Document ID: FAA-2014-0463-0001
Agency: faa
Document Type: Proposed Rule
Title: Non-aeronautical Use of Airport Hangars
Posted Date: 2014-07-22T04:00Z

[Federal Register Volume 79, Number 140 (Tuesday, July 22, 2014)]
[Proposed Rules]
[Pages 42483-42486]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17031]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Chapter I

[Docket No. FAA-2014-0463]

Policy on the Non-aeronautical Use of Airport Hangars

AGENCY: Federal Aviation Administration (FAA).

ACTION:  Notice of Proposed Policy; Request for Comments

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SUMMARY: Under Federal law, airport operators that have accepted 
federal grants and/or those that have obligations contained in property 
deeds for property transferred under various Federal laws such as the 
Surplus Property Act generally may use airport property only for 
aviation-related purposes unless otherwise approved by the FAA. 
Compliance inspections by FAA staff, as well as audits by the 
Government Accountability Office, have found that some hangars intended 
for aircraft storage are routinely used to store non-aeronautical items 
such as vehicles and large household items. In some cases, this storage 
interferes with--or entirely displaces--aeronautical use of the hangar. 
Moreover, many airports have a waiting list for hangar space, and a 
tenant's use of a hangar for non-aeronautical purposes prevents 
aircraft owners from obtaining access to hangar storage on the airport. 
At the same time, the FAA realizes that storage of some small 
incidental items in a hangar that is otherwise used for aircraft 
storage will have no effect on the aeronautical utility of the hangar. 
The FAA is proposing a statement of policy on use of airport hangars to 
clarify compliance requirements for airport sponsors, airport manager, 
airport tenants, state aviation officials, and FAA compliance staff. 
This notice solicits public comment on the proposed policy statement.

DATES: Send your comments on or before September 5, 2014. The FAA will 
consider comments on the proposed policy statement. Any necessary or 
appropriate revisions resulting from the comments received will be 
adopted as of the date of a subsequent publication in the Federal 
Register.

ADDRESSES: You may send comments [identified by Docket Number FAA-2014-
0463] using any of the following methods:
     Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your 
comments electronically.
     Mail: Docket Operations, U.S. Department of 
Transportation, West Building, Ground Floor, Room W12-140, Routing 
Symbol M-30, 1200 New Jersey Avenue SE., Washington, DC 20590.
     Fax: 1-202-493-2251.
     Hand Delivery: To Docket Operations, Room W12-140 on the 
ground floor of the West Building, 1200 New Jersey Avenue SE., 
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.
    For more information on the notice and comment process, see the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: To read background documents or comments received, go to 
http://www.regulations.gov at any time or to Room W12-140 on the ground 
floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC, 
between 9 a.m. and 5 p.m., Monday through Friday, except Federal 
holidays.

FOR FURTHER INFORMATION CONTACT: Kevin C. Willis, Manager, Airport 
Compliance Division, ACO-100, Federal Aviation Administration, 800 
Independence Avenue SW., Washington, DC 20591, telephone (202) 267-
3085; facsimile: (202) 267-4629.

SUPPLEMENTARY INFORMATION: 
    Privacy: We will post all comments we receive, without change, to 
http://www.regulations.gov, including any personal information you 
provide. Using the search function of our docket Web site, anyone can 
find and read the comments received into any of our dockets, including 
the name of the individual sending the comment (or signing the comment 
for an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (65 FR 19477-78).

Availability of Documents

    You can get an electronic copy of this Policy and all other 
documents in this docket using the Internet by:
    (1) Searching the Federal eRulemaking portal (http://www.faa.gov/regulations/search);
    (2) Visiting FAA's Regulations and Policies Web page at (http://www.faa.gov/regulations_policies; or
    (3) Accessing the Government Printing Office's Web page at (http://www.gpoaccess.gov/index.html.
    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Airport Compliance and Management 
Analysis, 800 Independence Avenue SW., Washington, DC 20591, or by 
calling (202) 267-3085. Make sure to identify the docket number, notice 
number, or amendment number of this proceeding.

