Document ID: FAA-2013-0259-3095
Agency: faa
Document Type: Notice
Title: Airport Investment Partnership Program: Application Procedures
Posted Date: 2021-04-20T04:00Z

[Federal Register Volume 86, Number 74 (Tuesday, April 20, 2021)]
[Notices]
[Pages 20586-20592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07586]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. 28895]

Airport Investment Partnership Program: Application Procedures

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of application procedures.

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SUMMARY: This document provides procedures for applying for FAA 
approval of the privatization or partial privatization of a federally 
obligated public airport. This document revises the procedures for 
applying for approval of the privatization of a federally obligated 
public airport, to reflect the provisions of the AIPP. It also revises 
the statement of issues the FAA will consider in granting exemptions 
and approving the transfer of a public use airport under the new 
program.

DATES: This policy takes effect April 20, 2021. No changes are required 
to an application submitted and accepted for review prior to 
publication if there is no change to the applicant's proposed 
transaction. The FAA will evaluate all applications in the order of 
receipt.

FOR FURTHER INFORMATION CONTACT: Kevin C. Willis, Director, Office of 
Airport Compliance and Management Analysis, (ACO-1), Federal Aviation 
Administration, 800 Independence Ave. SW, Washington, DC 20591, (202) 
267-3085.

SUPPLEMENTARY INFORMATION: 

Introduction and Background

    Section 149 of the Federal Aviation Authorization Act of 1996 
established an airport privatization pilot program (APPP), and 
authorized the Department of Transportation to grant exemptions from 
certain Federal statutory and regulatory requirements for up to five 
airport privatization projects. A request for participation in the APPP 
was initiated by the filing of either a preliminary or a final 
application for exemption with the FAA. The FAA issued final guidance 
for applying for participation in the program in September 1997.
    Section 160 of the FAA Reauthorization Act of 2018 established the 
Airport Investment Partnership Program (AIPP), which eliminates the 
limit on the number of airport privatizations that the FAA may approve, 
allows privatization of multiple airports by one airport sponsor, and 
allows public participation in ownership of a private operator. 
Requirements for FAA approval of an airport privatization are 
substantially the same as under the pilot program.
    This notice of application procedures to be used by applicants for 
an airport privatization project is being published pursuant to section 
149 of the Federal Aviation Administration Authorization Act of 1996, 
Public Law 104-264 (October 9, 1996) (1996 Reauthorization Act), which 
added a new section 47134 to Title 49 of the U.S. Code, and subsequent 
amendments of section 47134, including most recently Section 160 of the 
FAA Reauthorization Act of 2018, Public Law 115-254 (October 5, 2018).
    Section 47134, as amended, authorizes the Secretary of 
Transportation, and through delegation, the FAA Administrator, to 
exempt a sponsor of a public use airport that has received Federal 
assistance, from certain Federal requirements in connection with the 
privatization of the airport by sale or lease to a private party. 
Specifically, the Administrator may exempt the sponsor from all or part 
of the requirements to use airport revenues for airport-related 
purposes, to pay back a portion of Federal grants upon the sale of an 
airport, and to return airport property deeded by the Federal 
Government upon transfer of the airport. The Administrator is also 
authorized to exempt the private purchaser or lessee from the 
requirement to use all airport revenues for airport related purposes, 
to the extent necessary to permit the purchaser or lessee to earn 
reasonable compensation from the operations of the airport.
    The term ``public sponsor'' is used in this document to mean the 
governmental agency or authority that currently owns or operates a 
public airport and proposes to sell or lease it to a private purchaser 
or lessee. The term ``private operator'' is used to refer to a private 
firm or firms that propose to purchase or lease a public airport under 
the program; the term ``applicant'' means all of the parties jointly 
participating in the application for privatization of a particular 
airport. The terms ``operating entity'' and ``private investor'' are 
used for a partial privatization transaction, in which the public 
sponsor holds an interest in the operating entity, jointly, with a 
private sector investor.
    This document does not have the force and effect of law and is not 
legally binding in its own right. It is intended to provide clarity to 
the public regarding existing requirements under the law and agency 
policies. Mandatory terms such as ``must'' in this notice describe 
established statutory or regulatory requirements.

The September 1997 Notice of Final Application Procedures

    To implement section 47134, the FAA requested comments in April 
1997 on proposed program application procedures (62 FR 19638; April 22, 
1997). The FAA issued a Notice of Final Application Procedures in 
September

[[Page 20587]]

1997 (62 FR 48693; September 17, 1997). In that notice, the FAA 
addressed comments received on the notice and request for comment, and 
adopted comprehensive procedures for applying for participation in the 
program. In addition to identifying the application procedures to be 
used, the final notice discussed the issues the FAA will consider in 
determining whether to approve an application for an exemption under 
section 47134 and other Federal requirements for airport operation. The 
Notice of Final Application Procedures is posted on the FAA website at: 
https://www.faa.gov/airports/airportcompliance_compliance/privatization/.

