Semi-annual Airport Law Digest

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Articles

Here We Go Again: Upcoming FAA Reauthorization is Likely to Reinvigorate Debate over the Privatization of Air Traffic Control Services

The FAA’s current authorizing legislation expires in September, and Capitol Hill is once again abuzz over various proposals to reform the agency through a long-term reauthorization bill.  Last year, House Transportation and Infrastructure Chairman Bill Shuster’s (R-Pa.) effort to transfer air traffic control services from the FAA to an independent, non-profit entity fizzled out after substantial opposition to such reform in the Senate, as well as from the House Committee on Ways and Means.  With just a few short months remaining before the FAA’s authorization expires, Chairman Shuster recently introduced an updated proposal, the 21st Century Aviation Innovation, Reform, and Reauthorization (AIRR) Act, which purports to better address the concerns of general aviation and small, rural communities.

While many members and stakeholders continue to express concern over the privatization of air traffic control services, The President has largely endorsed the animating principles of the 21st Century  AIRR Act.  On June 5, 2017, the President released a set of Principles for Reforming the U.S. Air Traffic Control System.  These Principles reaffirm the FAA’s primary mission as a safety regulator and suggest that moving air traffic control services to a new entity will allow the National Aviation System to keep pace with industry change, more readily accommodate unmanned aircraft and commercial space-bound vehicles, and accelerate the implementation of Next Generation (NextGen) technology.  The Principles call for a new entity that would maintain open access for all airspace users, including rural communities and general aviation users, and be financially self-sufficient through collection of user fees.

Chairman Shuster’s proposal does not adopt all of the President’s Principles, nor does it address other issues of particular interest to airports.  The 21st Century AIRR Act, for example, does not specifically address whether the National Environmental Policy Act (NEPA) would apply to modifications of flight paths and procedures by the new entity.  The President’s Principles suggest that NEPA would apply only if change would exceed an FAA-established noise threshold.  This issue is of particular concern, given changes in community noise exposure that have resulted from the FAA’s implementation of Metroplex initiatives in several metropolitan areas (see article below); however, the 21st AIRR Act would require the FAA to undertake a comprehensive review of its community engagement practices and commission further study of noise-related health impacts.  Similarly, while the Principles suggest gutting aviation excise taxes in favor of user fees, there has as of yet been no proposal to rebalance the tax structure to ensure adequate and reliable funding for other programs funded through the Airport and Airway Trust Fund, such as the Airport Improvement Program (AIP), or address infrastructure needs by uncapping Passenger Facility Charges (PFCs).

On the same day the 21st Century AIRR Act was introduced, Senator Thune (R-S.D.), Chairman of the Senate Commerce, Science and Transportation Committee, introduced the Federal Aviation Administration Reauthorization Act of 2017.  The Senate bill proposes to keep air traffic control services within the FAA, while improving the agency’s delivery of those services through procurement and personnel reforms.  The bill also includes a title introduced by Senators Jim Inhofe (R-Okla.) and Tammy Duckworth (D-Ill.)—the Forward Looking Investment in General Aviation, Hangars, and Tarmacs (FLIGHT) Act of 2017—which would, among other things, give general aviation airports more time to accumulate non-primary entitlement funds and establish a pilot program to attract greater private sector investment in general aviation airports.

These proposals will be fiercely debated in a series of hearings and markups as the September deadline looms large, and industry groups such as ACI-NA and AAAE expect to play a major role.  For more information, please contact Peter Kirsch at pkirsch@kaplankirsch.com or Steven Osit at sosit@kaplankirsch.com.

While Details Still Unclear, Recent Executive Orders May Affect Airports Practice

In the early days of his new administration, the President signed numerous executive orders, many of which have been under the media spotlight.  There are several orders that have received less attention, and while in their early stages of implementation, may in time have significant effects on the practice of airport law.

First, on January 24, 2017 the President signed Executive Order 13766, Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects (EO 13766), which intends to streamline and expedite agency environmental review processes and procedures, particularly for projects which are considered to be “high priority” for the Nation.  EO 13766 charges the Chairman of the White House Council on Environmental Quality to determine—at the request of a Governor or head of any executive department or agency—if an infrastructure project qualifies as “high priority.”  To date, there has been no guidance released on how the executive branch will implement EO 13766 and no apparent designation of any projects as “high priority.”  However, the language of EO 13766 singles out and suggests that repairing and upgrading airports will likely be considered “high priority.”  Accordingly, airport sponsors should be aware that future development projects that require environmental review and/or approval could be accelerated through that process.

Second, Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs (EO 13771)—which was signed by the President on January 30, 2017—mandates that for every one new regulation promulgated, federal agencies must identify two prior regulations for elimination.  Recent guidance states that only “significant regulatory actions” are subject to EO 13771 and references an earlier Executive Order that defines “significant regulatory actions” as those expected to: (1) have an annual effect on the economy of $100 million or more or adversely affect the economy, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create serious inconsistency; (3) materially alter the budget impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues.  Commentators have been skeptical about the implementation of EO 13771, and it is presently the subject of litigation in the United States District Court for the District of Columbia, where a group of plaintiffs allege that EO 13771 is unconstitutional and a violation of the Administrative Procedure Act.  The District Court recently rejected the Government’s request to dismiss the case on procedural grounds.  It is unclear what effect EO 13771 may have on airports practice, especially pending the outcome of litigation, but it has the potential to significantly limit FAA’s ability to implement new regulations.

Third, on March 13, 2017, the President signed Executive Order 13781, Comprehensive Plan for Reorganizing the Executive Branch (EO 13781), which aims to further improve the efficiency, effectiveness, and accountability of the executive branch.  EO 13781 proposes a multi-step process with the end goal of eliminating or reducing federal government functions.  First, the head of each agency must submit a proposed plan to reorganize the agency, if appropriate, within 180 days of March 13, 2017.  Second, EO 13781 provides the public with the opportunity to suggest improvements in organization and function of the executive branch.  The responsibility to determine whether to restructure or eliminate unnecessary agencies falls on the Director of the Office of Management and Budget, who must provide a proposed plan within 180 days after the closing date for the submission of suggestions.  While no final decisions have been made, EO 13781 could impact airports practice if the function and structure of the FAA is reorganized, reduced, or reallocated to other entities (e.g., private businesses or other public entities).  EO 13781 should also be considered in the context of recent staffing departures and reassignments at the agency, which have represented a significant loss of institutional knowledge over the past 18 months.

Finally, on April 21, 2017, the President signed Executive Order 13788, Buy American and Hire American (EO 13788).  EO 13788 does not change any existing requirements related to Buy America or Buy American programs.  Instead, it orders executive branch agencies to “scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.”  It also requires agencies to conduct reviews and assessments of their internal processes and propose means to maximize, in accordance with existing legislation, the use of materials produced in the United States.  It is unclear how, if at all, EO 13788 will ultimately affect airports practice.  For more information, please contact Nick Clabbers at nclabbers@kaplankirsch.com.

Airport P3 Projects Move Forward

With federal government policy and progress on infrastructure uncertain, several airport sponsors have moved forward with their own public-private partnerships (P3s) or outright privatization.  Westchester County, NY, and St. Louis Lambert International Airport were recently approved for participation in the FAA’s privatization pilot program, and Hendry County, FL, is in the final stages of preparing a proposal for submission to FAA.  Kansas City International Airport has also explored possible P3 projects.  With the issue heating up, the first-ever P3 Airports Summit will be held in San Diego July 24 – 25.  A limited number of complimentary registrations remain available.  Please contact Peter Kirsch at pkirsch@kaplankirsch.com or Adam Giuliano at agiuliano@kaplankirsch.com for details.

Talk of Infrastructure Reform Heats Up, But Particulars are Still Uncertain

One of the President’s stated priorities throughout the campaign and the first days of his administration is rebuilding America’s transportation infrastructure.  In recent weeks, discussion of this priority has notably increased.  Specific details about (and any implementation of) the administration’s plan, however, continue to be sparse.

In late May, the White House released a six-page Fact Sheet focused on the infrastructure aspects of the President’s 2018 budget proposal.  The Fact Sheet describes an overreliance on federal funds for local infrastructure projects and overregulation on the part of the federal government.  The Fact Sheet outlines four “key principles” to infrastructure reform, including targeted federal investment and reliance on the private sector to provide both services and funding through public-private partnerships.  The Fact Sheet states that the 2018 budget has a target of $1 trillion of new infrastructure spending, but that the federal government will make only 20% of that investment, using it “to incentivize additional non-Federal funding, reduce the cost associated with accepting Federal dollars, and ensure Federal funds are leveraged such that the end result is at least $1 trillion in total infrastructure spending.”  The Fact Sheet also outlines some goals for streamlining and reducing the environmental review process associated with federal approval of infrastructure project.

In remarks on the topic, Secretary of Transportation Elaine Chao voiced her support for the President’s agenda, stating that the administration “hope[s] to broaden and expand participation in infrastructure funding so that more projects can be undertaken overall and so that we do not supplant existing state, local, or private funds already dedicated to infrastructure.”  She has strongly endorsed the expansion of public-private partnerships and recently floated the idea of a “page limit” on environmental reviews of infrastructure projects.  Then, in early June, the Department of Transportation published a notice in the Federal Register to “solicit input from…affected stakeholders to help the Department identify requirements that the Department imposes through rules, or interpretations found in policy statements or guidance, that unjustifiably delay or prevent completion of surface, maritime, and aviation transportation infrastructure projects.”

There has been little movement in Congress to take up the cause of infrastructure in any substantive way.  Senate Democrats introduced a $1 trillion infrastructure bill in late January, but it has thus far failed to progress.  For now, there does not appear to be any immediate movement on the issue or any imminent infusion of new funds.  For more information, please contact Peter Kirsch at pkirsch@kaplankirsch.com or Steven Osit at sosit@kaplankirsch.com.

Maryland Attempts to Force Court Decision on Environmental Review

The state of Maryland made headlines in May with an unorthodox legal strategy in a case before a federal district court.  The case revolves around whether the state’s Purple Line light rail project has properly received its federal environmental approval.  After several months without a district court decision, the state was concerned that continued delays would substantially increase costs, and filed a petition for a writ of mandamus with the United States Court of Appeals to compel the district judge to issue a ruling.  The Court of Appeals did not rule on the petition, but the district judge did issue a ruling shortly thereafter – finding that the project had not been sufficiently studied before receiving approval.  While this case did not directly concern airports, there are many instances of litigation delays in airport projects, especially regarding environmental issues.  The Purple Line case provides an interesting approach to moving that litigation forward, but the court’s ruling indicates that it should be used with caution.  For more information, please contact Chuck Spitlunik at cspitulnik@kaplankirsch.com.

Political Climate Leaves DOT, FAA in Uncertain Position

The uneven political landscape in Washington has had an effect on many federal agencies, and DOT and FAA are no exception, especially in the context of agency staffing.  While the President recently nominated Stephen G. Bradbury, a former George W. Bush Department of Justice official, to be the DOT General Counsel, many other upper and lower-level positions remain vacant.  For example, the post of the FAA chief counsel is vacant, as is the Associate Administrator for Airports, which has been empty following the departure of Eddie Angeles in January 2017.  Administrator Huerta’s term runs through January 2018, and it is possible—perhaps even likely—that the Associate Administrator position will not be filled until that time.  Symptomatic of the agency’s difficulties with staffing is the Part 16 enforcement and compliance process. As noted below, the FAA has issued only one Part 16 decision in the last six months while previously averaging ten to twelve per year.  With upwards of several dozen cases possibly pending, the agency is well behind its normal pace.  For more information, please contact Peter Kirsch at pkirsch@kaplankirsch.com or Steven Osit at sosit@kaplankirsch.com.

FAA Continues to Face Resistance in Implementing NextGen Flight Patterns

The FAA continues to work towards implementation of its Next Generation (NextGen) flight patterns, an effort to improve efficiency in its so-called “Metroplexes.”  While FAA considers implementation of NextGen at Metroplexes to be in varying stages of completion, the agency continues to face significant resistance from community groups in the form of political and legislative pressure and litigation across the country.  In general, residents have complained that the changes in flight patterns have considerably increased aircraft overflight noise in their communities without warning.

For example, in Washington, DC, one of the first Metroplexes to be considered complete, community groups have sued the FAA alleging that the federal environmental approval was obtained without sufficient public involvement, and the Governor of Maryland has formally requested that the FAA revert to pre-NextGen flight patterns.  The U.S. Court of Appeals recently heard arguments in a case brought by the City of Phoenix, alleging that the FAA improperly failed failed to account for historical considerations or provide opportunities for community input before announcing its change in flight patterns.  Another similar lawsuit is pending in Southern California.  Howard County, Maryland has weighed whether to sue FAA, and residents of Boulder, Colorado, have complained about changes to the flight patterns at Denver International Airport some 35 miles away.