Authority for the Policy

    This notice is published under the authority described in Title 49 
of the United States Code, Subtitle VII, part B, chapter 471, section 
47122(a).

Background

Airport Sponsor Obligations

    Airport sponsors that have accepted grants under the Airport 
Improvement Program (AIP) have agreed to comply with certain Federal 
policies included in each AIP grant agreement as sponsor assurances. 
The Airport and Airway Improvement Act of 1982 (AAIA), as amended and 
recodified at 49 U.S.C. 47107(a)(1), and the contractual sponsor 
assurances require that the airport sponsor make the airport available 
for aviation use. Grant assurance 22, Economic Nondiscrimination, 
requires the sponsor to make the airport available on reasonable terms 
without unjust discrimination for aeronautical activities, including 
aviation services. Grant assurance 19, Operation and Maintenance, 
prohibits an airport sponsor from causing or permitting any activity 
that would interfere with use of airport property for airport purposes. 
In some cases, sponsors who have received property transfers through 
surplus property and nonsurplus property agreements have similar 
federal obligations.
    The sponsor may designate some areas of the airport for non-
aviation

[[Page 42484]]

use,\1\ with FAA approval, but aeronautical facilities of the airport 
must be dedicated to use for aviation purposes. Limiting use of 
aeronautical facilities to aeronautical purposes ensures that airport 
facilities are available to meet aviation demand at the airport. 
Aviation tenants and aircraft sponsors should not be displaced by non-
aviation commercial uses that could be conducted off of airport 
property.
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    \1\ The terms ``non-aviation'' and ``non-aeronautical'' are used 
interchangeably in this Notice.
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    It is the longstanding policy of the FAA that airport property be 
available for aeronautical use and not be available for non-
aeronautical purposes unless that non-aeronautical use is approved by 
the FAA. Use of a designated aeronautical facility for a non-aviation 
purpose, even on a temporary basis, requires FAA approval. See FAA 
Order 5190.6B, Airport Compliance Manual, paragraph 22.6. The 
identification of non-aviation use of aeronautical areas receives 
special attention in FAA airport compliance inspections. See Order 
5190.6B, paragraphs 21.6.e and f(5).
    Areas of the airport designated for non-aeronautical use must be 
shown on an airport's Airport Layout Plan (ALP). The AAIA, at 49 U.S.C. 
47107(a)(16), requires that AIP grant agreements include an assurance 
by the sponsor to maintain an ALP in a manner prescribed by the FAA. 
Sponsor assurance 29, Airport Layout Plan, implements Sec.  
47107(a)(16) and provides that an ALP must designate non-aviation areas 
of the airport. The sponsor may not allow an alteration of the airport 
in a manner inconsistent with the ALP unless approved by the FAA. See 
FAA Order 5190.6B, Airport Compliance Manual, paragraph 7.18, and 
Advisory Circular 150/5070-6B, Airport Master Plans, chapter 10.
    Clearly identifying non-aeronautical facilities not only keeps 
aeronautical facilities available for aviation use, but also assures 
that the airport sponsor receives at least Fair Market Value (FMV) 
revenue from non-aviation uses of the airport. The AAIA requires that 
airport revenues be used for airport purposes, and that the airport 
maintain a fee structure that makes the airport as self-sustaining as 
possible. 49 U.S.C. 47107(a)(13)(A) and (b)(1). The FAA and the 
Department of Transportation Office of the Inspector General have 
interpreted these statutory provisions to require that non-aviation 
activities on an airport be charged a fair market rate for use of 
airport facilities rather than the aeronautical rate. See FAA Policies 
and Procedures Concerning the Use of Airport Revenue, Sec.  VII.C, 64 
FR 7696, 7721(Feb. 16, 1999) (FAA Revenue Use Policy). If an airport 
tenant pays an aeronautical rate for a hangar and then uses the hangar 
for a non-aeronautical purpose, the tenant may be paying a below-market 
rate in violation of the sponsor's obligation for a self-sustaining 
rate structure and FAA's Revenue Use Policy. Confining non-aeronautical 
activity to designated non-aviation areas of the airport helps to 
ensure that the non-aeronautical use of airport property is monitored 
and allows the airport sponsor to clearly identify non-aeronautical 
fair market value lease rates in order meet their federal obligations. 
Identifying non-aeronautical uses and charging appropriate rates for 
these uses prevents the sponsor from subsidizing non-aviation 
activities with aviation revenues.