The November 1997 Request for Comments

    Shortly after the final application procedures were published in 
September 1997, the FAA received a complaint about the effect of one 
provision of the final procedures on certain air carriers, relating to 
49 U.S.C. 47134(b)(1)(A). That section of the statute limited the 
exemption to permit the use of funds by the public airport sponsor for 
non-airport purposes, to amounts approved by 65 percent of the air 
carriers serving the airport and 65 percent of the air carriers by 
total landed weight of air carriers from the preceding calendar year. 
The same approval was required for increases in air carrier fees that 
exceed the increase in the Consumer Price Index. In interpreting that 
requirement, the FAA stated that the air carriers included in the 
calculation of the 65 percent would not include otherwise qualified air 
carriers that submitted proposals or that participate in consortia that 
submitted proposals for the privatization of the subject airport. The 
FAA position was based on the consideration that an air carrier that 
sought to operate the airport, whether successful or not, could base 
its vote on interests other than those of an air carrier, as intended 
by Congress.
    The complaint specifically objected to the exclusion of carriers 
that were unsuccessful in participating as private airport operator, 
and would be voting only from the point of view of an air carrier. In 
response, the FAA issued a Notice of Amendment to Final Application 
Procedures; Request for Comments (FR 62 63211; November 26, 1997). In 
that notice, the FAA suspended the exclusion of carriers that were 
unsuccessful in bidding on a privatization proposal, but confirmed that 
an air carrier that was a successful bidder on a privatization proposal 
would not be counted in a vote under the 65 percent rule. The notice 
requested comment on this issue, but no comments were received in the 
docket. Accordingly, the FAA has continued the policies announced in 
the November 1997 notice, and incorporates them in this revised 
application procedure. A carrier that bids on a privatization proposal 
but is unsuccessful will be counted in the list of carriers 
participating in the 65 percent vote. A carrier that is successful in 
bidding on a privatization proposal, and as a result will become the 
private airport operator or part of a consortium that will operate the 
airport, will not be included in the list of voting air carriers under 
section 47134(b)(1)(A) (as amended in 2003).

2003 Amendments to Section 47134

    In 2003, in Vision 100--Century of Aviation Reauthorization Act, 
Congress amended the provisions of section 47134(b) (1)(A) for 
obtaining the views and consent of air carriers for an exemption from 
the airport revenue use requirements of 49 U.S.C. 47107(b) and 47133 
(Pub. L. 108-176, section 155(a), Dec. 12, 2003, 117 Stat. 2508). As 
originally enacted in 1996, section 47134 required that 65 percent of 
air carriers at the airport, both by number of carriers and by 
percentage of total air carrier landed weight, approve the revenue use 
exemption. However, these provisions made no distinction between 
categories of airport.
    The 2003 amendment replaced section 47134(b)(1)(A)(i) and (ii) with 
new requirements that differ for primary airports and nonprimary 
airports. A primary airport is a commercial service airport with more 
than 10,000 passenger boardings each year. Section 47134(b)(1)(A) now 
provides:
    1. At a primary airport, an exemption from revenue use requirements 
requires 65 percent approval by scheduled air carriers serving the 
airport and approval by scheduled and nonscheduled air carriers serving 
the airport whose landed weight was at least 65 percent of total landed 
weight the previous year.
    2. At a nonprimary airport, the FAA may approve an exemption if the 
public sponsor has consulted with at least 65 percent of the owners of 
aircraft based at the airport.
    3. An air carrier is deemed to have approved an application for 
exemption unless it submits an objection in writing to the sponsor with 
60 days of the filing of the application with the FAA or the service of 
the application on the carrier, whichever is later.
    The revised application procedure issued in this notice reflects 
the new requirements in the 2003 amendments to section 47134.

2012 Amendment to Section 47134

    In 2012, in the FAA Modernization and Reform Act of 2012, Congress 
increased the number of airports that can participate in the 
privatization pilot program from 5 to 10 (Pub. L. 112-95, section 156, 
Feb. 14, 2012, 126 Stat. 36). That amendment has become irrelevant with 
the elimination in 2018 of any limit on the number of privatization 
projects that FAA may approve.

2018 Amendments to Section 47134

    Section 160 of the FAA Reauthorization Act of 2018 enacted 
amendments to Sec.  47134 to eliminate the limit on the number of 
airport privatization applications the FAA could approve, effectively 
maturing airport privatization beyond a pilot program. Section 160 made 
several additional changes to the FAA approval process.
    1. If an exemption is granted to an airport sponsor from the 
revenue use requirement and permits use of airport revenues for non-
airport purposes, then the FAA must grant an exemption to the sponsor 
from the requirement to repay Federal grant funds or return property to 
the Federal Government.
    2. If an exemption is granted to an airport sponsor from the 
revenue use requirement and permits use of airport revenues for non-
airport purposes, the FAA must grant an exemption to the private 
purchaser or lessee from the revenue use requirement and permit the 
purchaser or lessee to earn compensation from operation of the airport.
    3. The FAA may accept applications from a sponsor for privatization 
of multiple airports if all of the airports are under the control of 
the sponsor and all are located in the same State.
    4. A public airport sponsor may have an interest in the private 
operating entity that purchases or leases the airport.
    5. FAA may fund a grant of up to $750,000 for predevelopment 
planning costs related to preparation of a privatization application or 
draft application.
    These last two provisions are substantial changes from authority 
granted under the APPP. Accordingly, the following additional guidance 
is provided on how the agency proposes to address partial privatization 
applications and applications for the newly authorized planning grants.

