[Federal Register Volume 81, Number 115 (Wednesday, June 15, 2016)]
[Rules and Regulations]
[Pages 38906-38911]
[FR Doc No: 2016-14133]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Chapter I

[Docket No. FAA 2014-0463]

Policy on the Non-Aeronautical Use of Airport Hangars

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of final policy.

-----------------------------------------------------------------------

SUMMARY: This action clarifies the FAA's policy regarding storage of
non-aeronautical items in airport facilities designated for
aeronautical use. Under Federal law, airport operators that have
accepted federal grants and/or those that have obligations contained in
property deeds for property transferred under various Federal laws such
as the Surplus Property Act generally may use airport property only for
aviation-related purposes unless otherwise approved by the FAA. In some
cases, airports have allowed non-aeronautical storage or uses in some
hangars intended for aeronautical use, which the FAA has found to
interfere with or entirely displace aeronautical use of the hangar. At
the same time, the FAA recognizes that storage of some items in a
hangar that is otherwise used for aircraft storage will have no effect
on the aeronautical utility of the hangar. This action also amends the
definition of aeronautical use to include construction of amateur-built
aircraft and provides additional guidance on permissible non-
aeronautical use of a hangar.''

DATES: The policy described herein is effective July 1, 2017.

FOR FURTHER INFORMATION CONTACT: Kevin C. Willis, Manager, Airport
Compliance Division, ACO-100, Federal Aviation Administration, 800
Independence Avenue SW., Washington, DC 20591, telephone (202) 267-
3085; facsimile:<PHONE_NUMBER>.

ADDRESSES: You can get an electronic copy of this Policy and all other
documents in this docket using the Internet by:
    (1) Searching the Federal eRulemaking portal (http://www.faa.gov/regulations/search);
    (2) Visiting FAA's Regulations and Policies Web page at (http://www.faa.gov/regulations_policies); or
    (3) Accessing the Government Printing Office's Web page at (http://www.gpoaccess.gov/index.html).
    You can also get a copy by sending a request to the Federal
Aviation Administration, Office of Airport Compliance and Management
Analysis, 800 Independence Avenue SW., Washington, DC 20591, or by
calling<PHONE_NUMBER>. Make sure to identify the docket number, notice
number, or amendment number of this proceeding.

SUPPLEMENTARY INFORMATION:
    Authority for the Policy: This document is published under the
authority described in Title 49 of the United States Code, Subtitle
VII, part B, chapter 471, section 47122(a).

Background

Airport Sponsor Obligations

    In July 2014, the FAA issued a proposed statement of policy on use
of airport hangars to clarify compliance requirements for airport
sponsors, airport managers, airport tenants, state aviation officials,
and FAA compliance staff. (79 Federal Register (FR) 42483, July 22,
2014).
    Airport sponsors that have accepted grants under the Airport
Improvement Program (AIP) have agreed to comply with certain Federal
policies included in each AIP grant agreement as sponsor assurances.
The Airport and Airway Improvement Act of 1982 (AAIA) (Pub. L. 97-248),
as amended and recodified at 49 United States Codes (U.S.C.)
47107(a)(1), and the contractual sponsor assurances require that the
airport sponsor make the airport available for aviation use. Grant
Assurance 22, Economic Nondiscrimination, requires the sponsor to make
the airport available on reasonable terms without unjust discrimination
for aeronautical activities, including aviation services. Grant
Assurance 19, Operation and Maintenance, prohibits an airport sponsor
from causing or permitting any activity that would interfere with use
of airport property for airport purposes. In some cases, sponsors who
have received property transfers through surplus property and
nonsurplus property agreements have similar federal obligations.
    The sponsor may designate some areas of the airport for non-
aviation use,\1\ with FAA approval, but aeronautical facilities of the
airport must be dedicated to use for aviation purposes. Limiting use of
aeronautical facilities to aeronautical purposes ensures that airport
facilities are available to meet aviation demand at the airport.
Aviation tenants and aircraft owners should not be displaced by non-

aviation commercial uses that could be conducted off airport property.
---------------------------------------------------------------------------

    \1\ The terms ``non-aviation'' and ``non-aeronautical'' are used
interchangeably in this Notice.
---------------------------------------------------------------------------

