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Federal AviationAdministrationGrant Assurance
Compliance
David Cushing, Manager, Los Angeles Airports District Office
Principles
& Processes
ACA Fall
Conference 2013
2Federal Aviation
Administration2
Airport Compliance ProgramTo enforce sponsor commitments to protect the
public’s interest in civil aviation;To ensure Surplus Properties and Airport
Improvement Program investments serve their intended purposes;
To achieve balance between proprietary rights and business goals and the public interest in the aeronautical utility;
To be convincing, consistent and legally sufficient.
FAA is constantly thinking about our principles abstractly, strategically and in practice.
September 11, 2013 ACA Fall Conference
3Federal Aviation
Administration3
Our Grant Assurances are our Principles
Surplus Property Deeds are the Same
If an airport has accepted AIP funding or is otherwise obligated, (e.g. surplus property), then it must abide by certain rules.
Sponsors voluntarily agree to this rules.
Grant assurances (and deed covenants) most commonly at issue are 19, 22, 23, 24 and 29.
Revenue-Use Requirements are Federal Law
Civil Rights Requirements are Federal Law
Principles of Compliance
September 11, 2013 ACA Fall Conference 3
4Federal Aviation
Administration4
Principles of Compliance
Grant Assurance 5 states: A sponsor will (retain) all rights and powers necessary to perform any or all of the terms, conditions, and assurances. It will not sell, lease or encumber its title or interest in Exhibit A property
Preserving Rights and Powers and Good Title
Grant Assurance 4 states:
A sponsor holds good title to the landing area of the airport or site thereof, or will satisfy the Secretary that it will acquire good title.
September 11, 2013 ACA Fall Conference 4
5Federal Aviation
Administration5
Principles of Compliance
Operate and Maintain and Airport Layout Plan
Grant Assurance 19 states:
The airport and all facilities which are necessary to serve the aeronautical users of the airport … shall be operated at all times in a safe and serviceable condition...
September 11, 2013 ACA Fall Conference 5
Grant Assurance 29 states that the sponsor will:
a) keep up to date at all times an airport layout plan (ALP)
b) eliminate any change or alteration to the airport that the Secretary determines to be adverse to the airport and inconsistent with the ALP and pay for the change.
6Federal Aviation
Administration6
Principles of Compliance
Exclusive Rights and Fee and Rental Structure
Grant Assurance 23 states a sponsor will NOT:
Either directly or indirectly, grant or permit any person, firm, or corporation, the exclusive right at the airport to conduct any aeronautical activities
Grant Assurance 24 states a sponsor will:
Maintain a fee & rental structure for facilities and services which will make the airport as self-sustaining as possible
September 11, 2013 ACA Fall Conference 6
7Federal Aviation
Administration7
Principles of Compliance
Revenue Retention is Law and G.A. 25
All revenues generated by the airport (or system) plus fuel taxes apres 87 will go to capital or operating costs of the airport or system.
Non-fuel tax levying is not included in revenue.
Economic Development is specifically called-out in law.
It matters if you’re doing a deal with the sponsor or non-sponsor, sometimes.
Less rent for jobs or direct payment might be probable cause
September 11, 2013 ACA Fall Conference 7
8Federal Aviation
Administration8
Principles of Compliance
What do Grant Assurances 4, 5, 19, 23, 24, 25 and 29 mean for Economic Development?
1) Tend the aeronautical garden first.
2) Use strategic and balanced aeronautical business incentives.
3) Always use prudent business practices with regard to land ownership.
4) Protect the civil aviation interests of the public.
5) Be realistic when you’re altering the market.
September 11, 2013 ACA Fall Conference 8
9Federal Aviation
Administration
Standard of Compliance
“A sponsor meets its commitments when:(1). The federal obligations are understood;(2). A program (e.g., preventive maintenance, leasing
policies, operating regulations, etc.) is in place that the FAA deems adequate to carry out the sponsor’s commitments;
(3). The sponsor satisfactorily demonstrates that such a program is being carried out; and,
(4). Past compliance issues have been addressed.”FAA Order 5190.6B, 2.8.b.
