Regulatory Alert: FAA Releases Initial Guidance on Airport Layout Plan Reviews and Approvals

FAA Releases Initial Guidance on Airport Layout Plan Reviews and Approvals
October 5, 2024

Yesterday, the Federal Aviation Administration (FAA) released initial guidance that outlines how the agency will (a) determine whether it has the authority to review and approve an airport layout plan (ALP) on a proposed project and (b) process a notice of intent (NOI) from an airport sponsor that believes the project falls outside of FAA’s ALP approval authority. The guidance implements a AAAE-backed provision in section 743 of the recently passed FAA reauthorization law aimed at eliminating so-called “Section 163 determinations” and limiting FAA’s authority to regulate an airport’s non-aeronautical property transactions, except when the project may impact safety or occur on federally acquired or conveyed land.

Upon initial review, FAA’s guidance is a step in the right direction toward streamlining the agency’s review of airport development projects for several reasons: the former Section 163 determination process is no longer in effect; airports may take advantage of the new NOI process for certain non-aeronautical projects on sponsor-acquired land; and FAA’s guidance suggests its Airports District Offices (ADOs) and Regional Offices (ROs) will have some procedural flexibility when making ALP approval authority determinations. Moving forward, however, key questions remain unaddressed by the guidance, such as what FAA’s expectations are for NOIs and how the agency will review them; and how FAA will apply the National Environmental Policy Act (NEPA) where the agency’s ALP approval authority is limited to only a portion of a project.

Below is a summary of the guidance and major takeaways from our review. We encourage members to review the guidance, which can be found here, and provide us with any feedback. In the meantime, we will continue to work with FAA on implementation of the new FAA reauthorization law to ensure the updated ALP review and approval process is properly implemented and not inhibiting airport development projects.

Background. For years, AAAE and the airport community have urged FAA to streamline and reduce regulation of non-aeronautical development on non-federal land. In the 2018 FAA reauthorization law, Congress limited FAA’s authority to review and approve only those portions of an ALP that materially impact safety or adversely affect prior federal investments made at the airport. To implement the provision, FAA created a new process, commonly known as “Section 163 determinations,” that required the agency to first determine whether the agency had the authority to approve each ALP change. This process infamously added complications to ALP reviews and made some of them more burdensome and time consuming.

FAA Reauthorization Act of 2024. In the recently passed FAA reauthorization law, AAAE and ACI-NA successfully worked with our airport members to convince Congress to eliminate “Section 163 determinations” and streamline the ALP review and approval process for certain non-aeronautical projects. Three major changes were made under section 743 of the law:

FAA is prohibited from requiring an airport to seek approval for—or from directly or indirectly regulating—any project (or ALP update) that does not (a) materially impact aviation safety; (b) adversely affect the safety of people or property on the ground as a result of aircraft operations; or (c) adversely affect the value of prior federal investments at the airport. These three categories are known as FAA’s “zones of interest,” or the limits of its authority.
If only a portion of the project (or ALP update) falls within FAA’s authority, or zones of interest, then FAA is prohibited from reviewing the other portion(s) of the project.
If an airport wants to proceed with a project that is outside of FAA’s authority, or zones of interest, and not on their ALP, the airport must submit to FAA a NOI to proceed with the project (or a portion of the project). The project, or portion of the project, is considered outside of FAA’s authority if the agency does not object to the NOI within 45 days.

Overview of FAA’s Guidance. FAA’s guidance advises its ADO/RO field staff to take one of two different approaches depending on whether the airport (a) submits an ALP update or indicates its intent to move forward with a project that is already on an approved ALP; or (b) submits a NOI to proceed with a project that it believes is outside of FAA’s ALP authority. The two approaches are as follows:

Submitting ALP Update/Moving Forward with Project: If an airport submits an ALP update or indicates its intent to move forward with a project, FAA directs its ADO/ROs to determine whether the agency has ALP approval authority on that project. If the project, or portion of a project, will be constructed on federally acquired or conveyed land, then FAA automatically has authority over any portion of the project that will occur on such land. If the project will be constructed on sponsor-acquired land, then the ADO/RO must assess whether the project falls within FAA’s three zones of interest described above. FAA only retains ALP approval authority over the portion(s) of the project that falls within those areas of interest. In cases where no approval authority exists, FAA notes that it also does not have land use authority; meaning, a change in land use or a release would not be required.
Submitting NOI to Proceed with Project: If an airport submits a NOI to proceed with a project, FAA directs its ADO/ROs to submit the NOI to headquarters (HQ) “in a timely manner” because the agency only has 45 days to respond. FAA notes that these NOIs should only be submitted if the proposed project (a) is not currently on an approved ALP; (b) will occur on sponsor-acquired land; and (c) does not trigger one of FAA’s three zones of interest described above. The guidance does not provide any additional information regarding the form or contents of the NOI, how the agency will review NOIs at HQ, or any other such details.

Major Takeaways and Observations. Based on our initial review of the FAA’s guidance, we have several key takeaways and observations:

FAA is no longer requiring airports to follow the Section 163 determination process. The former Section 163 guidance has been removed from FAA’s website and is no longer in effect. To be clear, neither FAA nor airports should follow the prescriptive process that FAA had previously implemented to determine whether it had ALP review and approval authority.
Further guidance is needed from FAA on what the expectations are for NOIs and how the agency will review them. FAA’s guidance does not provide any details about the NOI process and instead directs ADO/ROs to send any such notices to HQ for review. This is a glaring omission. In a future iteration, FAA will need to provide more guidance on how NOIs should be prepared, how the agency will review such notices, or any other details. We expect FAA HQ will release additional guidance as they gain more experience reviewing NOIs.
FAA’s guidance makes clear that airports may currently submit NOIs for appropriate projects, and FAA will reply within 45 days. Although details about the process are scant, FAA’s guidance emphasizes that the NOI process is an option for airports, and ADO/ROs must submit NOIs to HQ for review as soon as possible because of the short 45-day turnaround time for a reply. In our discussion with members, AAAE is aware of specific NOI examples where the agency has replied within the timeframe, acknowledging it does not have ALP approval authority and not requiring any land use change or a release. Thus, airports should consider the NOI option for appropriate projects even though more details have not yet been provided by FAA.
FAA’s guidance does not require ADO/ROs to follow prescriptive procedures when making ALP approval authority determinations in cases where an airport submits an ALP update rather than a NOI. In the guidance, FAA explains that an ADO/RO must determine if it has ALP approval authority when an airport approaches the office ready to move forward with a proposed project or submits an ALP update. However, the guidance is mostly limited to how the ADO/RO must substantively make this determination. One benefit of this approach is that ADO/ROs should have some procedural flexibility when making these determinations, especially in cases where it is obvious FAA has authority.
FAA’s guidance makes it clear that if an ADO/RO determines the agency only has ALP authority over a portion of a project, FAA does not have authority over the whole project, which is in accordance with congressional intent. Under the former Section 163 determination process, FAA field staff often struggled making ALP authority determinations where only a portion of the project was subject to its authority, causing the agency to take a different approach over time. AAAE and airports will be closely following how FAA manages these types of determinations, which have traditionally led to confusion.
It is still unclear how FAA will apply NEPA where the agency’s ALP approval authority is limited to only a portion of a project. In the guidance, FAA indicates that a NEPA review is not required where the agency does not have ALP authority because no federal action occurs. However, FAA also notes that “[c]onsideration of environmental effects of an ALP approval frequently will encompass the effects of the entire proposal even where the FAA’s statutory authority to approve the ALP is limited.” The agency directs its field staff to determine the appropriate level of NEPA review, but minimal guidance is provided on how to do that in cases where FAA’s ALP authority is limited to only a portion of a project.
The guidance that FAA released today is “initial” and subject to change. A review of the document clearly shows that FAA is still assessing the impact of section 743 on ALP reviews and approvals, including the new NOI process that Congress mandated. We fully expect more definitive guidance at some point in the future, although timing is uncertain.

What’s Next? Streamlining FAA’s review and approval of airport development projects remains a topic priority for AAAE and airports, especially for non-aeronautical development projects. The guidance is a step in the right direction, but details remain unclear in critical areas, especially on how airports are expected to prepare NOIs and how FAA will review such notices at HQ. AAAE will continue to press FAA for guidance in key areas and ensure the new section 743 provision is properly implemented and not inhibiting airport development projects.