For its part, the FAA is making attempts to engage the public following some of its high-profile struggles.  In the two Metroplexes currently in the design phase (Cleveland-Detroit and Denver), the FAA has made a concerted effort to reach out to the public, even promising to exceed the requirements that would ordinarily apply under NEPA or the National Historic Preservation Act.  These initiatives include holding a series of community meetings, soliciting a wide variety of public comments, and reviewing those comments prior to issuing a final decision on implementation.  For more information, please contact Peter Kirsch at pkirsch@kaplankirsch.com.

FAA Reaches Landmark Settlement Agreement with City of Santa Monica

On January 28, 2017, the City of Santa Monica (City) and the FAA announced an historic settlement agreement that resolves litigation and controversy over the future of Santa Monica Airport (SMO) by, among other things, allowing the City to reduce SMO’s runway by almost one-third of its length in the immediate future and to close SMO entirely after 2028.  The settlement agreement seeks to resolve decades of litigation and controversy at SMO by establishing a framework for the operation—and ultimate closure—of SMO.  Most immediately, the settlement agreement resolves litigation focused on three issues:

  1. Expiration of Grant Assurances.  The City believed that its final grant agreement with the FAA expired in 2014, allowing it to close SMO.  The FAA, however, contended that the City’s final grant agreement was extended to 2023 as the result of a 2003 grant amendment that increased the grant amount to reflect final construction costs.  The City appealed the FAA’s decision to the U.S. Court of Appeals for the Ninth Circuit, which appeal was pending when the 2017 settlement was announced.
  2. Surplus Property Act.  The FAA took the position that the City was obligated by the terms of a 1948 Instrument of Transfer, releasing a portion of SMO from a wartime lease to keep SMO open indefinitely.  The City filed a quiet title action in federal court challenging that position.  The District Court dismissed the case on statute of limitations grounds.  On appeal, the Ninth Circuit reversed that decision in an opinion that also cast doubt on the substance of the FAA’s position.
  3. ​Leasing Issues.  In several Part 16 complaints, the FAA and SMO users challenged a variety of actions by the City regarding aeronautical leases and the City’s attempt to establish a proprietary-exclusive FBO.

The Consent Decree seeks to resolve all of those matters and establish a framework to avoid future litigation.  The key elements of the Consent Decree are:

  • The City may close SMO permanently after December 31, 2028, unless the City enters into a new grant agreement with the FAA before then.
  • The City may immediately reduce the operational length of SMO’s runway from 4,973 feet to 3,500 feet, after following the notice procedures in 14 C.F.R. § 157(b) and any applicable state or federal environmental laws, at the City’s expense and may use the land for compatible purposes subject to an avigation easement.
  • The FAA releases SMO from all deed restrictions, including Surplus Property Act restrictions.
  • The City must comply with Grant Assurances 19, 22, 23, 24, 25, and 30 through 2028, but the Consent Decree is silent regarding any other grant assurances that presumably no longer apply.
  • The Consent Decree also addresses a number of issues regarding aeronautical leases, the City’s ability to establish a proprietary-exclusive FBO, and other matters.

The District Court entered the Consent Decree on February 1, 2017, and the City has begun to take steps to shorten the runway and exercise its other rights under the Consent Decree.  The National Business Aviation Association (NBAA) has challenged the FAA’s authority to enter into the Consent Decree in the U.S. Court of Appeals for the District of Columbia.  The NBAA’s request to enjoin implementation of the Consent Decree was denied, and the case is pending before the D.C. Circuit.  A decision is expected sometime in 2018.  In the meantime, the City can move forward with the runway shortening and other actions permitted under the Consent Decree.  For more information, please contact Eric Pilsk at epilsk@kaplankirsch.com.

Litigation

Court Decisions

Use Restrictions and ANCA.  Town of E. Hampton v. Friends of the E. Hampton Airport, Inc., No. 16-1070, 2017 U.S. LEXIS 4165 (June 26, 2017 (denying petition for certiorari in review of 2nd Circuit decision holding that Town’s use restrictions were enacted in violation of the procedural requirements of ANCA).

Grant Assurances.  Vietnam Helicopters v. Cnty. of Contra Costa, No. 17-cv-01743-MMC, 2017 U.S. Dist. LEXIS 49728 (N.D. Cal. Mar. 31, 2017 (denying motion for temporary restraining order where plaintiff alleged airport sponsor was preparing to lease hangar in violation of Grant Assurances and where Part 16 complaint was pending).

Premises Liability.  Afoa v. Port of Seattle, 198 Wash. App. 206 (Mar. 20, 2017) (holding that the Port had a “nondelegable duty to ensure a safe workplace” on the airfield at Seattle-Tacoma Airport, and was therefore liable for the injuries of an independent contractor’s employee).

Settlements.  United States ex rel. Shepard v. Tippetts, No. 13-cv-00736-CMA, 2017 U.S. Dist. LEXIS 27083 (D. Colo. Feb. 27, 2017) (over objections by qui tam relators, approving settlement between FAA and Grand Junction Regional Airport Authority regarding possibly fraudulent statements made to FAA in application for grant funds).

Pending Cases

First Amendment.  McDonnell v. City & Cnty. of Denver, No. 17-1071 (10th Cir. appellee’s brief filed Jun. 7, 2017) (appealing the district court order requiring City and County officials to “timely process a permit application” to protest Executive Order barring individuals from seven predominantly Muslim countries from entering the United States at Denver International Airport).

Subject Matter Jurisdiction.  Kaufmann v. FAA, No. 17-3152 (6th Cir. petitioner’s brief filed May 24, 2017) (appeal of the district court decision dismissing complaint alleging FAA noncompliance with NEPA and NHPA because complaint should have been filed in the circuit court).

Airport Closure.  Nat’l Bus. Aviation Ass’n v. Huerta, No. 17-1054 (D.C. Cir. motion for stay and injunction denied and motion to dismiss referred to merits panel May 4, 2017) (challenging FAA settlement agreement with the City of Santa Monica that permits closure of the airport in 2028).

NextGen.  Citizens Assn. of Georgetown v. FAA, No. 15-1285 (D.C. Cir. briefing concluded May 31, 2017) (challenging RNAV procedures in the DC Metroplex area).

Passenger Facility Charges.  Hillsborough Cty. Aviation Auth. v. Huerta, No. 15-1238 (D.C. Cir. held in abeyance Mar. 2, 2017) (appealing FAA’s denial of Passenger Facility Charge authorization to construct an automated people mover at Tampa International Airport).

NextGen.  City of Phoenix v. Huerta, No. 15-1158 (D.C. Cir. argued Mar. 17, 2017) (challenging RNAV procedures in Phoenix).

Gate Allocation.  In re. Compliance with Federal Obligations by the City of Dallas, Texas, FAA Docket No. 16-15-10 (Notice of Investigation served Aug. 7, 2015) (FAA investigation into possible grant assurance violations related to a failure to accommodate air carrier requesting gate space).

Administrative Decisions

Acquisition of Property.  Boggs v. City of Cleveland, FAA Docket No. 16-16-15, Order of the Director (Jan. 24, 2017) (dismissing complaint alleging Grant Assurance violations where sponsor chose not to acquire private property shown on the Airport Layout Plan).

Federal Legislation

Consolidated Appropriations Act, 2017, Pub. Law No. 115-31 (signed May 5, 2017) (extending federal government funding at largely current levels through September 2017).

Federal Rules, Orders, and Guidance

Presidential Executive Orders

Buy American and Hire American, Exec. Order 13,788, 82 Fed. Reg. 18837 (Apr. 21, 2017) (requiring all executive branch agencies to “scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law”).

Comprehensive Plan for Reorganizing the Executive Branch, Exec. Order 13,781, 82 Fed. Reg. 13959 (Mar. 16, 2017) (requiring that within 180 days, “the head of each agency shall submit to the Director [of the Office of Management and Budget] a proposed plan to reorganize the agency, if appropriate, in order to improve the efficiency, effectiveness, and accountability of that agency”).

Reducing Regulation and Controlling Regulatory Costs, Exec. Order 13,771, 82 Fed. Reg. 9339 (Jan. 30, 2017) (requiring that “whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed”).

Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects, Exec. Order 13,766, 82 Fed. Reg. 8657 (Jan. 24, 2017) (setting process by which project proponents can request “high priority” status for infrastructure projects and petition the White House CEQ for expedited environmental review).

Department of Transportation and FAA

AC 150/5000-17, Critical Aircraft and Regular Use Determination (June 20, 2017).

Notice and Request for Input, Transportation Infrastructure: Notice of Review of Policy, Guidance, and Regulation, 82 Fed. Reg. 25734 (June 8, 2017) (“to solicit input from…affected stakeholders to help the Department identify requirements that the Department imposes through rules, or interpretations found in policy statements or guidance, that unjustifiably delay or prevent completion of surface, maritime, and aviation transportation infrastructure projects”).

ARP SOP 5.1, CATEX Determinations (June 2, 2017).

Order 8040.4B, Safety Risk Management Policy (May 2, 2017).

JO 7400.2L, Procedures for Handling Airspace Matters (eff. Apr. 27, 2017).

AC 150/5345-49D, Specification L-854, Radio Control Equipment (Jan. 17, 2017).

Department of Homeland Security

Fact Sheet: Aviation Security Enhancement for Select Last Point of Departure Airports with Commercial Flights to the United States (Mar. 21, 2017) (banning large electronic devices on flights originating from 10 Middle Eastern airports).

Reports, Studies, Articles, and Other Publications

U.S. Department of Transportation

Key Staff Appointments (May 20, 2017) (listing recent senior political appointees to the Department).

National Transportation Noise Map (showing noise impacts from airports and highways).

U.S. Government Accountability Office

International Travelers: CBP Collaborates with Stakeholders to Facilitate the Arrivals Process, but Could Strengthen Reporting of Airport Wait Times, GAO-17-470 (Mar. 30, 2017).

Airport Funding: FAA’s and Industry’s Cost Estimate for Airport Development, GAO-17-504T (Mar. 23, 2017).

Transportation Research Board, Airport Cooperative Research Program

Legal Research Digests

Legal Research Digest 31: Preemption of Worker-Retention and Labor-Peace Agreements at Airports (Feb. 2017).

Reports

Report 173: Use and Potential Impacts of AFFF Containing PFASs at Airports (May 2017).

Report 172: Guidebook for Considering Life-Cycle Costs in Airport Asset Procurement (Apr. 2017).

Report 171: Establishing a Coordinated Local Family Assistance Program for Airports (Apr. 2017).

Report 170: Guidebook for Preparing Public Notification Programs at Airports (Apr. 2017).

Report 166: Interpreting the Results of Airport Water Monitoring (Mar. 2017).

Report 169: Clean Water Act Requirements for Airports (Jan. 2017).

Report 168: Runway Protection Zones (RPZs) Risk Assessment Tool Users’ Guide (Jan. 2017).

Report 167: Guidebook for Developing Ramp Control Facilities (Jan. 2017).

Web-Only Documents

Web-Only Document 31: Improving Stakeholder Engagement in Aircraft Accident Response Planning (Apr. 2017).

Web-Only Document 30: Development of a NOx Chemistry Module for EDMS/AEDT to Predict NO2 Concentrations (Mar. 2017).

General Articles

Kaplan Kirsch & Rockwell LLP, P3 Airport Projects: An Introduction for Airport Lawyers (May 2017).

Airports Council International – North America, Airport Infrastructure Needs 2017 – 2021 (Mar. 2017).

Environmental Law Institute, Regulatory Reform in the Trump Era (Mar. 2017).

Unmanned Aircraft Systems

Decided Cases

Taylor v. Huerta, 856 F.3d 1089 (D.C. Cir. May 19, 2017) (holding that FAA did not have authority to promulgate regulations requiring hobbyist drone owners to register with the agency, but staying enforcement pending a petition for rehearing).

Boggs v. Merideth, No. 3:16-CV-00006-TBR, 2017 U.S. Dist. LEXIS 40302 (W.D. Ken. Mar. 21, 2017) (dismissing complaint alleging the defendant shot down plaintiff’s unmanned aircraft while over defendant’s property for lack of subject matter jurisdiction and stating that tort claims were properly brought in state court).

Pending Cases

Elec. Privacy Info. Ctr. v. FAA, Case No. 16-1297 (D.C. Cir. petitioner reply brief filed May 12, 2017) (challenging FAA’s decision not to promulgate privacy-specific UAS regulations).