    It is the longstanding policy of the FAA that airport property be
available for aeronautical use and not be available for non-
aeronautical purposes unless that non-aeronautical use is approved by
the FAA. Use of a designated aeronautical facility for a non-
aeronautical purpose, even on a temporary basis, requires FAA approval.
See FAA Order 5190.6B, Airport Compliance Manual, paragraph 22.6,
September 30, 2009. The identification of non-aeronautical use of
aeronautical areas receives special attention in FAA airport land use
compliance inspections. See Order 5190.6B, paragraphs 21.6(f)(5).
    Areas of the airport designated for non-aeronautical use must be
shown on an airport's Airport Layout Plan (ALP). The AAIA, at 49 U.S.C.
47107(a)(16), requires that AIP grant agreements include an assurance
by the sponsor to maintain an ALP in a manner prescribed by the FAA.
Sponsor assurance 29, Airport Layout Plan, implements Sec.
47107(a)(16) and provides that an ALP must designate non-aviation areas
of the airport. The sponsor may not allow an alteration of the airport
in a manner inconsistent with the ALP unless approved by the FAA. See
Order 5190.6B, paragraph 7.18, and Advisory Circular 150/5070-6B,
Airport Master Plans, Chapter 10.
    Clearly identifying non-aeronautical facilities not only keeps
aeronautical facilities available for aviation use, but also assures
that the airport sponsor receives at least Fair Market Value (FMV)
revenue from non-aviation uses of the airport. The AAIA requires that
airport revenues be used for airport purposes, and that the airport
maintain a fee structure that makes the airport as self-sustaining as
possible. 49 U.S.C. 47107(a)(13)(A) and (b)(1). The FAA and the
Department of Transportation Office of the Inspector General have
interpreted these statutory provisions to require that non-aviation
activities on an airport be charged a fair market rate for use of
airport facilities rather than the aeronautical rate. See FAA Policies
and Procedures Concerning the Use of Airport Revenue, (64 FR 7696,
7721, February 16, 1999) (FAA Revenue Use Policy).
    If an airport tenant pays an aeronautical rate for a hangar and
then uses the hangar for a non-aeronautical purpose, the tenant may be
paying a below-market rate in violation of the sponsor's obligation for
a self-sustaining rate structure and FAA's Revenue Use Policy.
Confining non-aeronautical activity to designated non-aviation areas of
the airport helps to ensure that the non-aeronautical use of airport
property is monitored and allows the airport sponsor to clearly
identify non-aeronautical fair market value lease rates, in order to
meet their federal obligations. Identifying non-aeronautical uses and
charging appropriate rates for these uses prevents the sponsor from
subsidizing non-aviation activities with aviation revenues.

FAA Oversight

    A sponsor's Grant Assurance obligations require that its
aeronautical facilities be used or be available for use for
aeronautical activities. If the presence of non-aeronautical items in a
hangar does not interfere with these obligations, then the FAA will
generally not consider the presence of those items to constitute a
violation of the sponsor's obligations. When an airport has unused
hangars and low aviation demand, a sponsor can request the FAA approval
for interim non-aeronautical use of a hangars, until demand exists for
those hangars for an aeronautical purpose. Aeronautical use must take
priority and be accommodated over non-aeronautical use, even if the
rental rate would be higher for the non-aeronautical use. The sponsor
is required to charge a fair market commercial rental rate for any
hangar rental or use for non-aeronautical purposes. (64 FR 7721).
    The FAA conducts land use inspections at 18 selected airports each
year, at least two in each of the nine FAA regions. See Order 5190.6B,
paragraph 21.1. The inspection includes consideration of whether the
airport sponsor is using designated aeronautical areas of the airport
exclusively for aeronautical purposes, unless otherwise approved by the
FAA. See Order 5190.6B, paragraph 21.6.

The Notice of Proposed Policy

    In July 2014, the FAA issued a notice of proposed policy on use of
hangars and related facilities at federally obligated airports, to
provide a clear and standardized guide for airport sponsors and FAA
compliance staff. (79 FR 42483, July 22, 2014). The FAA received more
than 2,400 comments on the proposed policy statement, the majority from
persons who have built or are in the process of building an amateur-
built aircraft. The FAA also received comments from aircraft owners,
tenants and owners of hangars, and airport operators. The Aircraft
Owners and Pilots Association (AOPA) and the Experimental Aircraft
Association (EAA) also provided comments on behalf of their membership.
Most of the comments objected to some aspect the proposed policy
statement. Comments objecting to the proposal tended to fall into two
general categories:
     The FAA should not regulate the use of hangars at all,
especially if the hangar is privately owned.
     While the FAA should have a policy limiting use of hangars
on federally obligated airports to aviation uses, the proposed policy
is too restrictive in defining what activities should be allowed.

