On Friday, December 3, 2021, the FAA published updates to several chapters of its most comprehensive guidance document for obligated airport sponsors: Order 5190.6B, Airport Compliance Manual (Sept. 2009) (the Manual).  The complete revised document, styled as “Change 1 to Order 5190.6B,” is available here. 

Specifically, Change 1 revises these chapters of the Manual:

• Chapter 1, Scope and Authority
• Chapter 9, Unjust Discrimination Between Aeronautical Users
• Chapter 10, Reasonable Commercial Minimum Standards
• Chapter 11, Self-Service
• Chapter 23, Reversions of Airport Property

While the FAA stated that “most of the changes are editorial,” it acknowledged that some revisions are intended to reflect substantive policy changes from 2009 to the present.  This article summarizes these and other revisions that Change 1 makes to the Manual.  Airport sponsors should take care to review these changes closely, as they reflect FAA policy and could potentially affect many areas of a sponsor’s airport management and operations.

Below is a brief summary of the revisions to each of the five Manual chapters reflected in Change 1.

Chapter 1 – Scope and Authority

Discusses the Manual’s purpose, the history of the FAA, and the nature of the federal airport obligations and the FAA’s Airport Compliance Program.

Most of the changes to this chapter are editorial, but several are significant.  Change 1 lays the groundwork for a potentially significant future revision by adding a new paragraph 1.11, which concerns Section 163 of the 2018 FAA Reauthorization Act.  The new paragraph merely states that Section 163 “narrowed the scope of the FAA authority over airport land uses.”  However, the introduction to Change 1 explains that “Section 163(a) will be more fully discussed in a future update” to the Manual, suggesting that a coming revision will build out paragraph 1.11.

Change 1 also qualifies the statement in the Manual’s previous version that a sponsor “must prepare a benefit-cost analysis” to receive Airport Improvement Program (AIP) funding for airport capacity development projects.  The Manual’s new version provides that a sponsor must do so “in certain cases,” without further clarification (¶ 1.7).

Change 1 notes that Congress occasionally establishes special-purpose airport funding programs in addition to AIP (citing the 2009 American Recovery and Reinvestment Act (ARRA) and the CARES Act), and that such programs will carry varying grant obligations (¶ 1.9(a)).  The revision also adds that 49 U.S.C. § 47107 is not the only statutory source of federal grant assurances and sponsor requirements (¶ 1.9(a)).  And the revision replaces the claim that “there is no obligation for the FAA to release” a sponsor from a federal obligation with the observation that “[t]he FAA exercises its discretion when releasing a sponsor from any of its obligations” (¶ 1.10(e)).

Chapter 9 – Unjust Discrimination Between Aeronautical Users

Addresses issues concerning making an airport available to aeronautical users on reasonable terms and without unjust discrimination. 

Most significantly, the new guidance allows a sponsor to enter into a management agreement with a third party for federally funded apron, and, in limited circumstances, permits the lease of such space (¶ 9.7(d)).  But the revision makes clear that federally funded apron and other public-use areas should be made available for public use on reasonable and not unjustly discriminatory terms.

Change 1 also adds that it is the responsibility of FAA airports district offices and regional airports divisions to advise sponsors “in accordance with this guidance,” reflecting the FAA’s continued interpretation of the Manual as a semi-regulatory document, rather than mere internal guidance.

The revised chapter replaces a discussion of complaints about airport rates and charges with one about air carrier incentives programs (¶ 9.2(e)).  Change 1 also modifies paragraph 9.4 to more strongly state that sponsors “should” (rather than are “encouraged to”) include a subordination clause in their contracts.  And Change 1 includes additional examples to illustrate various concepts, such as permissibly different rates for similar users (¶ 9.5(c)), differences in value of tenant facilities and services (¶ 9.5(d)), and escalation provisions (¶ 9.5(e)).

Significantly, Change 1 revises the previous version’s blanket statement that FBOs making the same or similar uses of airport facilities should be charged the same rates; the revision qualifies that statement with the phrase “absent some other distinguishing characteristic” and thus brings the statement in line with FAA guidance.  The revision also cites unattainable insurance requirements as an example of an unreasonable minimum standard (¶ 9.6(d)).  And the revision observes that where an airport does not have an FBO, an incentive during a startup period may be reasonable (¶ 9.6(e)); the prior provision only applied to “new airports.”  In addition, Change 1 clarifies the sponsor’s rights to exclusively provide some or all aeronautical services (¶ 9.6(g)).

Finally, Change 1 clarifies that an airport sponsor may refuse to lease space where the sponsor has a “reasonable and not unjustly discriminatory reason” for such refusal (¶ 9.7(a)), but that if neither the sponsor nor an FBO at the airport can provide adequate aeronautical services, a user may not be denied the opportunity to do so on reasonable terms at its own expense (¶ 9.7(b)).

Chapter 10 – Reasonable Commercial Minimum Standards

Concerns a sponsor’s authority to set commercial minimum standards and airport regulations.  Change 1 makes several substantive revisions to the chapter.  Paragraph 10.5(f) now clarifies that Specialized Aviation Service Operations (SASOs) should only be required to follow those airport minimum standards that are reasonable and relevant to them, rather than having to follow, “without adequate justification,” all minimum standards that pertain to FBOs.  That paragraph also now states that “[s]ponsors are not required to permit a SASO for fuel sales alone.”  While not prohibiting a sponsor from having a SASO that only provides fuel, the change indicates that sponsors need not allow such operations.

A new paragraph 10.5(g), Independent Operators, states that a sponsor “should” require persons or entities that provide an aeronautical service on the airport without an airport lease to obtain a permit or license from, and pay a fee to, the airport for their activities.  

Perhaps most significantly, Change 1 adds paragraph 10.7, Illegal Air Charters, which asks sponsors to notify the FAA of suspected illegal air-charter operations but not to investigate the operations themselves.  The paragraph also outlines certain provisions that sponsors have included in airport leases and licenses to prevent illegal commercial aeronautical activities.

Sponsors should note that the FAA has added examples throughout the chapter that are sometimes very specific and may therefore implicate a sponsor’s particular concerns.  Nonetheless, the examples are consistent with how the FAA has viewed matters in the past.

Chapter 11 – Self-Service

Concerns airport sponsors’ obligation to afford aeronautical users a reasonable opportunity to perform self-service on their own aircraft.  The updates to this chapter are largely editorial; however, several more-substantive items are notable.

Change 1 adds a more robust description of the activities that are considered self-service, which include tying down, adjusting, refueling, cleaning, performing repair and preventative maintenance, and otherwise taking care of one’s own aircraft, provided that the aircraft operator or its employees perform these tasks (¶ 11.2).  Change 1 specifically notes the provision of alternative approved fuels, such as ethanol-free premium automotive gasoline, as within the scope of self-service.  Change 1 also adds new references to 14 C.F.R. Part 43 and Advisory Circular 43-12A, Preventive Maintenance, as defining the scope of permissible self-service maintenance activities.

The Manual previously established a bright-line rule, reflected in the FAA’s application of AIP grant assurances, prohibiting aircraft operators from contracting out self-service activities to third parties—that is, the Manual’s previous version required that self-service activities be conducted by the operator of the aircraft or bona fide employees of such operator.  However, Change 1 indicates this is only “generally” the case and instructs sponsors to “request clarifying information to confirm that sufficient interest in and control over the aircraft is maintained [and] the aircraft operator retains sufficient control over third-party contracted employees for the purposes of self-servicing” (¶ 11.4).  Change 1 indicates, “FAA may, upon request, assist the airport sponsor in evaluating sufficient control for the purposes of evaluating self-servicing by a contracted third party.”

