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State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions (2012)

Chapter: III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions

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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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Suggested Citation:"III. Legal Requirements or Obligations That Can Affect Airports' Efforts to Reduce GHG Emissions." National Academies of Sciences, Engineering, and Medicine. 2012. State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22671.
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8 III. LEGAL REQUIREMENTS OR OBLIGATIONS THAT CAN AFFECT AIRPORTS’ EFFORTS TO REDUCE GHG EMISSIONS This section identifies laws, cases, and regulations that can affect the ability of airports to implement GHG-mitigation projects or the manner in which such projects are implemented. It does not identify or discuss every possible law in every jurisdiction, but rather iden- tifies the most important categories of laws affecting airport efforts to undertake GHG reduction efforts. A critical theme throughout this section is the effect that federal preemption has on the regulatory and pro- prietary power of airports to control aviation activity and sources of emissions owned and operated by parties other than the airport proprietor. Although the majority of GHG emissions come from aircraft, vehicles, and en- gines operated by others, the federal Clean Air Act (CAA), federal aviation laws, and other provisions re- strict the ability of airports to control these sources di- rectly. Nonetheless, airports retain a number of tools to influence emissions through incentives, assistance, and restrictions. Other restraints on airport activities arise from fed- eral restrictions on the use of airport revenue and prop- erty. While many GHG-related efforts are perfectly ap- propriate under revenue use provisions, more questions and greater risks arise where the nexus between GHG- reducing activities and aeronautical activities is at- tenuated. Further, some GHG-related activities trigger a range of permitting and other requirements from federal, state, and local governments. Many of these activities and regulatory requirements are similar to or encoun- tered during typical airport development and will be familiar to airports, while others may be unique to elec- tric power or other nonairport projects. A. Federal Clean Air Act The CAA28 is a complicated and far-reaching piece of federal legislation. It relies on a delicate balance of state or local regulation of some sources and federal regulation of others. In particular, mobile sources like aircraft, cars, and trucks are subject to substantial fed- eral regulation. For mobile sources with national and international markets, the CAA preempts certain regu- latory activities by state and local entities to prevent the balkanization of rules and requirements for manu- facturers and users. Some of these requirements limit the ability of airports or other actors to regulate GHG sources at airports. 1. Federal Preemption of Regulation of Mobile Emissions Sources The CAA affects airports’ and state and local enti- ties’ abilities to act in their regulatory capacity to regu- 28 Pub. L. No. 88-206, 77 Stat. 392, 42 U.S.C. ch. 85. late emissions from aircraft, motor vehicles, and other mobile sources. Because the vast majority of emissions associated with airports come from mobile sources, the CAA’s provisions regarding preemption in this area are critical to airports’ abilities to address GHG emissions. As a general rule, airports have greater latitude under the CAA to impose or encourage the adoption of GHG- reduction measures when acting in their proprietary capacity than in their regulatory capacity. However, the scope of that proprietary role in the context of vehi- cle/aircraft emissions has not been well defined by the courts. a. Aircraft or Aircraft Engines.—Section 233 of the CAA preempts any state or local regulation “respecting emissions of any air pollutant from any aircraft or en- gine thereof” unless the regulation is identical to fed- eral regulations.29 Both the U.S. Supreme Court and EPA have found that GHGs constitute “air pollutants” under the CAA.30 Thus, states and local entities may not promulgate an emissions standard for aircraft unless such standard is identical to a federal standard. However, EPA has not yet promulgated a GHG emissions standard for aircraft.31 In 2008, several states and environmental groups filed petitions seeking to compel EPA to regulate GHG emissions of aircraft, ma- rine vessels, and other nonroad vehicles.32 EPA subse- quently issued an Advanced Notice of Proposed Rule- making regulating aircraft nitrogen oxide emissions, which are not GHG emissions.33 Dissatisfied, petition- ers brought suit arguing that EPA was statutorily re- quired to make a finding regarding whether GHGs from aircraft endanger public welfare and, therefore, require regulation.34 The federal district court agreed with peti- tioners, and it allowed the lawsuit to proceed with re- gards to aircraft engines.35 Because the CAA contains no hard deadline to make the endangerment finding, it will be up to the court to determine whether EPA is proceeding at a reasonable pace. The future regulations are expected to be consistent with standards that may be developed by the International Civil Aviation Or- ganization. In the absence of EPA regulations, it is unclear whether states and localities are allowed to develop laws regarding GHG emissions of aircrafts. A Ninth Circuit Court of Appeals case from 1980 may provide some guidance. In that case, the court interpreted the 29 42 U.S.C. § 7573. 30 Massachusetts v. EPA, 549 U.S. 497, 127 S. Ct. 1438, 167 L. Ed. 2d 248 (2007); EPA, Endangerment and Cause or Con- tribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009). 31 Control of Air Pollution from Aircraft and Aircraft En- gines, 40 C.F.R. pt. 87 (2011). 32 Ctr. for Biological Diversity v. U.S. E.P.A., 794 F. Supp. 2d 151, 153 (D.D.C. 2011). 33 Id. 34 Id. 35 Id. at 158, 162 (2011).

