B-215606, NOV 14, 1984

B-215606, NOV 14, 1984

SURPLUS PROPERTY - SURPLUS PROPERTY ACT - DISPOSITION OF PUBLIC AIRPORTS - USE OF PROCEEDS DIGEST: CONSISTENT WITH THE PROVISIONS OF THE SURPLUS PROPERTY ACT PERTAINING TO DISPOSAL OF PUBLIC AIRPORTS CONVEYED UNDER THE ACT, 50 U.S.C. APP. 1622, 1622B, 1622C, AND THE QUITCLAIM DEED FROM THE UNITED STATES, THROUGH THE ADMINISTRATOR OF THE WAR ASSETS ADMINISTRATION, TO SAN BERNARDINO COUNTY, CALIFORNIA, SO LONG AS THE FAA ADMINISTRATOR CONSENTS TO THE SALE OF THE FONTANA AIRPORT AND THE COUNTY OBLIGES ITSELF TO USE THE PROCEEDS OF THE SALE WOULD BE LEGALLY PROPER. PROPERTY PUBLIC - SURPLUS - PROCEEDS FROM SALES DISPOSITION - REPLACEMENT FACILITIES CONSISTENT WITH 14 C.F.R. 155.7(B), TO THE EXTENT THAT THE EMERGENCY MANAGEMENT CENTER TO BE CONSTRUCTED IN SAN BERNARDINO COUNTY, CALIFORNIA, WILL BE USED FOR NON-AIRPORT PURPOSES, EXPENDITURE OF PROCEEDS FROM THE SALE OF THE FONTANA AIRPORT ON ITS CONSTRUCTION WOULD BE IMPROPER. ON THE OTHER HAND, TO THE EXTENT THAT THE CENTER WILL BE USED IN FURTHERANCE OF THE DEVELOPMENT, IMPROVEMENT, OPERATION OR MAINTENANCE OF A PUBLIC AIRPORT, SUCH EXPENDITURES WOULD BE PROPER.

THE HONORABLE GEORGE E. BROWN, JR. HOUSE OF REPRESENTATIVES

DEAR MR. BROWN:

BY LETTER OF JUNE 19, 1984, YOU ASKED SEVERAL QUESTIONS ABOUT THE SALE AND PURCHASE, RESPECTIVELY, OF THE FONTANA AND RIALTO AIRPORTS LOCATED IN SAN BERNARDINO COUNTY, CALIFORNIA. AS THE RIALTO AIRPORT IS NOT AVAILABLE FOR PURCHASE SUBSEQUENTLY YOUR STAFF SUGGESTED THAT WE LIMIT OUR RESPONSE TO DETERMINING WHETHER PROCEEDS FROM SALE OF THE FONTANA AIRPORT COULD BE USED TO BUY LAND ADJACENT TO THE RIALTO AIRPORT FOR DEVELOPMENT OF A MULTI -DISCIPLINED EMERGENCY MANAGEMENT CENTER THAT WILL COVER AIRPORT-RELATED ACTIVITIES. THIS QUESTION ALSO RAISES THE RELATED QUESTION ABOUT WHETHER THE FONTANA AIRPORT CAN BE SOLD. FOR THE REASONS GIVEN BELOW, WE CONCLUDE THAT THE COUNTY CAN SELL THE FONTANA AIRPORT PROVIDED THAT THE ADMINISTRATOR OF THE FEDERAL AVIATION ADMINISTRATION (FAA) APPROVES OF THE SALE. CONSISTENT WITH FEDERAL REGULATIONS, APPROVAL CAN ONLY BE GIVEN IF THE COUNTY PLEDGES TO USE THE PROCEEDS FROM THE SALE FOR DEVELOPING, IMPROVING, OPERATING OR MAINTAINING A PUBLIC AIRPORT. THE PROCEEDS OF THE SALE CAN ONLY BE SPENT ON THE EMERGENCY MANAGEMENT CENTER TO THE EXTENT THAT THE CENTER WILL FURTHER THESE PURPOSES.