Change 1 may also be read to limit the scope of permissible sponsor-imposed regulations concerning self-service.  Previously, the Manual allowed sponsors to establish reasonable and not unjustly discriminatory rules restricting equipment, personnel, or practices that would be “unsafe, unsightly, detrimental to the public welfare, or that would affect the efficient use of airport facilities by others.”  However, Change 1 strikes “unsightly” from this list of interests (¶¶ 11.5(e) and 11.7).  It is not clear what FAA intended by this change.

Finally, Change 1 suggests self-service activities conducted by air carriers may present different issues than those applicable to general aviation that and guidance applicable to self-service operations by general aviation users may be inapplicable to air carriers’ self-service (¶ 11.11).

Chapter 23 – Reversions of Airport Property

Concerns the conditions and process for reversion of airport property back to the United States.  These updates appear largely editorial and intended to improve readability.  However, sponsors should note that, per Change 1, the FAA or another federal agency must now conduct environmental due diligence prior to acceptance of a reversion of obligated property back to the federal government (¶ 23.9).  In addition, Change 1 eliminates the requirement that the FAA “must” give grantees an opportunity to reconvey property to cure a default under the applicable deed—that former requirement has been changed to the strong suggestion that the FAA “should” allow a grantee such an opportunity (¶ 23.11).  In voluntary reconveyances, grantees may now provide title insurance in lieu of an attorney’s opinion regarding the validity of title (¶ 23.11(c)).  Finally, Change 1 adds a new Appendix Y to the Manual, which is a Sample Notice of Reversion of Property and Revestment of Title to the United States.

Kaplan Kirsch & Rockwell and the experts from C&S Companies have joined forces to develop Navigating Section 163: A Guide to Facilitating Non-aeronautical Development at Your Airport, providing airport sponsors and their potential development partners the tools needed to navigate the complex new statutory requirements and realize the potential benefits under Section 163.  

Section 163 of the FAA Reauthorization Act of 2018 has prompted significant changes to the world of airport land use. For several generations, virtually any construction on an airport required review and approval by the Federal Aviation Administration (FAA), which triggered environmental reviews under the National Environmental Policy Act (NEPA). Often, the time and cost associated with the NEPA process led to many missed airport development opportunities. 

Section 163 reverses the prior expectation that almost all airport development is subject to FAA review and approval. Under the new law, FAA’s authority to regulate on-airport land use is limited to only development that affects the airfield and aircraft operations or implicates federal funding.   

C&S Companies and Kaplan Kirsch & Rockwell designed a guide to help readers understand key issues and grasp the related regulatory implications for development on land owned and controlled by an airport. The Guide provides the unique opportunity to combine the legal expertise of Kaplan Kirsch & Rockwell and the land use experience of C&S to position airports for success. The Guide provides a roadmap for airport sponsors who want to minimize potential barriers to on-airport development.

The Guide is available to the public and can be downloaded at www.section163.com.  

Kaplan Kirsch & Rockwell is a national law firm with a practice focused on solving problems that involve environmental, land use, public lands, transportation, and infrastructure law. The Firm’s airports practice is the largest in the country dedicated airport law. It is characterized by a comprehensive, creative, and strategic approach that comes from a deep understanding of the airport industry and from experience at more than 100 airports—from the largest fortress hubs in the world to small general aviation airports. Learn more about Kaplan Kirsch & Rockwell at www.kaplankirsch.com.  

C&S Companies is a full-service planning, design, and construction firm headquartered in Syracuse, New York with 20 offices across the country and a diverse national aviation practice. The firm is a leader in aviation consulting and delivers industry-leading, cross-discipline solutions to airport partners of all sizes, including in the area of airport land use, development strategy and integrated planning. The firm also serves government, higher education, healthcare, industrial, private development, and other clients with all kinds of infrastructure planning, design, and construction projects. Learn more about C&S at www.cscos.com.  

Click image to download a copy of Navigating Section 163: A Guide to Facilitating Non-aeronautical Development at Your Airport.

Kaplan Kirsch & Rockwell attorneys published an article on PFAS litigation that will be of interest to clients nationwide that are assessing their PFAS liability and litigation options.  The article, published in the most recent issue of the American Bar Association’s Natural Resources & Environment magazine, describes PFAS litigation to date, including suits against primary manufacturers of PFAS and against secondary manufacturers of PFAS-containing products.  It considers the potential wave of PFAS lawsuits under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) if at least some PFAS compounds are designated as CERCLA hazardous substances, as is widely expected.  The authors analyze past lessons learned from litigation over other emerging contaminants, MTBE and perchlorate.  Finally, they provide advice to potential PFAS litigants – defendants and plaintiffs alike.

Read the full article here.

For more information contact Thomas Bloomfield, Samantha Caravello, Nicholas Clabbers, Sarah Judkins, or Sara Mogharabi. Law clerks Tom Callahan and Camille Sippel also contributed to the writing of this article.

The first six months of 2021 were a whirlwind of activity.  The change in administration and control of the Senate means a unified, Democratic federal government for the first time in ten years.  The new administration was tasked with rolling out the new COVID-19 vaccines and charting a course for economic recovery.  For airports, the increase in vaccinations and return to a semblance of normal life has been welcome, with a surge in overall passenger traffic, particularly to leisure destinations.  While passenger numbers have yet to return to 100% of pre-pandemic levels, it seems clear that recovery is underway.  That said, the effects of the pandemic will continue to reverberate, as airports work to resolve budget, staffing, and operational issues.

This Airport Law Digest includes a list of principal cases decided over the last year; new DOT and FAA rules, policies, and guidance; and reports, studies, and articles of interest to airport legal professionals.  We have attempted to provide links to publicly available documents, and most other documents are available via subscription services such as Westlaw or LexisNexis.  As airports continue to recover from the effects of the COVID-19 pandemic, we have provided a select subset of COVID-19 guidance materials published in 2020 at the end of this Digest.

We hope you find this Digest useful in your efforts to remain current in the always-evolving legal and regulatory framework that governs airports. If you have questions about any of the materials in this Digest, please contact editor Nicholas M. Clabbers or any other Kaplan Kirsch & Rockwell attorney who normally represents you.

READ MORE: 2021 MID-YEAR NEWS + HOT TOPICS

LITIGATION (In Reverse Chronological Order)

FEDERAL AND SELECT STATE COURT DECISIONS

FOIA. Jobe v. NTSB, No. 20-30033, 2021 U.S. App. LEXIS 18135 (5th Cir. June 17, 2021) (holding that that outside parties to an NTSB investigation are considered governmental consultants subject to FOIA and not exempt under the “intra-agency” communication privilege).

Ridesharing. Turo v. Sup. Ct. of San Francisco Cty., No. CGC-18-563803 (Cal. App. 1st June 16, 2021) (denying appeal of finding that Turo was a “rental car company” under California law)

Employment Discrimination. Peterkin v. Prospect Airport Servs., Civ. Act. No. 21-490, 2021 U.S. Dist. LEXIS 109612 (E.D. Pa. June 11, 2021) (dismissing various employment-related claims against airport proprietor where plaintiff was employee of ground service contractor and had not established that proprietor was a joint employer).

Metroplex/NextGen. Arapahoe Cty. Pub. Airport Auth., et al. v. FAA, No. 20-1075, 2021 U.S. App. LEXIS 17023 (D.C. Cir. June 8, 2021) (per curiam) (dismissing petitions for review of FAA’s Denver Metroplex plan, holding that petitioners had failed to provide evidence of standing to pursue the case and that standing was not self-evident on the face of the pleadings).

Takings. Boggs v. City of Cleveland, 2021 U.S. Dist. LEXIS 101308 (N.D. Ohio May 28, 2021) (dismissing § 1983 claims based on takings from aircraft overflights on statute of limitations grounds and holding that the action accrued upon opening of new runway, and finding that plaintiffs were not entitled to relief under the Uniform Relocation and Real Property Acquisition Act because that statute provides no private right of action).