Reports, Studies, and Articles

FAA Drone Advisory Committee – Task Group 3, Tasking on Unmanned Aircraft Systems (UAS) Funding (Mar. 7, 2017).

A PDF of this Semi-annual Airport Law Digest is available.

Evaluating Airport P3 Projects: An Introduction for Airport Lawyers

20 minute read

Download a printer friendly PDF of this guide here.
 

P3 Airport Projects – An Introduction for Airport Lawyers
 

This short guide is intended as background reading for airport lawyers who are interested in learning the basics of airport public-private partnerships (P3s), about various P3 approaches, and about recent P3 airport activity in the United States.1

This guide is not a substitute for airport-specific legal advice and is not intended to provide legal counsel on matters unique to any particular airport situation. Nevertheless, it should serve as a foundation to inform internal discussions and to prepare for more detailed conversations with potential private sector partners. Note that at the end of the guide is a list of resource materials that may be instructive when preparing for such discussions and conversations.

A P3, in the broadest sense, is nothing more than a contractual relationship between a public entity (an airport sponsor or proprietor in this context) and a private sector entity or entities that allocates responsibility for delivery of services, investment of capital, and assumption of risk. The underlying principle of any P3 in the transportation realm is that by leveraging the respective skills and assets of the public and private entities, it should be possible to improve the efficiency by which transportation functions are provided. While any contractual relationship between a public and private entity could be called a P3, in the airport context, it has usually come to refer to the arrangement by which services or investments that traditionally have been provided by an airport sponsor are instead provided by a private sector entity.

P3s in the United States have, until recently, been viewed by the public, as well as certain public officials, with some degree of skepticism. A number of early prominent efforts at P3s were characterized as outright sales of public assets. Several toll roads failed (in that their private operators filed for bankruptcy) and had to be taken back by a public agency. In the U.S. airport industry, early discussions similarly focused on full airport privatizations (modeled on similar transactions in Europe), as, for example, under the FAA’s statutorily-authorized Airport Privatization Pilot Program.2

Over the past several years, U.S. P3 structures have evolved in the airport environment. They have begun to find a balance between adhering to the core interests of the public entity and engaging productively with the private sector. Airport P3s are more often targeted to specific development projects where significant capital is needed or risk is to be allocated – such as the various terminal projects at JFK and LaGuardia, the Great Hall project at Denver, or the newly privatized terminal at Paine Field in suburban Seattle.

I.     Identify Project Goals

In considering a delivery system for a potential project, one of the most important questions for a public entity to ask is “What are our goals, and in light of those goals, why should we consider a P3 structure instead of a traditional project delivery, procurement and financing process?”

While a P3 can be very helpful in certain circumstances, it is neither a panacea nor a source of free money. P3s can also create certain liabilities for the public entity that need to be addressed. Being thoughtful in understanding the public sponsor’s goals for any project and the reasons why it might want to consider a P3 structure is a vital element in the success of any project.

Public entities choose P3s for a variety of benefits that are applicable to the airport context, including:

  • Project delivery – can improve efficiency and save time and money;
  • Project procurement and innovation – can promote competition not only on cost but also on alternative design and technical considerations;
  • Risk allocation – can transfer certain risks to the private sector developer/concessionaire;
  • Accountability – can provide a single point of responsibility for all elements of project delivery;
  • Financing alternatives – can be more flexible where there are cash flow or borrowing capacity limits of a public entity. Additionally, private capital (both equity and debt) can be used to bring additional financial discipline to a project;
  • Customization – can increase the ability to customize contract terms to address specific project and authority concerns (including the adaptability of private sector counterparties for non-standard terms);
  • Limitation on recourse and financial risk exposure – can reduce financial risk; even though a failed P3 project will have adverse consequences for the public agency, those consequences can be reduced (relative to a traditional public project) so that, in the most extreme case of a developer default or bankruptcy, a material portion (and potentially all) of the financial loss that would otherwise be retained by the public sector will be borne by the private sector;
  • Long-term maintenance – can provide for long-term maintenance; often long-term operation and maintenance of a facility is included in a P3 structure, allowing for maintenance funding for the foreseeable future and providing a long-term commitment to high standards; and
  • Addressing life-cycle cost issues – can package design/construction with operations/maintenance responsibilities to optimize the delivery of both.

Notwithstanding these benefits (not all of which, of course, are available for every P3 arrangement), there are risks to the public entity in any P3 arrangement. Therefore, it is particularly important early in project planning to define the reasons why (and what kind of) a P3 path is being considered. P3 projects pursued without either clear goals or a clear understanding of the technique, can be problematic, and result in performance below expected standards.

A public entity’s own internal capabilities are essential for making a P3 approach successful. While many agencies focus on the initial P3 procurement it is equally important to be attentive to internal capacity. Long-term success is absolutely dependent upon the public agency’s ability to provide robust ongoing contract administration (during the construction period), and oversight of operation and maintenance over the entire contract period. Contract management expertise and discipline are crucial beginning with the initial pursuit of a P3, because a successful procurement is built upon an understanding of (and preparation for) future project management challenges. Therefore, a public entity must understand that a P3 approach will not eliminate internal administrative costs (though they may be different or lower). The likelihood of success could seriously be undermined if the public entity fails to ensure that that internal capacity is available – from the beginning of the project.

II.     Types of P3 Arrangements: Service Delivery

Different approaches to private airport investment in the United States illustrate the variability in the amount of the private investment and degree of governmental control. It is therefore useful to distinguish between P3 arrangements that are primarily designed to provide services or management for airport operations and those that are designed to deliver, operate and maintain a capital project. This section outlines the permutations of P3 arrangements that are used for delivery of services for an airport.

  • Service Contracts – Contracting for noncore services, such as cleaning, elevator and electric walkway maintenance, shuttle bus operations, financial consulting and engineering and design services are routine at airports in the United States. This option requires little or no private capital investment and would not typically be referred to as a P3 absent an unusually broad scope or other customizations.
  • Management Contracts – This option provides a vehicle for private management of existing airport facilities ranging from parking facilities to an entire airport system. Like the previous option, this approach is common in the United States with many permutations in the level of management control and extent to which operations are the responsibility of the management firm. In the U.S., airport proprietors generally at least retain contractual control over key decisions such as compliance with use and lease agreements, planning, environmental policy, and debt policy and capital expenditures. This option may be appropriate once an airport is built, or may grow from a design, build and finance structure. It is not likely to meet a local government’s need for capital investment.
  • Airline or User Consortia – Airlines and other users increasingly perceive that they can save costs and increase operational control over airport assets by offering to enter into consortia to operate key airport assets. The most common are fuel supply or delivery consortia, in which the consortium may just operate the fuel system or may construct and finance the system as well. Consortia are used for other facilities such as baggage claim, jet bridges, underwing services and other airport functions that exclusively serve one class of users (e.g., airlines). The degree of control over management, operations and capital investment can vary considerably.

IIi.     Types of P3 Arrangements: Project Delivery

The delivery of capital projects (e.g., a terminal, parking garage, etc.) is getting increased attention at airports. There are considerable variations in how a P3 could be employed in project delivery. The term P33 encompasses an array of project delivery arrangements, some of which are traditional in the airport sector, as well as several that are new (at least in the United States). The following are the main categories, many of which are likely already familiar to airport management:4

  • Full Privatization, Long-Term Lease, or Sale – Under this model, the airport proprietor enters into a long-term concession and lease, or (less often) sale of an airport. This can be accomplished either through the FAA’s Airport Pilot Privatization Program (APPP) or outside that program if the requisite legal constraints are addressed. Airports’ experience with the APPP suggests that it is not a particularly useful model for most airports. While there are three airports participating in the program today (San Juan, PR; Westchester County, NY and Hendry County, FL), a far greater number of airports have considered and rejected, or withdrawn from the program.5  By comparison, in 2016 there were 28 “majority private” (largely P3) and 79 “fully private” airports in Europe.6  In addition to being cumbersome to use, the APPP has not proven to be effective or workable in the U.S. investment marketplace. Many sponsors also find the approach untenable because it would deprive the local government of the ability to maintain control over airport assets.
  • Private Airport Development – There has been much discussion in the trade press and in academic circles about privately-funded airports, built and operated without federal assistance (i.e., without AIP grants). Branson Airport (Missouri) is currently the only privately-owned and developed commercial passenger airport in the United States. Branson has had enormous difficulty with its financing, has defaulted several times on its indebtedness, and is not generally seen as a viable precedent. One variation on this model that has rarely been used in the United States is the private development of an airport which is then sold or leased to a public entity. Fort Worth Alliance Airport, in Texas, is the closest example in the U.S. Alliance Airport is a cargo- and general aviation only airport. It was a P3 venture, built mainly with public funds (on privately owned land donated to the City of Ft. Worth). The motivating private sector goal was the development of the 14,000 acres on and around the airport that was owned by the developer. This approach is particularly useful for sponsors considering greenfield sites with considerable developable land either adjacent or nearby where there is sufficient demand for such development.
  • Design-Bid-Build (DBB) – This contracting structure is perhaps the most traditional, (so much so that many in the P3 industry do not consider it to be a P3 structure). Under DBB, the public entity engages an architect and/or a design engineering firm. A hard-bid for contractors is solicited based upon the final design. The public entity retains responsibility for financing and operating/maintaining the project.
  • Design-Build (DB) – This structure combines design and construction in one contract, usually based on 30 percent design, and imposes responsibility and liability on one entity (usually the contractor or a special purposed consortium entity). It is typical for a DB contract to be a fixed-fee arrangement. Generally, the public entity is responsible for financing, operating and maintaining the project. There is a relatively new variation on DB known as Progressive Design Build (PDB) in which the PDB team is selected much earlier in the design process.
  • Design-Build-Finance (DBF) – Under a DBF procurement, design, construction, and financing (complete or partial) are all combined in one contract. The public entity retains responsibility for operation and maintenance. Under this model, the design builder assumes responsibility for most of the design work (usually beyond 30 percent design), construction and full or partial financing of the project. The inclusion of private financing can also result in the contribution of private equity capital to the project structure.
  • Design-Build-Operate-Maintain (DBOM) – The DBOM model combines design and construction with long-term operation and maintenance into one contract, and all of those functions become the responsibility of the contractor. The public entity assumes the financing responsibility for the project, and retains the project revenue risk and any upside from project revenue.
  • Design-Build-Finance-Operate-Maintain (DBFOM) – This model is perhaps the one most commonly identified with transportation P3s in the U.S. Under a DBFOM, the developer or concessionaire is responsible for designing, constructing, financing, operating and maintaining the project. The Automated People Mover and Consolidated Rental Car Facility projects now being procured by Los Angeles as part of its LAX Landside Access Modernization Program are expected to follow this model. The typical length of a DBFOM contract is the period of construction plus 30-35 years, but it is important to recognize that there is not a single approach and the DBFOM model is evolving in the airport context. Generally speaking, the public entity retains full ownership of the project, but that, too, can be subject to some permutations. Financing is repaid either by project revenues going to the developer or by availability payments7 made by the public entity to the developer at certain milestones. Because of the financing, the private investor will need to invest private equity capital as well. Basic examples include a toll road, with toll revenue going to the developer, an airport terminal with revenues going to the developer along with some guaranteed availability payments, and a transit line with only availability payments. Financing techniques often include federal programs, such as TIFIA and PABs,8 in addition to grants used to supplement or repay the private financing.
  • Operate-Maintain / Concession and Lease – The above models address initial project delivery. In addition, there are forms of long-term operations and maintenance or concession and lease arrangements that can qualify as P3s. At the most extreme, these would extend to the entire airport (as is the case for many European airports, but is not generally possible in the United States except through the FAA’s Airport Privatization Pilot Program). However, such arrangements can be downscaled below the level of a whole airport but still cover complex and high value airport operations. The purpose of using such arrangements would be to achieve some of the benefits of a P3 with respect to the delivery of a service or the operations and maintenance of a particular facility. In essence, this P3 is itself a permutation of the traditional maintenance or capital investment models.
  • Development Rights in Exchange for Infrastructure Investment – This tool is relatively new in the airport industry but involves an exchange with a private sector investor in which the investor builds crucial infrastructure facilities that may not themselves be revenue-producing (e.g., runways or airfield facilities) in exchange for the ability to develop vacant airport real estate and retain revenue and profits from any development on the site. This approach gives the airport sponsor access to considerable capital without having to forfeit control over the capital facility itself. At airports with considerable vacant developable land, this arrangement can produce a win-win for the sponsor: investment in new infrastructure and new commercial or industrial development can enhance the economic value of the airport in the community.