1. BACKGROUND

UNDER EXECUTIVE ORDER 9689, JANUARY 31, 1946, 11, FED. REG. 1265 (1946), AND THE AUTHORITY PROVIDED IN THE SURPLUS PROPERTY ACT OF 1944, 58 STAT. 765, 770-71 AS AMENDED, CODIFIED AT 50 U.S.C. APP. SEC. 1622, THE WAR ASSETS ADMINISTRATION OF THE UNITED STATES GOVERNMENT CONVEYED FONTANA AIRPORT TO SAN BERNARDINO COUNTY BY QUITCLAIM DEED. ACCEPTANCE OF THE DEED REQUIRED THAT THE COUNTY AND ITS SUCCESSORS USE THE PROPERTY ONLY FOR PUBLIC AIRPORT PURPOSES. ACCEPTANCE ALSO REQUIRED THE COUNTY AND ITS SUCCESSORS TO COMPLY WITH THE DEED RESTRICTION THAT THE PROPERTY BE TRANSFERRED ONLY WITH APPROVAL OF THE CIVIL AERONAUTICS ADMINISTRATION OR ITS SUCCESSOR GOVERNMENT AGENCY, /1/ I.E., THE FEDERAL AVIATION ADMINISTRATION.

ACCORDING TO THE COUNTY, SINCE THE FONTANA AIRPORT WAS CONVEYED IN 1947 IT HAS NOT BEEN USED ACTIVELY, AND, DUE TO LAND DEVELOPMENT OVER THE YEARS, MOST LIKELY NEVER WILL BE USED AS AN AIRPORT. THE COUNTY WOULD LIKE TO SELL THE AIRPORT AND, AMONG OTHER THINGS, USE THE PROCEEDS TO DEVELOP A MULTI-DISCIPLINED EMERGENCY MANAGEMENT CENTER ADJACENT TO THE RIALTO AIRPORT. /2/ THE CENTER IS TO BE USED FOR EMERGENCY OPERATION THAT ENCOMPASS AVIATION-RELATED ACTIVITIES. THE COUNTY HAS SUGGESTED THAT ONCE SOLD THE FONTANA AIRPORT PROPERTY WILL NOT BE USED AS AN AIRPORT.

APPARENTLY THE COUNTY COMMUNICATED WITH THE FAA'S WESTER PACIFIC REGIONAL OFFICE IN JULY 1983 ABOUT THE POSSIBLE DISPOSAL OF THE FONTANA AIRPORT. IN RESPONSE, THAT OFFICE INDICATES THAT THE COUNTY WOULD HAVE TO COMPLY WITH PART 155 OF TITLE 14 OF THE CODE OF FEDERAL REGULATIONS WHICH APPLIES TO RELEASES OF AIRPORT PROPERTY FROM SURPLUS PROPERTY DISPOSAL RESTRICTIONS.

SUBSEQUENTLY, WE WROTE TO THE DEPARTMENT OF TRANSPORTATION AND REQUESTED ITS VIEWS ON THE QUESTIONS YOU RAISED. THE FAA, OFFICE OF AIRPORT STANDARDS, RESPONDED THAT THE FAA WOULD GRANT A RELEASE ALLOWING SALE OF THE FONTANA AIRPORT IF THE FUNDS FROM THE SALE WERE USED FOR DEVELOPMENT OF THE SAN BERNARDINO COUNTY AIRPORT SYSTEM. THE FAA SAID IT COULD NOT CONSIDER CONSTRUCTION OF THE PROPOSED EMERGENCY MANAGEMENT CENTER TO BE AIRPORT DEVELOPMENT, BUT SUGGESTED THAT TO THE EXTENT ITS CONSTRUCTION BENEFITTED THE RIALTO AIRPORT, THE PROCEEDS COULD BE SO USED. IN THIS REGARD, THE FAA NOTED THAT THE "BENEFIT WOULD HAVE TO BE SPECIFIC *** AND THE PRO RATA SHARE DIRECTLY RELATED TO AERONAUTICAL ACTIVITY."