Slots. Spirit Airlines, Inc. v. U.S. Dep’t of Transp., Case. No. 19-1248, 2021 U.S. App. LEXIS 15144 (D.C. Cir. May 21, 2021) (finding that FAA decision not to immediately allow new flights at Newark Liberty International Airport (EWR) following Southwest Airlines’ cessation of flights from EWR was arbitrary and capricious because it failed to assess the impact of that decision on competition at EWR and consider alternative means to alleviate congestion).

Drones. Elec. Privacy Info. Ctr. v. Drone Advisory Comm., 995 F.3d 993 (D.C. Cir. Apr. 30, 2021) (holding that privacy group was not entitled to certain records produced and maintained by subgroups of the FAA’s former Drone Advisory Committee because those subgroups did not report to or communicate directly with FAA).

Ridesharing. Mass. Port Auth. v. Turo, Inc., No. SJC-13012 (Sup. Jud. Ct. Mass. Apr. 21, 2021) (affirming preliminary injunction prohibiting operation of ridesharing service at Boston Logan Airport without a permit, finding that Turo was not immune from regulation under the Communications Decency Act and that the airport sponsor was likely to succeed in its claims that Turo was aiding and abetting trespassing).

Ridesharing. Turo Inc. v. City of Los Angeles, 847 Fed. Appx. 442 (9th Cir. Mar. 10, 2021) (reversing district court of preliminary injunction against ridesharing service at Los Angeles International Airport, finding that low level of activity from Turo as compared to overall traffic at LAX would not result in irreparable harm).

Hazards. Short v. United States, 847 Fed. Appx. 413, 2021 U.S. App. LEXIS 5637 (9th Cir. Feb. 25, 2021) (finding that for the purposes of liability under Federal Tort Claims Act, Forest Service was not mandated to close an airport on federal property or remove trees even if they constituted a “hazard” under FAA regulations, and the Forest Service appropriately mitigated risks by showing the trees in the FAA’s Airport Master Record).

Pre-emption. Bernstein v. Virgin Am., Inc., 990 F.3d 1157 (9th Cir. Feb. 23, 2021) (affirming district court’s decision that neither the Federal Aviation Act nor the Airline Deregulation Act preempts California state requirement for meal and rest breaks because they have no direct implications for safety).

PENDING CASES

Airport Access. Delux Pub. Charter, LLC v. Cty. of Orange, No. 8:20-cv-2344 (C.D. Cal. amended complaint filed June 17, 2021) (alleging de facto ban of JSX and JetSuiteX from John Wayne Airport in violation of Airline Deregulation Act and Airport Noise and Capacity Act, among other claims).

Environmental Review. Ctr. for Community Action & Envt’l Justice v. FAA, No. 20-70272 (9th Cir. argued Feb. 1, 2021) (petition for review of FAA approval of NEPA Finding of No Significant Impact associated with proposed air cargo facility at San Bernardino International Airport).

Metroplex/Next Gen.

City of Los Angeles v. Dickson, No. 19-71581 (9th Cir. argued June 11, 2021) (petition for review of FAA decisions setting flight procedures at Los Angeles International Airport).

City of Los Angeles v. FAA, No. 19-73164 (9th Cir. briefing concluded Apr. 26, 2021) (petition for review of FAA decision to allow flight tracks for departing aircraft at Hollywood Burbank Airport to shift following Metroplex implementation).

City of N. Miami Beach v. FAA, No. 20-14677A (11th Cir. amended pet. for review filed Dec. 28, 2020) (petition for review of FAA decision setting flight procedures at Miami International Airport).

ADMINISTRATIVE DECISIONS

​Skydiving. Mile-Hi Skydiving Ctr. v. City of Longmont, FAA Docket No. 16-19-03, Director’s Determination (Jan. 22, 2021) (finding no Grant Assurance violations where sponsor established a separate parachute drop zone and charged a per-square-foot nonexclusive access fee for the use of the drop zone) (appeal pending).

Access Restrictions. Forman v. Palm Beach Cty., FAA Docket No. 16-17-13, Final Agency Decision (Jan. 13, 2021) (affirming Director’s Determination finding County’s restriction on jet aircraft operations as not grandfathered under ANCA and an ongoing violation of Grant Assurance 22) (appeal pending).

Airport Revenue. United Airlines, Inc. v. Port Auth. of N.Y. & N.J., FAA Docket No. 16-14-13, Order (Jan. 11, 2021) (largely affirming Director’s Determination findings that Port Authority’s grandfathered status did not exempt it from all airport revenue use restrictions and that the Port Authority’s accounting practices were deficient and lacked transparency in violation of Grant Assurance 22).

Rates and Charges and Exclusive Rights. Star Marianas Air, Inc. v. Commonwealth Ports Auth., FAA Docket No. 16-18-01, Final Agency Decision (Jan. 10, 2021) (affirming Director’s Determination holding that sponsor’s rates and charges structure did not violate the Anti-Head Tax Act and Grant Assurance 1, and that complainant had failed to provide evidence of an exclusive right at the airport)

FEDERAL LEGISLATION

American Rescue Plan Act of 2021, Pub. L. No. 117-2 (Mar. 11, 2021).

FEDERAL RULES, ORDERS, AND GUIDANCE (In Reverse Chronological Order)

THE WHITE HOUSE

Memorandum for the Heads of Executive Departments and Agencies, Regulatory Freeze Pending Review (Jan. 20, 2021) (freezing further action on rules and regulations that had not yet been published in the Federal Register).

DEPARTMENT OF TRANSPORTATION AND FAA ORDERS, POLICIES, AND ADVISORY CIRCULARS

Draft Advisory Circular No. 150/5190-4B, Airport Compatible Land Use Planning (June 22, 2021) (comment period expires Aug. 6, 2021).

Frequently Asked Questions, Airport Rescue Grants (June 10, 2021) (guidance concerning grants to airports under American Rescue Plan Act).

Advisory Circular No. 150/5320-6G, Airport Pavement Design and Evaluation (June 7, 2021).

Policy, Review of Solar Energy System Projects on Federally-Obligated Airports, 86 Fed. Reg. 25,801 (May 11, 2021).

Notice, Funding Opportunity for Environmental Mitigation Pilot Program, 86 Fed. Reg. 25,060 (May 10, 2021).

Notice, Airport Investment Partnership Program: Application Procedures, 86 Fed. Reg. 20,586 (Apr. 20, 2021).

Frequently Asked Questions, Airport Coronavirus Response Grant Program (Apr. 9, 2021) (guidance concerning grants to airports under the Coronavirus Response and Relief Supplemental Appropriation Act).

Final Rule, Operation of Small Unmanned Aircraft Systems Over People, 86 Fed. Reg. 4314 (Jan. 15, 2021).

Final Rule, Remote Identification of Unmanned Aircraft, 86 Fed. Reg. 4390 (Jan. 15, 2021).

Request for Comments, Overview of FAA Aircraft Noise Policy and Research Efforts: Request for Input on Research Activities to Inform Aircraft Noise Policy, 86 Fed. Reg. 2722 (Jan. 13, 2021).

Final Rule, Special Flight Authorizations for Supersonic Aircraft, 86 Fed. Reg. 3782 (Jan. 15, 2021).

DEPARTMENT OF HOMELAND SECURITY

TSA Security Directive 1542-21-01, Security Measures – Face Mask Requirements (Jan. 31, 2021).