Discussion of Comments and Final Policy

    The following summary of comments reflects the major issues raised
and does not restate each comment received. The FAA considered all
comments received even if not specifically identified and responded to
in this notice. The FAA discusses revisions to the policy based on
comments received. In addition, the FAA will post frequently asked
Questions and Answers regarding the Hangar Use Policy on www.faa.gov/airport compliance. These Questions and Answers will be periodically
updated until FAA Order 5190.6B is revised to reflect the changes in
this notice.
    1. Comment: Commenters stated that the FAA should defer to local
government and leave all regulation of hangar use to the airport
operator.
    Response: The FAA has a contract with the sponsor of an obligated
airport, either through AIP grant agreements or a surplus property
deed, to limit the use of airport property to certain aviation
purposes. Each sponsor of an obligated airport has agreed to these
terms. The FAA relies on each airport sponsor to comply with its
obligations under this contract. To maintain a standardized national
airport system and standardized practices in each of the FAA's nine
regional offices, the agency issues guidance on its interpretation of
the requirements of the AIP and surplus property agreements. It falls
to the local airport sponsor to implement these requirements. The FAA
allows airport sponsors some flexibility to adapt compliance to local
conditions at each airport.
    However, some airport sponsors have adopted hangar use practices
that led to airport users to complain to the FAA. Some airport users
have complained that sponsors are too restrictive, and fail to allow
reasonable aviation-related uses of airport hangars. More commonly,
aircraft owners have complained that hangar facilities are not
available for aircraft storage because airport sponsors have allowed
the use of hangars for purposes that are unrelated to aviation,

