FAA and TSA Cost-Free Space Issue Brief_____________

Author: Joel Bacon, (703) 575-2478


What is at Issue?


TSA Space:  As the Transportation Security Administration has grown to address its broad mandates to oversee passenger and baggage screening at airports and other aspects of airport security, the agency has requested a significant amount of space in airports across the country – for passenger and baggage screening as well as for TSA employee break rooms, parking, and training facilities.  Given the direct costs (maintenance, electricity, etc.) of providing this space, the opportunity costs associated with not having other airport tenants or customers in the space occupied by TSA, and the fact that airports are required by federal regulation to have a fee and rental structure that make the airport as self-sustaining as possible, airports believe that the TSA should pay for its use of space at airports just like other tenants.


Congress has agreed with this premise and has included a rarely used general provision (specific text below) in two recent appropriations measures requiring the TSA to pay for its use of all space with the exception of “necessary security checkpoints.”  Most recently, the provision was included in the fiscal year 2003 omnibus appropriations bill (P.L. 108-7), which covers the period through September 30, 2003.       


The good news with gaining this fix as part of an appropriations measure is that it became effective immediately.  The down side is that the current requirement is applicable only in fiscal year 2003.  The AAAE/ACI-NA legislative team is actively pursuing a permanent fix that would require the TSA to continue paying for space in airports.  While we will urge Congress to make this requirement applicable to all space that the TSA uses, it will be extremely difficult to convince Congress to require TSA to pay for space at screening checkpoints.     


FAA Space:  The provision requiring TSA to pay for space at airports grew out of an earlier provision that the AAAE/ACI-NA legislative team was able to secure in the fiscal year 2001 and 2002 DOT spending bills requiring FAA to pay for its space at airports. 


Traditionally, the FAA paid for the use of FAA facilities located on airport property.  In 1999, however, the agency sent out notices to airport sponsors outlining its intention to reverse this decades-old practice and instead push airports to furnish space without cost.  Originally, FAA Regional Real Estate Contracting Officers were scheduled to begin applying the "new" guidelines for any lease expiring September 30, 1999. After airports raised serious concerns, the FAA delayed the implementation for one year until September 30, 2000, so that "airports would have time to adjust better to a potential loss of revenue."


In advance of the September 30, 2000, date for implementation of the new policy, AAAE/ACI-NA Legislative Affairs pushed for and was successful in gaining a general provision as part of the FY 2001 DOT appropriations bill prohibiting the FAA from moving forward with its policy on cost-free space. The provision was extended as part of the FY 2002 bill.  It was expanded to include the TSA as part of the FY 2002 supplemental spending bill and the fiscal year 2003 omnibus spending bill as outlined above.  The provision in effect now applies both to TSA and FAA.         



Why is it Important to Airports?


Forcing airports to provide space to the FAA and TSA would have obvious negative financial implications for airport operators.  Ensuring that airports continue to receive rent from all tenants, including the FAA and TSA, is a high priority for airport operators.



Major Provisions:


Public Law 108-7 (Effective Through September 30, 2003)

None of the funds in this Act shall be used to pursue or adopt guidelines or regulations requiring airport sponsors to provide to the Federal Aviation Administration and the Transportation Security Administration without cost building construction, maintenance, utilities and expenses, or space in airport sponsor-owned buildings for services relating to air traffic control, air navigation, aviation security or weather reporting: Provided, That the prohibition of funds in this section does not apply to negotiations between the agency and airport sponsors to achieve agreement on `below-market' rates for these items or to grant assurances that require airport sponsors to provide land without cost to the FAA for air traffic control facilities and the TSA for necessary security checkpoints.