2. LEGAL DISCUSSION

THE SURPLUS PROPERTY ACT, AS AMENDED IN 1947, PROHIBITED SURPLUS AIRPORT PROPERTY DISPOSED OF FROM BEING USED FOR OTHER THAN AIRPORT PURPOSES EITHER BY A GRANTEE OR TRANSFEREE WITHOUT THE WRITTEN CONSENT OF THE FAA ADMINISTRATOR (ADMINISTRATOR) AND ONLY UPON A DETERMINATION THAT SUCH A TRANSFER WOULD NOT MATERIALLY AND ADVERSELY AFFECT THE DEVELOPMENT, IMPROVEMENT, OPERATION, OR MAINTENANCE OF THE AIRPORT AT WHICH THE PROPERTY IS LOCATED. PUB. L. NO. 80-289, 61 STAT. 678-79, CODIFIED AT 50 U.S.C. APP. SEC. 1622(G)(2((A).

IN 1949 THE ACT AGAIN WAS AMENDED TO PROVIDE THE ADMINISTRATOR WITH SOLE RESPONSIBILITY TO DETERMINE AND ENFORCE COMPLIANCE WITH THE TERMS, CONDITIONS, RESERVATIONS AND RESTRICTIONS CONTAINED IN ANY INSTRUMENT OF DISPOSAL BY WHICH SURPLUS AIRPORT PROPERTY IS OR HAS BEEN TRANSFERRED TO STATES AND THEIR POLITICAL SUBDIVISIONS. PUB. L. NO. 81 311, 63 STAT. 700, CODIFIED AT 50 U.S.C. APP. SEC. 1622B. THE LEGISLATION ALSO AUTHORIZED THE ADMINISTRATOR TO GRANT RELEASES FROM ANY OF THE TERMS, CONDITIONS, RESERVATIONS, AND RESTRICTIONS CONTAINED IN ANY INSTRUMENT OF DISPOSAL UPON A DETERMINATION THAT THE PROPERTY TRANSFERRED (A) NO LONGER SERVED THE PURPOSE FOR WHICH TRANSFERRED OR (B) THAT THE RELEASE WOULD NOT PREVENT ACCOMPLISHMENT OF THE PURPOSE FOR WHICH THE PROPERTY WAS TRANSFERRED AND IS NECESSARY TO PROTECT OR ADVANCE THE INTERESTS OF THE UNITED STATES IN CIVIL AVIATION. 63 STAT. 700-01, CODIFIED AT 50 U.S.C. APP. SEC. 1622C. THE SAME SECTION PROVIDES THAT ANY SUCH RELEASES MAY BE GRANTED ON, OR MADE SUBJECT TO, SUCH TERMS AND CONDITIONS AS THE ADMINISTRATOR DEEMS NECESSARY TO PROTECT OR ADVANCE THE INTERESTS OF THE UNITED STATES IN CIVIL AVIATION. THE LEGISLATIVE HISTORY OF SECTION 1622C SHOWS THAT THE SECTION WAS INTENDED TO CLARIFY, AMONG OTHER THINGS, THE PROVISIONS OF EXISTING LAW REGARDING DISPOSITIONS OF SURPLUS AIRPORT PROPERTIES BY GRANTEES WHEN THE PROPERTIES NO LONGER SERVE ANY USEFUL AIRPORT PURPOSE. S. REP. NO. 690, 81ST CONG., 1ST SESS. 4 (1949). THUS, THE LAW PERMITS THE ADMINISTRATOR TO CONSENT TO A SALE OF SURPLUS AIRPORT PROPERTY CONVEYED UNDER THE SURPLUS PROPERTY ACT EVEN IF THE BUYER WILL USE THE PROPERTY FOR OTHER THAN PUBLIC AIRPORT PURPOSES.

PURSUANT TO THE AUTHORITY IN SECTIONS 1622B AND 1622C, THE ADMINISTRATOR HAS PROMULGATED REGULATIONS WHICH, AMONG OTHER THINGS, PLACE RESTRICTIONS ON RELEASES, AND, CORRESPONDINGLY, ON DISPOSALS OF SURPLUS AIRPORT PROPERTY. 14 C.F.R. PT. 155. THUS, SECTION 155.7(B) PROHIBITS THE ADMINISTRATOR FROM RELEASING PUBLIC AGENCIES FROM DEED RESTRICTIONS, IF THE RELEASE WOULD ALLOW A SALE OF PROPERTY TO A THIRD PARTY, UNLESS THE PUBLIC AGENCY INVOLVED OBLIGATES ITSELF TO USE THE PROCEEDS FROM THE SALE EXCLUSIVELY FOR DEVELOPING, IMPROVING, OPERATING OR MAINTAINING A PUBLIC AIRPORT. /3/ A QUESTION ARISES ABOUT WHETHER THE REGULATION IS LEGALLY PROPER.