FAA Oversight

    The FAA's enforcement of appropriate use of airport property has 
been the subject of two audits by the General Accounting Office (now 
called Government Accountability Office, or GAO). In August 1980, the 
GAO released a report to the Secretary of Transportation entitled 
``Misuse of Airport Land Acquired through Federal Assistance.'' This 
report highlighted several cases of federally funded land being used 
for various non-aeronautical purposes. The report cited a lack of 
oversight by FAA and recommended more active involvement in oversight. 
In May 1999, the GAO released the report, ``General Aviation Airports: 
Unauthorized Land Use Highlights Need for Improved Oversight and 
Enforcement''. This report highlighted the need for the FAA to increase 
its efforts to monitor airports for unauthorized use of land.
    In response to this second report, the FAA began conducting land 
use inspections at 18 selected airports each year, at least two in each 
of the nine FAA regions. A frequent finding from these inspections has 
been the prevalence of non-aeronautical items stored in aircraft 
hangars designated for aeronautical use. In some cases, the aircraft 
hangars contained only non-aeronautical items, such as automobiles 
(including sponsor-owned police cruisers), boats, large recreational 
vehicles, etc. In other cases, non-aeronautical items shared space with 
legitimate aeronautical use of hangars. Inspections have frequently 
uncovered motorcycles, furniture, tools, and other non-aeronautical 
items stored in hangars along with aircraft. Some hangar tenants were 
found to be operating non-aviation commercial businesses out of an 
airfield hangar.
    In May 2011, The Director of the Office of Airport Compliance and 
Management Analysis issued a Director's Determination under 14 CFR Part 
16,\2\ finding the City in violation of Grant Assurance 19. Operations 
and Maintenance by allowing non-aeronautical use of airport hangars for 
storing non-aviation items. The FAA ordered the City to submit a 
Corrective Action Plan to bring the airport back into compliance. As 
part of the City of Glendale's effort to formulate a Corrective Action 
Plan, the City requested the FAA to provide written confirmation on the 
status of certain items as aeronautical or non-aeronautical. The 
agency's July 12, 2012 response to the letter became widely circulated 
in the airport community and has been interpreted by some as general 
policy. Insofar as that letter suggested that all non-aeronautical 
items stored in a hangar would constitute a violation of the grant 
assurances, it applied to a specific situation at a specific airport 
and does not represent general agency policy.
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    \2\ Valley Aviation Services, LLP v. City of Glendale, Arizona, 
FAA Docket No. 16-09-06 (May 24, 2011) (Director's Determination).
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    A sponsor's grant assurance obligations require that its 
aeronautical facilities be used or be available for use for 
aeronautical activities. If the presence of non-aeronautical items in a 
hangar does not interfere with these obligations, then the FAA will 
generally not consider their presence to constitute a violation of the 
sponsor's obligation to provide reasonable access to aeronautical users 
and tenants. In cases where excess hangar capacity is unused because of 
low aviation demand, a sponsor can request FAA approval for interim 
non-aeronautical use of a hangar until that hangar is needed again for 
an aeronautical purpose. However, aeronautical use must take priority 
and be accommodated over non-aeronautical use even if the rental rate 
would be higher for the non-aeronautical use (See FAA Order 5190.6B, ] 
22.6). The sponsor is required to charge a fair market commercial 
rental rate for any hangar rental or use for non-aeronautical purposes.

