sponsors should also provide periodic information about the nature of all air service incentivized by the airport sponsor. 
   
• Despite the request of several airport sponsors, the Policy affirms that costs which are normally charged to carriers by a third party (e.g., ground handling and fuel charges) cannot be waived as part of an ACIP, even if the sponsor itself provides those services.
   
• The Policy prohibits an ACIP from “directly or indirectly” impacting rates for non-participating carriers, explaining, “[a]n acceptable ACIP will not result in an increase in the sponsor charges to non-participating carriers, i.e., on the charges that carriers would have paid in the absence of the incentivized service.” 
   
• The terms of an ACIP “should be” set forth “in a standalone document,” rather than embedded in an airline use and lease or similar type of operating agreement.
   
• While the FAA need not approve an ACIP, the Policy commits the FAA to reviewing an ACIP for compliance with an airport sponsor’s federal obligations “[a]t the request of an airport sponsor or of an air carrier potentially affected by an ACIP.”

The Policy is effective immediately.  However, existing incentive agreements and those signed prior to February 5, 2024 (i.e., within 60 days of the Policy’s publication) do not need to comply with the Policy, so long as the airport sponsor’s underlying ACIP (1) was adopted prior to December 7, 2023, and (2) complies with prior FAA guidance, including the 2010 Air Carrier Incentive Program Guidebook.  All other new or revised ACIPs must comply with the Policy.

Airport sponsors considering new ACIPs or revisions to existing ASIPs should carefully review the Policy.  If you have questions about the Policy, please contact Steven Osit (sosit@kaplankirsch.com), Nicholas Clabbers (nclabbers@kaplankirsch.com), Sarah Wilbanks (swilbanks@kaplankirsch.com), or any other Firm attorney with whom you regularly work.