1. Grant Assurance Compliance
Principles
&
Processes
David Cushing, Manager,
Los Angeles Airports District Office

2. Airport Compliance Program
To 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 13, 2012
ACA Fall Conference

3. Principles of Compliance
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
September 13, 2012
ACA Fall Conference 3 3

4. Principles of Compliance
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...
Grant Assurance 29 states that the sponsor will:
keep up to date at all times an airport layout plan (ALP) of the airport…
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.
September 13, 2012
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5. Principles of Compliance
Grant Assurance 22 states a sponsor must/may:
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 13, 2012
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6. Principles of Compliance
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
Revenue Retention is Law and G.A. 25
New exceptions for proceeds of sale of private airport to public entity and some mineral revenues under special circumstances.
September 13, 2012
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7. 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 B, 2.8.b.
September 13, 2012
ACA Fall Conference

8. Standard of Compliance Real-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 B ¶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 13, 2012
ACA Fall Conference

9. Standard of Compliance No Damages Resolution Seeking
…The FAA’s decision to withhold these funds can
potentially deprive aeronautical users of the benefit
of capital improvements which may enhance
safety or expand capacity. Such a decision is not
made lightly, and this action is not used to penalize
sponsors who may have unknowingly breached
their commitments, but corrected past errors after
becoming aware of their full obligations.”
[See Drake Aerial Enterprise, LLC v. City of Cleveland, Ohio, FAA Docket No.
, (February 22, 2010) (Director’s Determination) at 12]
September 13, 2012
ACA Fall Conference

10. Informal Complaints 14 CFR Part 13.1
FAA Goals (Order B, 5.4.a.):
Evaluate the facts and identify potential sponsor violations.
Clarify the rights and responsibilities of the sponsor and the complainant.
Offer assistance to resolve the dispute in a manner consistent with the sponsor’s assurances.
Provide the sponsor with the opportunity to comply with its federal obligations voluntarily when a violation is identified.
September 13, 2012
ACA Fall Conference

11. 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 13, 2012
ACA Fall Conference

12. Formal Complaints Initial 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 13, 2012
ACA Fall Conference

13. Formal Complaints Lessons for PartiesDo
Take it seriously
Understand the process
Respond to each allegation
Tell us the story
Recognize your obligations
Send pertinent supporting documentation
Don’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 13, 2012
ACA Fall Conference

14. Formal Complaints Lessons for FAA
As a result, after 10 years of Part 16, the FAA has initiated a Compliant Process Review Initiative
In 2011, we’re looking into our informal and formal processes and we’re listening to our stakeholders, including ACI.
We’re considering rulemaking.
September 13, 2012
ACA Fall Conference

15. QUESTIONS ?