Use of Hangars for Fabrication and Assembly of Aircraft

    While building an aircraft results in an aeronautical product, the 
FAA has not found all stages of the building process to be aeronautical 
for purposes of hangar use. A large part of the

[[Page 42485]]

construction process can be and often is conducted off-airport. Only 
when the various components are assembled into a final functioning 
aircraft is access to the airfield necessary.
    In Ashton v. City of Concord, NC,\3\ the complainant objected to 
the airport sponsor's prohibition of construction of a homebuilt 
aircraft in an airport T-hangar. The decision was based on a FAA 
determination that aircraft construction is not per se an aeronautical 
activity. While final stages of aircraft construction can be considered 
aeronautical, the airport sponsor prohibited this level of maintenance 
and repair in T-hangars but provided an alternate location on the 
airport. The FAA found that the airport sponsor's rules prohibiting 
maintenance and repair in a T-hangar, including construction of a 
homebuilt aircraft, did not violate the sponsor's grant assurances.
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    \3\ Ashton v. City of Concord, FAA Docket No. 16-99-09 (January 
28, 2000) (Director's Determination and affirmed by Final Agency 
Decision).
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    There have been industry objections to the FAA's designation of any 
aircraft construction stages as non-aeronautical. While the same 
principles apply generally to large aircraft manufacturing, compliance 
issues involving aircraft construction have typically been limited to 
homebuilt aircraft construction at general aviation airports. 
Commercial aircraft manufacturers use dedicated, purpose-built 
manufacturing facilities, and questions of aeronautical use for these 
facilities are generally resolved at the time of the initial lease. In 
contrast, persons constructing homebuilt aircraft sometimes seek to 
rent airport hangars designed for storage of operating aircraft and 
easy access to a taxiway, even though it may be years before a 
homebuilt aircraft kit will be able to take advantage of the convenient 
access to the airfield.
    The FAA is not proposing any change to existing policy other than 
to clarify that final assembly of an aircraft, leading to the 
completion of the aircraft to a point where it can be taxied, will be 
considered an aeronautical use.

Proposed Policy and Request for Public Comment

    The FAA intends to produce an agency policy on use of hangars and 
related facilities at federally obligated airports in sufficient detail 
to provide a clear and standardized guide for airport sponsors and FAA 
compliance staff. The FAA is proposing a policy statement for public 
comment based on the following general principles:
    1. The primary goal of this policy is to protect federal investment 
in federally obligated airports by ensuring aeronautical facilities are 
available to aeronautical users. Aeronautical users requesting the use 
of a hangar for aircraft storage should not be denied access because 
the airport sponsor is permitting tenants to use hangars to store 
vehicles or household items, or to operate non-aviation businesses.
    2. A secondary goal of the policy is to ensure that airport 
sponsors receive fair market rental for any approved use of airport 
property for non-aviation purposes.
    3. The primary purpose of a hangar in an aeronautical area of the 
airport is aircraft storage or operation of an aeronautical service 
business that requires maintenance or repair work on aircraft. If a 
hangar is serving one of these purposes, then incidental storage of 
non-aviation items that does not interfere with the primary purpose of 
the hangar and occupies an insignificant amount of physical hangar 
space will not be considered to constitute a violation of the grant 
assurances. In such cases, incidental storage of non-aviation items 
will be treated as having de minimis value (for purposes of compliance 
with the self-sustaining assurance) and will not require the sponsor to 
increase rent as a result of the storage of these incidental non-
aeronautical items.
    4. If an airport's hangar capacity substantially exceeds aviation 
demand (e.g., there are multiple vacant hangars and no requests to rent 
them for aeronautical purposes), the sponsor may request and FAA may 
approve interim non-aeronautical use of vacant hangars under the 
provisions found in FAA Order 5190.6B, Chapter 22.6. FMV non-
aeronautical rental rates would apply to any non-aviation use.
    5. Final, active assembly of an aircraft in the manufacturing or 
homebuilt construction process, resulting in a completed, operational 
aircraft requiring access to the airfield, is considered an 
aeronautical activity for the purposes of this policy.
    6. Using hangar space as a residence on a full-time or even 
temporary basis is not a compatible land use, no matter where it is 
located on the airport, and is not permitted.
    7. Airport sponsors are expected to take measures to ensure that 
aeronautical facilities on the airport are reserved for aeronautical 
use. These measures should include a periodic inspection program to 
ensure that the waiting time for those persons who are legitimately in 
need of a hangar for aircraft storage is minimized.
    8. Airport sponsors may adopt more stringent rules for use of 
hangars than required by the grant assurances, based on proprietary 
concerns for the safe and efficient use of airport property. However, 
such rules must be reasonable and not unjustly discriminatory against 
any aeronautical user. For example, an airport sponsor may limit 
storage of vehicles in hangars if there is concern that vehicular 
traffic on taxilanes or taxiways may create a safety hazard.
    9. The sponsor's federal obligations do not protect non-
aeronautical users and/or storage of non-aeronautical items. Non-
aeronautical use is not a protected activity.