such as operating a non-aviation business or storing multiple vehicles.
By issuing the July 2014 notice, the FAA intended to resolve both kinds
of complaints by providing guidance on appropriate management of hangar
use. The agency continues to believe that FAA policy guidance is
appropriate and necessary to preserve reasonable access to aeronautical
facilities on federally obligated airports. However, the final policy
has been revised in response to comments received on the proposal.
    2. Comment: Commenters, including AOPA, stated that the FAA lacks
the authority to regulate the use of privately owned hangars.
    Response: The FAA has a statutory obligation to assure that
facilities on aeronautically designated land at federally obligated
airports are reasonably available for aviation use. Designated
aeronautical land on a federally obligated airport is a necessary part
of a national system of aviation facilities. Land designated for
aeronautical use offers access to the local airfield taxiway and runway
system. Land designated for aeronautical use is also subject to certain
conditions, including FAA policies concerning rates and charges
(including rental rates) which were designed to preserve access for
aeronautical users and to support aeronautical uses. A person who
leases aeronautical land on the airport to build a hangar accepts
conditions that come with that land in return for the special benefits
of the location. The fact that the tenant pays the sponsor for use of
the hangar or the land does not affect the agreement between the FAA
and the sponsor that the land be used for aeronautical purposes. (In
fact, most hangar owners do not have fee ownership of the property;
typically airport structures revert to ownership of the airport sponsor
upon expiration of the lease term). An airport sponsor may choose to
apply different rules to hangars owned by the sponsor than it does to
privately constructed hangars, but the obligations of the sponsor Grant
Assurances and therefore the basic policies on aeronautical use stated
in this notice, will apply to both.
    3. Comment: Commenters believe that a policy applying the same
rules to all kinds of aeronautical structures, and to privately owned
hangars as well as sponsor-owned hangars, is too general. The policy
should acknowledge the differences between categories of airport
facilities.
    Response: A number of commenters thought that rules for use of
privately constructed and owned hangars should be less restrictive than
rules for hangars leased from the airport sponsor. The Leesburg Airport
Commission commented that there are different kinds of structures on
the airport, with variations in rental and ownership interests, and
that the FAA's policy should reflect those differences. The FAA
acknowledges that ownership or lease rights and the uses made of
various aeronautical facilities at airports will vary. The agency
expects that airport sponsors' agreements with tenants would reflect
those differences. The form of property interest, be it a leasehold or
ownership of a hangar, does not affect the obligations of the airport
sponsor under the Grant Assurances. All facilities on designated
aeronautical land on an obligated airport are subject to the
requirement that the facilities be available for aeronautical use.
    4. Comment: Commenters agree that hangars should be used to store
aircraft and not for non-aviation uses, but, they argue the proposed
policy is too restrictive on the storage of non-aviation related items
in a hangar along with an aircraft. A hangar with an aircraft in it
still has a large amount of room for storage and other incidental uses,
and that space can be used with no adverse effect on the use and
storage of the aircraft.
    Response: In response to the comments, the final policy deletes the
criteria of ``incidental'' or ``de minimis'' use and simply requires
that non-aviation storage in a hangar not interfere with movement of
aircraft in or out of the hangar, or impede access to other
aeronautical contents of the hangar. The policy lists specific
conditions that would be considered to interfere with aeronautical use.
Stored non-aeronautical items would be considered to interfere with
aviation use if they:
    [cir] Impede the movement of the aircraft in and out of the hangar;
    [cir] Displace the aeronautical contents of the hangar. (A vehicle
parked at the hangar while the vehicle owner is using the aircraft will
not be considered to displace the aircraft);
    [cir] Impede access to aircraft or other aeronautical contents of
the hangar;
    [cir] Are used for the conduct of a non-aeronautical business or
municipal agency function from the hangar (including storage of
inventory); or
    [cir] Are stored in violation of airport rules and regulations,
lease provisions, building codes or local ordinances.
    Note: Storage of equipment associated with an aeronautical activity
(e.g., skydiving, ballooning, gliding) would be considered an
aeronautical use of a hangar.
    5. Comment: Commenters stated the policy should apply different
rules to situations where there is no aviation demand for hangars,
especially when hangars are vacant and producing no income for the
sponsor.
    Response: At some airports, at some times, there will be more
hangar capacity than needed to meet aeronautical demand, and as a
result there will be vacant hangars. The FAA agrees that in such cases
it is preferable to make use of the hangars to generate revenue for the
airport, as long as the hangar capacity can be recovered on relatively
short notice for aeronautical use when needed. See Order 5190.6B,
paragraph 22.6. The final policy adopts a provision modeled on a
leasing policy of the Los Angeles County Airport Commission, which
allows month-to-month leases of vacant hangars for any purpose until a
request for aeronautical use is received. The final policy requires
that a sponsor request FAA approval before implementing a similar
leasing plan:
     The airport sponsor may request FAA approval of a leasing
plan for the lease of vacant hangars for non-aeronautical use on a
month-to-month basis.
     The plan may be implemented only when there is no current
aviation demand for the vacant hangars.
     Leases must require the non-aeronautical tenant to vacate
the hangar on 30 days' notice, to allow aeronautical use when a request
is received.
     Once the plan is approved, the sponsor may lease vacant
hangars on a 30 days' notice without further FAA approval.
    The agency believes this will allow airports to obtain some
financial benefit from vacant hangars no, while allowing the hangars to
be quickly returned to aeronautical use when needed. FAA pre-approval
of a month-to-month leasing plan will minimize the burden on airport
sponsors and FAA staff since it is consistent with existing interim use
guidance.
    6. Comment: Commenter indicates that the terms ``incidental use''
and ``insignificant amount of space'' are too vague and restrictive.
    Response: The FAA has not used these terms in the final policy.
Instead, the policy lists specific prohibited conditions that would be
considered to interfere with aeronautical use of a hangar.
    7. Comment: Commenter states Glider operations require storage of
items at the airport other than aircraft, such as tow vehicles and
towing equipment. This should be an approved use of hangars.

