U.S. Department 

of Transportation 

Federal Aviation 

Administration 

November 13,2014 

Glenn I. Kimura 

Deputy Attorney General 

Office of Airport Compliance and 

Management Analysis 

Department of the Attorney General, State of Hawaii 

465 S. King Street, Room 300 

Honolulu, HI 96813 

Counsel for Respondent 

800 Independence Ave., SW. 

Washington, DC 20591 

Re: FRANK HINSHAW, SKYDIVING SCHOOL, INC., d/b/a SKYDIVE HA WAil AND 

ISLAND SKYDIVING, LLC v. THE STATE OF HAW All (Docket No. 16-12-04) 

Dear Mr. Kimura: 

On August 18,2014, the Director of the Office of Airport Compliance and Management 

Analysis issued the Director's Preliminary Determination for the above-referenced matter 

preliminarily finding the Respondent to be in violation of its federal obligations with respect to 

Grant Assurance 22, Economic Nondiscrimination and Grant Assurance 23, Exclusive Rights. 

The Director found that the Respondent was not in violation of Grant Assurance 5, Preserving 

Rights and Powers. 

The Director's decision to issue a preliminary determination was predicated on the Director's 

expectation that the Respondent would submit a Corrective Action Plan (CAP) acceptable to the 

FAA within 30 days ofthe Determination. This CAP should clearly identify how the Respondent 

will proceed to finalize and implement the Hana Airport Operating Rules and Standards 

resulting in immediate aeronautical access for the Complainant. Additionally, the Respondent 

was directed to negotiate in good faith with the Complainant to develop temporary parachute 

landing area procedures to allow the Complainant to begin parachute operations at HNM during 

the pendency of the finalization of the Operating Rules and Standards. 

On September 17, 2014, the Respondent submitted the State of Hawaii's Corrective Action plan 

for FAA review and approval. The Director's review of the proposed corrective actions is 

detailed below: 

DIRECTIVE #1: 

The Director's Preliminary Determination directed the State to: 

"Submit a Corrective Action Plan, acceptable to the FAA, within 30 days 

of the Preliminary Determination clearly identifying how the Respondent 

1 Now referenced by the Respondent as the Hana Airport Rules for Skydiw and Transient Aircraft Operations. 

I 
will proceed to finalize and implement the Hana Airport Operating Rules 

and Standards resulting in immediate aeronautical access for the 

Complainant. " [Director's Preliminary Determination, page 4 7] 

RESPONDENT'S PROPOSED CORRECTIVE ACTION: 

"The State will commence a rule making procedure in accordance with 

Section 91-3, et seq. Hawaii Revised Statutes for the adoption of the 

Hana Airport Rules for Skydive and Transient Aircraft Operations by 

immediately beginning the processing for approval with the Office of the 

Governor, State of Hawaii, and which includes review by the State 

Departments of Budget and Finance and Business, Economic 

Development and Tourism in working towards having public hearings 

scheduled on Maui, State of Hawaii, during the first week of November 

2014. " [State of Hawaii's Corrective Action, Page 2] 

DIRECTOR'S RESPONSE: 

The Director acknowledges that the finalization and implementation of the Hana Airport Rules 

for Skydive and Transient Aircraft Operationi is subject to a State-level regulatory process in 

accordance with the Hawaii Revised Statutes. Accordingly, the Director is amenable to the 

Respondent's proposed corrective actions described above, including the proposed time line for 

conducting public hearings in November 2014. However, absent from the Respondent's 

proposal is a timeline or schedule identifying any legislative, administrative, and/or procedural 

steps that may be necessary for fmalizing and implementing the Hana Airport Rules after the 

public hearings have occurred. As such, it is unclear to the Director the timeframe for which 

aeronautical access for parachuting operations at the airport will be granted. 

In consideration of the foregoing, and in the interest of transparency, the Director conditionally 

approves the aforementioned proposed corrective action contingent upon the State providing a 

detailed timeframe for which the Respondent expects to finalize the Hana Airport Rules. 

Accordingly, the Director hereby directs the Respondent to submit a comprehensive schedule of 

events, inclusive of the requisite legislative, administrative, and/or procedural steps that may be 

required by Hawaii state law or other mandate identifying the approval process and the projected 

timeframe for approval and aeronautical access. The requisite documentation must be forwarded 

to the Director no later than 15 days from the date of this correspondence. 