COUNCIL ON ENVIRONMENTAL QUALITY

Interim Final Rule and Request for Comments, Deadline for Agencies To Propose Updates to National Environmental Policy Act Procedures, 86 Fed. Reg. 34,154 (June 29, 2021) (extending period by two years for federal agencies to propose their own regulations to implement July 2020 CEQ final rule revising NEPA procedures).

ENVIRONMENTAL PROTECTION AGENCY

Advanced Notice of Proposed Rulemaking, Addressing PFOA and PFOS in the Environment: Potential Future Regulation Pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act and the Resource Conservation and Recovery Act (Jan. 14, 2021) (not published in Federal Register and under review pursuant to regulatory freeze order of January 20, 2021).

CENTER FOR DISEASE CONTROL AND PREVENTION

Update, Requirement for Face Masks on Public Transportation Conveyances and at Transportation Hubs (June 10, 2021) (announcing intent to formally modify mask mandate order to remove requirement for masks in outdoor spaces at airports).

Order, Requirement for Persons to Wear Masks While on Conveyances and at Transportation Hubs (eff. Feb. 1, 2021).

REPORTS, STUDIES, ARTICLES, AND OTHER PUBLICATIONS (In Reverse Chronological Order)

U.S. DEPARTMENT OF TRANSPORTATION

Office of Inspector General, Report No. ZA2021026, Gaps in Guidance, Training, and Oversight Impede FAA’s Ability To Comply With Buy American Laws (June 2, 2021).

Office of Inspector General, Report No. AV2021024, DOT Appropriately Relied on Unsubsidized Carriers in Accordance With Its Policy but Conducted Limited Oversight of the Essential Air Service Communities They Serve (May 19, 2021).

Office of Inspector General, Report No. AV2021023, NextGen Benefits Have Not Kept Pace With Initial Projections, but Opportunities Remain To Improve Future Modernization Efforts (Mar. 30, 2021).

FAA, Final Report, Analysis of the Neighborhood Environmental Survey (updated Feb. 2021).

Office of Inspector General, Report No. AV2021017, Gaps in FAA’s Oversight of the AIP State Block Grant Program Contribute to Adherence Issues and Increase Risks (Feb. 10, 2021).

U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Report No. GAO-21-354, Passengers with Disabilities: Airport Accessibility Barriers and Practices and DOT’s Oversight of Airlines’ Disability-Related Training (Apr. 2021).

Report No. GAO-21-412T, COVID-19 Pandemic: Preliminary Observations on Efforts toward and Factors Affecting the Aviation Industry’s Recovery (Mar. 2021).

Report No. GAO-21-165, Unmanned Aircraft Systems: FAA Could Strengthen Its Implementation of a Drone Management System by Improving Communication and Measuring Performance (Jan. 2021).

CONGRESSIONAL RESEARCH SERVICE

Report No. LSB10589, Legal Issues Related to Transportation Mask-Wearing Mandates (Apr. 12, 2021).

Report No. R43545, Airport Privatization: Issues and Options for Congress (Mar. 11, 2021).

Report No. R42781, Federal Civil Aviation Programs: In Brief (Jan. 22, 2021).

TRANSPORTATION RESEARCH BOARD, AIRPORT COOPERATIVE RESEARCH PROGRAM

Research Reports

Research Report 233: Airport Biometrics: A Primer (May 2021).

Research Report 232: Playbook for Cultivating Talent in the Airport Environment (May 2021).

Research Report 230: Enhancing Academic Programs to Prepare Future Airport Industry Professionals (Apr. 2021).

Research Report 229: Airport Collaborative Decision Making (ACDM) to Manage Adverse Conditions (Apr. 2021).

Research Report 228: Airport Microgrid Implementation Toolkit (Apr. 2021).

Research Report 227: Evaluating and Implementing Airport Privatization and Public-Private Partnerships (Apr. 2021).

Research Report 225: Rethinking Airport Parking Facilities to Protect and Enhance Non-Aeronautical Revenues (Mar. 2021).

Research Report 226: Planning and Design of Airport Terminal Restrooms and Ancillary Spaces (Jan. 2021).

Synthesis Reports

Synthesis 115: Practices in Airport Emergency Plans (Mar. 2021).

Legal Research Digests

Legal Research Digest 42: Legal Implications of Data Collection at Airports (June 2021).

Legal Research Digest 41: Legal Issues Relating to Airport Commercial Contracts (Feb. 2021).

SELECT COVID-19 MATERIALS

Coronavirus Response and Relief Supplemental Appropriation Act, 2021, Pub. L. 116-260 (Dec. 27, 2020) (including coronavirus stimulus and emergency relief to airports)

FAA, Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations (updated Dec. 2020).

FAA, COVID-19 Vaccine Transport Considerations for Airport Operators (Dec. 11, 2020).

FAA, CARES Act Airport Grants – Frequently Asked Questions (updated Dec. 3, 2020).

DOT, DHS, and HHS, Runway to Recovery: The United States Framework for Airlines and Airports to Mitigate the Public Health Risks of Coronavirus (July 2, 2020).

FAA, Considerations for State, Local, and Territorial COVID-19 Restrictions That Impact Air Transportation (Mar. 28, 2020).

Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pub. Law No. 116-136 (Mar. 27, 2020).

Click to download a PDF of the Semi-Annual Airport Law Digest: 2021 Mid-Year Update. 

Emerging Issues: Advanced Air Mobility

Over the past several months, the concept of Advanced Air Mobility (AAM) has increasingly captured the attention of the aviation industry, including private investors, state and local governments, airport operators, federal regulators, and Congress. 

AAM is an umbrella term encompassing new modes of transporting passengers and cargo by air, enabled by recent advances in aircraft technology such as electric vertical takeoff and landing (eVTOL) capability.  There are a number of proposed business cases for AAM, including transportation between busy urban areas and airports in lieu of congested roadways (often referred to as Urban Air Mobility or UAM), enhanced connectivity to rural or other remote areas, intraregional transportation between major cities, and just-in-time on-demand cargo and delivery.  In each business case, AAM promises to deliver a mode of transportation that is more environmentally conscious, both in terms of no- or low-emissions and reduced noise impacts, as well as less expensive than traditional forms of air transportation.  While many AAM concepts would eventually transition to fully autonomous operations, most contemplate single-pilot operations in the first several years of operation.  None of the next-generation aircraft intended for AAM has yet achieved certification in the United States; however, several companies are completing advanced stages of design and actively working with FAA to achieve this milestone within the next few years.  As this milestone nears, many companies are now focused on ensuring that the infrastructure necessary to support AAM is in place by the time operations are approved.

In addition to myriad technical and operational challenges arising from the development and ultimate integration of AAM into the National Airspace System, developing the infrastructure necessary to support AAM presents a host of complex regulatory challenges for state and local governments and airport operators.  Many proposed AAM business models contemplate the construction of new “vertiports” at off-airport locations or, even where located on-airport, from landside facilities such as parking or intermodal transfer facilities.  These operations raise important questions regarding appropriate design standards and methods of certifying vertiports that will support AAM operations, passenger screening and security, and the eligibility of AAM infrastructure (or components thereof) for funding under the Airport Improvement Program, among other matters.  Additionally, it will be increasingly important to define appropriate boundaries between federal and state/local authority with respect to the siting of take-off and landing facilities and regulation of low-altitude operations – still very much an open issue in the context of unmanned aerial systems.  Electric aircraft may also require changes in state laws; for example, some state prohibitions on the resale of public utilities raise questions as to how the owners of vertiport infrastructure may generate revenue in exchange for supplying eVTOL with their power and recharging requirements.  These and other issues will no doubt be the subject of substantial policymaking and legislation in the months and years to come, which we look forward to detailing in future issues of the Airport Law Digest.