Partial Privatization

    Section 160 amended 49 U.S.C. 47134 by revising subsection (d)(2) 
to read: ``(2) PARTIAL PRIVATIZATION.--A

[[Page 20588]]

purchaser or lessee may be an entity in which a sponsor has an 
interest.'' This new provision could authorize and promote forms of 
airport governance not previously used in the United States, resulting 
in applications for arrangements that would be not only unprecedented 
but also complex. In reviewing AIPP applications under section 
47134(d)(2) and associated requests for exemption from the standard 
requirements for use of airport revenue, the FAA will seek to balance 
several key interests, including:
    1. Preserving program incentives for private investment in 
airports, consistent with the requirements and legislative intent of 
the AIPP;
    2. Ensuring that adequate airport revenues remain available for the 
operation, maintenance, and development of a participating airport; and
    3. Continuing reasonable and not unjustly discriminatory terms for 
use of the airport by aeronautical users and tenants.
    Based on experience with the APPP and preliminary conversations 
with aviation and finance industry representatives, the FAA will apply 
the following principles in its review of applications involving 
partial privatization arrangements:
    1. ``Partial privatization'' means public participation in a lease 
of the entire airport.
    New section 47134(d)(2) authorizes a public airport sponsor to own 
and/or control an interest in a private firm operating the entire 
airport under a long-term lease. The term ``partial privatization'' 
refers to the public sponsor's partial control of the private operation 
of the entire airport, and not to privatization of a part of an 
airport. Privatization of individual airport facilities has occurred at 
a number of airports in the U.S. through public-private partnerships, 
without participation in the APPP or AIPP, and without the need for 
special FAA review. (See Item 10 below).
    2. An AIPP project may have majority private control or majority 
public control. An application under section 47134(d)(2) may propose 
that the public airport sponsor transfer a majority interest in the 
airport operation to a private entity, or, alternatively, that the 
public sponsor hold a majority interest in the private operating 
entity.
    3. The public airport owner remains the Airport Improvement Program 
(AIP) sponsor in a project with majority public control. Where the 
public owner holds a controlling interest in a lease for private 
operation of the airport, the FAA will continue to consider the public 
airport owner as the airport sponsor, with responsibility for 
administration of grant projects and compliance with AIP grant 
agreements.
    4. The public owner remains the eligible agency for Passenger 
Facility Charges (PFC) collections in a project with majority public 
control. Where the public owner holds a controlling interest in a lease 
for private operation of the airport, the public sponsor will also 
remain the eligible agency for imposition of passenger facility charges 
at the airport. While section 47134(g)(1) allows a private sponsor to 
impose a passenger facility charge, the private investor in this case 
would not be the public agency, and also would not have satisfied the 
requirement in 49 U.S.C. 40117(a)(2) that an eligible agency ``controls 
the use of a commercial airport.''
    The PFC process is separate from the AIPP application process; PFC 
amendments related to a privatization initiative should be coordinated 
with the Office of Airports at FAA Headquarters.
    5. A reasonable concession fee paid by a private operator can be 
exempted from general revenue use requirements. For every application 
approved under the AIPP, whether the public owner or the private 
operator is the controlling entity, an exemption under section 
47134(b)(1) (3) will apply at a minimum to the private operator's 
reasonable concession fee, i.e., the amount paid by the private 
operator for the right to operate the airport and earn a return on 
investment from airport revenues in proportion to the private 
operator's share of the operating enterprise.
    6. The FAA will consider the degree of public participation in 
evaluating a request for exemption from general revenue use 
requirements. For revenues other than the initial concession fee 
payment, the degree of the public sponsor's control of a private entity 
operating the airport may affect the extent of the exemption granted 
under section 47134(b)(1) to allow use of revenue for non-airport 
purposes. For example, where a public sponsor retains majority control 
and ultimate responsibility for airport management, a reasonable 
concession fee payment could be expected to reflect only the value of 
the private investor's share of revenue from its passive investment. 
Payments to the public sponsor by the operating entity in excess of 
that amount, as profit from ongoing airport operations over the lease 
term, would generally be considered obligated airport revenue not 
subject to exemption.
    7. The FAA will consider the effects of the terms of the agreement 
between the private investor and the public airport owner. Where the 
degree of public participation in the entity operating the airport 
could affect the kinds of revenue covered by an exemption under section 
47134(b)(1), the FAA will look to the sources and effect of payments 
described in a proposed application and not simply the way various 
revenues are labeled by the applicants.
    8. The FAA will consider the private investor's relative 
participation in an AIPP initiative in approving an exemption for 
compensation from airport revenues. An exemption under section 
47134(b)(3) allowing a private investor to receive compensation for 
investment in and operation of the airport will be generally 
proportionate to the private investor's participation in the entity 
operating the airport.
    9. An AIPP initiative with both public and private participation 
should not result in diversion of airport revenue (by exemption 
permitted at a fully privatized airport). As a general principle, in an 
application filed under section 47134(d)(2), the total airport revenue 
paid to the public owner and the private investor and subject to 
exemption from revenue use requirements should not exceed the amount of 
exempted revenue a private investor would receive in a fully private 
transaction.
    10. An application must be permitted under State law. In some 
States, it is not clear that State law would permit the partial public 
ownership of a private firm operating an airport. The FAA encourages 
submission of the legal opinion described in item 1.H. of the final 
application, a statement of the public sponsor's authority to 
participate in a private enterprise, at the time of the preliminary 
application.