9 scope of Section 233 as not “preclusive of all state regu- lations in the field of aircraft engines.”36 The court adopted a test to determine whether state regulations were preempted: if “state pollution regulations can be met without affecting the design, structure, operation, or performance of the aircraft engine,” then the state regulations are not preempted.37 Accordingly, the court upheld the California regulations because such emis- sions limits could be met through abatement measures outside of the engine itself, such as by modifying test cell smoke stacks.38 Although there still might be some room for state and local regulation of aircraft engines, the scope of preemption suggested by this case appears to be sweeping. Moreover, the case did not address the extent to which airports’ proprietary powers (discussed below at Section III.A.1.d) would be affected by CAA preemption. b. Motor Vehicles and Motor Vehicle Engines.—The CAA also preempts state or local regulation of the emis- sions from new motor vehicles or new motor vehicle engines, with a limited exception for the State of Cali- fornia.39 CAA Section 209(a) provides: No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehi- cle engines subject to this part. No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.40 California has been granted a limited exception to the CAA Section 209(a) preemption; it may set its own motor vehicle emissions standards that are at least as tough as federal standards. 41 However, California must receive a waiver of preemption from EPA prior to en- forcing its regulations.42 EPA will grant a waiver unless it finds that California’s standards are not necessary to meet extraordinary and compelling circumstances or that they are not consistent with Section 202(a), which provides federal emissions standards for new motor vehicles and engines.43 Other states may enforce the California standards, but their standards must be iden- tical to those of California.44 Section 209(a) preemption affects the ability of states and localities to adopt regulations affecting on-road motor vehicles in operation at airports. Examples of on- road vehicles in use at airports include GSE and opera- tions/maintenance vehicles using on-road equipment 36 California v. Dep’t of the Navy, 624 F.2d 885, 888 (9th Cir. 1980). 37 Id. 38 Id. at 888–89 (9th Cir. 1980). 39 42 U.S.C. § 7543(a)–(b). 40 Id. § 7543(a). 41 Id. § 7543(b). 42 Id. § 7543(b). 43 Id. § 7543(b). 44 Id. § 7507. (such as pickup trucks, lavatory, or catering trucks us- ing “street legal” vehicles as a base) and private vehi- cles, taxis, or vans used in the transport of employees or passengers to airports. As discussed immediately below, courts have considered Section 209(a) requirements in a variety of contexts and have found that they have a wide scope of applicability. State-Level Manufacturing and Sales Mandates Affect- ing GHG Emissions from New Motor Vehicles or New Motor Vehicle Engines In 2002, the California Legislature enacted a law re- quiring the California Air Resources Board (CARB) to develop GHG emission standards for vehicles in model years 2009 and beyond.45 Two years later, CARB adopted regulations establishing a pair of standards for GHG emissions, one for new passenger cars and small trucks and one for new larger trucks.46 The regulations called for preliminary standards to be phased in from 2009 to 2012, with more stringent standards taking effect from 2013 to 2016.47 Over a dozen states subse- quently adopted GHG standards identical to Califor- nia’s. As required by the CAA, California petitioned EPA for a waiver to allow it to implement its proposed auto- motive GHG standards. Under the Administration of President George W. Bush, California’s waiver request was denied.48 However, in 2009, President Barack Obama directed EPA to reassess its decision to deny California’s waiver application.49 After accepting addi- tional comment, EPA published a notice in July 2009 granting California’s waiver request.50 Subsequent to the adoption of federal automotive GHG emissions standards, discussed below at Section III.A.3.b, California initiated a rulemaking to permit compliance with its standards based on compliance with 45 CAL. ASSEM. B. 1493, PAVLEY. VEHICULAR EMISSIONS: GREENHOUSE GASES (2002) (enacted), http://www.leginfo.ca. gov/pub/01-02/bill/asm/ab_1451-1500/ab_1493_bill_20020722_ chaptered.pdf. 46 California Air Resources Board (CARB), California Ex- haust Emissions Standards and Test Procedures for 2001 and Subsequent Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles (Mar. 12, 2010) (incorporated by refer- ence in CAL. CODE REGS. tit. 13, §§ 1960.1(k), 1961(d) (2011)). 47 Id. 48 California State Motor Vehicle Pollution Control Stan- dards: Notice of Decision Denying a Waiver of Clean Air Act Preemption for California’s 2009 and Subsequent Model Year Greenhouse Gas Emission Standards for New Motor Vehicles, 73 Fed. Reg. 12,156 (Mar. 6, 2008). 49 White House, State of California Request for Waiver un- der 42 U.S.C. 7543(b), the Clean Air Act, 74 Fed. Reg. 4905 (Jan. 26, 2009). 50 California State Motor Vehicle Pollution Control Stan- dards: Notice of Decision Granting a Waiver of Clean Air Act Preemption for California’s 2009 and Subsequent Model Year Greenhouse Gas Emission Standards for New Motor Vehicles, 74 Fed. Reg. 32,744 (July 8, 2009).