In the interim, there has been very little guidance for state and local governments and airport operators considering the development of AAM infrastructure.  It is therefore prudent to carefully coordinate any requests with your local Airports District Office.  Additionally, airports should closely coordinate with state and regional planning agencies, many of which have started to plan for AAM in long-range transportation planning efforts, to ensure that AAM-related initiatives are complimentary to and do not conflict with traditional aviation modes. 

For more information about AAM, contact Steven Osit.

Industry Groups Look Towards Recovery and Protecting Against Next Crisis

Earlier this year, as airports worldwide were struggling with the financial and operational impacts of the pandemic, the American Association of Airport Executives established a program specifically designed to be a resource for airport sponsors as they planned for both handling the pandemic and recovering from its effects.  The Airport Consortium on Customer Trust (ACT) has coordinated the efforts of the nation’s leading airports and consultants to share innovative solutions as sponsors prepared for return of travelers.  Kaplan Kirsch & Rockwell is a member of this ad hoc group.

The recent report issued by ACT, Finance and Revenue Generating Innovations, provides a comprehensive resource for the latest thinking in financing options and new ways to generate revenue that are not inextricably tied to passenger enplanements.  The report concluded that airport sponsors find themselves at an inflection point where it is appropriate to reevaluate their dependence on legacy sources of revenue (e.g., airline rates and charges; in-terminal and passenger-related concessions).  The authors recommend that airports examine a broader scope of revenue approaches (and strategies for partnering with the private sector) to reduce the volatility of cash flow, to mitigate risks, and to better weather the next unanticipated crisis.  The report discusses the value in reassessing the relationship with concessionaires and seeking more diversified revenue that is not directly tied to passenger counts.  For lawyers, the report suggests reassessing the contractual arrangements for many airport users to better spread the risk for unanticipated crises.

The report is available for download at no charge from the AAAE website.  Kaplan Kirsch & Rockwell partners Dave Bannard and Peter Kirsch helped co-author the white paper.

Frequently Asked Questions: ARPA

The American Rescue Plan Act of 2021 (ARPA) provides for approximately $8 billion of grants to airports.  This third round of federal COVID relief funds is in addition to the money designated for airports under the CARES Act (~$10 billion) and CRRSAA (~$2 billion).  The FAA, which is tasked with administering all of these grant programs, recently released its written guidance expanding upon how the ARPA money will be distributed and conditioned.  While providing much-needed information related to this new and expansive program, the guidance raises issues that airports should carefully consider when applying for, administering, and using their grant funding. 

ARPA funds are available until and must be obligated by September 30, 2024.  Sponsors must apply for ARPA grants by November 30, 2021, and the FAA has indicated that it intends to expedite the award of these funds.  ARPA funds can be used for operational expenses incurred on or after January 20, 2020, and debt service payments due on or after March 11, 2021 (the date that ARPA was enacted).  If ARPA funds are spent on new airport development, the development-related costs must be associated with combating the spread of pathogens at the airport (i.e., reconfiguring a terminal for social distancing, replacing or upgrading ventilation systems, etc.).  The allocations for ARPA grants can be found here, with more general information also available on the FAA’s website.  Note that the ARPA grant agreement will include a new special condition that the airport sponsor must implement a policy requiring all persons to wear a mask, in accordance with the TSA SD and CDC guidelines, at all times while in all public areas of the airport, except to the extent exempted.  Failure to comply with this condition may result in suspension of payments or termination of a grant.

While much of the General Airport Rescue Grant conditions will look similar to airports who have received CARES and CRRSAA money, ARPA also provides separate funding to airports that must be used for concessions-related relief in the form of a separate Concessions Rent Relief Airport Rescue Grant.  The pool of concessions relief funding is $800 million, to be allocated to primary commercial service airports based on number of annual boardings.  As with CRRSAA’s concessions relief program, airports may provide relief from rent and minimum annual guarantee (MAG) obligations for eligible concessionaires, but there are several new and different features in ARPA’s program. 

Significantly, the eligible pool of concessionaires has changed:  in the newer ARPA grants, relief must be provided to eligible small concessions (i.e., an in-terminal concession that is either (1) a small business that has maximum gross receipts, averaged over the previous 3 fiscal years, of less than $56,420,000 or (2) a joint venture as defined in 49 CFR § 23.3) and eligible large concessions (i.e., an in-terminal concession that has maximum gross receipts, averaged over the previous 3 fiscal years, of more than $56,420,000), whereas under CRRSAA, relief was to be provided to on-airport car rental, on-airport parking, and in-terminal airport concessions (as defined in 49 CFR Part 23).  In practice, this means, for example, that some airports may have provided relief to on-airport rental car companies under CRRSAA that now may not be eligible for ARPA relief.  

Also notable is that, while airports could retain up to 2% of its funding allocation to cover the costs of administering the relief under CRRSAA, there is no such similar provision in ARPA –  meaning that airports must administer the funds at their own expense and distribute 100% of their allotted ARPA concessions rent relief funding. 

Requirements for allocating the concessions relief will otherwise look similar to CRRSAA in that airports must administer the relief based on proportionality according to rent paid by eligible concessions in the relevant baseline time period; must only provide relief to concessions that remain ready, able, and available to provide services; and must again obtain certifications from participating concessionaires that they have not received a second draw or assistance for a covered loan under section 7(a)(37) of the Small Business Act (15 U.S.C. 636(a)(37)) that has been applied toward rent or MAG costs.  The last requirement stems from the general principle that federal money may not be used for the same purposes or expenses that have already been covered by another federal program (e.g., CARES, CRRSAA, ARPA). 

For more information about ARPA or the new FAQ, contact Sarah Wilbanks.

FAA Welcomes New Associate Administrator for Airports

In early June, President Biden appointed Shannetta Griffin, P.E., as the new Associate Administrator for Airports.  An experienced airport professional, Ms. Griffin joins the FAA from the Columbus Regional Airport Authority, where she served as the Chief Commercial Officer.  Earlier in her career, Ms. Griffin also worked for the Indianapolis Airport Authority and the Hartsfield-Jackson International Airport, as well as CDM Smith.  With Ms. Griffin’s appointment, Acting Associate Administrator Winsome Lenfert returns to her former role as Deputy.

PFAS Bill Moves Forward, Future Uncertain

On June 23, 2021, the House Energy and Commerce Committee approved H.R. 2467, the PFAS Action Act.  This legislation requires the EPA to designate PFOA and PFOS as a hazardous substance under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) within one year and gives the EPA an additional five years to determine whether to designate all PFAS as a hazardous substance under CERCLA. Importantly, the legislation includes a specific airport liability exemption from CERCLA.  The future of this legislation – both in the full House and the Senate – is unclear.  Nonetheless, PFAS will continue to be an extremely important issue for airports moving forward.  For more information, please contact Thomas Bloomfield, Sara Mogharabi, or Nicholas Clabbers.

FAA Issues Draft Land Use Compatibility Guidance, Invites Comments

On June 22, 2021, the FAA released Draft Advisory Circular 150/5190-4B, Airport Compatible Land Use Planning.  For airport sponsors, the draft is primarily a consolidation and clarification of existing policy and guidance on obligations to maintain compatible land uses on and near the airport.  However, there is new material directed at other stakeholder that will also apply to airports, so sponsors should review the draft in detail.  FAA is accepting comments on the draft until August 6, 2021.  For more information or to discuss submitting comments, please contact Catherine van Heuven or Nicholas Clabbers.

During the 2021 legislative session, the Colorado General Assembly passed numerous bills related to climate and energy. The primary climate change bill, House Bill 21-1266, works toward implementing the state greenhouse gas (GHG) reduction targets established in 2019 under House Bill (HB) 19-1261, by providing sector caps for GHG emissions from the industrial and manufacturing sector and oil and gas industry. This bill was less ambitious than the original proposal, which would have provided sector caps on GHG emissions from transportation and buildings, as well. However, it does create important environmental justice programs designed to help the state meet its emission reduction targets in a just and equitable fashion, by providing processes to better engage and learn from disproportionately impacted communities and to address disproportionate pollution in these communities.

