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Sponsor must decide and interpret the provisions of its
engineering and construction contracts.

Airport owners should be encouraged to accomplish necessary develop-
ment and all possible assistance within the limits of available
time and personnel will be rendered to airport owners to accomplish
this end. Even though Federal-aid Airport Program funds are not
used in accomplishing airport development, adherence to FAA standards
and specifications is desirable.

No FAA representative should depart from the established policy of the FAA which is:


To participate under the Federal Airport Act only in those
items of development which are needed for strictly airport
purposes, and

(2) To exclude from the Federal-aid Airport Program any item of
development that does not meet that test even though it would
foster and encourage the development of civil aviation in other
ways (as, for example, by providing a source of revenues
needed to pay airport operation and maintenance costs or by
increasing public use of an airport for nonaviation purposes).

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The eligibility of public agencies as Sponsors of Projects in the Federal-aid Airport Program is covered by Part 550.2 of the Regulations. This chapter gives further interpretations and policies concerning the points of sponsor eligibility.

34. PUBLIC AGENCY. A sponsor must be a "public agency," such as the U. S. Government or an agency thereof; a state, Puerto Rico, and the



Virgin Islands, or an agency of any of them; a municipality or other
political subdivision; or a tax-supported organization.

In addition, the sponsor must be financially able to perform all the
assurances, agreements and obligations of a Grant Agreement, including
the Sponsor's Assurances. In those instances where the proposed sponsor
is an airport authority, which meets the definition of a public agency,
it must be determined that the authority in addition to qualifying as
a public agency also meets all of the other requirements of an eligible
sponsor including financial ability as required by Part 550.2 of the
Regulations. Financial ability of airport authorities should be particu-
larly checked as in many instances these authorities do not have
established credit nor do they have the power to levy taxes or assessments
of any kind. In order for such authority to meet the requirements of
the Act and Regulations, it must be found that there is some reasonable
basis upon which it can be determined that the authority will qualify
as a sponsor from a financial standpoint.

BASIC LEGAL MEMORANDUM. The legal power, authority and eligibility of
public agencies within a state will be determined by the Regional Legal
Office in the Basic Legal Memorandum which is an opinion of a general
nature. The eligibility of sponsors in most instances will be evident
by reference to the Basic Legal Memorandum. If a proposed sponsor is not
clearly one of a class covered by the Basic Legal Memorandum, or if there
is any doubt as to the powers of a proposed sponsor, or if there is a
new or novel question, the Regional Legal Office shall be requested to
make an independent legal review and furnish an opinion as to eligibility
of the specific sponsor. This should be done at the earliest possible
time after an agency indicates a desire to participate in the FAAP.

COSPONSORS. Where two or more sponsors join in sponsorship of a project, whether they are in the same or in adjoining states, the Regional Legal Office will be requested to make an independent legal review, and furnish an opinion as to the eligibility of each sponsor. Each sponsor shall meet the eligibility requirements of Part 550.2 of the Regulations.


37. SPONSOR'S LEGAL OPINION. An opinion of the sponsor's attorney as to the powers of the sponsor will be required only in cases in which the Regional Legal Office or the General Counsel may feel that the opinion of the sponsor's attorney as to some particular question would assist in determining the eligibility of the sponsor.

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AGENCY. If a public agency so desires and such action is required or
permitted under state or local laws, it may, with or without partici-
pating financially, serve as agent of the public agency which is to
own and operate the airport and need not itself become a sponsor of the
project. In all such cases, an agency agreement clearly outlining the
the terms and conditions of the agency and the authority vested in the
agent to act for and on behalf of the sponsor shall have been entered
into, which agreement must be satisfactory to the FAA. A true copy of
the agency agreement shall be submitted with the Sponsor's Project

An agency agreement, in order to be found satisfactory, must be consistent
with the Act and the Regulations and must clearly show the extent of the
agency relationship. If funds are to be channeled through the agent, the
agreement should set up a workable procedure for payment of funds over
to the sponsor or contractor without delay and provide for return of any

provide that the United States Government, or any agency thereof, may
be considered as an eligible sponsor if the project is located in, or in
close proximity to, a national park, national recreation area, or national
monument, or in a national forest or a special reservation for government
purposes. The United States Forest Service can acquire land outside of
the designated boundaries of a national forest. The United States
Forest Service is not an eligible sponsor with respect to an airport site
owned by it but not included in the designated boundaries of a national





