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PA Bulletin, Doc. No. 97-265

NOTICES

INDEPENDENT REGULATORY REVIEW COMMISSION

Actions Taken by the Commission

[27 Pa.B. 972]

   The Independent Regulatory Review Commission met publicly at 11 a.m., Thursday, February 6, 1997, and took the following actions:

Regulations Approved

   Department of Transportation #18-322: Minimum Standards for Fixed Base Operations (creates 67 Pa. Code Chapter 476.)

Commissioners Present: John R. McGinley, Jr., Chairperson; Robert J. Harbison, III, Vice Chairperson; John F. Mizner; Irvin G. Zimmerman

Public meeting held
February 6, 1997

   Department of Transportation--Minimum Standards for Fixed Base Operations; Doc. No. 18-322

Order

   On October 4, 1994, the Independent Regulatory Review Commission (Commission) received this proposed regulation from the Department of Transportation (Department). This rulemaking would create 67 Pa. Code Chapter 476, establishing minimum standards for fixed base operators (FBO) at state-owned airports. The authority for this regulation is contained in section 5103(a) of the Aviation Code (74 Pa.C.S. § 5103(a)). The proposed regulation was published in the October 15, 1994 Pennsylvania Bulletin, with a 30-day public comment period. The final-form regulation was submitted to the Commission on November 14, 1996. Because the standing committees of the General Assembly did not have their full 20 days to review the regulation prior to the sine die adjournment, the Department was required to resubmit the final regulation on January 27, 1997, under section 5(c) of the Regulatory Review Act.

   The regulation applies to FBOs at Harrisburg International Airport and Capital City Airport. The other State-owned airport, Grand Canyon Airport, is not covered by this regulation. According to the Department, the minimum standards established in this regulation do not apply to Grand Canyon because it is presently leased to one airport operator who meets all of the needs of current airport users.

   The proposed regulation sets the minimum facility requirements for both Harrisburg International Airport and Capital City Airport. An FBO providing service at Harrisburg International shall provide a minimum of 50,000 square feet of aircraft parking and 10,000 square feet for automobile parking. An FBO at Capital City Airport shall provide a minimum of 40,000 square feet for aircraft parking and 10,000 square feet of automobile parking. An FBO at either airport must provide a building that contains a lounge, public restrooms, training and flight planning offices of at least 2,000 square feet, and a hangar of at least 10,000 square feet.

   An FBO must provide aircraft fuel and oil dispensing services, aircraft parking services and hangar storage services. Additionally, an FBO must provide two of the following services: airframe and power plant service; radio and instrument service; air taxi and charter services; flight training services; or ground handling services.

   The regulation requires any person desiring to provide fixed base operations to submit a written request to the Department indicating its interest in becoming an FBO. The Department, within 30 days, must respond to this request. Once a written request to conduct fixed base operations is granted by the Department, the FBO and the Department will enter into a written agreement in accordance with the requirements established in this rulemaking. Current agreements between FBOs and the Department are not affected by the requirements established in this chapter until the agreements terminate.

   According to the Department, the regulation will not increase costs to either itself or any FBO. Instead, the regulation provides minimum standards for services provided to airport users. Establishing the minimum standards in regulation assures that all FBOs will meet the same requirements. The Department states that this should result in more competition among FBOs and should assure better, quality service.

   There is currently only one FBO at both Harrisburg International Airport and Capital City Airport. Their current agreements will not be affected by this rulemaking. However, once their agreements expire, the FBOs must follow the procedures and meet the standards contained in the rulemaking in order to continue to operate.

   Our major comment on the proposed rulemaking questioned the need for the regulation. We believed that the minimum standards contained in the regulation could be more appropriately contained in a request for proposal (RFP) since the standards only apply to an FBO that contracts with the Department to provide services. Regulations are more appropriate for situations which apply to multiple locations and govern multiple parties. In this rulemaking, the Department sets different standards for two of its airports and no standards at its third airport. The standards set for each airport would only apply to a few entities since each airport may only need 2--5 FBOs. Therefore, we questioned the need for establishing the minimum standards by regulation and recommended the Department consider using the RFP process instead.