Availability of AIP Grants Under Sections 47102(3)(R) and 47134(l)

    Section 165 of the FAA Reauthorization Act of 2018 added a new item 
to the definition of ``airport development,'' at 49 U.S.C. 47102(3)(R), 
to extend eligibility for AIP grant funding to certain work performed 
relating to the preparation of an airport privatization project 
application under the AIPP:
    (R) predevelopment planning, including financial, legal, or 
procurement consulting services, related to an application or proposed 
application for an exemption under section 47134.
    Section 160 of the Act included a revised paragraph 47134(l), which

[[Page 20589]]

limited a grant for predevelopment costs relating to an application 
under section 47134 to $750,000 per application.
    On July 29, 2019, the FAA issued Program Guidance Letter (PGL) 19-
03, Grants for Predevelopment Costs for Airport Investment Partnership 
Program. The PGL contains guidance for agency staff on the review and 
approval of AIP grant applications for predevelopment planning related 
to a Section 47134 application. The PGL is available on the FAA website 
at: https://www.faa.gov/airports/aip/guidance_letters/media/aip-pgl-19-03-AIPP.pdf.

Summary of Revisions to Program Application Procedures

    In addition to minor style edits for clarity and program 
improvement, the following revisions have been made to the Process for 
Applying for an Exemption under section 47134:
    1. References to a limit of 10 airports and procedures for 
determining eligibility as one of the 10 participating airports have 
been deleted. A procedure is retained for filing a preliminary 
application, because of the value of the preliminary application in 
confirming an applicant's legal authority and preliminary plans for 
privatization of its airport, and the involvement of the FAA in the 
application process at an early stage.
    2. Because Section 160 allows a public sponsor to have an interest 
in the entity operating the airport, the procedures provide for three 
possible parties in a partial privatization of an airport: the ``public 
sponsor,'' the ``private investor'' (which may be a consortium of 
investors), and the ``private operator'' or ``operating entity'' that 
would be co-owned by the public sponsor and the private investor. In a 
full privatization of the airport, the application continues to refer 
to two parties: the public sponsor, and the private operator, who would 
be both investor and airport operator.
    3. ``Contents of the Preliminary Application'' eliminates the 
requirement for a distribution-ready copy of the request for proposals 
for management and operation of the airport.
    4. Regulatory references to TSA and airport security have been 
updated to cite to 49 CFR part 1542 rather than 14 CFR part 107 where 
applicable.
    5. Part II, ``Airport Property,'' requires information on each 
airport included in the application, in recognition that a public 
sponsor can request privatization of more than one airport in a multi 
airport system.
    6. Part II, ``Airport Property,'' has an added requirement for an 
explanation of any differences between the airport's Airport Layout 
Plan and Exhibit A to the public sponsor's Airport Improvement Program 
grant agreements for the airport.
    7. Part IV, ``Qualifications of the Private Operator,'' adds a 
request for any pending civil litigation against the private operator 
or its key personnel.
    8. Part IV, ``Qualifications of the Private Operator,'' adds letter 
of credit equal to cash reserves of six months for the initial 
operation.
    9. Part VI, ``Certification of Air Carrier Approval,'' is rewritten 
to implement the 2003 amendment to section 47134. That amendment 
requires a percentage of air carrier approval for issuance of an 
exemption from revenue use requirements at a primary airport. At a 
nonprimary airport, the FAA may issue an exemption upon certification 
that that public sponsor has consulted with at least 65 percent of the 
owners of aircraft based at the airport.
    10. In Part VII, ``Airport Operation and Development,'' paragraph 
A.5 adds more specific guidance for certification of air carrier 
approval of an increase in fees that will exceed the rate of inflation.
    11. In Part VII, ``Airport Operations and Development,'' paragraph 
A.3 requires the application to include a legal opinion and 
certifications from both the public sponsor and the private operator to 
address bankruptcy.
    12. Paragraph VII.B requires that transfer documents reflect the 
private operator's assumption of legal responsibility for compliance 
with grant assurances in effect under the public sponsor's current AIP 
grant agreements.
    13. The requirement for a fax number has been changed to an email 
address.

