FAA Order 5190.6B Airport Compliance Manual An Overview FAA Order 5190.6B is internal guidance for FAA employees. It is controlling on our decisions. But we recognize that it also serves as a useful guide to airport sponsors and users. Presented to: Federal Agency Update 2010 By: Kevin Willis, Airport Compliance Date: January 27, 2010

What Do These Things Have in Common? George H.W. Bush was sworn in as the 41st President of the United States The TV show Seinfeld premiered Democratic protests threaten communism in Czechoslovakia, Romania, and East Germany A gallon of gas was 97 cents Microsoft Office (version 1) was released The San Francisco 49ers defeated the Cincinnati Bengals in Super Bowl XXIII FAA Order 5190.6A was published The year was 1989! That’s how old our Compliance Manual was.

FAA Order 5190.6B Objectives of New Order One stop shopping for compliance guidance, policy, and source documentation. Guidance for FAA personnel. May also be used as a guide by sponsors and aeronautical users. It reflects changes in policy and regulations, precedent from Part 16 decisions, and compliance guidance materials issued since previous Order (1989). About 6 years ago, Airport Compliance set out with the goal of revising FAA Order 5190.6A. When that effort started, the primary driver was the fact that our Order didn’t necessarily fully reflect the current FAA policies. As the task of revising the manual evolved, it was clear that we really needed more of a one stop shop for compliance guidance. 3 3

FAA Order 5190.6B Why? Less reliance on institutional or personal knowledge Greater emphasis on detailed published guidance for “new” FAA employees Make it easier for FAA employees to identify correct answer and provide consistent responses The ultimate goal of these objectives is to make it easier for us as FAA employees to provide consistent, accurate guidance to airport sponsors and users. The objectives also track with the evolution of the FAA’s approach to Airport Compliance. But I’ll go into that more in a few slides.

5190.A versus 5190.B New ANCA and Part 161 Regulations (1990) New Law and Policy on Rates and Charges (1996) New Law on Airport Privatization (1996) New Part 16 Regulations (1996) New Law and Policy on Airport Revenue (1999 & 2008) New Land Use Inspections (1999) More Part 13.1 Complaint Process Info Part 16 Determinations on website at: http://part16.airports.faa.gov As I mentioned, the first big driver was the fact that our order didn’t fully reflect the policies and laws and we have today. FAA Order 5190.6A was published in 1989. A lot has changed since then. In 1996, the manner in which the FAA addressed compliance matters changed. Prior to the creation of the Part 16 process, all complaints were managed informally. The Part 13.1 process doesn’t set time limits on pleadings, so complaints would drag on and on and it was difficult to ever really resolve anything. 5 5

FAA Order 5190.6B Does NOT create new policy. Does NOT establish new regulations. Discusses existing policies, regulations, laws, and advisory circulars as related to the Federal Grant Assurances. The most important thing to leave here knowing is that we haven’t put out any new policies or regulations in the updated Order. The new order discusses existing policies, regulations, laws, and ACs related to the grant assurances in much more practical, almost text-book like fashion. The language strives to really make some of the concepts clearer. Hindsight is 20/20, and since we’ve been in the Part 16 business a dozen years, we know what some of the misconceptions are.

FAA Order 5190.6B How? Guidance is consolidated into a single document (with better appendix) Includes grant assurance references (revisions through March 2003) Organized by topic in accordance with Grant Assurances PDF document – key word searchable But in striving to achieve our goal of a one-stop shop for the existing policies and regulations associated with the grant assurances, the document has grown considerably. The old order was 62 pages and fit easily in a ½ inch three ring binder. The new order is 352 pages – not including the appendices – and it requires a 2 inch binder. But, despite it’s length, it’s a much more intuitive and I think it’s easier for someone who is not a compliance expert to use. It’s organized by topic, so if you a question about Grant Assurance 23, you can go to Chapter 8 which is titled “Exclusive Rights”. Plus on-line, the new order is a pdf document, so you can do key word searches. There are 8 sections to the new order Part 1 is background and legislative history Part 2 discusses the different types of federal agreements Part 3 is on complaint resolution Part 4 is all about airports and aeronautical users and is the longest section Part 5 is devoted to the sponsor’s financial responsibilities Part 6 is on land use Part 7 goes into releases and property reversions And then there is a lengthy appendix.

