Impact of Regulatory Compliance Costs on Small Airports (2013)

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17 1.1 Statement of the Problem Over time, federal, state, and local governments have gradually increased the regulatory requirements for U.S. airports. The costs of compliance in a wide array of subject areas have steadily increased airport capital and operat- ing costs. These costs are a growing concern for small hub and non-hub airports that have limited staff and financial resources. For many small airports, low levels of passenger enplanements and commercial aircraft operations limit their ability to raise revenue or cut costs significantly to pay for new requirements. With budgets already stretched by unavoid- able operating costs and capital expenditures, many small airports struggle to absorb regulatory compliance costs. While government agencies provide some funding for new regulatory initiatives, most compliance costs remain the responsibility of the airport. 1.2 Research Objectives The two objectives of this research study were (1) to iden- tify the regulatory compliance requirements applicable to small airports adopted from 2000 through the end of 2010 (the study period) and (2) to quantify the costs, including initial and recurring costs (where available), of federal regula- tory requirements on small airports. Additionally, potential funding sources to offset the cost of implementing regulatory requirements were identified. For this research, a small airport means a small hub or non-hub primary airport as defined by the Federal Aviation Administration (FAA) under the Airport Improvement Pro- gram (AIP). The terms “action” and “requirement” are used interchangeably to refer to the rules, regulations, orders, advi- sory circulars, mandates, and other compliance provisions issued during the study period. The research focused on the following requirements: • FAA and U.S. Department of Transportation (DOT) requirements • U.S. Environmental Protection Agency (EPA) and other federal environmental requirements • FAA and the Transportation Security Administration (TSA) security requirements • Occupational Safety and Health Administration (OSHA) requirements The research study identified and documented each require- ment. Where possible, the study attempted to identify the costs of the requirements from initial implementation through ongoing application. The goal was to provide airport operators and others with an understanding of the cumulative costs of regulatory compliance requirements. Further, airports can use the research results to inform the public, public officials, and others of the financial challenge these requirements pose and to encourage development of alternative solutions to funding shortfalls faced by many small airports. Information on poten- tial sources of funding for compliance is also provided. 1.3 Study Methods The study involved three major elements: • Identification of compliance requirements and agency cost estimates • Completion of industry surveys and interviews • Development of case studies Technical Appendix 1, Research Methodology, in Volume 2 of ACRP Web-Only Document 15: Data Supporting the Impact of Regulatory Compliance Costs on Small Airports (available C H A P T E R 1 Introduction

18 on the TRB website, www.trb.org/Main/Blurbs/168947.aspx) describes the research techniques used to compile this report in detail. 1.3.1 Identification of Compliance Requirements and Published Cost Estimates Agency websites were a primary source of information for FAA/DOT, EPA and OSHA requirements and compliance actions. Agency personnel also assisted in providing copies of documents that were not available on the websites. Many secu- rity requirements and actions are considered to be security- sensitive information (SSI) and are not available for pub- lic disclosure. The experience of individual researchers and industry experts was employed to identify the applicable secu- rity requirements and compliance actions adopted during the study period. Regulatory documents published by federal agencies are the primary source of published cost information for the requirements documented in this research. In addition to available rule documents, regulatory impact assessments and economic evaluations of regulatory actions were reviewed. The U.S. government’s consolidated regulatory website (www. regulations.gov) was one source of this information. Published cost information is included in the tables included in Appen- dix A (available on the TRB website in Volume 1 of ACRP Web- Only Document 15, www.trb.org/Main/Blurbs/168946.aspx). However, a relatively small number of the 291 requirements and compliance actions adopted during the study period were accompanied by an agency estimate of cost impacts. 1.3.2 Industry Surveys and Interviews An extensive two-phase survey effort was conducted. Phase 1 focused on determining whether airports were affected by particular compliance actions. Phase 2 focused on identifying the costs incurred to meet the requirements. For some requirements, separate questions were asked regard- ing initial and recurring compliance costs. The survey results were supplemented by telephone interviews with 13 select respondents. 1.3.3 Case Studies The cases of the following five airports were studied: • Golden Triangle Regional Airport (Columbus, MS)— non-hub • Yakima Air Terminal (Yakima, WA)—non-hub • Stewart International Airport (Newburg, NY)—non-hub • Santa Barbara Municipal Airport (Santa Barbara, CA)— small hub • Huntsville International Airport (Huntsville, AL)—small hub Research for the first three airports was conducted by tele- phone interview. Research for the latter two airports was conducted by on-site interviews. 1.4 Report Structure Chapter 2 provides an overview of the compliance actions adopted during the study period. The overview is supple- mented by information included in Technical Appendixes 2 through 5 in Volume 2 of ACRP Web-Only Document 15. Chapters 3 through 6 summarize the cost impact of compli- ance actions for each of the four regulatory areas—FAA/DOT requirements, environmental requirements, security require- ments, and OSHA requirements. Each chapter presents a summary of published cost data and per-airport and industry cost impacts reported through the surveys. Technical Appen- dixes 2 through 5 provide additional details. The chapters also present the results of the correlation analyses of compliance costs with both commercial passenger enplanements and com- mercial operations. Finally, the chapters include discussions of the potential sources of financial assistance to help pay the costs of the requirements and data on actual use of financial assistance. Chapter 7 summarizes the case study results. The full reports for each case study are contained in Appendix C (available in Volume 1 of ACRP Web-Only Document 15). Chapter 8 presents conclusions and offers strategies that the airport community might employ to reduce or mitigate the costs of federal requirements in the future. Appendixes A and B are also in Volume 1 of ACRP Web-Only Document 15. Appendix A consists of tables summarizing the requirements adopted during the study period. Appendix B consists of tables summarizing the survey data gathered as part of the research effort. Appendix D contains the slides and note pages of a presenta- tion that airports can use as a template to inform interested gov- ernmental officials and other stakeholders of the cost impacts of federal requirements. The Microsoft® PowerPoint template is available on the ACRP Report 90 summary page of the TRB website (http://www.trb.org/Main/Blurbs/168945.aspx). Technical Appendix 6 (available in Volume 2 of ACRP Web-Only Document 15) provides more detailed information on industry cost impacts of the compliance actions.