IV.     Selecting the Best P3 Approach

The rigorous evaluation of projects, including those which are the subject of unsolicited proposals, is essential to determine if a P3 structure is appropriate. The analysis of whether a P3 approach is appropriate starts with the very basic analysis of what the public entity is trying to accomplish. Among the questions that sponsor management should ask are the following:

  • Is the public agency implementing elements of a master plan?
  • Is the project focused on a revenue generating opportunity such as a parking garage or a consolidated car rental facility? 
  • Is the sponsor considering an unsolicited proposal for a new facility or project that is optional but could enhance the attractiveness of the airport or provide an additional revenue stream (e.g., airport hotel or solar farm)?

There is not one single evaluation process that public agencies should use for deciding whether to pursue a P3 opportunity. Evaluation processes run from the most elaborate, such as Virginia’s Office of Public-Private Partnerships9 annual project pipeline review to Pennsylvania’s Board review of projects on an individual basis.10

For some airport sponsors, a less formal and institutionalized process is likely to be more appropriate, but the fundamental premise should remain the same – it is critical for airport management to have a clear and robust internal process to review prospective projects in detail on a multi-disciplinary basis and for that evaluation to proceed independent of any specific proposal. Such process should typically be conducted in consultation with capable external advisors, particularly those with relevant financial, legal and technical expertise.

After initial screening, an effective evaluation process considers issues such as desirability, technical feasibility and financial feasibility. There may be more formal steps which may be appropriate, such as a value-for-money (VfM) study. A VfM study would, for example, compare a public sector traditional approach to a “shadow bid” in a P3 context, and evaluate all relevant project risks in a cash flow context.

In the end, any good evaluation process must leave considerable room for old-fashioned hard questions and experienced common sense knowledge.

V.     Financial Considerations

A P3 structure does not produce free money. A P3 structure can, however, allow for financial innovation and structuring that increases the value achieved when deploying inevitability limited funds.

Regardless of what structure is selected, the airport proprietor must have a way to pay for, or let the P3 developer earn, its investment and a return on its capital and risk.

The developer/concessionaire will want to be repaid its equity investment, be able to repay (and demonstrate to lenders its ability to repay) any loans, and earn a reasonable rate of return. There are typically three primary payment models for P3s:

  • Project revenues, such as user fees, utility fees, parking revenue, rental fees, concession revenues, advertising or other business revenue and lease revenue;
  • Availability payments, which are payments made by the public entity or project sponsor to the concessionaire or developer in exchange for the delivery of the project and the performance of an ongoing service (e.g., operations and maintenance), which payments would be funded from project revenues or non-project revenues, such as taxes, or for an airport, from sources such as landing fees, concession revenues, grant funds, PFCs, and non-aeronautical lease payments. Availability payments are typically made once a facility is in operation, and can be paired with progress or milestone payments paid during construction that cover part (but not all) of the construction cost; or
  • Management fees which are paid on a fee-for-service basis, a time-and-materials, fixed-fee or any of the other traditional bases for paying purely for services rendered.

Regardless of the exact payment model, any P3 that involves the investment of private equity and debt will need to have a payment structure that is credit worthy and bankable as determined by private investors and lenders.

VI.     Illustrations of P3 Models

New York. In the airport context, the new $4 billion Delta Terminal D (and C) at LaGuardia is being financed and constructed by a joint venture of Goldman Sachs and Delta Airlines, with a $600 million contribution by the Port Authority of New York and New Jersey. This follows the Central Terminal B $4 billion P3 project already underway at LaGuardia, which is being undertaken by a consortium team including Vantage, Merdiam, and Skanksa.

Houston. Houston Airport System’s version of a P3 was one in which Southwest Airlines funded and constructed a five-gate international terminal at Houston-Hobby. The challenge presented by the project was that Southwest needed an international terminal and accompanying facilities on a timetable that the Houston Airport System might not practically have been able to meet. Southwest assumed responsibility for construction and is being repaid from rental revenue from itself, other tenants and concessionaires. Houston pursued this approach for a number of financial as well as political reasons, the most important of which was the strong desire to keep Southwest happy and to complete the project on an aggressive schedule acceptable to Southwest. By shifting the construction burden to Southwest, Houston was able to shift any political risk for project overruns or delays to Southwest. The project was completed on time, in 2015, and at opening, Southwest was the only international carrier using the facility.

Seattle. An innovative example is Paine Field, near Seattle, the home to a Boeing’s widebody manufacturing facilities. The airport sponsor of Paine Field was confronted with an unusual political conflict when two airlines indicated a desire to begin commercial passenger service at the airport for the first time. Accommodating the airlines was a political minefield, but legally the airport could not reject the request. In order to maintain an arms-length relationship with the accommodation of passenger service, the sponsor entered into a P3 agreement for the construction of a new terminal to accommodate scheduled passenger service. The approach is essentially a DBFOM approach in which the developer is assuming all of the construction and financing risks, but the developer also retains most of the operating profit (there is only a de minimis profit sharing with the airport sponsor). To package this arrangement, the airport entered into a traditional ground lease with the developer assuming both the risk and reward from new passenger service. The private sector developer is responsible for all contractual relationships with carriers and suppliers at the terminal.

Non-Airport Projects. Sometimes P3 projects are driven by financing issues, such as cash flow, as was the case with the Denver transit district’s Eagle P3 rail line to Denver International Airport. RTD, the transit district, had sufficient revenue from its sales tax revenue but could not make revenue available in the time frame necessary to build the project on its schedule. RTD also did not have sufficient remaining debt capacity to issue its own debt. Other imperatives made a P3 approach attractive, including the desire to shift long-term operations and maintenance to the private sector. In that project, the concessionaire is repaid through availability payments.

A different example in the highway context is the I-70 East Project in Denver, currently being undertaken by the Colorado Department of Transportation (CDOT), the Colorado High Performance Transportation Enterprise (HPTE), and the Colorado Bridge Enterprise. Even though there is sufficient state funding available to finance this $1.1 billion project internally, CDOT and HPTE decided to pursue a P3 structure in order to shift the risk of the highly complex construction project to the developer and to include long-term operations and maintenance in the financing of the project. This decision was based on a comprehensive VfM study. Payments to the developer are to be availability/milestone payments, because of limited toll revenue generated from the additional managed lanes.

VII.     Liabilities and Risk Assessment

Liability. Even though, in most P3 projects, the public entity shifts the construction and project delivery risk, as well as long-term operations and maintenance obligations, to the private developer, there are still inherent risks for the public sector.

P3 projects tend to be long-term endeavors with various liability issues arising at different stages of the contract. Two particular financial areas are often identified as primary financial risks within the contract:11

  • The direct payments to the developer/concessionaire such as availability payments or milestone payments; and
  • Contingent liabilities, such as payments for termination events or compensation events, which may reflect risk allocation between the public entity and the developer.

Understanding, negotiating, and being prepared to address these liabilities in a P3 agreement is critical for public entities. Appropriate project management plays a significant role in ensuring that these liabilities are properly managed. Otherwise, change-order or compensationevent mechanisms can be abused, or performance and compliance regimes can fail to have their intended effect. Identifying these contingent liabilities and planning for them will help the public entity evaluate the merits of a P3 structure.

Risk Allocation. Project risk allocation is another factor often cited by public entities as a reason for pursuing a P3 structure. Risks such as construction and project delivery, environmental contamination, and compliance with FAA regulatory requirements can be transferred – but only up to a point, and only effectively where future contract administration considerations are paired with a detailed understanding of the project’s unique challenges (beyond what precedent might suggest in terms of risk allocation). Developers often resist accepting certain risks (especially environmental risks) without considerable economic compensation. A public entity needs to be rigorous in evaluating what risks it wants to allocate and why, and in assessing the economic impact of shifting risks to the developer. Such preparations can help the public entity in successfully transferring risk.

VIII.     Regulatory Considerations for Airport P3s

For airport projects, one unique complexity is the need to maintain compliance with the grant assurances and the related FAA regulatory requirements. Not only are the grant assurances not drafted with any sensitivity to P3 imperatives but the FAA’s general unfamiliarity with many P3 approaches means that navigating these requirements requires awareness, creativity and time.

Airport P3 projects are subject to regulatory considerations that are often absent in other P3 efforts, even in the transportation sector. There are several overarching regulatory impediments that have made sponsors—and some investors—reluctant even to consider P3 opportunities:

  • Revenue Use. Under federal law, most airports must operate as a closed fiscal system, meaning that all revenue generated at the airport (or on airport-owned real estate) must be used only for the capital and operating costs of the airport. Other infrastructure P3s do not generally have this constraint which means that models applicable to roads, rail, or utility infrastructure may not necessarily be directly transferrable to the airport environment.
  • Regulatory Comfort. The FAA is relatively unfamiliar with many P3 arrangements, even ones that are common in other arenas. Agency staff has limited expertise in navigating the regulatory hurdles for various P3 arrangements. As a result, the agency has provided relatively little guidance and direction to airport proprietors on what is, and is not, permissible in the highly regulated airport industry. While the agency continues, at Congress’ direction, officially to support its Airport Privatization Pilot Program, it has been less enthusiastic to provide broad based guidance on how to structure P3 transactions. The guidance that does exist is generally highly fact-specific to a particular airport.
  • Grant Assurances. Airport sponsors who accept federal grant funds (which include virtually all commercial service airports and thousands of general aviation airports listed in the FAA’s National Program for Integrated Airport Systems), are subject to a complex web of obligations that attach to the receipt of grant funds. These obligations, known as grant assurances, generally carry a 20-year duration from the date of the last FAA grant. Accompanying the grant assurances is a complicated set of contractual provisions which the FAA requires be included in any airport sponsor contract with private sector entity.12  The sheer number and breadth of these contractual provisions could significantly discourage private investment unless or until the FAA provides greater clarity on the extent to which the grant assurances apply to private sector partners in a P3 arrangement.
  • Mandatory Contract Language. FAA requires that an airport sponsor’s contracts contain both a subordination clause, (subordinating the relationship to any current or future FAA contractual or regulatory requirements) and a long list of contract clauses addressing issues such as civil rights, labor relations, and other provisions which are not necessarily common in the private sector. The FAA has yet to provide any guidance on the extent to which these requirements apply to P3 arrangement or, more generally, to private sector contractors who have no contractual privity with the FAA.
  • Airlines and Other Users. Airlines and other airport users have historically been skeptical of P3 arrangements because of the fear that they will result in higher rates and charges, could lead to diversion of revenue from the airport and, perhaps most importantly, could reduce the political and practical control that users traditionally have over airport decision making. As more of these arrangements prove successful, this skepticism is likely to dissipate.

Annotated Bibliography of Selected Reference Materials
 

The Transportation Research Board Airport Cooperative Research Program (ACRP) published a comprehensive guide to airport privatization in 2012 which has become the authoritative handbook for airport privatization efforts:

The U.S. Department of Transportation has published a number of useful guides and reports on P3s for transportation infrastructure: 

U.S. DOT has published a useful compendium of successful P3 practices:

The FHWA’s P3 toolkit (which is comprised of various elements)—although developed by FHWA for highway projects—is more broadly relevant, especially the ‘Publications’ and ‘Screening’ tool links:

The Congressional Research Service has published a guide for Congress on airport privatization options for its consideration:

Outside of the U.S., one might consider Canada’s approach. The Provinces and the Federal government there screen P3s systematically. Here are some materials on federal screening process in Canada:

On a global level, the World Bank maintains a thorough library related to P3s:

Endnotes
 

1 The World Bank notes, “[t]here is no standard, internationally-accepted definition” for P3 (also known as PPP) and, as a result, “[t]he term is used to describe a wide range of types of agreements between public and private sector entities”. See What Are Public-Private Partnerships?, PPPIRC World Bank Group, http://ppp.worldbank.org/public-privatepartnership/ (last visited April 12, 2017). For purposes of this paper, we use the term P3 to refer to “contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of transportation projects”, as such definition emphasizes that such arrangements can come in different forms and are distinguished primarily because they differ relative (i.e. “greater” participation) to customary existing practice. This approach is appropriate in the U.S. airport context given an existing baseline of private sector involvement in airport infrastructure delivery and management. See Innovative Finance Support: P3 Defined, DEPARTMENT OF TRANSPORTATION FEDERAL HIGHWAY ADMINISTRATION, https://www.fhwa.dot.gov/ipd/p3/defined/ (last visited April 12, 2017).

2 See infra note 5.

3 See supra note 1.

4 The U.S. Department of Transportation’s publication “Successful Practices for P3s,” (March 2016), is a good reference document. It is important to recognize that, if an airport proprietor intends to seek AIP funding for a project, not all project delivery mechanisms are available and many that may satisfy federal requirements are not familiar to federal contracting officers. It may be necessary to educate local FAA officials if the airport were to pursue any of these alternatives. See Successful Practices for P3s: A Review of What Works When Delivering Transportation via Public-Private Partnerships, U.S. DEPARTMENT OF TRANSPORTATION (2016), https://www.transportation.gov/sites/dot.gov/files/docs/P3_Successful_Practices_Final_BAH.PDF.