Although HB 21-1266 was the primary climate bill, the General Assembly also passed numerous bills related to reducing emissions from electricity generation and transmission, increasing the use of renewable energy, reducing emissions from natural gas used in buildings and for retail use, funding transportation efforts, and protecting utility consumers. 

Environmental Justice Disproportionate Impacted Community

HB21-1266  |  (Rep. Jackson, Rep. Weissman, Sen. Winter, Sen. Buckner)  |  Passed June 8, 2021, Awaiting Governor’s Signature

As it becomes clear that the impacts of climate change are being seen more severely in low-income and racially diverse communities, Colorado lawmakers have put forth a bill to meet state climate change goals in a just and equitable fashion. This law directs the Air Quality Control Commission (AQCC) to redouble efforts to engage with disproportionately impacted communities. The AQCC should increase the quantity of information sharing, particularly regarding adverse impacts from proposed AQCC actions, and the quality of the information by providing information in multiple languages, and in multiple mediums.

The bill also creates an Environmental Justice Task Force within the Department of Health and Environment to ensure that justice issues are considered in tandem with climate change issues going forward. The Task Force will be responsible for strategizing how to best incorporate environmental justice into the state’s climate change action with a report of recommendations due November 14, 2022.

Public Utilities Commission Modernize Electric Transmission Infrastructure

SB21-072  |  (Sen. Hansen, Sen. Coram, Rep. A. Valdez, Rep. Catlin  |  Passed June 3, 2021, Awaiting Governor’s Signature

Senate Bill (SB) 21-072 creates three key changes with regard to transmission and electricity markets in Colorado. First, the bill directs utilities with transmission assets to join an “organized wholesale market,” either a regional transmission organization or an independent system operator, by 2030, unless the Colorado Public Utilities Commission (PUC) determines that there is no viable market in place and that requiring the utility to join is not in the public interest. The bill will also allow utilities to claim for themselves a percentage of the customer savings that result from joining a market for the first five years. Second, the bill calls for the creation of the Colorado Energy Transmission Authority (CETA), an independent authority charged with identifying and procuring necessary transmission facilities in Colorado. CETA will be empowered to conduct competitive processes to select qualified transmission operators to finance, develop, and operate eligible facilities. Third, the bill changes the standards by which the PUC should grant investor-owned utilities’ applications for new transmission facilities that are proposed to help Colorado develop renewable energy and meet statewide climate targets.   

Define Pumped Hydroelectricity as Renewable Energy

HB21-1052  |  (Rep. McKean, Sen. Woodward)  |  Signed April 22, 2021

Under the state renewable energy standard statute, recycled energy is an eligible energy resource. Prior to the passing of this bill, pumped hydroelectric facilities were restricted from serving as a source of recycled energy under Colorado law. This bill removes this restriction and allows the definition of recycled energy to include any pumped hydroelectric facility under 15 megawatts that does not combust fossil fuel to pump water, is not located on a natural waterway, includes measures to prevent fish mortality in the facility, does not impact any decreed in-stream flow, and does not cause any violation of state water quality standards when operated.

Promote Innovative and Clean Energy Technologies

HB21-1324  |  (Rep. Pelton, Rep. Roberts, Sen. Rodriguez, Sen. Hisey)  |  Passed June 8, 2021, Awaiting Governor’s Signature

Under this bill, utility companies wishing to create or expand renewable energy production and storage initiatives may apply to the PUC for resources. Lawmakers believe that aiding in the creation of a market for zero-emission power is the best way to achieve Colorado’s long-term emission goals. The original version of the bill was amended to replace “low-emission” initiatives with “zero-emission” initiatives, signaling the legislature’s awareness that bold action will be required to meet climate change targets.

Public Utilities Commission Encourage Renewable Energy Generation

SB21-261  |  (Sen. Fenberg, Sen. Priola, Rep. A. Valdez)  |  Passed June 7, 2021, Awaiting Governor’s Signature

This bill was designed to encourage more customer-sited renewable energy generation facilities. To achieve this, the current limitation–which restricts customers from qualifying for renewable energy credits if they exceed 120% of their historical annual usage–is lifted. Additionally, customers may now carry forward monthly bill credits from their distributed generation indefinitely. To meet Colorado’s energy needs and emission reduction goals, small-scale generation by people who sell excess power generated on their property are now exempt from regulation as a public utility. Master Meter Operations (MMOs) including apartment buildings and mobile home parks are also exempt from being regulated as a public utility. The bill also reduces incentives for hydroelectric power by excluding facilities that require the construction of new dams or reservoirs.

Energy Equipment and Facility Property Tax Valuation

SB21-020  |  (Sen. Hansen, Sen. Hisey, Rep. A. Valdez, Rep. Soper)  |  Signed April 22, 2021

This bill changes how a property tax administrator determines the actual value of various renewable energy resources, including battery storage systems. The current income approach to valuation will be maintained for solar energy facilities generating two or fewer megawatts, but new (going into production after January 1, 2021) renewable energy facilities producing a greater amount of energy will be assessed under a new scheme. Previously a 20-year depreciation period was used to assess a tax factor under an “income approach.” Now a 30-year depreciation period will be used and the construction cost, based on incremental cost per kilowatt, of the renewable energy facility will be considered under the new “cost approach.” After the 20 or 30-year period (depending on when the facility began generating electricity), the tax factor is not applied.

Measures To Increase Biomass Utilization

HB21-1180  |  (Rep. D. Valdez, Rep. Will, Sen. Coram)  |  Passed May 19, 2021, Awaiting Governor’s Signature

Colorado lawmakers are interested in exploring biomass utilization and have tasked the Colorado Forest Service with conducting a study on the topic. The bill requires the engagement of stakeholders in the wildlife-urban corridor space, and creation of a report with findings and recommendations due on March 1, 2022.

Renewable And Clean Energy Project Grants

HB21-1253  |  (Rep. Froelich, Rep. Gray, Sen. Winter, Sen. Rankin)  |  Passed June 1, 2021, Awaiting Governor’s Signature

Local governments that wish to pursue renewable and clean energy infrastructure implementation projects can now be awarded a grant to fund their projects. This bill transfers $5 million from the general fund for this purpose. Grants must be made by August 15, 2021.

Additional Funding for Just Transition

HB21-1290  |  (Rep. Esgar, Rep. Will, Sen. Fenberg, Sen. Rankin)  |  Passed June 2, 2021, Awaiting Governor’s Signature

The decline of coal consumption is required for Colorado to meet climate change goals and emission targets in the near future. Doing so puts an entire industry of workers out of employment. This bill injects $15 million into the Just Transition Cash Fund (Fund) to support former coal workers in their transition to other employment. Eight million dollars is for the Fund and $7 million is for the Coal Transition Worker Assistance Program Account, located within the Fund. The law requires that 70% ($10.5 million) of the transferred funds be spent by the close of FY 2021-22, and the remaining Funds are to be spent in FY 2022-23. Spending should be prioritized first on supporting coal transition workers but remaining funds in FY 2022-23 may be used to support families of said workers as well. The Just Transition Office should create specific criteria to help determine where best to make expenditures and should prioritize investment in tier one transition communities as defined in the bill.