DIRECTIVE #2: 

The Director's Preliminary Determination also directed: 

"Additionally, should the Complainant seek to begin parachute 

operations at HNM prior to the finalization and implementation of the 

Operating Rules and Standards, the State is directed to negotiate in good 

faith to develop temporary procedures satisfactory to both the 

2 Previously referenced in the proceedings of this case as the Hana Airport Operating Rules and Standards. 

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Respondent and the Complainant to allow such operations. " [Director's 

Preliminary Determination, page 4 7] 

RESPONDENT'S PROPOSED CORRECTIVE ACTION: 

"In the interim pending the formal adoption of the said Hana Airport 

Rules, the State proposes to enter into a Letter of Agreement ("LOA'') in 

which the Complainant agrees to abide with the proposed Hana Airport 

Rules that were developed in coordination with Complainant's prior 

attorney and helicopter operators at the Hana Airport but further action 

was pending due to DRAFT AC 15015300-13 CHG 19 toAC 15015300-

13 Section 214 Guidance for Parachute Landing Area. The Letter of 

Agreement will require maintaining membership in the US. Parachute 

Association (USP A) and having Complainant obtain a waiver from the 

USPA/or the use of the available designated Parachute Landing Area 

(P LA) as this area does not meet the USP A Basic Safety Requirements 

(BSR) as stated in BSR Section 2-1, paragraph I, I. The Complainant 

will also be required to add the State as an additionally insured under 

the USP A member skydiving liability insurance and include the State in 

all liability waivers signed by participants in the skydiving activity. The 

State will confirm with F AAIHNL ADO for approval of the designated 

area within Hana Airport. Skydiving operations at Hana Airport can 

commence upon receipt of the signed LOA and notification that the said 

USPA waiver is granted along with providing the certificate of insurance 

naming the State as an additionally insured" [State of Hawaii's 

Corrective Action, Page 2] 

DIRECTOR'S RESPONSE: 

The Director's corrective action requirement, identified above, compels the State to negotiate in 

good faith to develop and implement temporary skydiving procedures in order to give the 

Complainant immediate aeronautical access to the Hana Airport while the State contemplates 

final implementation of the Hana Airport Rules. The Director's prescriptive corrective action is 

in direct response to the State's protracted rulemaking process, and the State's more than 7 year 

delay in granting the Complainant aeronautical access to HNM in contravention of Grant 

Assurance 22 and Grant Assurance 23. 

Upon review, the Director concludes that the State's proposed corrective actions, identified 

above, were not developed in good faith with the Complainant, nor were they developed in 

accordance with the State's obligations under the federal grant assurances. 

Specifically, the Director notes with concern, (1) the State's proposed requirement that the 

Complainant maintain membership in the United States Parachute Association as a condition of 

aeronautical access to HNM, (2) the State's proposed requirement that the Complainant obtain a 

waiver from the USPA for use of the proposed drop zone at HNM,( 3) the State's requirement 

that the State be named as an additionally insured under a USPA member skydiving liability 

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insurance policy, and (4) the State's request that the FAAIHNL ADO approve the designated 

parachute drop zone (PDZ) within Hana Airport. The Director's analysis of these components of 

the proposed corrective actions is explained in pertinent detail below. 

1. Requirement that the Complainant maintains membership in the United States 

Parachute Association as a condition of aeronautical access to HNM. 

As detailed in the Director's Preliminary Determination, Grant Assurance 22 requires an 

airport sponsor to operate the airport for the use and benefit of the public and to make it 

available to all types, kinds, and classes of aeronautical activity on fair and reasonable terms, 

and without unjust discrimination. FAA Order 5190.6B clearly defmes parachute activities 

as an aeronautical activity.3 As such, an airport sponsor may not condition aeronautical 

access to a federally-obligated airport on the aeronautical user's voluntary membership (or 

lack thereof) in an advocacy group such as the United States Parachute Association (USP A). 

While a sponsor has the proprietary right to develop airport rules or minimum standards 

pertaining to the conduct of parachute operations onto its airport, such rules or standards, 

temporary or otherwise, must be developed in a not unjustly discriminatory manner and must 

be in compliance with the sponsors federal grant obligations. The Director concludes that the 

State's proposed mandatory requirement that the Complainant obtain/maintain membership 

in the USPA in order to gain aeronautical access to a federally-obligated airport to be 

contrary to Grant Assurance 22, Economic Discrimination. 