Proposed Policy and Request for Comments

    In accordance with the above, the FAA proposes to adopt the 
following policy statement on use of hangars at federally obligated 
airports. The agency requests public comments on the proposed policy 
statement, as described in the ``Address'' and ``Dates'' information in 
this notice. Comments received by the due date will be considered in 
the development of a final agency policy statement.

Use of Aeronautical Land and Facilities

Applicability

    This policy applies to all aircraft storage areas or facilities on 
a federally obligated airport unless designated for non-aviation use on 
an approved Airport Layout Plan or otherwise approved for non-aviation 
use by the FAA. The policy statement generally refers to the use of 
hangars since they are the type of aeronautical facility most often 
involved in issues of non-aviation use. The policy applies to all users 
of aircraft hangars, regardless of whether a user is an owner or lessee 
of the hangar, including airport sponsors, municipalities, and other 
public entities.
I. General
    The intent of this policy is to ensure that the Federal investment 
in federally obligated airports is protected by making aeronautical 
facilities available to aeronautical users, and to ensure that airport 
sponsors receive fair market value for rental of approved non-aviation 
use of airport property. Sponsors who fail to comply with grant 
assurances and this policy may be subject to administrative sanctions 
such as the denial of funding from current and future AIP grants.

[[Page 42486]]

II. Standards for Aeronautical Use of Hangars
     Hangars located on airport property must be used for an 
aeronautical purpose, or be available for use for one, unless otherwise 
approved by the FAA.
     Aeronautical uses for hangars include:
[cir] Storage of operational aircraft
[cir] Final assembly of aircraft
[cir] Short-term storage of non-operational aircraft for purposes of 
maintenance, repair, or refurbishment

     Provided the hangar is used primarily for aeronautical 
purposes, an airport sponsor may permit limited, non-aeronautical items 
to be stored in hangars provided the items are incidental to 
aeronautical use of the hangar and occupy an insignificant amount of 
hangar space (e.g., a small refrigerator). The incidental storage of 
non-aeronautical items will be considered to be of de minimis value for 
the purpose of assessing rent.
     Generally, items are considered incidental if they:

[cir] Do not interfere with the aeronautical use of the hangar;
[cir] Do not displace the aeronautical contents of the hangar;
[cir] Do not impede access to aircraft or other aeronautical contents 
of the hangar;
[cir] Do not require a larger hangar than would otherwise be necessary 
if such items were not present;
[cir] Occupy an insignificant amount of hangar space;
[cir] Are owned by the hangar owner or tenant;
[cir] Are not used for non-aeronautical commercial purposes (i.e., the 
tenant is not conducting a non-aeronautical business from the hangar 
including storing inventory);
[cir] Are not stored in violation of airport rules and regulations.