5190.A versus 5190.B Old Order New Order 8 Chapters 23 Chapters 8 Items in Appendix Restrictive on line searches – “paper based” Relies on “paper files” and personal knowledge Limited references, not self-contained 23 Chapters 28 Items in Appendix Appendix is “e-based” (searchable) & easier for on line users Includes instructional materials for the “new employee” Improved guidance by referencing letters, documentation, graphs, pictures This slide compares the two documents. To me, the old order read like a government regulation. It was very theoretical. It was hard to find the right answer easily. I was always sticking little flags and sticky notes on the paragraphs I used the most because any time I had to find something specific I’d end up re-reading half the thing looking for the one sentence where it was mentioned. But the new order looks and feels a lot more like a college text book. It has a lot a pictures and samples in it. It’s easier to find what you’re looking for.

5190.A versus 5190.B Compliance Program Guidance Old Order New Order Minimal compliance program guidance No procedural Part 13.1 guidance Part 16 didn’t exist Lacks precedential support See Chapter 5 Extensive Guidance Differentiates Part 16 and Part 13.1 processes Extensive Part 13.1 guidance References precedent from Part 16 decisions As I mentioned before, the Part 16 process was created in 1996, and that really changed the way the FAA dealt with airport compliance matters. Prior to 1996, there were two people in Washington Headquarters that managed complaints through the Part 13.1 process. And based on what some people have told me, it wasn’t very effective. The old order didn’t provide any procedural guidance for how the complaints were handled, and it didn’t speak from any real institutional knowledge. So complainants would keep sending pleadings in, and the FAA was never really in a position to make a decision about things. It was kind of a mess. The Part 16 process really changed all that for Washington Headquarters, but it didn’t do much to help our staff in the ADOs and Regions who now address the informal complaints. The new order does. Chapter 5 provides guidance for FAA employees in the ADOs and Regions for how they should respond to Part 13.1 complaints. It does a nice job of explaining the difference between a Part 13.1 and Part 16 process. And it references some Part 16 decisions. If you’re curious, today we have six people in Washington Headquarters who conduct Part 16 investigations and we have one financial auditor. 9 9

5190.A versus 5190.B Good Title and Rights & Powers Old Order New Order Chapters 6 & 21 Clear explanation of Grant Assurances 4 & 5 Expands on discussion of delegation of sponsor obligations within the context of airport management, property transfers, and airport privatization Discusses inter-related nature of grant assurances in one place Limited guidance on ownership interests and management responsibilities Discussion limited to delegation of sponsor obligations and subordination of title The new order also goes into much greater detail about the specific assurances. The next few slides will compare how the two documents stack up with regard to some specific assurances. Chapter 6 is titled Rights and Powers and Good Title, and it’s all about Grant Assurances 4 and 5. I think the old order has about 4 paragraphs on those two assurances and it’s vague. Chapter 21 is on Land Use Compliance Inspections. It explains a requirement that was established in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century which was signed into law in 2000. So obviously, there’s no mention of this in the old order. 10 10

5190.A versus 5190.B Compatible Land Use, Airspace, & Inspections Old Order New Order Minimal guidance on compatible land use Limited to Part 77 protections Lack of definitions No reference guidance (for new employee use) Little guidance on incompatible residential use Compatible Land Use & Airspace Protections, See Chapter 20 Provides references to guidance documents and sample letters on noise, obstructions, and other incompatible land uses Includes definitions Residential on-airport hangar homes and through-the-fence residential airparks The old order really doesn’t talk about Grant Assurance 21, Compatible Land Use. It talks about protecting Part 77 surfaces, but it doesn’t get into issues like noise or incompatible uses. The new order devotes a chapter to this topic and it has some great samples. There’s a sample easement, a sample fair disclosure statement, and a letter the FAA has sent regarding a through the fence residential airpark. 11 11

5190.A versus 5190.B Compatible Land Use, Airspace, & Inspections Old Order New Order Compliance Inspections, See Chapter 21 Explains authority and history for conducting land use inspections Step by step guidance with graphics and pictures Exhibit A and ALP inconsistencies Sample letters Minimal guidance on Land Use Inspections criteria Lacks details and explanations for actual inspection process As I said before, Chapter 21 discusses that AIR-21 requirement. The FAA has to do two land use inspections per region each year. So if you get that “we’re coming letter”, you might want to read Chapter 21 to see what our process is. 12 12

5190.A versus 5190.B Economic Nondiscrimination Old Order New Order Presented only within context of exclusive rights and availability on fair and reasonable terms Abstract, theoretical approach See Chapters 9, 10, 11, 12, 13, 14 & 18 Real discussion of Grant Assurance 22 Discusses Grant Assurance 22 within context of similarly situated, Minimum Standards, leases, restrictions, and rates & charges The New Order really focuses on discussing Grant Assurance 22, Economic Nondiscrimination. The old order just had a very short discussion about exclusive rights and availability on fair and reasonable terms. But since Grant Assurance 22 is our most contested assurance, the new order devotes 7 chapters to its various facets. 13 13