10 federal GHG emissions standards.51 In accordance with the identicality requirements of the CAA, other states that have adopted California’s regulations must gener- ally revise their standards to match California’s.52 Although airports and other local governments do not have the authority to adopt manufacturing or sales mandates affecting GHG emissions from motor vehicle fleets on their own, external GHG emissions standards may reduce the emissions impact of airport motor vehi- cle use. State- and Local-Level Purchasing Mandates Affecting New Motor Vehicles or New Motor Vehicle Engines In Engine Manufacturers Association v. South Coast Air Quality Management District (EMA I),53 the U.S. Supreme Court considered the validity of a number of rules promulgated by a Los Angeles-area air quality agency (the District) that required certain public and private fleets to buy only those vehicles meeting emis- sions standards that were stricter than federal or feder- ally-approved engine standards. The District’s Rule 1194 was of interest to area air- ports because it required both public and private air- port ground access fleet operators, such as limousine or transit service operators, to acquire a specified percent- age of vehicles that met CARB’s standards for low- emission vehicles.54 Airport transportation fleet opera- tors purchasing and leasing heavy-duty vehicles, such as shuttle buses, were directed to acquire alternative- fuel vehicles, defined as vehicles “not powered by gaso- line or diesel fuel.”55 The airport fleet purchasing re- quirement applied regardless of whether the private fleets were under public contract. The District argued that the fleet regulations, in- cluding Rule 1194, were not preempted by the CAA be- cause the requirements related to the purchase of vehi- cles by fleet owners rather than the sale of vehicles by manufacturers or retailers. The U.S. Supreme Court rejected this contention and adopted a sweeping defini- tion of emissions standards: A command, accompanied by sanctions, that certain pur- chasers may buy only vehicles with particular emission characteristics is as much an “attempt to enforce” a “standard” as a command, accompanied by sanctions, that a certain percentage of a manufacturer’s sales volume must consist of such vehicles. We decline to read into § 209(a) a purchase/sale distinction that is not to be found in the text of § 209(a) or the structure of the CAA.56 The Supreme Court did not address whether some of the fleet rules that applied to purchases by local gov- 51 CARB, supra note 46. 52 42 U.S.C. § 7507. 53 Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist. (EMA I), 541 U.S. 246, 124 S. Ct. 1756, 158 L. Ed. 2d 529 (2004). 54 Id. at 249. 55 Id. at 250 n.2 (internal citations omitted). 56 Id. at 255. ernments, as opposed to private operators, would be excepted from preemption. The Supreme Court re- manded the case to the lower courts to consider 1) “the scope of petitioner’s challenge”; 2) “whether some of the Fleet Rules…can be characterized as internal state pur- chase decisions….”; and 3) “whether § 209(a) preempts the Fleet Rules even as applied beyond the purchase of new vehicles (e.g., to lease arrangements or to the pur- chase of used vehicles).”57 On remand, the district court held that the fleet rules were not preempted because they fell into the market participant exception.58 The case was then ap- pealed to the Ninth Circuit.59 As discussed below in Section III.A.1.d., the Ninth Circuit affirmed, holding that the fleet rules as applied to state and local gov- ernments were outside the scope of preemption because they fell into the market participant exception.60 The court reasoned that state governments have the ability to order their own affairs and those of their subdivi- sions in a way that differs from their rights to impose mandates on private entities. In addition to affirming the market participant is- sue, the Ninth Circuit remanded the remaining provi- sions of the fleet rules to the district court to determine whether they were preempted. In 2008, the district court and the parties entered a stipulated entry of judgment containing the court’s determination that the fleet rules were not preempted insofar as they directed the decisions of state and local governments, as well as private entities under state and local contracts.61 How- ever, the court did determine that the fleet rules were preempted insofar as they attempted to direct the deci- sions of Federal Government entities and private enti- ties not under state contract.62 State Regulation of In-Use Operations for Motor Vehi- cles or Motor Vehicle Engines CAA Section 209(d) also provides that “[n]othing in this part shall preclude or deny to any State or political subdivision thereof the right otherwise to control, regu- late, or restrict the use, operation, or movement of reg- istered or licensed motor vehicles.”63 This is referred to as the “in-use” exception to preemption. Examples of “in-use” requirements include “carpool lanes, restric- tions on car use in downtown areas, and programs to 57 Id. at 258–59. 58 Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 2005 WL 1163437, at *13 (C.D. Cal. 2005) (not reported). 59 Id. 60 Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt. Dist., 498 F.3d 1031, 1039 (9th Cir. 2007). 61 Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., No. 00-9065 FMC (C.D. Cal. Feb. 7, 2008) (stipulated entry of judgment). 62 Id. 63 42 U.S.C. § 7543(d).

11 control extended idling of vehicles.”64 Therefore, state and local authorities may be able to adopt in-use motor vehicle regulations at airports. For example, a locality might prohibit engine idling in airport vehicle waiting areas. Denver is an example of a jurisdiction that im- poses such a requirement, including on the Denver In- ternational Airport. c. Nonroad Engines or Vehicles.—Nonroad engines in operation at an airport include construction equipment and GSE that are not “street legal,” including aircraft pushback tugs, baggage loaders, generators, snow plows, loaders, tractors, air-conditioning units, and cargo-moving equipment.65 Section 209(e) of the CAA generally preempts state or local regulation of emissions from nonroad engines or vehicles, with an exception for certain California regu- lations and other states’ regulations that are identical to California’s.66 For “new engines which are used in construction equipment or vehicles or used in farm equipment or vehicles and which are smaller than 175 horsepower,” the CAA provides that “no State or any political subdivision thereof shall adopt or attempt to enforce any standard or other requirement relating to the control of emissions.”67 For other nonroad engines, the CAA provides that EPA may authorize California to impose “standards and other requirements relating to the control of emissions” under specific conditions.68 Other states with nonattainment or maintenance plans in place may adopt identical standards, so long as they provide 2 years of lead time.69 Generally, courts have interpreted the CAA’s non- road preemption provisions in a similar way to those applicable to on-road engines; that is, to prevent states and local entities from acting in their regulatory capac- ity to force the purchase or sale of engines cleaner than federal or federally-approved standards. However, the reach of the California exception from the nonroad pre- emption provision is broader than that of the on-road provision because the CAA authorizes California to regulate both existing and new nonroad emissions sources provided that certain conditions (i.e., waiver) have been met.70 The EPA interprets the CAA to extend the Section 209(d) allowance of in-use requirements to regulation of 64 Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1094 (D.C. Cir. 1996); see also 42 U.S.C. § 7408(f) (requiring administrator to make available to state and local authorities information relat- ing to such strategies). 