     Hangars should be leased with consideration of the size 
and quantity of aircraft to be stored therein. To maximize the 
availability of hangars for all aeronautical users, sponsors should 
avoid leasing a hangar that is disproportionately large for the 
aircraft to be stored in the hangar (i.e., hangars built to store 
multiple aircraft should be used for multiple aircraft storage).
     Hangars must not be used as a residence. The FAA 
differentiates between a typical pilot resting facility or aircrew 
quarters versus a hangar residence or hangar home. The former are 
designed to be used for overnight and/or resting periods for aircrew, 
and not as a permanent or even temporary residence. See FAA Order 
5190.6B, Paragraph 20.5.b.
     This policy on hangar use applies regardless of whether 
the hangar occupant leases the hangar from the airport sponsor or 
developer, or the hangar occupant constructed the hangar at their own 
expense and holds a ground lease only. When designated aeronautical 
land is made available for construction of hangars, the hangars built 
on the land will be fully subject to the sponsor's obligations to use 
aeronautical facilities for aeronautical use.
III. Approval for Non-Aeronautical Use of Hangars
    Where hangars are unoccupied and there is no current aviation 
demand for hangar space, the airport sponsor may request that FAA 
approve an interim use of a hangar for non-aeronautical purposes for a 
period no more than five years. Interim leases of unused hangars can 
generate revenue for the airport and prevent deterioration of 
facilities. FAA will review the request in accordance with Order 
5190.6B, ] 22.6. Approved interim or concurrent revenue-production uses 
must not interfere with safe and efficient airport operations and 
sponsors should only agree to lease terms that allow the hangars to be 
recovered on short notice for aeronautical purposes.
    The airport sponsor is required to charge non-aeronautical fair 
market rental fees for the non-aeronautical use of airport property, 
even on an interim basis. (See Policies and Procedures Concerning 
Airport Revenue, Sec.  VII.C.)
IV. No Right to Non-Aeronautical Use
    In the context of enforcement of the grant assurances, this policy 
allows some incidental storage of non-aeronautical items in hangars. 
However, the policy neither creates nor constitutes a right to store 
non-aeronautical items in hangars. Airport sponsors may restrict or 
prohibit storage of non-aeronautical items. Sponsors should consider 
factors such as emergency access, fire codes, security, insurance, and 
the impact of vehicular traffic on their surface areas when enacting 
rules regarding hangar storage. In some cases, permitting certain 
incidental non-aeronautical items in hangars could inhibit the 
sponsor's ability to meet obligations associated with grant assurance 
19, Operations and Maintenance. Sponsors should ensure that taxiways 
and runways are not used for the vehicular transport of such items to 
or from the hangars.
V. Sponsor Compliance Actions
    It is expected that aeronautical facilities on an airport will be 
available and used for aeronautical purposes in the normal course of 
airport business, and that non-aeronautical uses will be the exception. 
Sponsors should have a program to routinely monitor use of hangars and 
take measures to eliminate and prevent unapproved non-aeronautical use 
of hangars. Sponsors should ensure that length of time on a waiting 
list of those legitimately in need of a hangar for aircraft storage is 
minimized. Sponsors should also consider incorporating provisions in 
airport leases, including aeronautical leases, to adjust rental rates 
to FMV for any non-incidental non-aeronautical use of the leased 
facilities. FAA personnel conducting a land use or compliance 
inspection of an airport may request a copy of the sponsor's hangar use 
program and evidence that the sponsor has limited hangars to aviation 
use.

    Issued in Washington, DC, on July 15, 2014.
Randall S. Fiertz,
Director, Office of Airport Compliance and Management Analysis.
[FR Doc. 2014-17031 Filed 7-21-14; 8:45 am]
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