5190.A versus 5190.B Economic Nondiscrimination Old Order New Order Fair and Reasonable (rates & charges) expanded Availability of leased space Air carrier access Entire chapters on: Minimum Standards Lease agreements Noise Restrictions Safety & Efficiency Presented only within context of exclusive rights and availability on fair and reasonable terms Abstract, theoretical approach Chapter 9 – Unjust Discrimination Between Aeronautical Users Chapter 10 – Reasonable Commercial Minimum Standards Chapter 11 – Self-Service Chapter 12 – Review of Aeronautical Lease Agreements Chapter 13 – Airport Noise and Access Restrictions Chapter 14 – Restrictions Based on Safety and Efficiency Procedures Chapter 18 – Rates and Charges 14 14

5190.A versus 5190.B Rates & Charges and Revenue Use Old Order New Order Policies did not exist Limited to: Context of nondiscrimination NEUP/reverter with surplus property Fails to reflect evolution of FAA’s involvement in assessing management agreements and leases See Chapters 15, 16, 17, 18, & 19 Includes full legislative history Expands context to include: Defines airport revenue Permitted and prohibited uses Ground access projects The guidance related to a sponsor’s financial responsibilities was extremely vague in the old order. It was really limited to just nondiscrimination and property releases. It certainly doesn’t reflect the Rates and Charges or Revenue Use Policies that followed. 15 15

5190.A versus 5190.B Rates & Charges and Revenue Use Old Order New Order No discussion of financial reports Does not address rate-making methodologies beyond rates and charges Entire Chapters on: Revenue Diversion (consolidated) Resolving Revenue Diversion Self-sustainability Financial Reporting So now we have: Chapter 15 – Permitted and Prohibited Uses of Airport Revenue Chapter 16 – Resolution of Unlawful Revenue Diversion Chapter 17 – Self-Sustainability Chapter 18 – Airport Rates and Charges Chapter 19 – Airport Financial Reports Again, this isn’t new FAA policy – it’s just new to the Compliance Order because a lot of this guidance didn’t exist in 1989. 16 16

5190.A versus 5190.B Exclusive Rights Old Order New Order Under Chapter 3 Limited to: Background Policy Qualifications and Standards (Total of 5 pages) See Chapters 8, 11, & 12 Chapter 8 has 14 pages fully devoted to this topic that adds: Specifically outlines remedies Identifies its linkage to #22 Examples of how to identify Exclusive Rights terms and context in leases Samples we’ve used While the old order did have a full chapter on Exclusive Rights, it was really limited to the legislative background and policy. It also had all of three paragraphs on Minimum Standards. The new order also devotes a full chapter to Grant Assurance 23. Chapter 8 - Exclusive Rights gets into the different ways a sponsor can inadvertently convey an exclusive right. It also offers a lot of advice on steps a sponsor can take to prevent an exclusive right from occurring. 17 17

5190.A versus 5190.B Exclusive Rights Old Order New Order Limited to (cont’d): Single service provider Self-service v. proprietary exclusive General guidance on lease agreements Chap. 11 Self Service adds: Citations to Orders Exclusive Rights restrictions based on precedent New Fractional Ownership info Chap. 12 Lease Agreements adds: TTF Reasonable access I include Chapter 11 – Self-Service in the group with Exclusive Rights because the two issues get closely connected in a lot of Part 16’s. Chapter 12 – Review of Aeronautical Lease Agreements discusses how some types of lease arrangements may inadvertently confer an exclusive right. It also explains the potential compliance problems that are often associated with through the fence access agreements. 18 18

FAA Order 5190.6B FAA–2009–0924 Notice published October 13, 2009 Comments due March 31, 2010 September 2010 And if you don’t like the new Order, you can tell us. We did publish a notice in the Federal Register requesting comments on October 13. It’s FAA Docket Number 2009-0924. Comments are due March 31 of next year, and we plan to respond to them by September. Please keep in mind, because this order doesn’t establish any new policy or law, we will not entertain any comments asking us to change existing policy or law. We are looking for comments that critique our conclusions of existing policy, law, and precedent. This is about how we have articulated existing policies and any factual errors we may not have caught. Depending on the type and volume of comments, we’ll decide how to proceed. So right now, I don’t know when FAA Order 5190.6C will be published.

Airport Compliance Program COMMENTS? WWW.REGULATIONS.GOV FAA DOCKET 2009-0924 QUESTIONS? Kevin.Willis@faa.gov 20