Process for Applying for an Exemption Under Section 47134

Exemption Application and Review Process: Overview

    The FAA will apply the following policies and procedures for filing 
and review of requests for privatization of a public airport under 49 
U.S.C. 47134:
    1. A request for participation in the airport investment 
partnership program will be initiated by the filing of a preliminary 
application for exemption under section 47134(a). A public sponsor may 
also elect to file a final application without the prior filing of a 
preliminary application, if the public sponsor has selected a private 
operator.
    2. All applications will be evaluated in the order of receipt.
    3. FAA will consider an application to be filed on the date it is 
received by the FAA. Application packages will be date-stamped on 
receipt in Room 600 East at the FAA headquarters building.
    4. FAA will review the application to determine if it meets the 
procedural requirements stated in this notice.
    5. The FAA will accept preliminary applications filed before the 
applicant has commenced the procurement process for the selection of an 
operator. The preliminary application must contain the information 
listed under the section titled ``Contents of Applications.'' The FAA 
will notify applicants of its decision on the acceptance of the 
application for review within 30 days of the filing of the preliminary 
application.
    6. If the preliminary application meets the requirements described 
in this notice, the applicant will be notified that the application is 
``accepted for review.'' The FAA may request additional information 
before accepting the application for review, but the original filing 
date will remain in effect. Following the FAA's acceptance of the 
preliminary application, the applicant is authorized to select a 
private operator, negotiate an agreement, and submit a final 
application to the FAA.
    7. If the preliminary application does not meet the requirements 
described in this notice, and cannot be brought into compliance with 
those requirements with information requested by the FAA during its 30-
day review, the preliminary application will be rejected. The FAA will 
notify the applicant that the application is rejected and that the 
application is no longer on file. The applicant may file a new 
application at any time, and receive a new ``on file'' date at that 
time.
    8. The FAA will publish in the Federal Register a notice that a 
preliminary application has been received under 49 U.S.C. 47134, and 
that the FAA has accepted the application for review.
    9. Applicants may file a final application after the public sponsor 
has selected a private operator and reached substantial agreement on 
the terms of the privatization transaction. If an application cannot 
reasonably be brought into compliance with the requirements of section 
47134 and other applicable Federal statutes with current information in 
accordance with the time schedule submitted during the preliminary 
pplication, and any extensions of time approved by the FAA, the FAA 
will notify the applicant that the application is rejected and that the 
application is no longer on file. The applicant may file a new 
application at any time, and receive a new ``on file'' date at that 
time.

[[Page 20590]]

    10. If an applicant fails to timely file a final application in 
accordance with the time schedule submitted during the preliminary 
application, and any extensions of time approved by the FAA, the FAA 
will notify the applicant that the application is rejected and that the 
application is no longer on file. The applicant may file a new 
preliminary application at any time, and receive a new ``on file'' date 
at that time.
    11. The FAA will publish in the Federal Register a notice of 
receipt of the final application, establish a docket, and accept public 
comment on the application for a period of 60 days. The FAA reserves 
the right to modify the comment period at its own discretion. If an 
application is approved, exemptions will be issued after the execution 
of all documents necessary to fulfill the requirements of section 47134 
and other laws and regulations within the FAA's jurisdiction (e.g., 
issuance of a Part 139 certificate to the private operator; FAA 
confirmation that the private operator has a TSA approved security 
program under 49 CFR part 1542). FAA representatives will be available 
to meet with parties interested in an airport privatization project 
both before and after the filing of a preliminary application for 
exemption to discuss the Federal statutory requirements and policies 
that apply to applications under section 47134. Airport sponsors are 
encouraged to meet with the FAA early in the process to ensure that the 
parties understand the actions that will be necessary for final program 
participation.

Filing an Application

    1. Applicants must submit one original application package and four 
copies containing the information described under ``Content of 
Applications'' in this notice to: Associate Administrator for Airports, 
ARP-1, Room 600 East, Federal Aviation Administration, 800 Independence 
Avenue SW, Washington, DC 20591.
    2. All preliminary and final applications may be delivered, mailed, 
or submitted on a USB flash drive, but will not be considered to be 
``on file'' with the FAA until received in the Office of the Associate 
Administrator for Airports, Room 600 East.
    3. There is no required form for an application. However, the 
preliminary application package must be submitted with a cover letter, 
signed by appropriate officials of the current public sponsor or, in 
the case of the final application, signed jointly by appropriate 
officials of the current public sponsor and the private operator 
proposing to buy or lease the airport. The cover letter must request 
one or more of the exemptions authorized by 49 U.S.C. 47134(b) for the 
purpose of the privatization of an airport. Please title each section 
according to the section titles below.
    4. Officials signing for the public sponsor must provide evidence 
of their authority to file the application, e.g., an enacted state 
statute or adopted city council resolution.

