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Airport Business Diversity Conference Year in Review/Preview Legal Issues. Airport Improvement Program (AIP). Federal Grant Program Focuses on Developing and Maintaining the Nation’s Public Use Airports In FY 2007, awarded about $3.5 Billion in grant dollars for more than 2,500 projects

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airport improvement program aip
Airport Improvement Program (AIP)

Federal Grant Program

    • Focuses on Developing and Maintaining the Nation’s Public Use Airports
    • In FY 2007, awarded about $3.5 Billion in grant dollars for more than 2,500 projects
      • 3,300 airports are eligible for AIP grants for airport planning & development
  • FAA has a policy of ensuring that socially and economically disadvantaged businesses are able to participate in contracting opportunities created by AIP grants.
aip and dbe

DBE Requirements

  • Accept federal grant funds - airport sponsor must comply with Civil Rights statutes, Executive Orders and other federal regulations
  • See 49 USC 47123, 47107(e), and 47113
  • Sponsors must have DBE program if awarding $250,000 or more in AIP funds. 49 CFR 26.21
faa reauthorization and aip
FAA Reauthorization and AIP
  • FAA Released NextGen Reauthorization Bill in Feb 2007
  • House version of Reauthorization (HR2881) passed September 20
  • Bill hasn’t gotten out of the Senate. Other non-FAA provisions (highway funding, rail tax credit bonds, doubling tax on oil spills) added in substitute.
  • Substitute bill failed cloture vote in May (which limits time that a bill can be debated) – this basically stalls the bill in the Senate.
faa reauthorization and aip1
FAA Reauthorization and AIP
  • For the AIP program to be in the “grant business” FAA must have three things – AIP Contract Authority, Trust Fund Expenditure Authority and Trust Fund Revenue Authority
  • FAA Contract Authority comes from the actual authorizing statute itself.
    • Has not been passed yet.
  • FAA can continue issuing AIP grants through June 30, 2008 – the current extension.
faa reauthorization and aip2
FAA Reauthorization and AIP
  • Our current authorization extension takes us through June 30, 2008.
  • Before that time, there will need to be a statutory remedy that allows the AIP program to continue.
  • After June 30, 2008 – construction and design for grants that have already been issued can continue, but no new grants can be issued.
faa reauthorization and aip3
FAA Reauthorization and AIP
  • Both House and Senate versions include AIP increases for each of the 4 years of the authorization
    • $3.8 Billion in FY2008, increasing to $4.1 Billion in FY2011.
  • House bill includes PFC increase to $7.00
  • Senate did not include a PFC increase.
  • Both the House Bill and the Senate Bill included provisions for an Airport Concessions Training Program.
faa reauthorization and aip4
FAA Reauthorization and AIP
  • Senate Bill 1300 Section 703 Requires FAA to establish a formal certification training program for airport concessions DBE program.
  • House Bill 2881 requires the Secretary of Transportation to establish a mandatory training program on DBE certification within 1 year after a passage of reauthorization with a report to Congress within 24 months of enactment.
  • Both House and Senate proposal include new initiatives on the environment, including research and proof of concept programs.
faa reauthorization and aip5
FAA Reauthorization and AIP
  • Environmental issues key over next few years at airports.
  • Environmental issues are strongly supported by both the House and the Senate.
  • FAA has also strongly supported environmental initiatives.
  • Focus on the environment could lead to expanded opportunities for DBE participation at airports.
recent court challenges
Recent Court Challenges
  • South Florida Chapter of Association of General Contractors v. Broward County
    • Challenges County’s Part 26 program
  • Pacific Legal Foundation v. Port of Oakland
    • Challenges Port’s non-car rental Part 23 program
    • Claim under Proposition 209
part 26 cases
Part 26 – Cases
  • Adarand, Western States Paving, Sherbrooke and Northern Contracting
  • USDOT’s DBE Program has been upheld and found constitutional
business size 23 33 and 26 65
Business Size §§ 23.33 and 26.65
  • Race and Gender based programs must be narrowly tailored to meet a compelling governmental interest.
    • One element of a narrowly tailored DBE program - DBE business must be small
      • measured by gross receipts or number of employees.
  • Existing business size standards have not been adjusted for inflation since 1992.
  • DOT final rule issued April 2, 2007 (effective May 2, 2007), makes inflationary adjustments for ACDBE and DBE size standards.
  • Similar inflationary adjustments to ACDBE size standard every two years and to DBE size standard every year.
specifics on business size parts 23 and 26 revisions
Specifics on Business Size – Parts 23 and 26 Revisions
  • Most ACDBE businesses - $47.78 million gross receipts averaged over previous 3 fiscal years (previously $30 million)
  • ACDBE Banks and Financial Institutions - $750 million in assets (previously $275 million)
  • Car rental ACDBE businesses - $63.71 million gross receipts averaged over previous 3 fiscal years (previously $40 million)
  • Pay Telephone ACDBE businesses - 1,500 employees (no change from previous standard)
  • ACDBE Automobile Dealers - 200 employees (no previous standard)
  • DBE Businesses: $20.41 million gross receipts averaged over previous 3 fiscal years (previously $19.57 million)
new questions and answers
New Questions and Answers
  • New Q & A’s under review in DOT
    • UCP Issues
    • Joint Check Issues
    • Subrecipients
    • Assistance by Prime Contractor
    • Certification
    • Confidentiality
    • Consultation
  • Airport Sponsor subject to compliance reviews by Office of Civil Rights
  • 14 CFR Part 16 Airport Enforcement Proceeding
    • Withhold grant funds
    • Terminate grant eligibility
  • DOJ referral for DBE/ACDBE Program Fraud
    • Jail
    • Fines
  • Suspension and Debarment
    • Listed on the Federal Government’s Excluded Parties List System; not eligible to participate in Federal contracts
  • DOT directive to UCP to initiate proceeding to remove DBE/ACDBE certification
upcoming regulatory activity
Upcoming Regulatory Activity
  • Sunset provision in 49 CFR Part 23
    • Provisions of this rule will become inoperative on April 21, 2010 unless extended by DOT
    • Begin review in 2009 on whether to extend program
      • Process offers opportunity for modifications to program
links to usdot information
  • Secretary’s Briefings and Speeches
  • OIG’s Investigation Reading Room
  • USDOT Order 4200.5D Governmentwide Debarment, Suspension, and Ineligibility
  • Excluded Parties List System
  • Questions and Answers Concerning Response to Western States Paving Company v. Washington State Department of Transportation
  • Office of Small and Disadvantaged Business Utilization for DBE Program Issues includes Links to 49 CFR Parts 23 and 26