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NEW OR REPLACEMENT AIRPORTS. Construction of new airports should be
limited to communities where: (1) the volume of air traffic, now or in
the future, exceeds the potential capacity of the existing airport(s);
(2) the existing airport(s) cannot economically be improved to handle its
(their) air traffic safely and adequately; (3) the area lacks an airport
but facts show the need for one; or (4) one new airport can serve two or
more communities more efficiently than existing facilities. The majority
of communities can be adequately served by one properly planned, well-
developed civil airport. Under these conditions, Federal-aid Airport
Program funds should be spent on only the one airport. The airport can
be a new one provided the area has a substantial aeronautical requirement,
but does not have an airport or has an existing airport which needs to be
replaced. New or replacement airports should be located to best serve
area or regional needs. Joint ownership or support by two or more
communities is desirable in these cases. The following will be used in
determining need for new airports:



An airport serving the community can no longer efficiently and safely accommodate all types of operations due to total volume. Annual air carrier operations in excess of 30,000 will be used as a guide to determine when a study should be made as to whether a separate airport is needed for general aviation,

There is no existing airport with the capacity or potential for development to serve the anticipated aeronautical requirements of the area. GUIDES FOR FAAP PARTICIPATION IN REPLACEMENT AIRPORTS. The following is a statement of the general requirements and policy guides governing Federal participation in the construction of replacement airports.

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(1) As a condition precedent to FAAP participation in a replacement airport, it will be necessary for the FAA to make the determination that the Government's interest in the development and improvement of a nationwide system of public airports requires the development of a new replacement airport rather than the improvement of the existing airport.

Accordingly, any recommendation for programming a replacement
airport must be fully supported by facts establishing that the
old airport is obsolete and cannot be modernized at an economi-
cal cost. In addition, the relocation of public and private
facilities (including NAVAIDS) necessitated by closing the old
airport will not be eligible for FAAP. (See Paragraph 107.)

(2) If the sponsor proceeds with the development of a new replacement
airport without the above determination having been made, FAAP
funds should not be made available for the new airport until the
Administrator is satisfied that such new replacement airport has
been developed to such an extent that it meets aviation needs
as well as the old airport.


(3) The Administrator's consent for the sale, other disposal, or nonairport use of the old airport will not be given until: (1) the airport owner's obligation to the Federal Government relative to the operation and maintenance of such airport has been transferred to the replacement airport, or (2) the replacement airport has been made subject to a Grant Agreement, or (3) the airport owner agrees that it will transfer to the replacement airport, when it is developed and placed in operation, any existing obligations of the airport owner to the Federal Government relative to operation and maintenance of the existing airport. Additionally, the Administrator's consent to the sale, other disposal, or nonairport use of the old airport will not be given until: (1) the replacement airport has been developed and placed in operation, or (2) he is satisfied that disposition of such airport may be made without adversely affecting the needs of civil aviation in the area pending development of the replacement airport.

b. Policy Guides:

The policy guides which are to be followed in considering and determining whether there should be any reduction in the amount of Federal participation in the development of a replacement airport under a Federal-aid Airport project because of previous Federal expenditures in the existing airport are set forth below:

(1) Where no FAAP funds have been expended for land acquisition in the existing airport, full FAAP matching funds may be authorized in the development of a replacement airport regardless of whether the existing airport (1) was developed under a relief program, such as WPA; or (2) was developed under the DCLA or DLAND Programs; or (3) is a surplus airport disposed of without monetary consideration under the Surplus Property Program; or (4) received FAAP funds for the development or improvement of facilities located thereon.


(2) Where FAAP funds have been expended on the existing airport to acquire land for airport purposes, FAAP fund participation will be limited to that portion of the cost of the replacement airport in excess of the total cost (Federal share plus sponsor's share) of such land acquisition. (See Paragraph 138, AS P


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