    Response: Tow bars and glider tow equipment have been added to the
list of examples of aeronautical equipment. Whether a vehicle is
dedicated to use for glider towing is a particular fact that can be
determined by the airport sponsor in each case. Otherwise the general
rules for parking a vehicle in a hangar would apply.
    8. Comment: Commenter states it should be clear that it is
acceptable to park a vehicle in the hangar while the aircraft is out of
the hangar being used.
    Response: The final policy states that a vehicle parked in the
hangar, while the vehicle owner is using the aircraft will not be
considered to displace the aircraft, and therefore is not prohibited.
    9. Comment: Commenters, including Experimental Aircraft Association
(EAA), stated that aviation museums and non-profit organizations that
promote aviation should not be excluded from hangars.
    Response: Aviation museums and other non-profit aviation-related
organizations may have access to airport property at less than fair
market rent, under section VII.E of the FAA Policy and Procedures
Concerning the Use of Airport Revenue. (64 FR 7710, February 16, 1999).
However, there is no special reason for such activities to displace
aircraft owners seeking hangar space for storage of operating aircraft,
unless the activity itself involves use and storage of aircraft.
Accordingly, aviation museums and non-profit organizations will
continue to have the same access to vacant hangar space as other
activities that do not actually require a hangar for aviation use, that
is, when there is no aviation demand (aircraft storage) for those
hangars and subject to the discretion of the airport operator.
    10. Comment: Commenters suggest that the policy should allow a
`grace period' for maintaining possession of an empty hangar for a
reasonable time from the sale of an aircraft to the purchase or lease
of a new aircraft to be stored in the hangar.
    Response: The FAA assumes that airport lease terms would include
reasonable accommodation for this purpose and other reasons a hangar
might be empty for some period of time, including the aircraft being in
use or at another location for maintenance. The reasons for temporary
hangar vacancy and appropriate ``grace periods'' for various events
depend on local needs and lease policies, and the FAA has not included
any special provision for grace periods in the final policy.
    11. Comment: Commenters believe that the policy should allow some
leisure spaces in a hangar, such as a lounge or seating area and
kitchen, in recognition of the time many aircraft owners spend at the
airport, and the benefits of an airport community.
    Response: The final policy does not include any special provision
for lounge areas or kitchens, either specifically permitting or
prohibiting these areas. The policy requires only that any non-aviation
related items in a hangar not interfere in any way with the primary use
of the hangar for aircraft storage and movement. The airport sponsor is
expected to have lease provisions and regulations in place to assure
that items located in hangars do not interfere with this primary
purpose.
    12. Comment: Commenters, including EAA, stated that all
construction of an aircraft should be considered aeronautical for the
purpose of hangar use, because building an aircraft is an inherently
aeronautical activity. The policy should at least allow for use of a
hangar at a much earlier stage of construction than final assembly.
    Response: The FAA has consistently held that the need for an
airport hangar in manufacturing or building aircraft arises at the time
the components of the aircraft are assembled into a completed aircraft.
Prior to that stage, components can be assembled off-airport in smaller
spaces. This determination has been applied to both commercial aircraft
manufacturing as well as homebuilding of experimental aircraft.
    A large majority of the more than 2,400 public comments received on
the notice argued that aircraft construction at any stage is an
aeronautical activity. The FAA recognizes that the construction of
amateur-built aircraft differs from large-scale, commercial aircraft
manufacturing. It may be more difficult for those constructing amateur-
built or kit-built aircraft to find alternative space for construction
or a means to ultimately transport completed large aircraft components
to the airport for final assembly, and ultimately for access to
taxiways for operation.
    Commenters stated that in many cases an airport hangar may be the
only viable location for amateur-built or kit-built aircraft
construction. Also, as noted in the July 2014 notice, many airports
have vacant hangars where a lease for construction of an aircraft, even
for several years, would not prevent owners of operating aircraft from
having access to hangar storage.
    Accordingly, the FAA will consider the construction of amateur-
built or kit-built aircraft as an aeronautical activity. Airport
sponsors must provide reasonable access to this class of users, subject
to local ordinances and building codes. Reasonable access applies to
currently available facilities; there is no requirement for sponsors to
construct special facilities or to upgrade existing facilities for
aircraft construction use.
    Airport sponsors are urged to consider the appropriate safety
measures to accommodate aircraft construction. Airport sponsors leasing
a vacant hangar for aircraft construction also are urged to incorporate
progress benchmarks in the lease to ensure the construction project
proceeds to completion in a reasonable time. The FAA's policy with
respect to commercial aircraft manufacturing remains unchanged.
    13. Comment: Commenter suggests that the time that an inoperable
aircraft can be stored in a hangar should be clarified, because repairs
can sometimes involve periods of inactivity.
    Response: The term ``operational aircraft'' in the final policy
does not necessarily mean an aircraft fueled and ready to fly. All
operating aircraft experience downtime for maintenance and repair, and
for other routine and exceptional reasons. The final policy does not
include an arbitrary time period beyond which an aircraft is no longer
considered operational. An airport operator should be able to determine
whether a particular aircraft is likely to become operational in a
reasonable time or not, and incorporate provisions in the hangar lease
to provide for either possibility.
    14. Comment: Commenter suggests that the FAA should limit use of
hangars on an obligated airport as proposed in the July 2014 notice.
Airport sponsors frequently allow non-aeronautical use of hangars now,
denying the availability of hangar space to aircraft owners.
    Response: Some commenters supported the relatively strict policies
in the July 2014 notice, citing their experience with being denied
access to hangars that were being used for non-aviation purposes. The
FAA believes that the final policy adopted will allow hangar tenants
greater flexibility than the proposed policy in the use of their
hangars, but only to the extent that there is no impact on the primary
purpose of the hangar. The intent of the final policy is to minimize
the regulatory burden on hangar tenants and to simplify enforcement
responsibilities for airport sponsors and the FAA, but only as is
consistent with the statutory requirements for use of federally
obligated airport property.

