[Federal Register Volume 62, Number 228 (Wednesday, November 26, 1997)]
[Notices]
[Pages 63211-63213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31106]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Docket No. 28895]
Airport Privatization Pilot Program: Application Procedures
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of amendment to final application procedures; request
for comments.
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SUMMARY: Section 149 of the Federal Aviation Authorization Act of 1996
establishes an airport privatization pilot program, and authorizes the
Department of Transportation to grant exemptions from certain Federal
statutory and regulatory requirements for up to five airport
privatization projects. On September 16, 1997, the FAA issued a notice
of final procedures for application for an exemption under the program.
The notice included a provision that air carriers that submitted a
proposal for the private operation of an airport but were unsuccessful
would not be counted as air carriers for the purpose of the requirement
that certain aspects of the privatization application be approved by 65
percent of the air carriers at the airport. In this amendment to the
procedures, the FAA is clarifying that the provision does not apply
retroactively to requests for proposals issued prior to the issuance of
the FAA procedures on September 16, 1997. With respect to future
requests for proposals, the provision is suspended until the FAA
undertakes further public process on this aspect of the procedures. A
separate provision of the procedures, which states that an air carrier
that is a successful bidder on a privatization proposal will not be
considered an air carrier under the 65 percent rule, is not affected.
[[Page 63212]]
DATES: This policy amendment is effective on publication. Comments on
the issue are due January 12, 1998.
ADDRESSES: Comments should be mailed, in quadruplicate, to: Federal
Aviation Administration, Office of Chief Counsel, Attention: Rules
Docket (AGC-200), Docket No. 28895, 800 Independence Avenue, SW.,
Washington, DC 20591. All comments must be marked: ``Docket No.
28895.'' Commenters wishing the FAA to acknowledge receipt of their
comments must include a pre-addressed, stamped postcard on which the
following statement is made: ``Comments to Docket No. 28895.'' The
postcard will be date stamped and mailed to the commenter. Comments on
this Notice may be examined in room 915G on weekdays, except on Federal
holidays, between 8:30 a.m. and 5 p.m..
FOR FURTHER INFORMATION CONTACT:
Benedict D. Castellano Manager, (202-267-8728) or Kevin C. Willis (202-
267-8741) Airport Safety and Compliance Branch, AAS-310, Federal
Aviation Administration, 800 Independence Ave. SW., Washington, DC
20591.
SUPPLEMENTARY INFORMATION:
Introduction and Background
This notice of amendment to application procedures to be used by
applicants for an airport privatization project and request for
comments is being published pursuant to Sec. 149 of the Federal
Aviation Administration Authorization Act of 1996, Pub. L. No. 104-264
(October 9, 1996) (1996 Reauthorization Act), which adds a new
Sec. 47134 to Title 49 of the U.S. Code. Section 47134 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
compensation from the operations of the airport.
On September 16, 1997, the FAA issued a notice of procedures to be
used in applications for exemption under the Airport Privatization
Pilot Program (62 FR 48693). The FAA has identified one issue in that
notice that requires clarification.
Specifically, 49 U.S.C. Sec. 47134(b)(1)(i)(ii) limits 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 is required for increases in air carrier fees that
exceed the increase in the Consumer Price Index. In interpreting this
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. This
position was based on the consideration that the vote of such a
carrier, whether or not it is the successful proponent, could be based
on its interests as a proponent rather than its interests as a user of
the airport and would not further the congressional objective of the 65
percent approval requirement.
On September 17, 1997, counsel for several Allegheny County Airport
Part 135 operators filed comments arguing that the FAA had exceeded its
authority by disqualifying otherwise qualified air carriers that
submitted proposals or that participate in consortia that submitted
proposals for the privatization of the subject airport from exercising
their voting rights expressly granted in 49 U.S.C. Section 47134. The
comments requested that the FAA delete provisions in question.
The comments argue that Congress did not intend for air carriers to
lose their voting rights in the privatization process. The statute
provides no basis for carrier exclusion or limitation other than the
creation of the two classes, number serving the airport and percentage
of landed weight. The comments further argue that the disqualification
provision was issued in final notice without an opportunity for public
comment and review. As a result, this provision violates the
Administrative Procedure Act. Additionally, its application,
retroactively is unlawful and a denial of due process. In the case of
Part 135 operators at Allegheny County Airport, the provision would
exclude many of the air carriers from exercising their voting rights
under the statute because many of the air carriers responded to the
airport's RFP without notice that doing so would jeopardize their
voting rights under the statute.
After consideration of counsel's arguments, the FAA has decided to
amend its application procedures and suspend the effectiveness of one
provision. First, air carrier exclusion from the 65 percent approval
rule based upon participation as a bidder in the privatization process
will not be applied retroactively, i.e., to a solicitation issued
before September 16, 1997, the date of the final notice, on the basis
that this provision was not proposed for public comment and review. To
impose it retroactively on carriers that participated in a bidding
process prior to publication of the final procedures would
inappropriately exclude them from exercising their voting rights
without the benefit of notice of the adverse consequences of their
participation as a bidder. Second, the FAA suspends indefinitely the
provision in Part VI Certification of Air Carrier Approval (62 FR
48707) excluding otherwise qualified air carriers who submitted
unsuccessful proposals as a private operator from participating in the
voting process.
This provision was not proposed by the FAA and was not suggested in
the Federal Register comment process. Moreover, it is not obvious that
an unsuccessful bidder would give more weight to its interests as an
unsuccessful bidder than its interests as an air carrier in deciding
how to cast its vote.
In contrast, the proposal to exclude successful air carrier bidders
from participation in the voting process was proposed in a comment in
the Federal Register process, and the September 17 comments do not
oppose such an exclusion. Moreover, the potential conflict of interest
for a successful bidder is clear.
The FAA is suspending the provision, rather than deleting it,
because we believe that the issue deserves further public comment
before a final decision is made. We are therefore, providing a 45-day
comment period to permit interested persons to address specifically the
issue of whether otherwise qualified air carriers should be
disqualified from participating in the statutory voting process because
of their participation as unsuccessful bidders in a privatization
proposal.
Pending further action, the FAA will exclude from the air carrier
voting process only otherwise qualified air carriers that have been
selected as the private operator (either individually or as a
participant in a consortium) by the public agency.
[[Page 63213]]
Issued in Washington, DC, on November 20, 1997.
Susan L. Kurland,
Associate Administrator for Airports.
[FR Doc. 97-31106 Filed 11-25-97; 8:45 am]
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