On April 13, 2012, as a result of the February 14, 2012 passage of the Federal Aviation Administration Modernization and Reform Act of 2012 (“FMRA”), the Federal Aviation Administration (“FAA”) proposed modifications to the “grant assurances” incorporated into FAA’s contracts with airports that receive FAA funding for physical improvements and/or noise compatibility purposes. These changes were made in order to ensure the consistency of the grant contracts with the changes arising out of FMRA. The revisions primarily address three categories of actions: (1) permission for “through the fence” operations under specified conditions; (2) exceptions to current restrictions on use of airport revenues; and (3) revision to rules governing use of revenues gained from disposal of airport property subsidized by FAA.
(1) Grant Assurance 5, “through the fence” arrangements, whereby proximate, off-airport, aviation-related development, either residential or commercial, is now allowed access to airport property through the airport’s security fence under specified circumstances. FMRA has restored the opportunity for “through the fence” arrangements which, after 9/11, were prohibited due to security concerns. Consequently, Grant Assurance 5, subsection g, was revised to provide the terms under which “through the fence” arrangements may operate.
(2) Grant Assurance 15, “Veteran’s Preference,” which previously included only “Vietnam era veterans,” now includes “Persian Gulf veterans, Afghanistan-Iraq war veterans, disabled veterans” and business owned and operated by disabled veterans from those conflicts;
(3) Grant Assurance 25, governing use of airport revenues, to add two new exceptions to the general rule that “[a]ll revenues generated by the airport and any local taxes on aviation fuel established after December 30, 1987, will be expended by it for the capital or operating costs of the airport; the local airport system; or other local facilities which are owned or operated by the owner or operator of the airport and which are directly and substantially related to the actual air transportation of passengers or property; or for noise mitigation purposes on or off the airport.” Grant Assurance 25.a. The first exception, set forth in new section a.(2) deals with the FAA’s financing of the sale of a “privately owned airport to a public sponsor.” It provides that the limitation set forth above on the uses of revenue will not apply under certain specified conditions applicable to the prior owner of the private airport. Those conditions require, among other things, that, in the event of a sale to a public airport, the prior owner will repay FAA “an amount equal to the unamortized portion of any airport improvement grant made to the private owner for use other than land acquisition after October, 1996 plus an amount equal to the Federal share of the current market value of any airport land acquired with an airport improvement grant,” made after October 1, 1996. A second revision also exempts revenues derived from mineral extraction, production or lease at a general aviation airport;
(4) Grant Assurance 29, also dealing with the new rules governing “through the fence” access, requiring amendment to airport layout plans (“ALP”) to include “all proposed and existing access points used to taxi aircraft across the airport’s property boundary;” and
(5) Grant Assurance 31, governing use of proceeds from disposal of real property. Previously, proceeds from the disposal of airport real property which equal the “portion of the proceeds of such disposition which is proportionate to the United States’ share of the cost of acquisition of such land” were limited, with the permission of the Secretary, to reinvestment in another eligible airport improvement project at the airport or within the national airport system, or repayment into the aviation trust fund. The amendment now prescribes certain criteria by which the Secretary shall make the determination on the use of funds, including, in descending order: (1) reinvestment in an approved noise compatibility project; (2) reinvestment in an approved project that is eligible for grant funding under 49 U.S.C. § 47117(e); (3) reinvestment in an approved airport development project that is eligible for grant funding under 49 U.S.C. §§ 47114, 47115 or 47117; (4) transfer to an eligible sponsor of another public airport to be reinvested in an approved noise compatibility project at that airport; and (5) paid to the Secretary for deposit in the Airport and Airway Trust Fund. 77 Fed.Reg. 22376, 22378 (the criteria prescribed for allocation of proceeds from the sale of land for noise compatibility purposes under Grant Assurance 31, subsection a, are substantially similar).
Comments on the proposed revisions are due no later than May 14, 2012.