Contents of the Preliminary Application

    The preliminary application should consist of:
    1. As much of the information required by Part I, ``Parties to the 
Transaction,'' from the Final Application, as is available.
    2. A summary narrative of the objectives of the privatization 
initiative, i.e., what the public sponsor wants to accomplish by the 
solicitation. The narrative should indicate whether the applicant plans 
on the full privatization of the airport by lease or sale to a private 
operator, or intends a partial privatization by holding an interest in 
the operating entity that will operate the airport.
    3. A description of the process and a reasonable, realistic 
timetable to be employed in selecting an operator and completing 
transfer of the airport. This should include the identification of all 
local approvals and the time frame when the FAA can anticipate the 
final application will be submitted for review.
    4. All of the information required by Part II, ``Airport 
Property,'' from the Final Application.
    5. Financial statements including balance, income, and cash flow 
statements for the last two full fiscal year periods.
    6. A description of the procurement, i.e., selection/evaluation of 
a private operator for the management and operation of the airport with 
reference to the nine statutory conditions under 49 U.S.C. 47134.

The Final Application

    The following statements and information must be included in the 
final application. The FAA realizes that some documents, figures, and 
other information will not be available until shortly before the 
execution of the transfer transaction. The final application may only 
be filed after the public sponsor has selected a private operator and 
reached sufficient agreement with the operator on the terms of the 
transaction to represent those terms in an application. The FAA will 
not require that all information listed below be provided at the time 
of the application.
    However, for each item below for which information is not 
available, the applicant may substitute a description of the expected 
response and the date by which the final information will be available. 
Information not provided with the application should be submitted to 
the FAA as soon as it becomes available.

Part I. Parties to the Transaction

    A. Name of the airport proposed for sale or lease.
    B. Name and address of the public sponsor of the airport; name, 
address, telephone number, and email address of the person to contact 
about the application.
    C. Name and address of the private operator proposing to purchase 
or lease the airport; name, address, telephone number, and email 
address of the person to contact about the application.
    D. If the private operator proposing to purchase or lease the 
airport is a partnership, joint venture, or other consortium of 
multiple interests, the name and address of each of the participating 
members.
    E. Citizenship of the private operator or each member of the 
private operator consortium, and percentage of interest of each such 
member.
    F. If the public sponsor will retain an interest in the new 
operating entity and share ownership of that entity with a private 
investor, the percentages of ownership to be held by the public sponsor 
and the private investor respectively.
    G. A statement of the public sponsor's authority to sell or lease 
the airport, with a citation to legal authorities.
    H. If the public sponsor will share ownership in the operating 
entity with a private investor, a statement of the public sponsor's 
authority to participate in a private enterprise.

Part II. Airport Property

    A. For each airport included in the application, a description of 
the airport property to be transferred. Applicants should describe 
property in sufficient detail to identify the parcels of property and 
facilities to be transferred; a map and a legal description of the 
property may be included but are not required.
    B. A history of the acquisition of existing airport property. 
Applicants should include information on grants, types of deeds, the 
dates and means of conveyance, e.g., Surplus Property Act, other 
Federal conveyance of donated property, parcels purchased with Federal 
funds, and parcels purchased with only local funds.

[[Page 20591]]

    C. An explanation of any differences between the airport property 
to be transferred and Exhibit A to recent AIP grant agreements.
    D. Evidence of Good Title to the airport property satisfactory to 
the FAA.

Part III. Terms of the Transfer

    A. A detailed description of the terms of the transfer, other than 
financial, including:
    1. Term of the lease or other transfer agreement.
    2. A description of any rights, authority, or interests retained by 
the public sponsor, including reversion of title to facilities.
    3. If the private operator is a consortium, a description of the 
respective rights and responsibilities of each member.
    4. If the public sponsor will share ownership of the operating 
entity, a description of the respective rights and responsibilities of 
the public sponsor and private owners of the operating entity.
    B. Financial terms of the transaction:
    1. Amounts and timing of payments to the public sponsor.
    2. Amounts of payments to sponsor to be used, respectively, for 
airport purposes (including recoupment of public sponsor investments 
not previously recovered) and for other purposes.
    3. Financing arrangements, including sources of the funds used by 
the private operator for purchase or initial lease payment and future 
lease payments, and for return on investment.
    4. Projected impact of the initial transaction on the fee structure 
for charges to airport users.
    5. Projected impact of future purchase or lease payments to the 
public sponsor on the fee structure for charges to airport users.
    6. Other relevant financial terms of the transfer.
    C. Copies of all documents executed as part of the transfer, to be 
provided as they are executed or are in sufficiently final form to 
indicate the substantive nature of the expected final document.
    D. If applicable, a request for confidentiality of any particular 
document or information submitted, with supporting information.
    E. Provisions of a document conferring third-party beneficiary 
rights on behalf of the FAA to enforce, directly against the private 
operator, key obligations contained in AIP grant agreements and the 
assurances required by section 47134.