65 See 42 U.S.C. § 7550(10). 66 42 U.S.C. § 7543(e). 67 Id. 68 Id. at § 7543(e)(2). 69 Id. at § 7543(e)(2)(B). 70 Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075 (D.C. Cir. 1996) (holding that implied preemption provision of CAA authorizing California to adopt emission standards for nonroad sources that are not expressly preempted applies to new and used non- road sources). nonroad engines.71 An EPA interpretive rule provides that “EPA believes that states are not precluded under Section 209 from regulating the use and operation of nonroad engines, such as regulations on hours of usage, daily mass emission limits or sulfur limits on fuel….” 72 The precise limits of this power to regulate in-use emis- sions are not settled, but EPA’s interpretation indicates that states (and their subdivisions) may adopt some in- use limitations on emissions from nonroad vehicles without running afoul of preemption under the CAA. The full reach of this power in terms of possible restric- tions on GSE use has not been established. An EPA waiver of CAA preemption is required where nonroad engine limitations contain restrictions on the quantity of certain pollutants emitted by particu- lar classes of engines. In 2008, the Ninth Circuit ruled that nonroad engine emissions limitations that may be met through in-use requirements are invalid where they are framed as requirements that engines “not emit more than a certain amount of a given pollutant” and have not been approved by EPA.73 The court found that such rules were emissions standards that could not be enforced without EPA authorization.74 Where California has obtained EPA approval for similar standards, such as it did for in-use regulations relating to nonroad transport refrigeration units operating in California, the D.C. Circuit has upheld such regulations.75 EPA approval of California’s regulations is essential to the state’s ability to enforce in-use nonroad regula- tions specifying emission performance standards. In 2007, CARB proposed extensive regulations limiting nitrogen oxide and particulate matter emissions for in- 71 Air Pollution Control, Preemption of State Regulation for Nonroad Engine and Vehicle Standards, 59 Fed. Reg. 36,969, 36,973–74 (July 20, 1994) (Further indication that section 209(e)(2) was not intended to apply to in-use regulations is the fact that, if the subsection were applied to in-use regulations, then California would be the only government (local, state or federal) that could directly set regulations for nonroad engines in use. EPA’s mandate under section 213 applies only to new engines.). 72 Control of Air Pollution, Determination of Significance for Nonroad Sources and Emission Standards for New Nonroad Compression-Ignition Engines At or Above 37 Kilowatts, 59 Fed. Reg. 31,306, 31,339 (June 17, 1994); 40 C.F.R. pt. 89, subpt. A, app. A (emphasis added). See Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1094 (D.C. Cir. 1996) (upholding EPA’s rule in this regard). 73 See Pac. Merch. Shipping Ass’n v. Goldstene, 517 F. 3d 1108, 1115 (9th Cir. 2008) (finding California regulations relat- ing to auxiliary engines on oceangoing ships to be preempted under CAA § 209, even if the standard could be met using cleaner fuels, because the plain language of the rules regulated emissions from ship engines by requiring that engines “not emit more than a certain amount of a given pollutant.” (quot- ing Engine Mfrs. Ass’n v. SiCoast Air Quality Mgmt. Dist., 541 U.S. 246, 253)). 74 Pac. Merch. Shipping Ass’n v. Goldstene, 517 F.3d 1108, 1115 (9th Cir. 2008). 75 Am. Trucking Ass’ns v. EPA, 600 F.3d 624 (D.C. Cir. 2010).

12 use nonroad diesel-fueled fleets and off-road large spark-ignition engines, including airport GSE.76 The in- use nonroad diesel regulations impose limits on idling, buying older vehicles, and selling off-road vehicles.77 Beginning in 2010, users of nonroad equipment were to begin cleaning up their fleets to meet fleet average- emissions requirements through replacement, repower- ing, and retrofitting.78 In 2008, CARB sought EPA approval to enforce these rules.79 As of early 2012, EPA had not approved Cali- fornia’s request for a CAA preemption waiver related to its retrofit requirements for nonroad vehicles. Thus, California has yet to begin enforcement of the regula- tory fleet average-emissions requirements.80 However, the state is enforcing the regulatory in-use require- ments relating to idling, reporting, labeling, and sales disclosures.81 In December 2011, CARB adopted amendments to these rules in response to the California Legislature’s request that CARB consider the impact of the recession and resultant emissions inventory changes on the rule.82 CARB has plans to implement several other emis- sion-reduction programs targeting in-use fleets— including some airport GSE—such as an air toxic con- trol measure for portable engines and new emission standards and fleet requirements for forklifts and other industrial equipment.83 State-Level Regulations Affecting GHG Emissions from Nonroad Vehicles or Nonroad Vehicle Engines At the time of this digest’s preparation, California had yet to adopt rules limiting GHG emissions from nonroad vehicles. d. Market Participant Exception.—As noted above, a critical question is whether an action by an airport in its proprietary role as airport operator is covered by the CAA’s preemption of regulation. This question has not been definitively resolved, but cases applying the mar- ket participant doctrine in the CAA and other contexts 76 In-Use Off-Road Diesel Vehicle Regulation, available at http://www.arb.ca.gov/msprog/ordiesel/ordiesel.htm (last vis- ited June 12, 2012). 77 Regulatory Advisory 10-414: Enforcement of the In-Use Off-Road Diesel Vehicle Regulation (May 2011), http://www. arb.ca.gov/enf/advs/advs414.pdf. 78 Id. 79 Id. 80 Id. 81 Id. 82 Notice of Public Hearing to Consider Proposed Amend- ments to the Regulations for In-Use Off-Road Diesel-Fueled Fleets and Off-Road Large Spark Ignition Engine Fleet Re- quirements 3 (Oct. 19, 2010), available at http://www.arb.ca. gov/regact/2010/offroadlsi10/offroadlsinotice.pdf. 83 Ground Support Equipment (GSE) (Sept. 2, 2009), http://www.arb.ca.gov/msprog/offroad/gse/gse.htm (last visited June 12, 2012). suggest that there is room for exercise of proprietary power that may exceed regulatory powers. The U.S. Supreme Court originally established the market participation doctrine in dormant Commerce Clause cases, in light of “considerations of state sover- eignty, the role of each State as guardian and trustee for its people, and the long recognized right of trader or manufacturer, engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.”84 The Court estab- lished that “in market participant cases, courts under- take ‘a single inquiry: whether the challenged program constituted direct state participation in the market.’”85 The doctrine recognizes that “[n]ot all actions by state or local government entities…constitute regulation, for such an entity, like a private person, may buy and sell or own and manage property in the marketplace.”86 Ac- cordingly, where a federal statute preempts state regu- lation in a particular field, state action in that field “is not preempted so long as it is proprietary rather than regulatory,” absent congressional