Limit Fee Install Active Solar Energy System

HB21-1284  |  (Rep. A. Valdez, Rep. Van Winkle, Sen. Hansen, Sen. Priola)  |  Passed May 27, 2021, Awaiting Governor’s Signature

To promote the adoption of solar electric and solar thermal devices, a current law caps various fees that can be imposed on the consumer for the installation of the solar energy system. This bill modifies the language to clarify that the limit is not per fee, but an aggregate of all governmental fees assessed on the installation of the system across state, county, municipal, and political subdivisions. In aggregate, a residential user will pay up to $500 for a solar installation permit and a commercial user up to $1,000. Only in cases where the governmental body can prove the actual costs of issuing the permit exceeded $1,000 can the governmental body recover costs against the applicant. To prevent an immediate fee jump, where a governmental body’s permitting fees is less than $500, this law mandates the authority may only increase its fee by 5% annual until the $500 limitation is reached.

Adopt Programs Reduce Greenhouse Gas Emissions Utilities

SB21-264  |  (Sen. Hansen, Rep. A. Valdez, Rep. Bernett)  |  Passed June 8, 2021, Awaiting Governor’s Signature

This bill concerns gas distribution utilities who must now file a clean heat plan with the PUC. Using GHG emissions from 2015 as a baseline, each utility’s plan must demonstrate how they will reduce GHG emissions by 4% by 2025 and by 22% by 2030 through the use of clean heat resources. A cost cap of 2.5% of the utility’s annual gas bill for all full-service customers will be established by the PUC for each utility. The cost cap considers the cost of compliance for the utility with its clean heat plan.

Energy Performance for Buildings

HB21-1286  |  (Rep. Kipp, Rep. A. Valdez, Sen. Priola, Sen. Pettersen)  |  Passed June 8, 2021, Awaiting Governor’s Signature

This bill was designed to improve energy efficiency of covered buildings in Colorado. Under the bill, owners of covered buildings must submit annual reports to the Colorado Energy Office with data about the building’s energy use and GHG emissions. Electric and gas utilities are also required to provide data on energy use when the building owner requests it. The bill provides for the creation of a task force of building owners, building professionals, utility representatives, and local government representatives to recommend building performance standards. The AQCC will be responsible for promulgating rules adopting performance standards. 

There are also several technological projects launched by the bill including the creation of a database of qualifying covered buildings and owners, and a publicly accessible database where users can use interactive maps or lists to see individual buildings’ reported data. Additionally, building owners will be required to pay a $100 fee per building to fund program administration, and may be subject to a growing fine if they violate requirements, beginning at $500 per violation and escalating for repeat offenders (some public buildings are exempt from fees and penalties).

Electric Utility Promote Beneficial Electrification

SB21-246  |  (Sen. Fenberg, Rep. A. Valdez, Rep. Froelich)  |  Passed June 7, 2021, Awaiting Governor’s Signature

Following the success of Demand Side Management (DSM) policies used by the PUC in other areas, this bill directs the PUC to create a beneficial electrification program using the same model. The program’s purpose is to encourage the use and adoption of efficient electric equipment and the discontinuation of inefficient, fossil-fuel based equipment. The bill encourages the creation of Colorado-based jobs by requiring any installation, upgrade, or new construction under the program to be performed by utility employees or qualified Colorado-licensed contractors. Under this bill, heat pumps qualify as an energy efficient measure which cannot be prohibited by homeowner association covenants.

Public Utilities Commission Gas Utility Safety Inspection Authority

SB21-108  |  (Sen. Story, Rep. Bernett, Rep. Cutter)  |  Passed June 1, 2021, Awaiting Governor’s Signature

This law increases the safety of Colorado’s natural gas pipelines by adopting necessary state rules to comply with, or exceed federal requirements. Through this legislation, the PUC accepts responsibility to enforce pipeline safety requirements, including those made by the federal Department of Transportation. The maximum fines for violating gas pipeline safety rules are also doubled; violators could be fined up to $200,00 per violation or $2,000,000 in aggregate. A fee shifting scheme has also been added, allowing the PUC to recover court costs while recovering these fines. In addition to a maximum, a minimum fine of $5,000 per violation must be levied even if the violator negotiates a settlement with the PUC that includes remediation and mitigation measures.

Public Utilities Commission Modernize Gas Utility Demand-side Management Standards

HB21-1238  |  (Rep. Bernett, Sen. Hansen)  |  Passed May 27, 2021, Awaiting Governor’s Signature

DSM programs have been shown to promote energy efficiency, reduce energy consumption, and be an economical solution for rate payers. Public utilities are encouraged to use DSM programs as long as they are proven to be cost-effective; this bill updates the metrics used to make this determination. This bill also adds labor standards for any plumbing, mechanical, or electrical work performed for the DSM program. The work must be performed by either the utility’s own employee or by someone selected from a list of qualified contractors. Qualified contractors must participate in an apprenticeship program. Other smaller residential projects that are eligible for a rebate must be done by a licensed plumber or electrical contractor.

Sustainability of the Transportation System

SB21-260  |  (Sen. Fenberg, Sen. Winter, Rep. Garnett, Rep. Gray)  |  Passed June 2, 2021, Awaiting Governor’s Signature 

This law aims raise more than $3 billion to improve the current transportation system, expand infrastructure in some areas, and modernize infrastructure everywhere to facilitate widespread adoption of electric vehicles. An overarching goal of the bill is to mitigate adverse environmental and health impacts created by transportation system use. To accomplish these goals, the bill creates several new TABOR-exempt enterprises capable of raising revenue that does not count toward the state’s overall spending limit. The bill also includes $1.484 billion from the state’s general fund and a one-time transfer of $380 million from federal funds (American Rescue Plan Act) this fiscal year.

The new and expanded enterprises include the Community Access Enterprise, which authorizes imposing a retail delivery fee and expected to generate $41.1 million revenue in its first two years. Revenue will fund the installation of electric vehicle charging stations, electric transit alternatives, electric vehicle adoption incentive programs, and the creation of hydrogen fuel cell car infrastructure. The Clean Fleet Enterprise is focused incentivizing the conversion of whole fleets of vehicles to electric vehicles. Through retail delivery and per ride fees, this enterprise is expected to raise $36.9 million in its first two years to fund financing programs and research studies about best strategies to facilitate electric vehicle adoption. The Clean Transit Enterprise will function similarly with the goal of replacing high emitting gasoline and diesel vehicles used in public transit with lower emission electric vehicles. The Air Pollution Mitigation Enterprise will collect small fees via rideshare and delivery companies to use to mitigate environmental and health impacts caused by the rapid rise in retail deliveries and carshare services. Mitigation efforts will have $20.3 million to use from this enterprise in its first two years. Finally, the Bridge Enterprise has been expanded to become the Bridge and Tunnel Enterprise. This enterprise is tasked with financing, repairing and maintaining bridges and tunnels across the state. To fund this mission, the bill authorizes the imposition of a bridge and tunnel retail delivery fee and a bridge and tunnel impact fee and retains the existing bridge safety surcharge. Consumers will see small (2¢ in FY 2022-23) fees added to their gasoline purchases to finance this initiative. All the fees authorized in this bill are indexed with inflation to provide steady financing into the future. 

Electric Vehicle License Plate

HB21-1141  |  (Rep. Hooten, Rep. A. Valdez, Sen. Bridges)  |  Passed June 7, 2021, Awaiting Governor’s Signature  

This goal of this new law is two-fold: to promote public awareness and familiarity with electric vehicles and to better enforce benefits awarded to electric vehicle owners. Both goals are accomplished through the same means: easy identification via a specialized electric vehicle license plate. Once a new electric vehicle is registered with the state, the owner will be issued this electric vehicle license plate. The license plate will grant access to certain benefits such as access to special travel lanes and electric vehicle charging parking spots. By distinguishing electric vehicles in this way, lawmakers hope to better regulate these incentives so that non-electric vehicle owners do not take advantage of them due to enforcers’ lack of familiarity with electric vehicles. Additionally, lawmakers hope that increased identification of electric vehicles will make consumers more aware of their electric vehicle options. Expanded consumer awareness should then lead to higher adoption rates as consumers are able to relate more experiences with electric vehicles they have seen on the roads. 