   In response, the Department provided several reasons for the need to proceed with the regulation. First, the Department cited the Office of Budget's Manual for contracting services where it states that an RFP ''will be used to obtain consultant, professional and other services when the work statement is detailed, the agency is seeking a contractor's solution to a management problem, and/or criteria, in addition to cost, will be used in evaluating proposals.'' Under this guidance, the Department believes it is inappropriate to use the RFP process since FBOs do not provide service to the Department. Instead, FBOs are tenants of the Department who provide services to airport users.

   Second, the Department indicated that the RFP process would make it difficult to turn down applicants who wish to pick and choose the types of services they wish to provide. The ability of an FBO to provide a less capital intensive service, such as fueling, does not provide a level playing field with those FBOs who provide a full complement of services requiring more capital investment. In order to establish a level playing field, the Department believes it must require all FBOs to provide minimum services to assure that the more capital intensive services are provided. By establishing minimum standards in a regulation, the Department will have a binding norm that all potential applicants can review to determine if they may be eligible to provide services, as well as the process that will be used to make a decision on the application. In addition, the minimum standards also ensure that each FBO meets applicable safety standards.

   Third, the Department observed that the regulation sets standards that are similar to the requirements at other airports, none of which utilize an RFP process to select FBOs. These airports include Reading Regional Airport, Johnstown-Cambria County Airport, Lancaster Airport, Hazelton Municipal Airport, Wilkes-Barre/Scranton Airport, and Northeast Philadelphia Airport.

   Finally, the Department wrote to the FBOs at Capital City and at Harrisburg International Airport regarding the use of an RFP process instead of establishing a regulation. Both FBOs indicated that they supported using a regulation instead of the RFP process.

   We still believe that the Department could have set these minimum standards via an RFP because it only deals with two locations and will only be used by a few FBOs. However, we believe that the Department has justified the use of a regulation to establish the standards and we defer to their judgment that a regulation will be administratively easier. However, we recommend that the Department carefully review the implementation of the regulation to ensure that it is an efficient process to establish FBO agreements at state-owned airports. If the regulation creates unnecessary barriers for FBO services at Commonwealth-operated airports, the Department should amend the regulation accordingly or again consider the use of an RFP process.

   A second significant concern with the regulation arose when the Department initially submitted the final-form regulation in September of 1996. Upon our review of the regulation, we notified the Department we had a concern with the lack of specific criteria the Department would use to accept or reject an application. Specifically, the regulation merely provided that the Department could establish internal review procedures to evaluate the applications and that the Department had the total discretion in the selection or rejection of the application. The regulation did not give any notice or indication as to what criteria would be employed. We believed the regulation should include the criteria used to review applications to provide notice to the affected parties and ensure consistent and fair review of the applications. The Department agreed that such language was necessary and withdrew the regulation to make the amendments.

   The resubmitted final-form regulation contains the criteria that will be employed to review applications. We believe the inclusion of the criteria will insure a fair and consistent process for the evaluation of FBOs.

   We have reviewed this regulation and find it to be in the public interest. The regulation will establish minimum standards for FBO services that will be easily understood and available to all potential FBOs. The establishment of the standards will also ensure that all FBOs are providing safe and adequate service at State- owned airports.

Therefore, It Is Ordered That:

   1.  Regulation No. 18-322 from the Department of Transportation, as submitted to the Commission on January 27, 1997, is approved; and

   2.  The Commission will transmit a copy of this Order to the Legislative Reference Bureau.

JOHN R. MCGINLEY, JR.,   
Chairperson

[Pa.B. Doc. No. 97-265. Filed for public inspection February 21, 1997, 9:00 a.m.]


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