The Director also believes that it is pertinent to point out that the FAA, not the USP A, 

promulgates regulations, rules, orders, circulars, and other official publications pertaining to 

airport, aircraft, and airspace operations under the statutory authority granted to it under 49 

United States Code (USC) § I 06. Specifically, 14 Code of Federal Regulation (CFR) Part 

91, General Operating and Flight Rules, 14 CFR Part 119, Certification: Air Carriers and 

Commercial Operators, and 14 CFR 105, Parachute Operations provide the regulatory 

framework for which parachute operations within the national airspace system must be 

conducted, including onto airports. Additionally, FAA Advisory Circular 1 05-2E, Sport 

Parachuting provides suggestions to improve sport parachuting safety and disseminates 

information to assist all parties associated with on-airport parachuting operations. While the 

FAA, to date, has not issued parachute drop zone siting or dimensional standards to be used 

by federally-obligated airports, the absence of any such standards does not give an airport 

sponsor the ability to require the Complainant to adhere to USP A Basic Safety Requirements 

(BSR) in order to gain access to the Airport. The USPA's BSR's are considered best 

practices for skydiving operators and participants; however, the BSRs are not FAAsanctioned safety standards and therefore cannot be required as condition of access to the 

airport. The Director also concludes that the State's proposed corrective actions were not 

developed in good faith with the Complainant, as was directed. 

Accordingly, the proposed corrective action described and evaluated above is not approved 

by the Director due to the inherent unjustly discriminatory nature of the State's requirements. 

3 FAA Order 5190.68, Appendix Z at 314 

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2. Requirement that the Complainant obtain a waiver from the USPA for use of the 

proposed drop zone at HNM. 

In the analysis of issue # 1 above, the Director found that requiring the Complainant to 

maintain membership in the USP A in order to gain aeronautical access to the Hana Airport to 

be unjustly discriminatory and therefore not in compliance with the State's federal grant 

assurances. Accordingly, the State's requirement that the Complainant obtain a waiver from 

the USP A for the use of the proposed drop zone at HNM is considered a moot point and 

therefore not an approved corrective action in accordance with the federal grant assurances 

and the prescriptive requirements of the Director's Preliminary Determination. 

3. Requirement that the State be named as an additionally insured under a USP A member 

skydiving liability insurance policy. 

In the analysis of issue # 1 above, the Director found that requiring the Complainant to 

maintain membership in the USP A in order to gain aeronautical access to the Hana Airport to 

be unjustly discriminatory and therefore not in compliance with the State's federal grant 

assurances. Accordingly, the State's requirement that the Complainant name the State as an 

additionally insured under a USP A member skydiving liability insurance policy is considered 

to be a moot point and therefore is not an approved corrective action in accordance with the 

federal grant assurances and the prescriptive requirements of the Director's Preliminary 

Determination. 

However, the Director affirms that the State, as the proprietor of the Hana Airport, may 

exercise its proprietary right to require general liability insurance on aeronautical tenants of 

the airport, as well as the proprietary right to be named as an additionally insured on such 

insurance policies. The Director cautions that minimum insurance requirements must not be 

unjustly discriminatory and the amounts of coverage should be reasonably consistent with 

other similarly situated airport tenants. The Director also affirms that the State may exercise 

its proprietary right to require the Complainant to include the State in any or all liability 

waivers signed by skydiving participants.4 

4. The State will confirm with F AAIHNL ADO the approval of the designated area within 

Hana Airport. 

The FAA does not formally approve or disapprove of proposed PDZ siting or dimensional 

standards at airports. As discussed in detail in the Director's Preliminary Determination, four 

( 4) safety risk evaluations were conducted by the FAA Flight Standards and/or the FAA Air 

Traffic Organization on the proposed skydiving operations into Hana Airport. In each 

instance, the FAA concluded that the Complainant's proposed skydiving operation at Hana 

Airport can be conducted safely with proper coordination, commuuication, and airport 

operational procedures in place. Accordingly, it is the airport sponsor's responsibility to 

designate the PDZ and to develop airport rules and regulations governing the safe and 

4 The Director encourages the parties to leverage the existing tenant/sponsor relationship established through the 

Complainant's existing commercial skydiving operations at Upolu and Dillingham airports to develop a tenable 

commercial skydiving lease/use agreement at Hana Airport. 