5 The Airport Privatization Pilot Program was established by federal law in 1966. 49 U.S.C. § 47134 (2012). According to the FAA, the program is “designed to allow airports to generate access to sources of private capital for airport improvement and development.” See Fact Sheet – What is the Airport Privatization Pilot Program, FEDERAL AVIATION ADMINISTRATION (Sept. 27, 2013), http://www.faa.gov/news/fact_sheets/news_story.cfm?newsId=14174. Federal law limits the number of participating airports to 10, of which only one can be a large hub airport and at least one must be a general aviation airport. There are currently only three airports participating in the program: (1) a small general aviation airport in Hendry County, Florida; (3) Westchester County Airport, and (3) San Juan, Puerto Rico’s Luís Muñoz Marín International Airport. Eight other airports have considered or started participation in the program but have later dropped out. The principal advantage of participation in the program is that federal law waives certain prohibitions on revenue diversion as a mechanism to encourage private investment. Nevertheless, the rigidity of the program and of the procedural requirements has made the APPP unattractive to most airport proprietors and to investors.

6 See The Ownership of Europe’s Airports, AIRPORTS COUNCIL INTERNATIONAL (2016), http://newairportinsider.com/wpcontent/uploads/2016/04/ACIEUROPEReportTheOwnershipofEuropesAirports2016.pdf.

7 Availability payments generally are contractually guaranteed payments the public entity makes to the private entity to pay for construction, cost of capital, and operation and maintenance, and usually involves projects with little revenue generation. By contrast, for a revenue generation project, there are usually no availability payments and the private entity receives all or part of the upside profit from the project itself, such as a parking structure or terminal facility.

8 U.S. DOT’s Build America Bureau (BAB) administers both the Transportation Infrastructure Finance and Innovation Act (TIFIA) loans as well as the Private Activity Bond (PAB) program. See About the Build America Bureau, U.S. DEPARTMENT OF TRANSPORTATION, https://www.transportation.gov/buildamerica/about (last visited April 12, 2017).

9 See, e.g., Final 2016 Virginia P3 Project Pipeline, VIRGINIA PUBLIC-PRIVATE PARTNERSHIPS (Jan. 4, 2016), http://www.p3virginia.org/wpcontent/uploads/2016/02/Final-January-2016-P3-Project-Pipeline.pdfhttp://www.p3virginia.org/ (last visited April 12, 2017); Draft Implementation Manual and Guidelines for the Public Private Transportation Act of 1995, VIRGINIA PUBLIC-PRIVATE PARTNERSHIPS (Jan. 2016), http://www.p3virginia.org/wpcontent/uploads/2016/01/PPTAImplementation-Manual-01-04-2016-finalposted-to-website-before-Jan-CTB.pdf.

10 See Providing for Public Private Transportation Partnerships Implementation Manual & Guidelines, THE COMMONWEALTH OF PENNSYLVANIA 16 (Sept. 29, 2014), https://www.dot.state.pa.us/public/Bureaus/press/P3/P3ImplementationManual&Guidelines.pdf.

11 See supra note 4, at 33.

12 In early 2016, the FAA published a comprehensive list of required contract language. See Required Contract Provisions for Airport Improvement Program and for Obligated Sponsors, FAA AIRPORTS (Jan. 29, 2016), https://www.faa.gov/airports/aip/procurement/federal_contract_provisions/media/combinedfederal-contract-provisions.pdf. While this comprehensive list, has been useful, it has also left open a number of complex questions concerning the circumstances under which language must be included in contracts with no federal financial involvement or where the airport proprietor has no direct contractual privity. Id.

Law Alert – Buy American Executive Order Has No Immediate Impact

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“Buy American” Presidential Executive Order Has No Immediate Impact on Transportation Agencies

On April 18, 2017, President Trump signed a Presidential Executive Order on Buy American and Hire American. The Executive Order does not change any existing requirements related to Buy America or Buy American programs. Instead, it orders executive branch agencies to “scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.” It also requires agencies to conduct reviews and assessments of their internal processes and propose means to maximize, in accordance with existing legislation, the use of materials produced in the United States.

Many transportation agencies already deal with domestic preference requirements on a regular basis. Because the Executive Order does not change existing law, it has no immediate impact on current Buy America and Buy American programs. After the required review and assessments by executive agencies, which will conclude in late November of this year, U.S. DOT may propose modifications to its Buy America and Buy American programs. For now, existing domestic preference requirements remain in place.

ACRP Legal Research Digest 31: Preemption of Worker-Retention and Labor-Peace Agreements at Airports

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Kaplan Kirsch & Rockwell partner Eric Smith has authored an overview for airport management personnel and other interested personnel—such as airport authority board members and elected officials—to explain the issues related to labor-harmony or labor-peace agreements.  These agreements typically require an organization to become signatory to some form of an agreement with a labor organization and may lead to implications and legal entanglements.

For a copy of the proceedings, click here.

Semi-annual Airport Law Digest – 2016 Year in Review

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While 2016 was a year with significant changes in the national political landscape, airport law did not see the same kind of dramatic changes. There have been important developments nevertheless in the areas of Unmanned Aircraft Systems (UAS, or drones), NextGen implementation, and internal restructuring at FAA. With the incoming administration committed to making major reforms throughout government, it is possible that the coming year will see more significant developments in the federal regulation of airports and aviation.

This Digest contains short articles on several important developments in airport law in 2016, and also includes: a listing of principal cases decided last year; new FAA rules, policies, and guidance; and reports, studies, and articles of particular interest to airport legal professionals. Note that UAS materials appear at the end of the Digest in their own category. The Digest also includes a look-ahead to some of the important legal and political developments we expect to see in 2017, such as investments in infrastructure, the implementation of safety management systems, updates to the Department of Transportation’s NEPA guidance, and the potential upcoming battle over FAA reauthorization.

We hope you find this Digest useful in your efforts to remind current in the always-evolving legal and regulatory framework that governs airports.

Articles

FAA Continues NextGen Implementation, but Faces Numerous Hurdles

As FAA continues to implement new NextGen procedures across the country, community opposition has presented a significant hurdle for the agency’s plans. Several ongoing and recently decided lawsuits challenge FAA’s procedures as not properly considering community concerns before adopting new flight patterns. Congress remains concerned as well, as evidenced by recent Congressional action that attached a rider to the defense authorization bill requiring FAA to consult with local communities before implementing NextGen flight patterns. In addition, in two recent audits, the Department of Transportation, Office of the Inspector General has criticized FAA for its failure to implement a comprehensive approach to NextGen implementation. FAA has taken a number of steps to improve community outreach and engagement, but it remains to be seen how well they will work to satisfy airport and community needs and expectations. For further information, please contact Peter Kirsch at pkirsch@kaplankirsch.com.

FAA Issues New UAS Regulations

In June, the FAA unveiled its long-anticipated framework for the operation of small unmanned aircraft systems (sUAS) in the National Airspace System, codified in a new Part 107 of the Federal Aviation Regulations. See 81 Fed. Reg. 42064 (June 28, 2016). Under Part 107, commercial sUAS operators will no longer be required to seek case-by-case operating authorization from the FAA. Instead, any person holding a “remote pilot certificate”—obtained by passing an aeronautical knowledge test—will be authorized to operate a sUAS for any purpose, so long as they stay within the parameters established under Part 107. Operators may also apply to the FAA for a Certificate of Waiver or Authorization (CoW) from most of these rules by demonstrating that the proposed operation may still be safely conducted. For more information about these new rules and how they pertain to airport sponsors and local governments, please read Kaplan Kirsch & Rockwell’s recent summary regarding the topic or contact Eric Smith at esmith@kaplankirsch.com.

Federal Aviation Administration Staffing − Recent Changes and a Look Ahead

As is common with the change in administrations, the past twelve months have seen significant changes in the senior management and legal staff at FAA – both at the political and senior career level. Most notably, Eduardo Angeles, Associate Administrator for Airports, left his post in December ahead of the incoming administration. No replacement has yet been announced and, if history is any indication, it is likely to be mid-to-late 2017 before a replacement is named. Meanwhile, the senior airports official at FAA is Winsome Lenfert, who arrived in Washington this autumn from the Southern Regional Airports Division. Other recent moves include Glen Martin (from Administrator, Western Pacific Region, to Vice President, Air Traffic Services, Air Traffic Office, Headquarters) and Dennis Roberts (from Administrator, Southern Region, to Administrator, Western Pacific Region). In addition, Jim Whitaker, former Deputy Administrator and Chief NextGen Officer, left the agency in June 2016. The FAA Chief Counsel’s office is also in the midst of a significant reorganization. Jim Lofton was recently named as the Assistant Chief Counsel, Airports and Environmental Law Division. While Lofton has 25 years of environmental law experience with the Department of Justice, he is new to the FAA. Senior airport lawyers in the agency, including Daphne Fuller and Jonathan Cross, have taken other positions with the AGC outside the airport area. In the compliance world, Kevin Willis, who was previously the deputy in the compliance office, has taken over for Randy Fiertz, who moved last year to head the Seattle Regional Airports Division office.

It is important to note that although the President-Elect has nominated Elaine Chao to assume the position of Secretary of Transportation in January 2017, FAA Administrator Michael Huerta has a term appointment that expires on January 7, 2018. Huerta has indicated that he intends to serve out the remainder of his term. Other senior political appointments at the FAA or Department of Transportation have yet to be announced and are not likely to be on the top of the list of appointments for the new administration.

Things to Watch for in 2017

Incoming Administration Signals Increased Infrastructure Development, Including Airports

Throughout the Presidential campaign, the President-Elect repeatedly promised to increase focus on infrastructure – particularly roads, bridges, and airports. His plan relies heavily on private financing and a reduction in regulatory burdens, which critics have argued will disproportionately assist new construction and leave existing facilities in need of repair neglected. The President-Elect has nominated former Bush-era Secretary of Labor Elaine Chao to be the new Secretary of Transportation. In her questionnaire response to the Senate Committee on Commerce, Science, and Transportation, Chao lists as one of her top priorities expediting critical infrastructure construction projects. Importantly, Chao states that she wants to complete these projects “with or without a new infusion of funds,” suggesting that if Congressional approval of funding stagnates, alternative strategies (cuts in regulations or tax breaks for the private sector) may become more prevalent.

The private sector has already indicated great interest in public-private partnerships (so-called P3s) in the airport realm and with a supportive administration, it is likely that there will be significant activity designed to make it easier for private investment in airport projects. As an illustration of the new emphasis on P3 projects, Westchester County, New York recently announced that it will join the FAA’s Airport Privatization Pilot Program with a proposed 40-year lease of the Westchester County Airport. In addition, the Port Authority of New York and New Jersey and Los Angeles World Airports are moving forward with P3 projects at LaGuardia Airport and Los Angeles International Airport, respectively. For more information, please contact Peter Kirsch at pkirsch@kaplankirsch.com.

Update to Department of Transportation’s NEPA Implementation Guidance

In mid-December, the Department of Transportation released a draft update to its Order 5610.1, which governs the Department’s NEPA implementation procedures. The stated goals of the updated Order are to (1) ensure a full and fair NEPA process that includes meaningful public involvement throughout, and the balanced consideration of a reasonable range of alternatives and their impacts on the human environment; (2) improve efficiency and expedite project delivery; (3) provide good customer service to stakeholders through consistent implementation of NEPA across the Department; (4) provide the requisite flexibility for the Department’s Operating Administrations (OAs) to apply their NEPA implementing procedures to their specific programs; and (5) balance the needs of all OAs, from those with well-established NEPA programs to those seeking more guidance. Comments on the proposed changes were due on January 10, 2017. For further information, please contact Steven Osit at sosit@kaplankirsch.com.

FAA Reauthorization

The current FAA authorization legislation expires in September. No one in Washington desires a repeat of the last reauthorization efforts, when Congress had to approve 23 separate short-term extensions of FAA authority before Congress finally approved a reauthorization bill. Nevertheless, recent efforts at reauthorization have proved contentious, especially on issues related to the role of (and control over) the air traffic system. All indications are that FAA reauthorization efforts will ramp up in the spring of 2017 with significant activity this summer. One of the major points of contention during the most recent reauthorization debate was a proposal advanced by House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) to transfer air traffic control operations from FAA to a not-for-profit corporation. Shuster has indicated that he does not intend to completely abandon that proposal, although the details may change depending on the support it receives from the incoming administration and other members of Congress.  For further information, please contact Peter Kirsch at pkirsch@kaplankirsch.com.

