Airport Revenue Diversion Continued from page 67 relies upon2 . As part of the program, AIP provides federal funding in the form of grants to the owner of the airport, called the sponsor, for projects to improve the airport. The sponsor is primarily a public agency such as a city, munici- pality, state or some other type of local government entity. In exchange for that money, airport sponsors must agree to abide by federal grant assurances as a condition of enter- ing the program. The sponsor is then bound to comply with the assurances and all applicable federal laws, regulations, policies and guidelines upon acceptance of the grant offer. There are 39 grant assurances covering many areas of airport business. The two most relevant to revenue di- version issues are Grant Assurance 24, Fee and Rental Structure, and Grant Assurance 25, Airport Revenues.3 Grant Assurance 24 requires an airport to maintain a fee and rental structure for facilities and services at the airport, which will make the airport as self-sustaining as possible under the circumstances at that particular airport. Grant Assurance 25 requires all revenue generated by the airport to be expended for capital and operating costs of the airport. Some exceptions exist where revenue diversion is grand- fathered within the scope of financial authority established before 1982, and where it is authorized under an exemption issued by the FAA as part of the airport privatization pilot program, but these instances are limited to specific airports.4 C. Compliance Manuals and Policies In addition to federal law requirements, the FAA sets forth a number of compliance manuals and policies that serve to guide both FAA personnel, airport sponsors and FBOs in all aspects of airport business. The following materials are valuable resources for understanding the framework within which airport revenue is controlled: ■■ FAA Airport Compliance Program: ensures airport sponsors comply with the federal obligations they assume when they accept federal AIP grants and is administered by the FAA headquarters Airport Compliance Division (ACO-100) in Washington, DC. 2 The Airport Improvement Program Handbook, also known as FAA Order 5100.38D, is a mandatory handbook for any airport receiving funding from the AIP program and provides permissive, rather than prohibitive, guidance. 3 Grant Assurance 24, Fee and Rental Structure, is codified un- der 49 U.S.C. §47107(a)(13); and Grant Assurance 25, Airport Revenue, is codified under 49 U.S.C. §47107(b)(1). 4 See Page 15-12 of the FAA Airport Compliance Manual, Order 5190.6B for a list of the 12 airports included on the grandfathered list. Aviation Business Journal | 3rd Quarter 2016 http://www.faa.gov/airports/ airport_compliance/overview/ ■ ■ FAA Airport Compliance Manual, Order 5190.6B: provides guidance to FAA personnel on interpreting and administering requirements for airport sponsors accepting federal grants and is the guidebook for the Airport Compliance Program. Part V, Financial Responsibilities covers revenue diversion. http://www.faa.gov/airports/resources/ publications/orders/compliance_5190_6/. ■ ■ FAA Revenue Use Policy, 64 Fed. Reg. 7696, No. 30: describes the scope of airport revenue subject to federal requirements, lists those requirements, and outlines the permitted and prohibited use of airport revenue falling under that scope. https://www.gpo.gov/ fdsys/pkg/FR-1999-02-16/pdf/99-3529.pdf ■ ■ FAA Airport Improvement Program (AIP) Handbook, Order 5100.38D: provides policy and guidance to FAA personnel for the AIP program. http://www.faa.gov/airports/aip/aip_handbook/ ■■ FAA Airport Sponsor Grant Assurances: re- quirements that airport sponsors must comply with as a condition of receiving a federal AIP grant. http://www.faa.gov/airports/aip/grant_assurances/ D. Decisions, Databases and Resources The FAA conducts enforcement proceedings specifically to investigate and address compliance issues concerning grant assurance obligations, whether initiated by a spon- sor, an FBO or the FAA itself. The FAA allows parties to resolve disputes informally in order to bring airport spon- sors to compliance, but they also have the power to termi- nate eligibility for grants and issue compliance orders. The DOT Office of Inspector General, in turn, oversees the FAA’s compliance efforts through the Aviation arm of their Office of Auditing and Evaluation. Below are some useful resources for decisions, reports and data from these agencies: ■■ 14 CFR Part 16 Decision Database, Rules and Guidance: 14 CFR Part 16—Rules of Practice for Federally-Assisted Airport Enforcement Proceedings governs all proceedings involving federally-assisted airports including all matters of airport revenue diver- sion. The decision database can be found at: http://part16.airports.faa.gov/ Continued on page 71 69