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efficient integration of the PDZ into the overall airport operation in a manner that is 

reasonable and not unjustly discriminatory to the parachute operator. 

CONCLUSION: 

I. The Director conditionally approves of the State's corrective actions identified in 

Directive #1 above. 

In the interest of transparency, the Director's conditional approval is contingent upon the 

State providing (1) a detailed timefrarne for which the Respondent expects to finalize the 

Hana Airport Rules and (2) a comprehensive schedule of events, inclusive of the requisite 

legislative, administrative and/or procedural steps that may be required by Hawaii state law 

or other mandate identifying the totality of the approval process for which the Hana Airport 

Rules will be subjected, and the projected timefrarne for approval and aeronautical access. 

The requisite documentation must be forwarded to the Director no later than 15 days from 

the date of this correspondence. 

2. The Director does not approve the State's proposed corrective actions in Directive #2 

above. 

The Director's Preliminary Determination specifically directed the State to negotiate in good 

faith to develop temporary skydiving procedures satisfactory to both the Respondent and the 

Complainant to allow commercial skydiving operations to take place at HNM during the 

pendency of the State's bureaucratic rulemaking process. Instead, the State acted to develop 

proposed temporary procedures that are not consistent with the State's federal grant 

obligations and the Director's Preliminary Determination. More specifically, the Director 

does not concur with: 

a. The State's proposed requirement that the Complainant maintain membership in the 

United States Parachute Association as a condition of aeronautical access to HNM; 

b. The State's proposed requirement that the Complainant obtain a waiver from the 

USP A for use of the proposed drop zone at HNM, and; 

c. The State's requirement that the State be named as an additionally insured under a 

USPA member skydiving liability insurance policy. 

The Director concludes that the State's proposed requirement that the Complainant 

obtain/maintain membership in the USPA in order to gain aeronautical access to a federallyobligated airport to be contrary to Grant Assurance 22, Economic Discrimination, as more 

fully described above. 

Consequently, the Director once again directs the State to negotiate in good faith, with the 

Complainant's active participation, to develop temporary parachuting procedures to allow the 

Complainant immediate aeronautical access to the Hana Airport. Such temporary procedures 

must be in compliance with the State's federal grant obligations, including the requirement 

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that the State operate the airport for the use and benefit of the public and to make it available 

to all types, kinds, and classes of aeronautical activity on fair and reasonable terms, and 

without unjust discrimination in accordance with Grant Assurance 22. 

Please note, it will not be necessary to obtain the Director's direct approval of the temporary 

procedures prior to the start of the Complainant's commercial skydiving operation since the 

Director expects the procedures to be developed to the satisfaction of both the State and the 

Complainant and in compliance with the sponsor's federal obligations. 

The Director cautions the State that protracted correspondence or negotiations with the 

Complainant in developing the temporary procedures can be construed as additional 

unreasonable delay and could result in the Director initiating action to withhold the 

processing ofthe State of Hawaii's applications for Airport Improvement Program 

discretionary grants under 49 U.S.C. § 47115 and general aviation airport grants under 49 

U.S.C. § 47114(d). 

Sincerely, 

Randall S. Fiertz 

Director, Office of Airport Compliance 

and Management Analysis 

Nw. 1), 2.. oly 

Date 

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CERTIFICATE OF SERVICE 

/:l--

I HEREBY CERTIFY that on f31 /{0</, 2014, I placed in the United States mail (first 

class, postage paid) a true copy of the foregoing document addressed to: 

For Complainant 

Frank Hinshaw 

Skydiving School Inc., 

d/b/a Skydive Hawaii 

PO Box 75520 

Honolulu, Hawaii, 96836 

Richard J. Durden 

Attorney at Law 

27987 Richmond Hill Road 

Conifer, CO 80433 

For Respondent 

Glenn I. Kimura 

Deputy Attorney General 

Department of the Attorney General, State of Hawaii 

465 S. King Street, Room 300 

Honolulu, HI 96813 

Copy to: 

FAA Part 16 Airport Proceedings Docket 

Office of Airport Compliance and Management Analysis 

FAA Western Pacific Region 

Honolulu Airports District Office 

&ct:;j::-~ Claudia :oberts·· 

Office of Airport Compliance 

and Management Analysis 

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