indication to the con- trary.87 Two Ninth Circuit cases provide particularly helpful case law on understanding the market participant ex- ception. In Engine Manufacturers Association v. South Coast Air Quality Management District (EMA II),88 the Ninth Circuit held that the state rules fell into the market participant exception, saving them from pre- emption under CAA Section 209. EMA II addressed whether the state could mandate state and local enti- ties’ fleets (as opposed to private fleets) to procure cleaner vehicles than required under federal or EPA- approved California minimum emissions standards. The court found that “the section contains nothing to indicate a congressional intent to bar states from choos- ing to use their own money to acquire or use vehicles that exceed the federal standards.”89 This exception to Section 209 preemption is similar in many ways to the proprietor’s exception in federal aviation law, discussed at Section III.B, although the exception does not have the same explicit statutory basis. In EMA II, the Ninth Circuit set forth two tests for market participation: the efficient procurement test and the narrow scope test. 84 Reeves, Inc. v. Stake, 447 U.S. 429, 438–39, 100 S. Ct. 2271, 2278, 65 L. Ed. 2d 244, 252 (1980) (internal citations omitted); see also Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 809–10, 96 S. Ct. 2488, 2498, 49 L. Ed. 2d 220, 231 (1976). 85 Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist. (EMA II), 498 F.3d 1031, 1040 (9th Cir. 2007) (quoting Reeves, Inc. v. Stake, 447 U.S. 429, 435 n.7 (1980)). 86 Sprint Spectrum L.P. v. Mills, 283 F.3d 404, 417 (2d Cir. 2002) (emphasis added). 87 Engine Mfrs. Ass’n, 498 F.3d at 1041; see also Bldg. & Constr. Trades Council v. Associated Builders & Contractors, 507 U.S. 218, 231–32, 113 S. Ct. 1190, 1198, 122 L. Ed. 2d 565, 579 (1993). 88 Engine Mfrs. Ass’n, 498 F.3d at 1031. 89 Id. at 1043.

13 First, state action is proprietary if it “essentially reflect[s] the [governmental] entity’s own interest in its efficient procurement of needed goods and services, as measured by comparison with the typical behavior of private parties in similar circumstances.” 463 F.3d at 1084 (quoting [Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686, 693 (5th Cir. 1999)]). In these circum- stances, the market participant doctrine “protects com- prehensive state policies with wide application from pre- emption, so long as the type of state action is essentially proprietary.” Id. Second, state action is proprietary if “the narrow scope of the challenged action defeat[s] an infer- ence that its primary goal was to encourage a general pol- icy rather than address a specific proprietary problem.” Id. (quoting Cardinal Towing, 180 F.3d at 693). Thus, the doctrine also “protects narrow spending decisions that do not necessarily reflect a state’s interest in the efficient procurement of goods or services, but that also lack the effect of broader social regulation.” Id.90 The court rejected a suggestion that the California rules did not meet the “efficient procurement” test be- cause they considered emissions alongside price and performance, rather than price or performance alone.91 According to the Ninth Circuit, “‘efficient procurement’ means procurement that serves the state’s purposes— which may include purposes other than saving money— just as private entities serve their purposes by taking into account factors other than price in their procure- ment decisions.”92 The court pointed to evidence that FedEx and UPS “have, for their own purposes, adopted programs to introduce less-polluting vehicles into their fleets.”93 Finally, the Ninth Circuit determined that the “market participant doctrine’s protection of state pro- prietary action includes proprietary action by states’ political subdivisions.”94 An unresolved question is the extent to which air- ports can potentially use the market participant excep- tion for local regulation to address GHG emissions from tenants’ vehicles. It will be essential for airports to tie their initiatives to the self-interested operation of the airport as an enterprise, rather than to frame them as attempts to solve regional or global problems. Specifi- cally, tying airport policies to specific regulatory re- quirements, liabilities, or other considerations is safer than tying them to general efforts to address climate change. A recent case analyzing the market participation ex- ception under the Federal Aviation Administration Au- thorization Act (FAAA Act) provides useful guidance. In 2011, the Ninth Circuit decided American Trucking Association v. City of Los Angeles.95 At issue in that case were various provisions of the Port of Los Angeles’s Clean Trucks Program, which had been enacted to ad- 90 Id. at 1041. 91 Id. at 1045–46. 92 Id. at 1046. 93 Id. at 1047. 94 Id. at 1041–45. 95 Am. Trucking Ass’ns, Inc. v. City of L.A., 660 F.3d 384 (9th Cir. 2011). dress concerns that the proposed expansion of its cargo terminal would increase air pollution.96 Under that pro- gram, motor carriers could not operate drayage trucks—trucks that move cargo from marine terminals to customers, railroad, or other trucks for long distance transport—without a concession agreement.97 The American Trucking Association challenged the State’s actions, arguing that they did not qualify as “efficient procurement” and were therefore preempted by federal law.98 Specifically, the association challenged the provi- sions requiring concessionaires to 1) transition away from using independent contract drivers, 2) address local parking regulations in an off-street parking plan, 3) maintain trucks according to manufacturers’ specifi- cations, 4) attach to their trucks placards with a phone number to report emission concerns, and 5) demon- strate financial capability to comply with the concession agreement.99 Although “the Port does not purchase drayage ser- vices [because] such services are an integral part of Port business,” the court held that “when an independent State entity manages access to its facilities, and im- poses conditions similar to those that would be imposed by a private landlord in the State’s position, the State may claim the market participation doctrine.”100 Thus, the Port “acted in its proprietary capacity, as a market participant, when it…entered into concession agree- ments.”101 However, the court did not save every provi- sion of the concession agreement from preemption.102 The employee-driver provision, requiring concession- aires to gradually cease using independent owner- operators for Port drayage, did not fall under the mar- ket participant exception because it “seeks to impact third party behavior unrelated to the performance of the concessionaire’s obligations to the Port” and is “tan- tamount to regulation.”103 American Trucking Association sheds additional light on airports’ ability to use the market participant exception to take actions that address GHG emissions. The considerations here are similar to those discussed above. Based on American Trucking Association, the more integral a part of airport business the action is, the more likely it is to be viewed as proprietary rather than regulatory. e. Summary of Federal Preemption of Regulation from Mobile Emissions Sources.—Under the CAA, local gov- ernments cannot directly limit GHG emissions from aircraft, such as by specifying the amount of GHGs that could be emitted per flight. The CAA would also likely preempt efforts by an airport to restrict use of the air- 96 Id. at 390. 97 Id. 98 Id. at 399. 99 Id. at 394. 100 Id. at 401. 101 Id. at 402. 102 Id. 103 Id. at 408.

