Regulatory Alert: FAA Releases Updated Guidance on ALP Reviews and Section 163 Determinations
August 10, 2022
The Federal Aviation Administration (FAA) released updated guidance that outlines how the agency reviews requests from airports that want to propose changes to their airport layout plans (ALP), particularly for non-aeronautical development purposes. The guidance was first released in late 2020 and implements a provision in the 2018 FAA reauthorization bill, known as “Section 163,“ that limits the agency's authority to regulate an airport's non-aeronautical property transactions except where there may be safety impacts, among other reasons. 
Upon initial review, the updated guidance contains one major change regarding FAA's authority to approve an airport's proposed ALP change: if the agency determines it has the authority under Section 163 to approve any portion of a proposed project, then FAA will retain approval authority over the entire project. Previously, FAA segmented the proposed project based on portions where it had authority and portions where it had no authority, leading to confusion and delays in some cases, particularly with reviews under the National Environmental Policy Act (NEPA). FAA noted that revisions to guidance are aimed at “enhancing efficiency and easing decision-making.“ 
We encourage members to review the updated guidance, which can be found here, and provide us with any feedback as we continue to discuss with FAA and the Hill our concerns and issues associated with Section 163 determinations. Feedback will be particularly helpful as streamlining existing Section 163 requirements is a priority for AAAE and the airport community in the upcoming FAA reauthorization bill that will be considered by Congress next year.  
Background. For years, AAAE and airports have urged FAA to streamline and reduce regulation of non-aeronautical development on non-federal land. In many cases airports have been forced to endure lengthy FAA review periods for ALP amendments even though proposed changes are for non-aeronautical development on land acquired without federal funding. Under Section 163 of the 2018 FAA reauthorization bill, Congress limited FAA's authority to regulate an airport's non-aeronautical property transactions except in certain circumstances. 
In December 2020, FAA released an internal memorandum to provide guidance to field offices, airports, and other stakeholders on how the agency has implemented Section 163, including the process by which FAA will evaluate requests from airports to change an ALP, change land use from aeronautical to non-aeronautical, or dispose of airport-owned land. Unfortunately, FAA's implementation of Section 163 has led to unintended consequences and a process that has become burdensome and time consuming in some cases. 
Takeaways from FAA's Updated Guidance. The primary change in FAA's updated guidance is a revised interpretation of Section 163 and the agency's approval authority over ALP changes. 
Under Section 163, FAA retains authority to review and approve changes to an ALP that (1) materially impact the safe and efficient operation of aircraft; (2) adversely affect the safety of people or property on the ground; or (3) adversely affect the value of prior federal investments at the airport. In previous guidance, FAA analyzed multiple components of a project to determine whether they had ALP approval authority over each. Segmenting each component has reportedly led to confusion in the field on how to evaluate these types of projects in some cases, including conducting a NEPA environmental review.
In the updated guidance, FAA emphasizes now that if ALP approval authority is triggered for any portion of a proposed project—and the project “cannot be whole without other components of the project“—then FAA retains authority over the entire project. FAA explained the rationale for their revisions in the document, noting that the experience gained over the past few years allowed them to better understand how the original guidance impacted their operational efficiency. The goal of the revisions is to enhance efficiency and ease decision-making by simplifying the review process. 
What's Next? We encourage members to review the updated guidance and provide us with feedback on any of the changes and/or any other impacts that your airport is experiencing as it relates to Section 163 requirements. Feedback will be particularly helpful as we continue to engage with FAA and lawmakers on this issue. As highlighted in a AAAE/ACI-NA letter to Senate Committee leaders in June, we are asking Congress to direct FAA to correct their misinterpretation of the land use streamlining provisions in Section 163, which has resulted in overly burdensome processes and inhibited airport development. This is one of our priorities that we want addressed as part of the next FAA reauthorization. 
 
The Federal Aviation Administration (FAA) released updated guidance that outlines how the agency reviews requests from airports that want to propose changes to their airport layout plans (ALP), particularly for non-aeronautical development purposes. The guidance was first released in late 2020 and implements a provision in the 2018 FAA reauthorization bill, known as “Section 163,“ that limits the agency's authority to regulate an airport's non-aeronautical property transactions except where there may be safety impacts, among other reasons. 
Upon initial review, the updated guidance contains one major change regarding FAA's authority to approve an airport's proposed ALP change: if the agency determines it has the authority under Section 163 to approve any portion of a proposed project, then FAA will retain approval authority over the entire project. Previously, FAA segmented the proposed project based on portions where it had authority and portions where it had no authority, leading to confusion and delays in some cases, particularly with reviews under the National Environmental Policy Act (NEPA). FAA noted that revisions to guidance are aimed at “enhancing efficiency and easing decision-making.“ 
We encourage members to review the updated guidance, which can be found here, and provide us with any feedback as we continue to discuss with FAA and the Hill our concerns and issues associated with Section 163 determinations. Feedback will be particularly helpful as streamlining existing Section 163 requirements is a priority for AAAE and the airport community in the upcoming FAA reauthorization bill that will be considered by Congress next year.  
Background. For years, AAAE and airports have urged FAA to streamline and reduce regulation of non-aeronautical development on non-federal land. In many cases airports have been forced to endure lengthy FAA review periods for ALP amendments even though proposed changes are for non-aeronautical development on land acquired without federal funding. Under Section 163 of the 2018 FAA reauthorization bill, Congress limited FAA's authority to regulate an airport's non-aeronautical property transactions except in certain circumstances. 
In December 2020, FAA released an internal memorandum to provide guidance to field offices, airports, and other stakeholders on how the agency has implemented Section 163, including the process by which FAA will evaluate requests from airports to change an ALP, change land use from aeronautical to non-aeronautical, or dispose of airport-owned land. Unfortunately, FAA's implementation of Section 163 has led to unintended consequences and a process that has become burdensome and time consuming in some cases. 
Takeaways from FAA's Updated Guidance. The primary change in FAA's updated guidance is a revised interpretation of Section 163 and the agency's approval authority over ALP changes. 
Under Section 163, FAA retains authority to review and approve changes to an ALP that (1) materially impact the safe and efficient operation of aircraft; (2) adversely affect the safety of people or property on the ground; or (3) adversely affect the value of prior federal investments at the airport. In previous guidance, FAA analyzed multiple components of a project to determine whether they had ALP approval authority over each. Segmenting each component has reportedly led to confusion in the field on how to evaluate these types of projects in some cases, including conducting a NEPA environmental review.
In the updated guidance, FAA emphasizes now that if ALP approval authority is triggered for any portion of a proposed project—and the project “cannot be whole without other components of the project“—then FAA retains authority over the entire project. FAA explained the rationale for their revisions in the document, noting that the experience gained over the past few years allowed them to better understand how the original guidance impacted their operational efficiency. The goal of the revisions is to enhance efficiency and ease decision-making by simplifying the review process. 
What's Next? We encourage members to review the updated guidance and provide us with feedback on any of the changes and/or any other impacts that your airport is experiencing as it relates to Section 163 requirements. Feedback will be particularly helpful as we continue to engage with FAA and lawmakers on this issue. As highlighted in a AAAE/ACI-NA letter to Senate Committee leaders in June, we are asking Congress to direct FAA to correct their misinterpretation of the land use streamlining provisions in Section 163, which has resulted in overly burdensome processes and inhibited airport development. This is one of our priorities that we want addressed as part of the next FAA reauthorization. 
 