New Rules for Safety Management Systems

In mid-July 2016, FAA released a Supplemental Notice of Proposed Rulemaking (SNPRM) for Airport Safety Management Systems (SMS), which proposed to limit the applicability of the previously-released SMS rules to fewer airports and extended the time for compliance to twelve months from the effective date of the final rule, among other items. Comments were due on September 12, 2016, and the final rule is expected to be published in early 2017. For a summary of the SNPRM, please read Kaplan Kirsch & Rockwell’s white paper or contact Peter Kirsch at pkirsch@kaplankirsch.com.

Passenger Facility Charge Rules

The FAA proposed, and then promptly withdrew, a proposed re-write of its Order regarding the administration of the Passenger Facility Charge program. The proposal was greeted with considerable concern by industry groups and while the agency has now withdrawn the proposal, a revised proposal is likely to be issued in 2017.

Litigation

Court Decisions

Flight Patterns and Jurisdiction. McKay v. City & Cty. of San Francisco, No. 16-cv-03561 NC; 16-cv-03564 NC (consolidated), 2016 U.S. Dist. LEXIS 178436 (N.D. Cal. Dec. 23, 2016) (dismissing complaint over new Metroplex flight patterns because district court lacked subject matter jurisdiction and case should have been initiated in court of appeals).

Noise Issues. Citizens for Quiet Skies v. Mile-Hi Skydiving, No. 15CA1159, 2016 LEXIS 1803 (Colo. App. Dec. 22, 2016) (unpublished) (affirming dismissal of neighborhood plaintiffs’ claims of negligence per se, nuisance, trespass, and unjust enrichment alleged against skydiving operator at municipal airport).

Area Navigation (RNAV). Lyons, v. FAA, No. 14-72991, 2016 U.S. App. LEXIS 22925 (9th Cir. Dec. 21, 2016) (unpublished) (denying petition for judicial review of FAA decision on RNAV flight pattern rerouting).

Preemption and Runway Length. Tweed New Haven Airport Auth. v. Jepsen, Case No. 3:15cv01731 (D. Conn. Dec. 9, 2016) (denying defendant State of Connecticut’s motion to dismiss complaint alleging that state law limiting the length of runways is preempted by federal law).

Use Restrictions and ANCA. Friends of the E. Hampton Airport, Inc. v. Town of E. Hampton, 841 F.3d 133 (2d Cir. 2016) (holding that Town’s use restrictions were enacted in violation of the procedural requirements of ANCA).

Grant Reimbursements. Tulsa Airports Improvement Trust ex rel. Cinnabar Serv. Co. v. FAA, 839 F.3d 945 (10th Cir. 2016) (denying as not timely filed an airport contractor’s appeal for reimbursement from FAA for noise abatement work).

First Amendment. NAACP v. City of Philadelphia, 834 F.3d 435 (3d Cir. 2016) (upholding finding that a ban on non-commercial advertisements in airport advertising space violated the First Amendment, without deciding whether the advertising space was a public or non-public forum).

Standing. Stallworth v. Bryant, No. 3:16-CV-246-CWR-FKB, 2016 U.S. Dist. LEXIS 109947 (S.D. Miss. Aug. 18, 2016) (finding that a private citizen did not have standing to contest State’s planned reorganization of municipal airport authority).

Environmental Review. Zbitnoff v. City of Winooski, No. 5:14-cv-132, 2016 U.S. Dist. LEXIS 105329 (D. Vt. Aug. 10, 2016) (rejecting challenge to EIS for Air Force’s decision to locate new F-35 jets at an air base where plaintiffs claimed that the Air Force failed to consider the possibility that municipalities would make use of the Part 150 program and demolish nearby neighborhoods).

Final Agency Decisions. Southwest Airlines Co. v. U.S. DOT, 832 F.3d 270 (D.C. Cir. 2016) (dismissing administrative appeal for lack of jurisdiction because DOT guidance letter was not a final agency action under the Administrative Procedure Act).

Constitutional Rights. Rogers v. Louisville-Winston Cty. Airport Auth., No. 1:13-CV-197-SA-DAS, 2016 U.S. Dist. LEXIS 103336 (N.D. Miss. Aug 5, 2016) (finding no violations of the Equal Protection clause or the First Amendment where the airport authority refused to rent a specific hangar to a tenant).

Antitrust. Boston Exec. Helicopters, LLC v. Maguire, No. 15-13647-RGS, 2016 U.S. Dist. LEXIS 87398 (D. Mass. July 6, 2016) (finding that a local airport authority was immune from antitrust suits).

FAA Penalty Authority. Wallaesa v. FAA, 824 F.3d 1071 (D.C. Cir. 2016) (holding that FAA has the authority to impose civil penalties for interference with flight crewmembers even where the conduct is not physically violent but is nonetheless disruptive).

Revenue Diversion. Air Transportation Ass’n of Am. v. Jordan, No. 3:16-cv-00230-HZ, 2016 U.S. Dist. LEXIS 73731 (D. Or. May 30, 2016) (finding that a group of airlines did not have standing to sue the City of Portland for improper airport revenue diversion related to new charges for sewer improvements because the City merely charged the airport sponsor, which then passed those charges to the airlines).

Environmental Analysis. California v. U.S. DOT, No. 02-cv-04621-KAW; 02-cv-04623-KAW (consolidated), 2016 U.S. Dist. LEXIS 66859 (N.D. Cal. May 20, 2016) (addressing a 2003 permanent injunction on new construction at an airport until the sponsor complied with NEPA, and holding that the withdrawal of the original construction plan and submission of an updated plan requiring NEPA compliance warranted lifting of the injunction).

Airport Real Estate. City of Santa Monica v. United States, 650 F. App’x. 326 (9th Cir. 2016) (unpublished) (reversing district court ruling that City’s quiet title action for property underlying airport was barred by statute of limitations).

First Amendment. Southwest Airlines Pilots’ Ass’n v. City of Chicago, No. 16 C 5117, 2015 U.S. Dist. LEXIS 70266 (N.D. Ill. May 14, 2016) (granting temporary restraining order and allowing pilots’ association to display advertisements critical of airline in terminal facilities).

Equal Protection and Ridesharing Services. Illinois Transp. Ass’n v. City of Chicago, No. 14 cv 827, 2016 U.S. Dist. LEXIS 54598 (N.D. Ill. Apr. 25, 2016) (denying defendant City’s motion to dismiss plaintiff taxi trade group’s equal protection suit, which alleged disparate airport fees and regulations for traditional taxi agencies and Transportation Network Providers).

Ridesharing Fees. Tadepalli v. Uber Techs, Inc., No. 15-cv-04348-MEJ, 2016 U.S. Dist. LEXIS 55014 (N.D. Cal. Apr. 25, 2016) (approving settlement of a class action suit against ride-sharing service Uber for misrepresentation of “airport tolls” in its rates charged to customers).

Preemption. Crawford v. Antonio B. Won Pat Int’l Airport Auth., No. 15-00001, 2016 U.S. Dist. LEXIS 44657 (D. Guam Mar. 31, 2016) (holding that a plaintiff’s unjust enrichment claim was not preempted by federal law where it was based on the airport authority’s alleged improper use of the plaintiff’s ancestral lands).

Flightcrew Rules. Indep. Pilots Ass’n. v. FAA, 638 F. App’x 6 (D.C. Cir. 2016) (rejecting challenge to FAA’s decision to exclude all-cargo operations from a final rule setting forth new flightcrew member duty and rest requirements for passenger operations).

Ridesharing Services. Gebresalassie v. District of Columbia,170 F. Supp. 3d 52 (D.D.C. 2016) (dismissing equal protection complaint alleging disparate treatment of traditional taxis and transportation network companies).

Preemption. Echavarria v. Williams Sonoma, Inc., No. 15-6441, 2016 U.S. Dist. LEXIS 33980 (D. N.J. Mar. 16, 2016) (holding that the Federal Aviation Administration Authorization Act does not preempt state law governing motor carrier employer-employee relationships).

Environmental Analysis. City of Mukilteo v. U.S. DOT, 815 F.3d 632 (9th Cir. 2016) (upholding FAA decision to forgo an EIS before the commencement of new commercial passenger service).

Preemption. Cent. W. Va. Reg’l Airport Auth., Inc. v. Triad Eng’g, Inc., No. 2:15-cv-11818, 2016 U.S. Dist. LEXIS 19816 (D. W. Va. Feb. 18, 2016) (holding that where a landslide occurred on airport property, state law claims of negligence, breaches of warranties, breach of contract, and products liability against defendant engineering firm were not preempted by the Federal Aviation Act).

Bird Strikes. Friends of Animals v. Clay, 811 F.3d 94 (2d Cir. 2016) (upholding a depredation permit issued to an airport operator under the Migratory Bird Treaty Act allowing the operator to “take” birds in “emergency situations”).

Preemption. Nat’l Fed’n. of the Blind v. United Airlines, Inc., 813 F.3d 718 (9th Cir. 2016) (holding that a class action alleging claims for violation of California’s antidiscrimination laws was preempted by the Air Carrier Access Act and its implementing regulations).

Gate Allocation. City of Dallas v. Delta Airlines, Inc., No. 3:15-CV-2069-K, U.S. Dist. LEXIS 2105 (N.D. Tex. Jan. 8, 2016) (granting preliminary injunction to Delta Airlines to allow continued use of gates at Dallas Love Field following the expiration of certain provisions of the Wright Amendment).

Pending Cases

NHPA and Section 4(f) Review. Kaufmann v. FAA, No. 3:16-cv-00801-DJH-CHL (W.D. Ky. filed Dec. 14, 2016) (challenge to FAA compliance with National Historic Preservation Act and Section 4(f) of the Department of Transportation Act for a tree trimming project at Louisville Bowman Field).

Gate Allocation. City of Dallas v. Delta Airlines, Inc., No. 16-10051 (5th Cir. argued Sept. 26, 2016) (appealing district court grant of preliminary injunction regarding gate allocation at Love Field following the expiration of certain provisions of the Wright Amendment).

Area Navigation. Citizens Assn. of Georgetown v. FAA, No. 15-1285 (D.C. Cir. filed Aug. 24, 2015) (challenging RNAV procedures in the DC Metroplex area).

Passenger Facility Charges. Hillsborough Cty. Aviation Auth. v. FAA, No. 15-1238 (D.C. Cir. held in abeyance Oct. 28, 2016) (appealing FAA’s denial of Passenger Facility Charge authorization to construct an automated people mover at Tampa International Airport).

Area Navigation. City of Phoenix v. Huerta, No. 15-1158 (argument scheduled Mar. 17, 2017) (challenging RNAV procedures in Phoenix).

Gate Allocation. In re. Compliance with Federal Obligations by the City of Dallas, Texas, FAA Docket No. 16-15-10 (Notice of Investigation served Aug. 7, 2015) (FAA investigation into possible grant assurance violations related to a failure to accommodate air carrier requesting gate space).

Administrative Cases

Minimum Standards. R.L.S. Rental Co., Inc. v. City of Joplin, FAA Docket No. 16-13-06, Director’s Determination (June 10, 2016) (finding no violation of Grant Assurances where the FBO was in compliance with consistently-applied minimum standards).

Economic Nondiscrimination. Messinger v. Clover Acquisition Corp., FAA Docket No. 16-15-01, Director’s Determination (May 26, 2016) (finding that a sponsor’s actions in banning a former airport employee from FBO premises because he was sexually harassing another employee did not constitute a violation of Grant Assurance 22).

Grant Assurances Generally. Hicks v. City of Mount Airy, FAA Docket No. 16-15-07, Director’s Determination (Apr. 29, 2016) (finding sponsor in compliance with all Grant Assurances despite complaint alleging more than seven violations).

Insurance. Hirokai Nishio v. Saipan Int’l Airport, FAA Docket No. 16-13-03, Director’s Determinations (Apr. 29, 2016) (finding a violation of Grant Assurance 22 where the airport sponsor applied insurance requirements inequitably).

Airport Revenue Diversion. Chandler Air Serv., Inc. v. City of Chandler, FAA Docket No. 16-13-05, Director’s Determination (Feb. 9, 2016) (finding that the City may have violated Grant Assurance 25, Airport Revenue, by collecting levied aviation fuel tax and placing it in the City’s general fund and by waiving delinquent tax and interest for operator, but giving sponsor a reasonable time to comply before finding a violation).

Federal Legislation

National Defense Authorization Act for Fiscal Year 2017, S. 2943 (signed by President Obama on Dec. 23, 2016) (includes a provision requiring the FAA to review RNAV flight path changes and take steps to mitigate the negative effects these changes have had on the community).