14 port by certain aircraft based on their GHG emis- sions.104 In addition, airports cannot use their police power to directly regulate emissions from new motor vehicles or nonroad vehicles (such as baggage-handling vehicles) used at the airport. However, airports can choose to purchase fleets of alternative-fuel or low- emissions vehicles. They may also be able to use their proprietary powers to require the use and purchase of low-emissions equipment by their tenants and permit- tees. In addition, the CAA probably does not preempt airports from imposing certain restrictions on the op- eration or use of GSE, such as requiring cleaner fuels, imposing idling restrictions, or the like. 2. Regulation of Emissions from Indirect Sources An important, although little used, exception to CAA preemption is state and local authority to regulate “in- direct sources” of emissions, an area traditionally in the local domain of land-use control.105 For the purposes of this exception, the CAA defines an indirect source as: a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution. Such term includes parking lots, parking garages, and other facilities subject to any meas- ure for management of parking supply (within the mean- ing of subsection (c)(2)(D)(ii) of this section), including regulation of existing off-street parking but such term does not include new or existing on-street parking.106 The authority of states to regulate indirect sources is codified in Section 110(a)(5) of the CAA, which allows the inclusion of “any indirect source review program” in a State Implementation Plan.107 Such programs may include measures “as are necessary to assure, or assist in assuring, that a new or modified indirect source will not attract mobile sources of air pollution, the emission of which would cause or contribute to air pollutant con- centrations” exceeding or preventing maintenance of national ambient air quality standards.108 The Ninth Circuit recently upheld the San Joaquin Valley Unified Air Pollution District’s enactment of regulations limiting emissions from construction equipment at certain developments, finding the regula- tion of mobile sources at indirect sources permissible because the emissions reductions required of construc- tion equipment were regulated by reference to the de- velopment site rather than by reference to the construc- tion equipment in use.109 The court rejected the 104 Reimer & Putnam, supra note 26, at 88–89. 105 Nat’l Ass’n of Home Builders v. San Joaquin Valley Uni- fied Air Pollution-Control Dist., 627 F.3d 730, 737–38 (9th Cir. 2010) (citing Manchester Envtl. Coal. v. EPA, 612 F.2d 56, 58 (2d Cir. 1979)). 106 42 U.S.C. § 7410(a)(5)(C). 107 Id. at § 7410(a)(5)(A)(i). 108 Id. at § 7410(a)(5)(D). 109 Nat’l Ass’n of Home Builders v. San Joaquin Valley Uni- fied Air Pollution-Control Dist., 627 F.3d 730, 738–40 (9th Cir. 2010). contention that Section 209 of the CAA preempted the District’s regulation of nonroad sources at the site.110 Like the development sites at issue in the San Joa- quin Valley, airports could be characterized as indirect sources. Indeed, the CAA makes clear that EPA has the authority to promulgate indirect source regulations at federally assisted or owned airports.111 There is no case law that addresses the ability of 1) state or local entities to impose indirect source requirements on airports (for GHGs or traditional pollutants), or 2) the ability of air- ports to set indirect source limits on tenants. 3. EPA and Other Federal Regulation of GHGs from Mobile Sources Airports should also keep abreast of EPA and other federal efforts to reduce GHG emissions. EPA efforts may reduce the need for or value of airport-specific ini- tiatives. There is also some potential for conflict or ten- sion between federal and local efforts that could drive up costs or create concerns for airports or airport stake- holders. EPA and FAA initiatives could also lead to new regulatory obligations for airports. a. Climate Change Legislation.—The U.S. House of Representatives passed climate legislation in 2009; leg- islation was considered, but not adopted, by the Senate in 2010. The proposals considered by Congress centered on a cap-and-trade program. In a cap-and-trade pro- gram, a government establishes a limit or “cap” on the total pollution that can be emitted for a certain jurisdic- tion. In this case, the program would apply to emissions produced in the United States. The total emissions un- der the cap are divided into emissions permits and is- sued to certain polluting entities. These entities are required to hold a quantity of permits that represents the equivalent of their pollution levels. If an entity does not have enough permits to cover its own pollution, it can implement pollution reduction measures or it can “trade” by purchasing permits from another entity. The government cannot issue permits beyond the cap, thereby limiting actual emissions in the jurisdiction to the target level. The United States is unlikely to see a national cap- and-trade program in the near future. Since Congress considered the proposals in 2009 and 2010, the pros- pects of climate legislation have diminished considera- bly. However, Congress could still consider utility- sector-specific legislation. Even when passage of a comprehensive climate bill seemed possible, proposed legislation did not consider airports to be industrial sources that should be covered under a cap-and-trade program.112 Neither the climate change legislation passed by the House of Representa- tives in 2009 nor the Senate bills considered during 2010 would have changed the CAA’s provisions regard- 110 Id. at 740. 111 42 U.S.C. § 7410(a)(5)(B). 112 American Clean Energy and Security Act of 2009, H.R. 2454, 111th Cong., § 221(c) (2009), http://www.gpo.gov/fdsys/ pkg/BILLS-111hr2454pcs/pdf/BILLS-111hr2454pcs.pdf.