September 11, 2013 ACA Fall Conference 9
10Federal Aviation
Administration
Standard of ComplianceReal-Time Compliance Corrective Action
“The FAA generally takes punitive compliance
actions, such as withholding funds under 49
U.S.C. § 47114, when reasonable efforts have
failed to achieve voluntary compliance. [See FAA
Order 5190.6B ¶2.4.(a.)] This is because aviation
users receive direct benefits from the Federal
investments made at public use airports via grants
from the FAA to airport sponsors. …
September 11, 2013 ACA Fall Conference 10
11Federal Aviation
Administration
Standard of ComplianceNo Damages Resolution Seeking
…The FAA’s decision to withhold these funds canpotentially deprive aeronautical users of the benefitof capital improvements which may enhancesafety or expand capacity. Such a decision is notmade lightly, and this action is not used to penalizesponsors who may have unknowingly breachedtheir commitments, but corrected past errors afterbecoming aware of their full obligations.” [See Drake Aerial Enterprise, LLC v. City of Cleveland, Ohio, FAA Docket No.
16-09-02, (February 22, 2010) (Director’s Determination) at 12]
September 11, 2013 ACA Fall Conference 11
12Federal Aviation
Administration
Informal Complaints14 CFR Part 13.1
FAA Goals (Order 5190.6B, 5.4.a.):1. Evaluate the facts and identify potential sponsor
violations.2. Clarify the rights and responsibilities of the
sponsor and the complainant.3. Offer assistance to resolve the dispute in a manner
consistent with the sponsor’s assurances.4. Provide the sponsor with the opportunity to
comply with its federal obligations voluntarily when a violation is identified.
September 11, 2013 ACA Fall Conference 12
13Federal Aviation
Administration
Formal Complaints
• 14 CFR Part 16 is a formal process• Good faith efforts prior to filing• Complainant must have standing• Appeal process• Threshold issue: is the sponsor in violation of its
federal obligations?• NO DAMAGES• It’s not about what’s fair to complainant.• It’s about whether the sponsor is within compliance.
September 11, 2013 ACA Fall Conference 13
14Federal Aviation
Administration
Formal ComplaintsInitial Complaint
20 days Docketing Notice
20 days Answer (address the facts and the allegation)
10 days Reply
10 days Rebuttal (address changed argument conglomeration)
120 days Director’s Determination
30 days for Appeal (point out specific error)
20 days for Appeal Reply (just agree with Director!)
60 days for Final Agency Decision
60 days for Court of Appeals appeal.
September 11, 2013 ACA Fall Conference 14
15Federal Aviation
Administration
Formal ComplaintsLessons for Parties
Do• Take it seriously• Understand the process• Respond to each allegation• Tell us the story• Recognize your obligations• Send pertinent supporting documentationDon’t• Call names• Send a copy of the grant assurances• Ignore deadlines• Send unnecessary exhibits• Bring up unrelated issues• Get off track – focus on your obligations• Be afraid to admit past mistakes that you have fixed
September 11, 2013 ACA Fall Conference 15
16Federal Aviation
Administration16
QUESTIONS ?
17Federal Aviation
Administration17
Grant Assurance 22 states a sponsor must/may:
Principles of Compliance
a) Must make the airport available as an airport for public use on reasonable terms and without unjust discrimination
b) Must apply nondiscriminatory and substantially comparable rules, regulations, conditions, rates, fees, rentals, and other charges to airport businesses….
h) May establish reasonable, and not unjustly discriminatory, conditions on all users necessary for the safety and efficiency…
i) May prohibit or limit a type of aeronautical use if such action is necessary for the safe operation of the airport or necessary to serve the civil aviation needs of the public.
September 11, 2013 ACA Fall Conference 17