FAA Extension, Safety, and Security Act of 2016, Pub. L. 114-190 (enacted July 15, 2016) (FAA reauthorization through September 2017).

Airport and Airway Extension Act of 2016, Pub. L. 114-141 (enacted Mar. 30, 2016) (FAA reauthorization for 3.5 months, expiring July 15, 2016).

Federal Rules, Orders, and Guidance

Department of Transportation and FAA

Advisory Circular 150/5200-28F, Notices to Airmen (NOTAMs) for Airport Operators (Dec. 30, 2016).

Notice of Availability and Request for Comment, Update to U.S. Department of Transportation’s NEPA Implementing Procedures, 81 Fed. Reg. 92966 (Dec. 20, 2016) (setting deadline for comments at Jan. 10, 2016).

Update, Working Group on Improving Air Service to Small Communities (last updated Dec. 19, 2016) (announcing 25 stakeholder members of Working Group, available here).

Notice of Receipt and Acceptance for Review, Airport Privatization Pilot Program: Preliminary Application for Westchester County Airport, White Plains, NY, 81 Fed. Reg. 90044 (Dec. 13, 2016).

List of Nationwide Buy America Waivers (as of Dec. 27, 2016) (listing manufacturer’s equipment that has been issued a Buy American Waiver under 49 U.S.C. § 50101(b) and can be used on AIP-funded projects).

Draft Advisory Circular 150/5050-4A, Community Involvement in Airport Planning (Oct. 7, 2016) (deadline for comments extended to Feb. 8, 2017).

Standard Operating Procedure 9.00, FAA Aeronautical Study, Coordination and Evaluation (Sept. 1, 2016).

Draft FAA Order 5500.1B, Passenger Facility Charge (Aug. 5, 2016) (withdrawn).

Advisory Circular 150/5200-30D, Airport Field Condition Assessments and Winter Operations Safety (July 29, 2016), and Draft Change 1 (Dec. 30, 2016).

Final Rule, Extension of Requirement for Helicopters to Use the New York North Shore Helicopter Route, 81 Fed. Reg. 48323 (July 25, 2016).

Supplemental Notice of Proposed Rulemaking, Safety Management System for Certificated Airports, 81 Fed. Reg. 45872 (July 14, 2016) (comments were due Sept. 12, 2016).

Notice of Final Policy, Non-Aeronautical Use of Airport Hangars, 81 Fed. Reg. 38906 (June 15, 2016).

Notice of Policy, Evaluating Disputed Changes of Sponsorhip at Federally Obligated Airports, 81 Fed. Reg. 36144 (June 6, 2016).

Extension to Order, Operating Limitations at New York Laguardia Airport, 81 Fed. Reg. 33126 (May 25, 2016).

Extension to Order, Operating Limitations at John F. Kennedy International Airport, 81 Fed. Reg. 32636 (May 25, 2016).

Press Release, City of Cleveland Agrees to Pay $200,000 and Enhance Compliance Systems (May 17, 2016).

Withdrawal of Notice of Proposed Rulemaking, Slot Management and Transparency for LaGuardia Airport, John F. Kennedy International Airport, and Newark Liberty International Airport, 81 Fed. Reg. 30218 (May 16, 2016) (withdrawing Jan. 8, 2015 Notice of Proposed Rulemaking that would have imposed longer-term limits on scheduled and unscheduled operations at subject airports and established a secondary market for slots).

Draft Advisory Circular No. 150/5360-14A, Access to Airport by Individuals with Disabilities (May 6, 2016); see also Opportunity to Comment on the Draft Advisory Circular, 81 Fed. Reg. 27489 (May 6, 2016) (setting comment deadline at June 6, 2016, though comments received after that date may be considered).

Notice of Proposed Policy Amendment and Request for Comments, Passenger Facility Charge (PFC) Program: Eligibility of Ground Access Projects Meeting Certain Criteria, 81 Fed. Reg. 26611 (May 3, 2016).

Compliance Guidance Letter, Interim Procedures for Review of Restrictions on Banner Towing, Powered Parachute, Gliders, Light Sport Aircraft, Parachute Operations, and Ultralights at Federally Obligated Airports (Apr. 25, 2016).

Program Guidance Letter No. 16-01, Wildlife Hazard Site Visits & Associated Follow-up Actions (Apr. 12, 2016).

Notice of Intent, Nondiscrimination on the Basis of Disability in Air Travel; Establishment of a Negotiated Rulemaking Committee, 81 Fed. Reg. 20265 (Apr. 7, 2016).

Change of Newark Liberty International Airport (EWR) Designation, 81 Fed. Reg. 19861 (Apr. 6, 2016) (designating EWR as a Level 2, schedule-facilitated airport effective Oct. 30, 2016).

National Part 139 CertAlert No. 16-01, Operational Safety During Snow Removal Activities (Apr. 1, 2016).

Notice of Final Policy, Guidance on the Procedures and Process to Petition the Secretary Under the Airport and Airway Improvement Act, 81 Fed. Reg. 17756 (Mar. 30, 2016).

Advisory Circular No. 150/5100-20, Guidance on the Extraction of Oil and Gas at Federally Obligated Airports (Mar. 23, 2016).

Final Policy, Petition of the Aircraft Owner and Pilots Association (AOPA) To Amend FAA Policy Concerning Flying Club Operations at Federally Obligated Airports, 81 Fed. Reg. 13719 (Mar. 15, 2016).

Order 8000.369B, Safety Management System (Mar. 18, 2016).

Order 8260.3C, United States Standard for Terminal Instrument Procedures (Mar. 14, 2016).

Required Contract Provisions for Airport Improvement Program and for Obligated Sponsors (eff. Jan. 29, 2016).

Notice of Proposed Rulemaking, Stage 5 Airplane Noise Standards, 81 Fed. Reg. 1923 (Jan. 14, 2016).

Standard Operating Procedure 8.00, Runway Safety Area Determination (Jan. 1, 2016).

Advisory Circular No. 70/7460-1L, Obstruction Marking and Lighting (eff. Dec. 4, 2015).

Reports, Studies, and Articles

U.S. Department of Transportation

Office of the Inspector General, Audit Announcement – Review of FAA’s Runway Safety Initiatives (Dec. 8, 2016).

Office of the Inspector General, Audit Report: Total Costs, Schedules, and Benefits of FAA’s NextGen Transformational Programs Remain Uncertain (Nov. 10, 2016).

Office of the Inspector General, Audit Report: FAA Reforms Have Not Achieved Expected Cost, Efficiency, and Modernization Outcomes (Jan. 15, 2016).

U.S. Government Accountability Office

Air Traffic Control: Experts’ and Stakeholders’ Views on Key Issues to Consider in a Potential Restructuring, GAO-17-131 (Oct. 2016).

Federal Aviation Administration: Preliminary Observations of Potential Air Traffic Control Restructuring Transition Issues, GAO-16-386R (Feb. 10, 2016).

Transportation Security: Status of GAO Recommendation on TSA’s Security-Related Technology Acquisitions, GAO-16-176 (Feb. 2016).

Transportation Research Board, Airport Cooperative Research Program

Legal Research Digests

Legal Research Digest 30: Contract Risk Management for Airport Agreements (Nov. 2016).

Legal Research Digest 28: Operational and Legal Issues with Fuel Farms (June 2016).

Legal Research Digest 27: The Fourth Amendment and Airports (Apr. 2016).

Reports

Report 164: Exhaust Emissions from In-Use General Aviation Aircraft (Nov. 2016).

Report 165: Tracking Alternative Jet Fuel (Nov. 2016).

Report 163: Guidebook for Preparing and Using Airport Design Day Flight Schedules (Nov. 2016).

Report 161: Guidelines for Improving Airport Services for International Customers (Oct. 2016).

Report 162: Guidebook for Assessing Airport Lead Impacts (Oct. 2016).

Report 159: Pavement Maintenance Guidelines for General Aviation Airport Management (Sept. 2016).

Report 160: Addressing Significant Weather Impacts on Airports: Quick Start Guide and Toolkit (Sept. 2016).

Report 158: Deriving Benefits from Alternative Aircraft-Taxi Systems (Aug. 2016).

Report 157: Improving the Airport Customer Experience (July 2016).

Report 156: Guidebook for Managing Compliance with Federal Regulations: An Integrated Approach (May 2016).

Report 154: Water Efficiency Management Strategies for Airports (May 2016).

Report 152: Evaluation Methods for Determining Interior Noise Levels Used in Airport Sound Insulations Programs (Mar. 2016).

Report 153: Guidebook for IROPS Stakeholder Communication & Coordination (Mar. 2016).

Report 151: Developing a Business Case for Renewable Energy at Airports (Apr. 2015).

Report 148: LED Airfield Lighting System Operation and Maintenance (Dec. 2015).

Report 149: Improving Ground Support Equipment Operational Data for Airport Emissions Modeling (Dec. 2015).

Synthesis Reports

Synthesis 78: Continuity of Operations Planning for Small Airports (Oct. 2016).

Synthesis 77: Airport Sustainability Practices (Sept. 2016).

Synthesis 76: Helicopter Noise Information for Airports and Communities (Aug. 2016).

Synthesis 75: Airport Advisories at Non-Towered Airports (Aug. 2016).

Synthesis 73: Emergency Communications Planning for Airports (July 2016).

Synthesis 72: Tabletop and Full-Scale Emergency Exercises for General Aviation, Non-Hub, and Small Hub Airports (July 2016).

Synthesis 74: Combining Mixed-Use Flight Operations Safely at Airports (June 2016).

Synthesis 71: Airport Safety Risk Management Panel Activities and Outcomes (May 2016).

Synthesis 70: Building Information Modeling for Airports (May 2016).

Synthesis 69: Airport Sustainability Practices—Drivers and Outcomes for Small Commercial and General Aviation Airports (Apr. 2016).

Web-Only Documents

Web-Only Document 29: Compendium of State and Federal Laws Affecting the Possession of Firearms at Airports (Aug. 2016).

Web-Only Document 27: Methodology to Develop the Airport Terminal Building Energy Use Intensity (ATB-EUI) Benchmarking Tool (Apr. 2016).

Web-Only Document 26: Methodology to Improve AEDT Quantification of Aircraft Taxi/Idle Emissions (Mar. 2016).

General Articles

E. Dourado and R. Russell, Airport Noise NIMBYism: An Empirical Investigation (Oct. 2016).

Unmanned Aircraft Systems

Decided Cases

Huerta v. Haughwout, No. 3:16-cv-358, 2016 U.S. Dist. LEXIS 92866 (D. Conn. July 18, 2016) (affirming FAA’s authority to issue administrative subpoenas against UAS operator who attached a flamethrower and handgun to his UAS and posted videos to YouTube).

Elec. Privacy Info. Ctr. v. FAA, 821 F.3d 39 (D.C. Cir. 2016) (dismissing a premature challenge to FAA’s decision not to promulgate privacy-specific UAS regulations).

Pending Cases

Elec. Privacy Info. Ctr. v. FAA, Case No. 16-1297 (D.C. Cir. petition for review filed Aug. 22, 2016) (challenging FAA’s decision not to promulgate privacy-specific UAS regulations).

Taylor v. Huerta, No. 15-1495 (D.C. Cir., opening brief filed June 14, 2016) (petition for review of various FAA rules and regulations related to hobbyist use of drones as violating the Administrative Procedure Act and other federal statutes).

Boggs v. Merideth, No. 3:16-cv-00006-DJH (W.D. Ken. filed Jan. 4, 2016) (complaint alleging the defendant shot down plaintiff’s unmanned aircraft while over defendant’s property).

FAA Rules, Orders, and Guidance

News & Updates: FAA Issues Part 107 Waivers, Airspace Authorizations (Oct. 25, 2016).

Law Enforcement Guidance for Suspected Unauthorized UAS Operations (Aug. 11, 2016).

Final Rule, Operation and Certification of Small Unmanned Aircraft Systems, 81 Fed. Reg. 42064 (June 28, 2016).

Advisory Circular 107-2, Small Unmanned Aircraft Systems (June 21, 2016).

Legal Interpretation Memorandum, Educational Use of Unmanned Aircraft Systems (UAS) (May 4, 2016).

Notice of Availability of Part 48 Registration System for FAA Exemption Holders, Registration of Small Unmanned Aircraft Systems Operated Under Exemptions Issued by the FAA, 81 Fed. Reg. 23544 (Apr. 21, 2016).

Reports, Studies, and Articles

United States Department of Transportation, Office of Inspector General, Audit Report: FAA Lacks A Risk-Based Oversight Process for Civil Unmanned Aircraft Systems (Dec. 1, 2016).

The White House Office of Science and Technology Policy, Fact Sheet: New Commitments to Accelerate the Safe Integration of Unmanned Aircraft Systems (Aug. 2, 2016).