15 ing the development of aircraft-related emissions stan- dards. However, the American Clean Energy and Security Act bill passed by the House did include liquid petro- leum fuels, including jet fuel, in the cap-and-trade pro- gram. Had it come into effect, the bill would have likely increased costs associated with jet fuel as the emissions cap was lowered over time.113 Airlines are cognizant that potential climate change regulation could impact the aviation sector, and in particular fuel prices. In ac- cordance with recent Securities and Exchange Commis- sion guidance regarding disclosure related to climate change,114 United Airlines, American Airlines, and Delta Air Lines all acknowledged that U.S. or interna- tional climate regulation could impact their businesses in their annual investor disclosures.115 b. EPA Regulation of GHGs from Mobile Sources.—In the absence of federal legislation establishing a regula- tory program for climate change–related emissions, EPA has been moving forward with regulations for GHGs under the CAA. In 2009, EPA determined that emissions of GHGs from motor vehicles endanger the health and welfare of current and future generations, enabling and requiring EPA to regulate GHG emissions under the CAA.116 At the same time, there have been efforts in Congress to remove or delay EPA’s ability to promulgate and enforce standards relating to GHGs under the CAA. It is unclear at this time whether any such measures will have sufficient support to become law. Aircraft and Aircraft Engine Emissions Standards Section 231 of the CAA governs pollution standards for aircraft and aircraft engines.117 EPA’s existing stan- dards are found in 40 C.F.R. Part 87. As discussed in Section III.A.1.a, a 2011 federal district court case held that EPA must consider whether GHGs endanger pub- lic welfare and, if so, whether standards are necessary. EPA has not yet done so. If it does promulgate emis- sions standards, EPA has the discretion to consider a variety of factors, including international standards, 113 See John E. Putnam, The American Clean Energy and Security Act of 2009: How Would the Bill Passed by the House Affect the Aviation Industry? (July 14, 2009), available at http://www.kaplankirsch.com/files/Waxman-Markey_Aviation _Paper.pdf. 114 Commission Guidance Regarding Disclosure Related to Climate Change, 75 Fed. Reg. 6290 (Feb. 8, 2010). 115 United Continental Holdings, Inc., Annual Report (Form 10-K) 10-11 (Feb. 26, 2010); AMR Corporation, Annual Report (Form 10-K) 9 (Feb. 17, 2010); Delta Air Lines, Inc., Annual Report (Form 10-K) 8, 19 (Feb. 24, 2010). 116 Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009). 117 42 U.S.C. § 7571. safety concerns, and compliance costs.118 FAA enforces EPA’s standards through regulation.119 EPA’s authority to establish standards for GHG emissions from aircraft under the CAA does not extend to the regulation of jet fuel. Rather, FAA has exclusive authority to prescribe “standards for the composition or chemical or physical properties of an aircraft fuel or fuel additive to control or eliminate aircraft emissions” for pollutants EPA has found endanger the public health and welfare.120 EPA’s 2008 Advanced Notice of Proposed Rulemak- ing on Regulating Greenhouse Gas Emissions discussed two potential approaches for regulating aircraft GHG emissions under the CAA: engine emission standards or a fleet-average standard.121 Under an engine emission standard, each aircraft could be required to emit less than a particular level of GHGs. EPA currently estab- lishes aircraft emissions standards for other pollutants and also requires measurement and reporting of CO2 emissions during engine exhaust testing for certifica- tion.122 EPA indicated that under an engine emission standard approach it could seek a near-term (i.e., 5 year) standard based on best currently available tech- nology and consider more significant reductions re- quirements over the long term.123 Under a fleet-average standard, EPA could hold air- lines responsible for meeting average emissions stan- dards for their entire fleet, rather than for each indi- vidual engine.124 EPA also discussed the possibility of measuring average fleet compliance through alternative metrics, such as fuel consumption or methodologies that would take into account operational controls that re- duce GHG emissions.125 Airlines would likely be able to use flexible compliance mechanisms to generate, bank, and trade compliance credits with other airlines.126 118 Nat’l Ass’n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1230 (D.C. Cir. 2007) (upholding a final rule regulating nitro- gen oxide emissions from aircraft where the final rule did not interpret “the Act as requiring the agency to give subordinate status to such factors as cost, safety, and noise”). 11942 U.S.C. § 7572(a). 120 49 U.S.C. § 44714. 121 Regulating Greenhouse Gas Emissions Under the Clean Air Act, 73 Fed. Reg. 44,354, 44,472 (July 30, 2008). Test methods for greenhouse gases other than CO2 would require development. Id. at 44,469. 122 Id. at 44,472. 123 Id. 124 Id. Note that EPA’s regulation of emissions from aircraft currently does not apply to general aviation engines. Id. at 44,473. 125 Id. at 44,472–73. 126 Id. at 44,472.