Final Policy

    In accordance with the above, the FAA is adopting the following
policy statement on use of hangars at federally obligated airports:

Use of Aeronautical Land and Facilities

Applicability

    This policy applies to all aircraft storage areas or facilities on
a federally obligated airport unless designated for non-aeronautical
use on an approved Airport Layout Plan or otherwise approved for non-
aviation use by the FAA. This policy generally refers to the use of
hangars since they are the type of aeronautical facility most often
involved in issues of non-aviation use, but the policy also applies to
other structures on areas of an airport designated for aeronautical
use. This policy applies to all users of aircraft hangars, including
airport sponsors, municipalities, and other public entities, regardless
of whether a user is an owner or lessee of the hangar.

I. General

    The intent of this policy is to ensure that the federal investment
in federally obligated airports is protected by making aeronautical
facilities available to aeronautical users, and by ensuring that
airport sponsors receive fair market value for use of airport property
for non-aeronautical purposes. The policy implements several Grant
Assurances, including Grant Assurance 5, Preserving Rights and Powers;
Grant Assurance 22, Economic Nondiscrimination; Grant Assurance 24, Fee
and Rental Structure; and Grant Assurance 25, Airport Revenues.

II. Standards for Aeronautical Use of Hangars

    a. Hangars located on airport property must be used for an
aeronautical purpose, or be available for use for an aeronautical
purpose, unless otherwise approved by the FAA Office of Airports as
described in Section III.
    b. Aeronautical uses for hangars include:
    1. Storage of active aircraft.
    2. Final assembly of aircraft under construction.
    3. Non-commercial construction of amateur-built or kit-built
aircraft.
    4. Maintenance, repair, or refurbishment of aircraft, but not the
indefinite storage of nonoperational aircraft.
    5. Storage of aircraft handling equipment, e.g., towbars, glider
tow equipment, workbenches, and tools and materials used in the
servicing, maintenance, repair or outfitting of aircraft.
    c. Provided the hangar is used primarily for aeronautical purposes,
an airport sponsor may permit non-aeronautical items to be stored in
hangars provided the items do not interfere with the aeronautical use
of the hangar.
    d. While sponsors may adopt more restrictive rules for use of
hangars, the FAA will generally not consider items to interfere with
the aeronautical use of the hangar unless the items:
    1. Impede the movement of the aircraft in and out of the hangar or
impede access to aircraft or other aeronautical contents of the hangar.
    2. Displace the aeronautical contents of the hangar. A vehicle
parked at the hangar while the vehicle owner is using the aircraft will
not be considered to displace the aircraft.
    3. Impede access to aircraft or other aeronautical contents of the
hangar.
    4. Are used for the conduct of a non-aeronautical business or
municipal agency function from the hangar (including storage of
inventory).
    5. Are stored in violation of airport rules and regulations, lease
provisions, building codes or local ordinances.
    e. Hangars may not be used as a residence, with a limited exception
for sponsors providing an on-airport residence for a full-time airport
manager, watchman, or airport operations staff for remotely located
airports. The FAA differentiates between a typical pilot resting
facility or aircrew quarters versus a hangar residence or hangar home.
The former are designed to be used for overnight and/or resting periods
for aircrew, and not as a permanent or even temporary residence. See
FAA Order 5190.6B paragraph 20.5(b)
    f. This policy applies regardless of whether the hangar occupant
leases the hangar from the airport sponsor or developer, or the hangar
occupant constructed the hangar at the occupant's own expense while
holding a ground lease. When land designated for aeronautical use is
made available for construction of hangars, the hangars built on the
land are subject to the sponsor's obligations to use aeronautical
facilities for aeronautical use.