Part IV. Qualifications of the Private Operator

    A. A complete description of airport management and operations 
experience, including the identity, experience, expertise, and 
responsibility of key personnel. A description of the facilities and 
airports presently being managed by the company, both domestically and 
internationally. If the private operator is a newly formed entity, 
describe the experience of the constituent members and the proposed 
management structure to integrate operational functions.
    B. Financial resources for operating/capital expenses of the 
airport. Copies of the 10K annual reports filed in the past three years 
with the Securities and Exchange Commission, if filed. If 10K annual 
reports were not filed, provide a balance sheet and income statement 
prepared in accordance with Generally Accepted Accounted Principles, 
with all footnotes applicable to the financial statements. The private 
operator should have a letter of credit equal to cash reserves of six 
months for the initial operation of the airport unless a lower amount 
is approved in advance by the FAA.
    C. Timing and details of application for Part 139 certificate, if 
applicable.
    D. Plan for compliance with 49 CFR part 1542, if applicable.
    E. A description of the private operator's capability and 
experience of complying with the public sponsor's existing grant 
assurances, including the assurance of compatible land use around the 
airport; the protection of navigation aids, approach lights, runway 
safety areas, and runway protection zones; and the continuation and 
extension of avigation easements.
    F. Affiliations with air carriers or other persons engaged in 
aeronautical business activity at an airport (other than airport 
management).
    G. A description of all charges of unfair or deceptive practices or 
unfair methods of competition brought against the private operator and 
private operator's key personnel; and, in the case of a private 
operator that is a joint venture, partnership, or other consortium, the 
separate members of the entity in the past 10 years. The description 
should include the disposition or current status of each such 
proceeding.
    H. Any other pending civil litigation against the private operator 
or its key personnel.

Part V. Requests for Exemption

    A. Describe the specific exemption requested by the public sponsor 
under 49 U.S.C. 47134(b)(1), from the prohibition on use of airport 
revenue for general purposes, including the amount of funds involved. 
The description should include sale or lease proceeds as well as funds 
in existing airport accounts that would be transferred to general 
accounts.
    B. Describe the specific exemption requested by the public sponsor 
under 49 U.S.C. 47134(b)(2) from the requirement to repay Federal grant 
funds or return property.
    C. Describe the specific exemption requested by the private 
operator under 49 U.S.C. 47134(b)(3) from the prohibition on use of 
airport revenue for general purposes. The description should include 
the anticipated amount of airport revenue to be used for compensation 
of the private operator, the source of airport funds involved, and a 
description of the effect, if any, on air carrier and other 
aeronautical user fees.

Part VI. Certification of Air Carrier Approval

    A. For an application relating to a primary airport:
    1. Provide a certification that air carriers meeting the 
requirements of 49 U.S.C. 47134(b)(1)(A)(i) approve the exemption 
described in Part V.A. above.
    2. Provide:
    i. A list of all U.S. air carriers serving the airport, to include 
all carriers conducting operations at the airport under authority of 14 
CFR part 121 that have a lease and/or use agreement at the airport or 
that conducted at least 50 flights under such authority in the 
preceding calendar year;
    ii. A list of all carriers conducting operations at the airport as 
a commuter air carrier within the meaning of 14 CFR part 298 that have 
a lease and/or use agreement at the airport or that conducted at least 
50 flights under such authority in the preceding calendar year; and
    iii. A list of all operators conducting operations at the airport 
under authority of 14 CFR part 135 that have a lease and/or use 
agreement at the airport and that have at least one aircraft used in 
Part 135 operations based at the airport.
    3. The lists described in VI.A.2 should exclude any carrier that is 
not currently serving the airport or that has responded to a 
solicitation or submitted a proposal to serve as a private airport 
operator or participate in a private airport operator consortium at 
that airport.
    4. Provide:
    i. A list of the air carriers that have approved the exemption;
    ii. The total landed weight of operations by all air carriers 
listed

[[Page 20592]]

under VI.A.2 above at the airport for the preceding year;
    iii. The total landed weight of each air carrier listed under 
VI.A.2 above that has approved the exemption; and
    iv. A list of carriers serving the airport in the previous or 
current year but excluded from the lists in VI.A.2, with the reason for 
exclusion.
    5. Provide a copy of each document indicating air carrier approval 
of or objection to the exemption requested.
    6. Provide a description of consultation with foreign air carriers 
serving the airport on proposals for air carrier approval under 49 
U.S.C. 47134(b)(1)(A).
    B. For an application relating to a nonprimary airport:
    1. Provide certification that the public sponsor has consulted with 
at least 65 percent of the owners of aircraft at the airport regarding 
the sponsor's application for the exemption described in Part V.A. 
above.
    2. Copies or a description of the information conveyed to aircraft 
owners at the airport regarding the proposed exemption.
    3. Copies of comments received from aircraft owners on the proposed 
exemption.

