Regulatory Alert: FAA Releases Interim Guidance on Streamlined Procedures for PFC Authorizations
Today the Federal Aviation Administration (FAA) issued interim, internal guidance on the streamlined procedures for reviewing applications received from small-, medium-, or large-hub airports to impose and/or use passenger facility charges (PFCs). The internal FAA guidance specifies the process FAA Airport District Offices/Regional Offices (ADOs/ROs) must follow when processing an application from these airports to impose a PFC and/or to use PFC revenue on projects. While the guidance will significantly reduce the amount of time for FAA to review a number of PFC applications, FAA excluded certain projects from the new streamlined review process, a move that will limit the potential advantages to airports.
You can view FAA's PFC Update, PFC 73-20, here.
Background. During consideration of the FAA reauthorization bill, AAAE, ACI-NA and airports from around the country successfully convinced Congress to adopt language calling on FAA to streamline the PFC application process for all hub sizes. The final bill, which Congress passed in late 2018, expanded the streamlined process already in place for non-hubs to small-, medium-, and large-hub airports. The measure also included an airport proposal to eliminate the so-called "significant contribution" requirement for large and medium hubs.
FAA Guidance Overview. The FAA guidance today indicates the agency is finally ready to streamline the PFC application process for some, but not all, projects at small-, medium-, and large-hub airports. The agency outlined specific types of projects that will be exempt from the streamlining initiative, including terminal projects over $25 million. This will keep the 120-day review process in place for a number of PFC projects at larger airports. AAAE is continuing to review this plan and how it will impact airports.
In the memorandum, FAA indicates that they are issuing the interim guidance for FAA ADOs/ROs on the PFC streamlining requirement because the agency recognizes an immediate need for expeditious processing of PFC applications. FAA also expressed its intent to develop procedures, through a public process, for public agencies to follow when implementing the streamlining requirement from the FAA reauthorization bill. Data collected from the interim, streamlined procedures will ultimately be used to develop more permanent changes to the PFC program in the future.
Projects Ineligible for Streamlining. The expedited PFC application process outlined in the guidance will reduce the time -- from 120 days to 30 days -- that FAA has to review a PFC application and issue its acknowledgement for those eligible projects at small, medium, and large hubs. However, FAA, not Congress, has specified a number of notable projects that the agency says will not be eligible for the streamlined process. Applications involving the following will be ineligible:
- Significant policy precedent;
- Significant legal issues, as determined by the FAA's Chief Counsel;
- Significant controversy, as evidenced by significant opposition to FAA's proposed action by the applicant or other airport authorities, airport users, Federal, State, or local agencies, elected officials, or communities;
- Multimodal projects; or
- Significant airport noise, access, or revenue diversion issues.
The agency is also precluding the following types of projects from streamlined processing:
- Debt service on otherwise ineligible projects;
- Blending of two or more PFC decisions to obtain a uniform collection level; and
- Terminal building projects in excess of $25 million, except stand-alone passenger bridges.
Other Highlights. Airports have been urging FAA to take other steps to streamline the cumbersome PFC application process. Many have suggested that FAA should not review a PFC application if the airport intends to use the PFC revenue to pay the local match for a project already approved and funded under the Airport Improvement Program (AIP). The FAA memorandum released today appears to address that suggestion. It indicates that a PFC project does not need to be reviewed by the agency if: (1) a project is in an existing AIP grant; (2) there is no scope change to the project; and (3) the requested PFC amount is only for the local match of the AIP grant.
If you would like to provide feedback or have any questions in relation to the new guidance, please contact Brad Van Dam at brad.vandam@aaae.org or Justin Barkowski at justin.barkowski@aaae.org.