Anastasia Telesetsky, Navigating the Legal Landscape for Environmental Monitoring by Unmanned Aerial Vehicles, 7 Geo. Wash. J. Energy & Envtl. L. 140 (Spring 2016).

Press Release, FAA Administrator Makes Two Major Announcements (last modified July 1, 2016) (announcing formation of drone advisory committee and publication of educational use interpretation memorandum).

Micro Unmanned Aircraft Systems Aviation Rulemaking Committee, Recommendations and Final Report (Apr. 1, 2016).

Troy A. Rule, Drone Zoning, 96 N. C. L. Rev. 133 (2016).

B. Jansen, State drone laws could clash with federal drone policy, USA Today (Mar. 13, 2016).

FAA Publishes SNPRM Related to SMS

8 minute read

I.    Background

Safety Management Systems

The Federal Aviation Administration (FAA) defines a safety management system (SMS) as a “system to assure the safe operation of aircraft through effective management of safety risk…designed to continuously improve safety by identifying hazards, collecting and analyzing data and continuously assessing safety risks.”1 SMS has four main elements: safety policy, safety risk management, safety assurance, and safety promotion.

The FAA is pursuing several SMS initiatives simultaneously as part of an international effort to implement SMS throughout the aviation industry. The FAA has said it will implement SMS for all aviation components that it oversees or regulates: airports, air carriers, and air traffic. This discussion paper focuses narrowly on FAA’s SMS initiative for airports.

On October 7, 2010, the FAA published a Notice of Proposed Rulemaking (NPRM) to amend FAR Part 139 to add the following requirement: “Each certificate holder, or applicant for an Airport Operating Certificate, must develop and maintain an Airport Safety Management System that is approved by the Administrator.”2

On July 14, 2016, the FAA published a Supplemental Notice of Proposed Rulemaking (SNPRM) that modifies the NPRM and addresses many, but not all, of the comments submitted in response to the NPRM. The major changes from the NPRM to the SNPRM, as well as a summary of potential issues with the SNPRM, is included in sections II and III.

The deadline to submit comments to the SNPRM was September 12, 2016.3

II.    Major Changes from the NPRM to the SNPRM

  • Applicability: Under the SNPRM, SMS applicability requirements would apply only to about half of all Part 139 commercial airports. The SMS requirements would apply to 268 airports, as opposed to all 544 Part 139 airports that would have been covered under the NPRM. The following categories of certificated airports would be required to implement SMS under the SNPRM:

    (1) Airports classified as a small, medium, or large hub airport in the National Plan of Integrated Airport Systems (NPIAS);

    (2) Airports identified by U.S. Customs and Border Protection (CBP) as a port of entry, designated international airport, landing rights airport, or user fee airport (collectively referred to throughout the SNPRM as “international airports”); or

    (3) Airports that have more than 100,000 total annual operations (according to best available data).4 The SNPRM uses 2012 data but there are few changes in this list since 2012.
     

  • Training: The SNPRM revises the training approach from the NPRM, which originally proposed an SMS training requirement for all employees and tenants with access to the movement and non-movement areas of the airport. In contrast, the SNPRM proposes a two-pronged approach to the training requirement for all employees and tenants with access to the movement and non-movement areas of the airport.5 The first prong requires SMS training specific to an individual’s role and responsibility in implementation and maintenance of the SMS.6 The second prong requires hazard awareness and reporting awareness orientation for all other individuals with access to the movement and non-movement areas.7

    In addition, unlike the NPRM, the SNPRM includes a requirement for recurrent training every other year and also would require the update of publications for the hazard awareness orientation requirement on the same schedule.8 The FAA believes this revision will limit the pool of employees that must be trained to approximately 3 to 10 people per airport.

    Airports should consider the following issues concerning the SNPRM’s new training requirements:

  1. Is the FAA’s assertion that between 3 and 10 employees per airport will need training an accurate estimate?
  2. Will the SNPRM training requirements be cumbersome, time consuming, and/or excessively costly?
  3. What types of individuals, and how many, would be affected by an obligation to train certain individuals with access to the movement and non-movement areas?
  4. How would the airport develop and administer a training program?
  5. What will be the administrative and recordkeeping implications of the SMS training program?
  • Data Protection: The SNPRM requires an airport sponsor to establish a confidential hazard reporting system and encourages hazard reporting by all persons accessing the movement and non-movement area.9
  • Implementation: The SNPRM extends the timeline for submission of an implementation plan to within 12 months of the effective date of a final rule and submission of the SMS manual and/or Airport Certification Manual update to within 24 months of the effective date of the final rule.10 This extends the one-year timeline established in the NPRM. The FAA believes this time extension will help airport sponsors in their implementation process.

    The SNPRM did not address commenters’ data protection concerns in the NPRM.  Airports should consider:

  1. Whether and how the airport will work with state and local legislators to provide additional protection from data and disclosure.
  2. Whether to submit additional comments to the SNPRM regarding the scope of data disclosure and its potential chilling effect on voluntary reporting by private entities.
  • Accountable Executive: The SNPRM provides for slight changes in the definition of an “accountable executive.” Under the SNPRM, “accountable executive” now means:

    “an individual designated by the certificate holder to act on its behalf for the implementation and maintenance of the Airport Safety Management System. The Accountable Executive has control of the certificate holder’s human and financial resources for operations conducted under the Airport’s Operating Certificate. The Accountable Executive has ultimate responsibility to the FAA, on behalf of the certificate holder, for the safety performance of operations conducted under the holder’s Airport Operating Certificate.”11

III.    Summary of Potential Issues with the SNPRM

  • Data Protection: A number of comments on the NPRM addressed issues of data protection, including claims that persons not employed by an airport sponsor would be reluctant to voluntarily share information or report hazards for fear of litigation or public perception if the information was released through state or local sunshine laws.12

    In response, the FAA reiterated that 49 U.S.C. § 44735 contemplates protection of SMS data that is voluntarily submitted to the FAA but such protection is not afforded to SMS information that must be submitted to the FAA.13  For these reasons, the FAA is not proposing data reporting requirements for safety-related data created under an SMS and it believes there should be no implications under FOIA for such safety-related data.14

    The SNPRM was not revised to address the public disclosure concerns submitted in comments to the NPRM. Airport sponsors will have to work with state and local legislators to provide additional protection from data disclosure.15
     

  • Interoperability: The FAA received a number of comments on the NPRM regarding interoperability and how the various SMS efforts and requirements will work together.16 In response to these comments, the FAA proposes to revise the definition for “hazard” and “risk” to harmonize with the Part 121 (air carrier) SMS.17 The SNPRM, however, does not do much to enhance the interoperability of the various SMS efforts although the FAA asserts that it continues to explore efforts to enhance interoperability and states that it is open to commenters’ suggestions.18
     
  • Non-movement Area: The FAA received a number of comments criticizing the NPRM’s proposal that SMS apply to the non-movement area. Commenters questioned the FAA’s definition of “non-movement area,” suggesting that the definition could lead to confusion.19 Commenters also made various recommendations about the scope of the definition.20 The FAA concluded, however, that the proposed definition is “consistent with existing guidance on distinguishing airport areas based on whether aircraft are subject to air traffic control.”21 The FAA also determined that the “air operations area” definition in 14 C.F.R. § 153.3 should not replace the proposed non-movement area definition because the term is associated with security-related issues, rather than operational safety issues.22

    In addition, the FAA received over twenty-five comments regarding the application of SMS in the non-movement area.23 The FAA disagreed with these comments because aircraft and airside personnel routinely flow between the two areas.24 As a result, like the NPRM, the SNPRM applies SMS to both movement and non-movement areas.
     

  • Accountable Executive: Under the SNPRM, each airport sponsor must identify an accountable executive who will have control of the human and financial resources for operations conducted under the Airport’s Operating Certificate and has ultimate responsibility to the FAA for the safety performance of operations conducted under the Airport Operating Certificate. The FAA expects in most instances that the airport director would be designated the accountable executive.

    Airports should consider the following issues concerning the requirement to designate an accountable executive:

  1. Who would assume the role of the airport’s accountable executive under the revised definition of the SNPRM?
  2. Would the accountable executive have the time and ability to fulfill the obligations of the position, in addition to other existing responsibilities?
  3. Would changes in delegations and authorities to the accountable executive be necessary to ensure that the individual has the “ultimate responsibility” required under the SNPRM?
  4. Would the prospective accountable executive need additional training to fulfill the obligations to implement SMS?
  5. Would the accountable executive need additional delegation of authority from the local elected body?
  6. Would the airport have to amend the airport organizational chart, position descriptions, internal procedures, manuals, or other internal documents to account for these new responsibilities and reporting obligations, including providing “whistle-blower” protection for employer reporting hazards?

IV.    Conclusion

The FAA has modified the proposal set forth in the NPRM in an effort to address some, but not all, of the concerns raised by airports. In conclusion, the major changes in the SNPRM modify the NPRM by:

  • Significantly narrowing the SMS requirements to roughly half of all Part 139 certificated airports;
  • Establishing a new two-pronged approach to the training requirement for all employees and tenants with access to the movement and non-movement areas of an airport;
  • Extending the timeline for which airport sponsors will be required to develop and implement an SMS within two years of the effective date of the final rule; and
  • Slightly revising the definition of an accountable executive that allows airport directors to assume the role of an accountable executive.

Throughout the SNPRM, the FAA requests input and comments from interested parties who may be impacted by the proposed changes in the SNPRM. Airport sponsors and other interested parties should take advantage of this opportunity to provide input and, where warranted, request additional information or explanation from the FAA if previous comments or concerns were not adequately addressed.

No participant in the aviation industry ever wants to oppose reasonable safety efforts. Nevertheless, the FAA’s SMS initiatives have the potential to pose considerable new administrative, recordkeeping, and oversight obligations on certain Part 139 airports. Airports need to consider how to prepare for these possible new obligations and to identify funding and administrative structures in advance.

Although the precise SMS requirements may well change when the FAA considers comments on its proposed rule, it is almost certain that some new SMS requirements will be imposed.

In preparing comments, remember to comment on both the changes in the SNPRM and the original NPRM. Airports should consider the following issues if they are planning to submit comment on the SNPRM and airport SMS generally:

  1. How does the narrowed scope of applicability in the SNPRM affect the airport sponsor?
  2. Has the narrowed scope gone far enough?
  3. Is the airport sponsor comfortable with the data protection provisions outlined in the SNPRM and with communicating with state and local legislators to provide additional protection from data disclosure?
  4. Do the revised timelines proposed in the SNPRM provide an adequate amount of time to develop and implement an SMS
  5. What activities not currently covered in the Airport Certification Manual might be included in the SMS Manual?
  6. What areas of the airport might be included in the SMS Manual and what level of access and operational control does the airport exercise over each such area?
  7. Is it practical to implement all components of SMS immediately and simultaneously? If not, consider commenting to the FAA on a phase-in schedule that might be practical.
  8. Can the airport’s existing permitting and security badging policies and procedures be changed to impose SMS responsibilities on airport tenants and users, especially in non-movement areas?
  9. What changes in primary regulatory documents (e.g., Rules and Regulations, Minimum Standards) and airport agreements (e.g., leases, permits) would be necessary to implement SMS?
  10. What changes in policies, procedures, and regulatory documents would be needed to ensure that airport tenants and users implement mitigation measures identified in the safety risk management process, in addition to existing prescriptive requirements in, for example, Airport Rules and Regulations, Minimum Standards, leases, and permits?

This discussion paper is not intended to provide legal advice but is provided as information as a courtesy to our clients and friends. Please contact your attorney for legal advice.

If you have any questions or would like to learn more about the topics addressed in this discussion paper, please contact Peter Kirsch at pkirsch@kaplankirsch.com or at 303.825.7000.

1 FAA, Draft Advisory Circular 150/5200-37A, 1 (June 21, 2016) (citing the International Civil Aviation Organization, Safety Management Manual, 6.5.3 ICAO Doc. 9859-AN/4744 (3rd ed. 2013)).
2 FAA, Supplemental Notice of Proposed Rulemaking, Safety Management System for Certificated Airports, 81 Fed. Reg. 45872 (July 14, 2016).
3 Id. at 45872.
4 Id. at 45875.
5 Id.
6 Id. at 45876.
7 Id.
8 Id.
9 Id. at 45884.
10 Id.
11 Id. at 45907.
12 Id.
13 Id.
14 Id.
15 Id. at 45883.
16 Id. at 45887.
17 Id. at 45888.
18 Id.
19 Id. at 45881.
20 Id.
21 Id.
22 Id.
23 Id.
24 Id. at 45882.

A PDF of this discussion paper is available.