III. Approval for Non-Aeronautical Use of Hangars

    A sponsor will be considered to have FAA approval for non-
aeronautical use of a hangar in each of the following cases:
    a. FAA advance approval of an interim use: Where hangars are
unoccupied and there is no current aviation demand for hangar space,
the airport sponsor may request that FAA Office of Airports approve an
interim use of a hangar for non-aeronautical purposes for a period of 3
to 5 years. The FAA will review the request in accordance with Order
5190.6B paragraph 22.6. Interim leases of unused hangars can generate
revenue for the airport and prevent deterioration of facilities.
Approved interim or concurrent revenue-production uses must not
interfere with safe and efficient airport operations and sponsors
should only agree to lease terms that allow the hangars to be recovered
on a 30 days' notice for aeronautical purposes. In each of the above
cases, the airport sponsor is required to charge non-aeronautical fair
market rental fees for the non-aeronautical use of airport property,
even on an interim basis. (64 FR 7721).
    b. FAA approval of a month-to-month leasing plan: An airport
sponsor may obtain advance written approval month-to-month leasing plan
for non-aeronautical use of vacant facilities from the local FAA Office
of Airports. When there is no current aviation demand for vacant
hangars, the airport sponsor may request FAA approval of a leasing plan
for the lease of vacant hangars for non-aeronautical use on a month-to-
month basis. The plan must provide for leases that include an
enforceable provision that the tenant will vacate the hangar on a 30-
day notice. Once the plan is approved, the sponsor may lease vacant
hangars on a 30-day notice basis without further FAA approval. If the
airport sponsor receives a request for aeronautical use of the hangar
and no other suitable hangar space is available, the sponsor will
notify the month-to-month tenant that it must vacate.
    A sponsor's request for approval of an interim use or a month-to-
month leasing plan should include or provide for (1) an inventory of
aeronautical and non-aeronautical land/uses, (2) information on vacancy
rates; (3) the sponsor's procedures for accepting new requests for
aeronautical use; and (4) assurance that facilities can be returned to
aeronautical use when there is renewed aeronautical demand for hangar
space. In each of the above cases, the airport sponsor is required to
charge non-aeronautical fair market rental fees for the non-
aeronautical use of airport property, even on an interim basis. (64 FR
7721).
    c. Other cases: Advance written release by the FAA for all other
non-aeronautical uses of designated aeronautical facilities. Any other
non-aeronautical use of a designated aeronautical facility or parcel of
airport land requires advance written approval from the FAA Office of
Airports in accordance with Order 5190.6B chapter 22.

IV. Use of Hangars for Construction of an Aircraft

    Non-commercial construction of amateur-built or kit-built aircraft
is considered an aeronautical activity. As with any aeronautical
activity, an airport sponsor may lease or approve the lease of hangar
space for this activity without FAA approval. Airport sponsors are not
required to construct special facilities or upgrade existing facilities
for construction activities. Airport sponsors are urged to consider the
appropriate safety measures to accommodate these users.
    Airport sponsors also should consider incorporating construction
progress targets in the lease to ensure that the hangar will be used
for final assembly and storage of an operational aircraft within a
reasonable term after project start.

V. No Right to Non-Aeronautical Use

    In the context of enforcement of the Grant Assurances, this policy
allows some incidental storage of non-aeronautical items in hangars
that do not interfere with aeronautical use. However, the policy
neither creates nor constitutes a right to store non-aeronautical items
in hangars. Airport sponsors may restrict or prohibit storage of non-
aeronautical items. Sponsors should consider factors such as emergency
access, fire codes, security, insurance, and the impact of vehicular
traffic on their surface areas when enacting rules regarding hangar
storage. In some cases, permitting certain incidental non-aeronautical
items in hangars could inhibit the sponsor's ability to meet
obligations associated with Grant Assurance 19, Operations and
Maintenance. To avoid claims of discrimination, sponsors should impose
consistent rules for incidental storage in all similar facilities at
the airport. Sponsors should ensure that taxiways and runways are not
used for the vehicular transport of such items to or from the hangars.

VI. Sponsor Compliance Actions

    a. It is expected that aeronautical facilities on an airport will
be available and used for aeronautical purposes in the normal course of
airport business, and that non-aeronautical uses will be the exception.
    b. Sponsors should have a program to routinely monitor use of
hangars and take measures to eliminate and prevent unapproved non-
aeronautical use of hangars.
    c. Sponsors should ensure that length of time on a waiting list of
those in need of a hangar for aircraft storage is minimized.
    d. Sponsors should also consider including a provision in airport
leases, including aeronautical leases, to adjust rental rates to FMV
for any non-incidental non-aeronautical use of the leased facilities.
In other words, if a tenant uses a hangar for a non-aeronautical
purpose in violation of this policy, the rental payments due to the
sponsor would automatically increase to a FMV level.
    e. FAA personnel conducting a land use or compliance inspection of
an airport may request a copy of the sponsor's hangar use program and
evidence that the sponsor has limited hangars to aeronautical use.
    The FAA may disapprove an AIP grant for hangar construction if
there are existing hangars at the airport being used for non-
aeronautical purposes.

