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Airport Business Diversity Conference Year in Review/Preview Legal Issues

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 Business Diversity Conference Year in Review/Preview Legal Issues

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  1. Airport BusinessDiversity ConferenceYear in Review/PreviewLegal Issues

  2. 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.

  3. 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

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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

  11. Part 26 – Cases • Adarand, Western States Paving, Sherbrooke and Northern Contracting • USDOT’s DBE Program has been upheld and found constitutional

  12. 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.

  13. 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)

  14. 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

  15. Enforcement • 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 • http://epls.arnet.gov • DOT directive to UCP to initiate proceeding to remove DBE/ACDBE certification

  16. 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

  17. LINKS TO USDOT INFORMATION • Secretary’s Briefings and Speeches • http://www.dot.gov/affairs/briefing.htm • OIG’s Investigation Reading Room • http://www.oig.dot.gov/Room?type=2 • USDOT Order 4200.5D Governmentwide Debarment, Suspension, and Ineligibility • http://www.dot.gov/ost/m60/grant/DOT_Order_4200.5D.pdf • Excluded Parties List System • http://www.epls.gov/ • Questions and Answers Concerning Response to Western States Paving Company v. Washington State Department of Transportation • http://www.fhwa.dot.gov/civilrights/dbe_memo_a5.htm • Office of Small and Disadvantaged Business Utilization for DBE Program Issues includes Links to 49 CFR Parts 23 and 26 • http://osdbuweb.dot.gov/business/dbe/dbe_program.cfm

  18. Questions

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