IT IS WELL-SETTLED THAT AS LONG AS REGULATIONS ARE REASONABLY RELATED TO THE PURPOSES OF THEIR AUTHORIZING LEGISLATION, THEY MUST BE SUSTAINED. POWELL V. SCHWEIKER, 688 F.2D 1357, 1360-61 (11TH CIR. 1982); GRUBBS V. BUTZ, 514 F.2D 1323, 1330 (D.C. CIR. 1975).

ALTHOUGH SECTIONS 1622B AND 1622C CURRENTLY /4/ ARE SILENT ABOUT USE OF PROCEEDS FROM SALES OF SURPLUS AIRPORT PROPERTY, BOTH SECTIONS DO GIVE THE ADMINISTRATOR BROAD AUTHORITY TO RELEASE GRANTEES FROM SURPLUS PROPERTY DISPOSAL RESTRICTIONS. IT IS EVIDENT THAT THE ADMINISTRATOR'S DECISION TO RELEASE A GRANTEE FROM A DEED RESTRICTION, AND CORRESPONDINGLY, TO ALLOW A SALE OF SURPLUS AIRPORT PROPERTY, DEPENDS UPON WHETHER THE RELEASE WILL FURTHER AND PROTECT THE INTEREST OF THE UNITED STATES IN CIVIL AVIATION.

WE THINK THAT THE REGULATORY RESTRICTION ON THE USE OF SALE PROCEEDS IS BOTH REASONABLY RELATED TO AND CONSISTENT WITH THE AUTHORITY PROVIDED IN SECTIONS 1622B AND 1622C. THE REGULATION FURTHERS AND PROTECTS THE INTERESTS OF THE UNITED STATES IN CIVIL AVIATION BY ENSURING THAT PROCEEDS OBTAINED FROM SALES OF SURPLUS PROPERTY CONTINUE TO BE USED FOR THE SAME PURPOSE FOR WHICH THE ORIGINAL SURPLUS PROPERTY GRANT WAS MADE, THAT IS, FOR PUBLIC AIRPORT PURPOSES. BOTH THE LANGUAGE OF THE ACT AUTHORIZING CONVEYANCE OF SURPLUS AIRPORTS AND THE FONTANA AIRPORT DEED REFLECT THESE PURPOSES.

ACCORDINGLY, AS LONG AS THE ADMINISTRATOR CONSENTS TO THE SALE AND THE COUNTY OBLIGATES ITSELF TO USE THE PROCEEDS FOR DEVELOPING, IMPROVING, OPERATING OR MAINTAINING A PUBLIC AIRPORT, WE THINK THE COUNTY CAN SELL THE FONTANA AIRPORT, NOTWITHSTANDING THAT THE BUYER WILL NOT USE IT FOR PUBLIC AIRPORT PURPOSES. IN THIS REGARD, THE ADMINISTRATOR IS AUTHORIZED TO RELEASE THE COUNTY FROM DEED RESTRICTIONS, SUCH AS THAT THE PROPERTY CONTINUE TO BE USED FOR PUBLIC AIRPORT PURPOSES, THAT COULD IMPEDE A SALE.