Part VII. Airport Operation and Development

    A. Provide a description of how the private operator, the public 
sponsor, or both will address the following issues with respect to the 
operation, maintenance, and development of the airport after the 
proposed transfer.
    1. Part 139 certification. If applicable, a request for a Part 139 
certificate should be filed with thelocal FAA Regional Airports 
Division. The exemption application needs only to reflect the private 
operator's intentions and the status of a certificate application, if 
applicable.
    2. Continuing access to the airport on fair and reasonable terms 
and without unjust discrimination, in accordance with section 
47134(c)(1).
    3. Continued operation of the airport in the event of bankruptcy or 
other financial or legal impairment of the private operator, in 
accordance with the specific terms of section 47134(c)(2). The 
application should include any provision for reversion to the public 
sponsor. The application should include a legal opinion and 
certifications from both the public sponsor and the private operator 
that the proposed plan will be effective under operation of all 
applicable law, including but not limited to bankruptcy law, in 
assuring the continued operation of the airport.
    4. Maintenance, improvement, and modernization of the airport, in 
accordance with section 47134(c)(3), including the public sponsor's 
most recent 5 year capital improvement plan and the 5 year capital 
improvement plan proposed by the private operator. Applicants should 
identify the sources of funds to be used for capital development, 
including any continuing contributions by the public sponsor. If funds 
are to be borrowed, applicants should identify the expected sources, 
anticipated repayment terms of any borrowed funds, and the source of 
revenue to be used for repayment. Applicants should also include any 
financial security provisions, such as a letter of credit or 
performance bond, for the accomplishment of the maintenance, 
improvement, and modernization projects committed to by the private 
operator.
    5. Compliance with the limitations on air carrier fees, pursuant to 
section 47134(c)(4), not imposed for funding of new capital development 
undertaken after the transfer to the private operator. If it is the 
private operator's intent to impose an increase in fees on air carriers 
exceeding the limit in section 47134(c)(4), provide:
    i. The amount of the planned increase in fees;
    ii. A list of the air carriers that have approved the increase;
    iii. The total landed weight of all operations by air carriers at 
the airport for the preceding year (which for a primary airport should 
be the same as provided in VI.A.4.b); and
    iv. The total landed weight of all operations by air carriers that 
have approved the increase.
    6. Compliance with the limitation on general aviation fees 
described in section 47134(c)(5).
    7. Maintenance of safety and security at the airport, in accordance 
with section 47134(c)(6). The application should note the applicant's 
contacts with the FAA Regional Airports Division or Airports District 
Office on Part 139 and TSA on Part 1542, but does not need to duplicate 
information filed in connection with those actions. The application 
should include planned efforts by the private operator to maintain the 
public sponsor's existing mechanisms for communicating with airport 
tenants and users and the public on safety and security issues.
    8. Mitigation of adverse effects of noise from airport operations, 
in accordance with section 47134(c)(7). The applicant should 
specifically describe its intentions with respect to an existing or 
future Part 150 noise compatibility program for the airport, with 
respect to the public sponsor's commitments under past records of 
decisions on airport development projects, and other measures the 
private operator proposes to take in the future.
    9. Mitigation of adverse effects on the environment from airport 
operations, in accordance with section 47134(c)(8).
    10. Confirmation that any collective bargaining agreement that 
covers employees of the airport and is in effect on the date of the 
sale or lease of the airport will not be abrogated by the sale or 
lease, as required by section 47134(c)(9).
    11. The private operator's intentions regarding consultation with 
general aviation users regarding the planned privatization of the 
airport, and the projected effect on general aviation of the proposed 
changes in operation and management of the airport.
    12. Private operator's plans (if known) for development of general 
aviation.
    B. The private operator's acceptance of the grant assurances 
contained in the public sponsor's grant agreements with the FAA and 
intention to assume legal responsibility for compliance with those 
assurances, as reflected in the transfer documents. Assurance 25 need 
not be addressed. In addition, the applicants' agreement that the grant 
assurances and the assurances required for granting an exemption under 
section 47134 create third-party beneficiary rights enforceable by the 
FAA in an administrative or judicial legal proceeding, and permit FAA 
to enforce directly against the private operator the grant assurances 
and the assurances required for granting an exemption under section 
47134.
    C. Provide a description of the parties' efforts to consult with 
airport users about the proposed transaction and of the parties' 
community outreach efforts.

Part VIII. Periodic Audits.

    A. Section 47134(k) provides that the FAA may conduct periodic 
audits of the financial records and operations of an airport receiving 
an exemption under the pilot program. Applicants should indicate in the 
application their express assent to this provision.

    Issued in Washington, DC.
Winsome A. Lenfert,
Acting Associate Administrator for Airports.
[FR Doc. 2021-07586 Filed 4-19-21; 8:45 am]
BILLING CODE 4910-13-P