Gasoline And Special Fuels Tax Info Disclosure

SB21-065  |  (Sen. Liston, Rep. Mullica)  |  Signed March 21, 2021

Under this bill, certain relevant information regarding a gasoline distributor’s failure or refusal to pay monthly taxes may be disclosed by the Department of Revenue to taxpayers. When requested in writing by a local government official, gasoline distributors must also disclose certain records relating to alleged violations of the administration of the gasoline and special fuels tax.

Natural Disaster Mitigation Enterprise

HB21-1208  |  (Rep. L. Cutter, Rep. M. Gray)  |  Passed June 7, 2021; Awaiting Governor’s Signature

This bill creates a Natural Disaster Mitigation Enterprise (Enterprise) to decrease losses and risks to communities’ lives and property through investments in pre-disaster natural disaster mitigation measures, and decreasing costs associated with disaster response and recovery. Specifically, the Enterprise will provide grants to local governments to implement “resilience and natural disaster mitigation projects,” assist in providing matching funds required for federal grants for mitigating natural disasters, and provide technical assistance to local governments for natural disaster mitigation. In order to fund these efforts, the Enterprise levies a fee against certain insurers that provide the types of insurance policies that are largely expected to pay for the losses intended to be mitigated through the Enterprise’s work.

Create Agricultural Drought and Climate Resilience Office

HB21-1242  |  (Rep. B. McLachlan)  |  Passed June 7, 2021; Awaiting Governor’s Signature

This bill creates the agricultural and climate resilience office within the Department of Agriculture.  The office provides voluntary assistance, nonregulatory programs, and incentives that increase the ability to anticipate, prepare for, mitigate, adopt to, and respond to hazardous events, trends, and disturbances related to drought or climate change.  The office may promulgate rules related to the assistance, programs, and incentives it provides.  Programs administered by the office must be designed to benefit agricultural producers that receive a majority of their income from agriculture and must pay for implementation of practices to address and mitigate the impacts of climate change or drought, or to provide direct adaptation support.  The office also advises the Department, the governor, and other state agencies on the impact to agriculture of drought and climate policies and programs. 

Measures to Modernize the Public Utilities Commission

SB21-272  |  (Sen. Hansen, Sen. Fenberg, Rep. Bernett)  |  Signed June 10, 2021

This bill overhauls several areas for the PUC. To begin, it aims to usher in a new level of transparency by requiring intervenors in a matter before the PUC to disclose any corporate affiliation, corporate funding source, or other financial relationship dating back two years, and that disclosure must be made publicly known on the PUC’s website. The bill also requires regulated public utilities using resource planning software to provide software licenses and modeling data to PUC staff. Colorado energy impact bonds will now be available to help retire aging, inefficient energy facilities and for programs that mitigate the effects of extreme weather events and climate change. To meet Colorado’s clean energy and climate change goals, the PUC will also be required to promulgate a rule directing all retail utilities subject to the renewable energy standard to retire renewable energy credits. To help accomplish the goals of this bill, the annual fee collected from non-telephone public utilities will be raised from .25% to .45% of the utility’s gross intrastate utility operating revenue for the preceding calendar year.

Sunset Office of Consumer Counsel

SB21-103  |  (Sen. Fenberg, Sen. Winter, Rep. Esgar)  |  Passed June 7, 2021, Awaiting Governor’s Signature

The Office of Consumer Counsel (OCC) is part of the Department of Regulatory Agencies (DORA) and was created to represent and protect consumers interests related to investor-owned electric and natural gas utilities in front of the PUC. Under this bill, the OOC will be continued until 2028 and the OCC will be renamed the Office of the Utility Consumer Advocate. This bill removes the cap on the number of employees that may be employed by the office director and authorizes the director to broaden their considerations when determining whether the public interest will be served by appearing before the PUC. The public interest considerations now include decarbonization goals, just transition, and environmental justice. The annual review of the OOC’s performance and certain hiring requirements have been lifted in light of the sunset review.

Low-income Utility Payment Assistance Contributions

HB21-1105  |  (Rep. Kennedy, Sen. Hansen, Sen. Priola)  |  Passed June 7, 2021, Awaiting Governor’s Signature

Currently, low-income families in Colorado are eligible for an energy assistance program administered by Energy Outreach Colorado (EOC). Under the new law, qualifying families will also be eligible for fuel assistance to supplement the nutritional assistance they receive. To finance this expanded program, it is removed from its original funding source and instead financed through the implementation of a small fee charged to investor-owned utility customers. A water payment assistance program, financed by a voluntary fee charged to water utility customers will also be administered by the EOC. Finally, Section 14 of the bill directs the EOC’s priorities when retrofitting low-income households: first ensuring customer savings, then considering emission reductions, and improving indoor air quality.

Public Utilities Commission Study of Community Choice Energy

HB21-1269  |  (Rep. Hooton, Rep. Boesenecker, Sen. Donovan)  |  Passed June 8, 2021, Awaiting Governor’s Signature

Lawmakers are interested in learning more about the concept of community choice energy (CCE), where communities can purchase electricity from wholesale supplies rather than individually purchasing from their designated local invest-owned electric utility. Aside from potentially lowering community member’s utility bills, this concept would also give communities more latitude to support renewable energy programs. This bill directs the PUC to investigate CCE and submit a report of their findings to the appropriate legislative committee by December 15, 2022.

Cooperative Electric Associations Governance Requirements

HB21-1131  |  (Rep. Amabile, Rep. Catlin, Sen. Winter, Sen. Coram)  |  Signed April 29, 2021

This bill is procedural and effects the bylaws and election process for electric cooperatives. Included in these updates is the requirement that these associations post information about their rates and net metering requirements on their websites. Financial audits must be made available to members upon request as well.

Click to download a PDF of the Colorado Energy & Climate Legislation – 2021 Year in Review.

We are proud to have co-authored the recently released “Finance Assessment and Options” paper prepared for the American Association of Airport Executive’s Airport Consortium on Customer Trust.  The paper discusses options for airports to diversify their funding and creative approaches to resiliency in light of the economic impacts of the pandemic.  Click here for the publication or contact David Bannard or Peter Kirsch for more information. 

Polly Jessen’s article, “A Crash Course on Environmental Covenants on Real Property,” was published in the April 2021 issue of the Colorado Real Estate Journal. The article discusses how Colorado’s environmental covenant statute is an important tool in the remediation of contaminated properties. The article helps buyers understand what covenants can indicate about the condition of a potential property, how they affect reuse and redevelopment, and how they can be modified and removed. The article aims to ease the hesitations of many buyers to acquire property with an environmental covenant by answering the following:

• How do you recognize a statutory environmental covenant on title?
• Why are they recorded on title?
• What kinds of sites typically have these covenants?
• How do environmental covenants work?
• Can they be removed or modified?

Polly co-authored the article with Dan Miller, Senior Associate Attorney General with the Natural Resources and Environment Section at the Colorado Department of Law.

Click here to read the full article. 

Adam Giuliano’s article, “Infrastructure Privatization Can Still Be A Useful Model,” was recently published on Law360. The article touches on what infrastructure privatization entails and argues that, because conditions are ripe for an increase in privatization proposals, private and public sector clients need to be proactive and anticipate such proposals. The article also discusses how clients, be they pro-, con- or agnostic, can better prepare for the potential upcoming infrastructure privatization wave by understanding lessons learned from the past as well as by considering how privatizations might need to adapt for the present.

Click here to read the full article.