THE COUNTY HAS INFORMED US THAT THE PLANNED EMERGENCY MANAGEMENT CENTER ADJACENT TO THE RIALTO AIRPORT, FOR WHICH IT INTENDS TO USE THE PROCEEDS OF THE AIRPORT SALE, WILL BE USED FOR EMERGENCY OPERATIONS THAT INCLUDE AVIATION-RELATED ACTIVITIES. CONSISTENT WITH 14 C.F.R. SEC. 155.7(B), TO THE EXTENT THE CENTER WILL BE USED FOR NON-AIRPORT PURPOSES, EXPENDITURE OF PROCEEDS FROM THE SALE OF THE FONTANA AIRPORT ON ITS CONSTRUCTION WOULD BE IMPROPER. ON THE OTHER HAND, TO THE EXTENT THAT THE CENTER WILL BE USED TO FURTHER THE DEVELOPMENT, IMPROVEMENT, OPERATION OR MAINTENANCE OF A PUBLIC AIRPORT, SUCH EXPENDITURE WOULD BE PROPER. /5/ WE SEE NO PROBLEM WITH A PRO RATA EXPENDITURE OF THE PROCEEDS. THUS, FOR EXAMPLE, IF 10 PERCENT OF THE CENTERS ACTIVITIES WILL FURTHER PUBLIC AIRPORT ACTIVITIES, THE PROCEEDS OF THE FONTANA AIRPORT SALE CAN BE USED TO FINANCE 10 PERCENT OF THE CENTER'S CONSTRUCTION. THE REMAINDER OF THOSE PROCEEDS, LIKEWISE, MUST BE USED ONLY FOR PUBLIC AIRPORT PURPOSES.

UNLESS WE HEAR OTHERWISE FROM YOUR OFFICE, THIS OPINION WILL BE AVAILABLE FOR PUBLIC RELEASE 30 DAYS FROM TODAY.

/1/ THE DEED ALSO CONTAINED A PROVISO THAT SUBSEQUENT TRANSFEREES ASSUME ALL THE OBLIGATIONS IMPOSED UPON THE GRANTEE BY THE DEED'S PROVISIONS.

/2/ AS WE UNDERSTAND IT, THE CITY FINANCED MOST OF THE CONSTRUCTION OF THE RIALTO AIRPORT WITH FEDERAL GRANT FUNDS. SINCE THE CONSTRUCTION, THE CITY HAS OBTAINED ADDITIONAL GRANT FUNDS INCLUDING ASSISTANCE FOR DEVELOPMENT OF AN AIRPORT MASTER PLAN.

/3/ SECTION 152.207 OF TITLE 14, A SIMILAR REGULATION ISSUED UNDER THE AUTHORITY OF THE AIRPORT AND AIRWAY DEVELOPMENT ACT OF 1970, PUB. L. NO. 91-258, 84 STAT. 219, AS AMENDED, AND CONTINUED UNDER THE AIRPORT AND AIRWAY ACT OF 1982, 49 U.S.C. APP. SECS. 2201-2225, PROVIDES THAT WHEN A RELEASE HAS BEEN GRANTED AUTHORIZING DISPOSAL OF LAND ACQUIRED THROUGH A CONVEYANCE UNDER THE SURPLUS PROPERTY ACT, THE PROCEEDS REALIZED FROM THE DISPOSAL CANNOT BE USED AS MATCHING FUNDS FOR ANY AIRPORT DEVELOPMENT PROJECT OR AIRPORT PLANNING GRANT, BUT MAY BE USED FOR ANY OTHER AIRPORT PURPOSE.

/4/ AS ORIGINALLY ENACTED, SECTION 1622C CONTAINED A PROVISO ESSENTIALLY THE SAME AS SECTION 155.7(B), THAT IS, REQUIRING SALE PROCEEDS TO BE USED ONLY FOR PUBLIC AIRPORT PURPOSES, PUB. L. NO. 81 311, 63 STAT. 700-01; HOWEVER, IT ONLY WAS APPLICABLE TO PROPERTY SOLD WITHIN 5 YEARS OF OCTOBER 1, 1949, THE DATE OF THE ACT'S ENACTMENT.

/5/ IT IS POSSIBLE THAT THE GRANT AGREEMENTS PERTAINING TO CONSTRUCTION OF THE RIALTO AIRPORT IMPOSE RESTRICTIONS ON USE OF THE LAND ADJOINING THE AIRPORT. AS WE HAVE NOT BEEN PROVIDED WITH THESE AGREEMENTS, HOWEVER, WE CANNOT COMMENT ON THAT ISSUE.