    Issued in Washington, DC, on the 9th of June 2016.
Robin K. Hunt,
Acting Director, Office of Airport Compliance and Management Analysis.
[FR Doc. 2016-14133 Filed 6-14-16; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: October 21, 2009 (Volume 74, Number 202)]
[Notices]
[Page 54114-54115]
[DOCID:fr21oc09-113]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60822; File No. SR-NYSEArca-2009-77]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change Amending NYSE Arca Options Rule 5.3(j)

October 14, 2009.

    On August 19, 2009, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 \2\ thereunder to
amend the definition of Futures Reference Asset in NYSE Arca Rule
5.3(j)(1)(E) to permit options on Futures-Linked Securities to be based
on products linked to CBOE Volatility Index Futures (``VIX Futures'').
The proposed rule change was published for comment in the Federal
Register on September 11, 2009 for a 21-day comment period.\3\ The
Commission received no comment letters regarding the proposal. This
order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60621 (September 3,
2009), 74 FR 46818.
---------------------------------------------------------------------------

    NYSE Arca Rule 5.3(j) designates the listing and trading of options
on Equity Index-Linked Securities, Commodity-Linked Securities,
Currency-Linked Securities, Fixed Income Index-Linked Securities,
Futures-Linked Securities, and Multifactor Index-Linked securities,
collectively known as Index-Linked Securities (as defined in NYSE Arca
Equities Rule 5.2(j)(6)) that are principally traded on a national
securities exchange and an ``NMS Stock'' (as defined in Rule 600 of
Regulation NMS under the Act). Futures-Linked Securities pay at
maturity an amount of cash based on the performance of a ``Futures
Reference Asset,'' currently defined as an index of futures on Treasury
Securities, GSE Securities, supranational debt and debt of a foreign
country or a subdivision thereof, or interest rate futures, or options
or derivatives on any of the foregoing. The Exchange proposes to
include VIX Futures in this definition.
    After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange \4\ and, in particular, the requirements of Section 6 of the
Act.\5\ Specifically, the Commission finds that the proposed rule
change is consistent with Section 6(b)(5) of the Act,\6\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanisms of a free and open market and a national market system,
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \4\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Currently, the Exchange will consider listing and trading options
on Index-Linked Securities, including options on Futures-Linked
Securities, provided the Index-Linked Securities meet the criteria for
underlying securities set forth in NYSE Arca Rule 5.3(a)-(b).
Underlying Index-Linked Securities must meet the criteria and
guidelines for underlying securities set forth in Rule 5.3(a); or the
Index-Linked Securities must be redeemable at the option of the holder
at least on a weekly basis through the issuer at a price related to the
applicable underlying Reference Asset.\7\ After the addition of VIX
Futures to the definition of a Futures Reference Asset in NYSE Arca
Rule 5.3(j)(1)(E), options on Index-Linked Securities, including
options on Futures Linked Securities, would continue to be subject to
all Exchange rules governing the trading of equity options \8\ and the
current continuing or maintenance listing standards applicable to the
trading of options on Index-Linked Securities on NYSE Arca. The
Commission also notes that it has previously approved an amendment to
NYSE Arca Equities Rule 5.2(j)(6)(v) to add the VIX Futures to the
definition of ``Futures Reference Asset'' for the listing and trading
of Futures-Linked Securities.\9\
---------------------------------------------------------------------------

    \7\ For purposes of NYSE Arca Rule 5.3(j), Reference Assets
collectively refers to Equity Reference Assets, Commodity Reference
Assets, Currency Reference Assets, Fixed Income Reference Assets,
Futures Reference Assets, and Multifactor Reference Assets.
    \8\ Despite the fact that Index-Linked Securities are linked to
an underlying index, each trade as a single, exchange-listed
security. Accordingly, rules pertaining to the listing and trading
of standard equity options apply to options on Index-Linked
Securities.
    \9\ See Securities Exchange Act Release No. 58968 (November 17,
2008), 73 FR 71082 (November 24, 2008) (SR-NYSEArca-2008-111); see
also Securities Exchange Act Release No. 60535 (August 19, 2009), 74
FR 46826 (August 26, 2009) (NYSEAmex-2009-55).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-NYSEArca-2009-77) is hereby
approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).

---------------------------------------------------------------------------

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-25203 Filed 10-20-09; 8:45 am]

BILLING CODE 8011-01-P