16 Motor Vehicle GHG Emission Standards In March 2010, EPA and the National Highway Traffic Safety Administration (NHTSA), which is re- sponsible for vehicle fuel economy standards, finalized a joint automotive GHG emissions rule for passenger cars and light trucks with model years 2012 through 2016. The rule requires corporate average fuel economy of 35.5 mi/gal and a combined average emissions level of 250 grams of CO2 per mile by 2016.127 This was the first federal regulation of GHG emissions under the CAA, and it triggered the potential for EPA to regulate emis- sions from utilities and other stationary sources. For model years 2017 through 2025, EPA and NHTSA will conduct an analysis of even stricter requirements that could be equivalent to a range from 47 mi/gal to 62 mi/gal.128 4. EPA Regulation of GHGs from Stationary Sources EPA has also begun to regulate GHG emissions for new or modified large stationary sources such as power plants, industrial facilities, and refineries. Some very large airports’ heating/cooling, cogeneration, or other stationary facilities could be subject to these require- ments now or with future developments. The first step in EPA’s regulatory process was to re- quire certain large emitters of GHGs to report their emissions. Airports with large combustion-based heat- ing, cooling, or cogeneration facilities at airports were more likely to be subject to this requirement. Five air- ports reported their emissions for 2010.129 Facilities that emit 25,000 metric tons or more of CO2 equivalent (MT CO2e) per year will be required to report GHG emissions data to EPA annually.130 127 Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010). 128 2017 and Later Model Year Light Duty Vehicle GHG Emissions and CAFE Standards; Notice of Intent, 75 Fed. Reg. 62,739 (Oct. 13. 2010). 129 GHG Data, 2010 Greenhouse Gas Emissions from Large Facilities, http://tinyurl.com/74vwtve (last visited June 12, 2012). 130 Mandatory Reporting of Greenhouse Gases, 74 Fed. Reg. 56,260 (Oct. 30, 2009); 40 C.F.R. pt. 98. Table 1. Airport Stationary Sources Reporting GHG Emissions to EPA in 2011 Airport 2010 Emissions MT CO2e (metric tons of CO2 equivalent) Denver International Airport 28,926 Cottonbelt Compressor Station at Dallas/Fort Worth Airport 31,365 Los Angeles International Airport 47,439 Massport Logan Airport (BOS) 29,120 O'Hare International Airport 52,219 As a next step, EPA adopted a regulation, known as the “Tailoring Rule,” by which emitters of GHGs will have to secure permits for certain new or modified ma- jor stationary sources.131 EPA’s rule went into effect in January 2011.132 Applicability thresholds used to determine when emissions of traditional pollutants are subject to CAA regulation are exceptionally low for GHGs (250 tons per year or lower) and would sweep in a very large number of sources, including stationary sources of combustion at airports if applied to GHGs. EPA recognized the dif- ficulties associated with this situation and has set much higher thresholds for determining when a “major source” of GHG emissions is subject to regulation under two CAA stationary source permitting programs—the Prevention of Significant Deterioration and Title V Op- erating Permit programs. The Tailoring Rule phases in applicability of those programs to GHG emissions by setting GHG thresholds that are higher than the statu- tory thresholds.133 Prevention of Significant Deteriora- tion requirements will apply to new sources that emit at least 100,000 tons of GHGs per year, or to existing sources whose GHG emissions will increase by 75,000 tons per year.134 Sources already subject to Title V’s permitting provisions will also be required to report GHG emissions.135 Because aircraft, nonroad GSE, and motor vehicles are mobile and not stationary sources, the application of the Tailoring Rule to airports would likely focus on very large stationary sources—such as boilers and cogenera- tion and heating plants—that meet emissions thresh- olds.136 However, as noted above, airport-related, sta- 131 40 C.F.R. pts. 52, 70; Final Title V Permitting Programs Under the Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 250 (Dec. 30, 2010). 132 Id. 133 Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31514 (June 3, 2010). 134 Id. at 31518. 135 Id. at 31523. 136 See also discussion of indirect sources at § III.A.2, herein.

17 tionary-source, GHG emissions reported to EPA are well below the Tailoring Rule thresholds. 5. EPA Regulation of Refrigerants and Fire-Control Substances Many refrigerants used in industrial and commercial settings, including at airports, are potent GHGs that deplete stratospheric ozone (also known as the ozone layer). Title VI of the CAA regulates certain refriger- ants, fire control substances, and other chemicals that can deplete stratospheric ozone. Section 608 of the CAA and its implementing regulations restrict the use, vent- ing, release, and disposal of refrigerants from station- ary sources.137 Under these regulations, EPA is obli- gated to “reduce the use and emission of such substances to the lowest achievable level.”138 Refriger- ants used in motor vehicle air conditioning are also sub- ject to restrictions under Section 609 of the CAA.139 Airports already face a number of mandatory duties associated with the use and disposal of certain refriger- ants that are also GHGs. Steps beyond these mandatory duties may be able to further reduce GHG emissions and may provide some opportunities to generate sur- plus credits. B. Federal (Non-CAA) Preemption of Aviation Regulation This subsection discusses federal statutes that pre- empt state or local control over flight operations; airport activities that would affect air carrier prices, routes, or services; and noise and access restrictions at airports. Because aircraft are generally the largest source of GHG emissions at U.S. airports, these limitations on airport control of aircraft operations and access have the potential to greatly affect an airport’s ability to re- duce its carbon footprint. This is particularly true given that FAA has taken a sweeping view of the preemptive scope of the federal aviation provisions, maintaining that they preclude a wide range of safety and environ- mental measures taken by airports that could affect aircraft or flight operations.140 Airport GHG measures that are intended to affect aircraft or aircraft opera- tions—or have the effect of doing so—could trigger these federal aviation preemption provisions. For ex- ample, an airport decision to cap the number of aircraft flights to restrict GHG growth would be preempted. FAA views the proprietor exception (discussed be- low) to preemption in this field as “very limited.”141 In a recent decision, FAA acknowledged the existence of a limited proprietor’s right in the areas of noise and con- 137 42 U.S.C. § 7671g. 138 Id. § 7671g(a)(3)(A). 139 Id. § 7671h. 140 See FAA, Final Decision and Order, In the Matter of the City of Santa Monica, FAA Docket No. 16-02-08, at 3–4 (July 8, 2009), modified by Order Granting Motion for Clarification of Final Agency Decision (Sept. 3, 2009). 141 Id. at 32. gestion regulation, but argued that this right does not extend to aviation safety and operations cases.142 FAA’s argument has yet to be fully tested in federal court or in the context of GHG reductions.143 FAA has supple- mented its view of the preemptive force of the aviation statutes by taking a similarly wide view of the force of the grant assurances, allowing only reasonable restric- tions on aircraft operations. 1. Preemption of Control Over Flight Operations Neither airport proprietors nor other local entities may regulate the operation of aircraft in flight for any purpose, including reducing GHG emissions.144 The fed- eral interest in aircraft operations extends to their op- erations on the airport, at least on active runways.145 Aircraft operation on parts of the airport other than the runways may be seen as affecting aviation safety and efficiency and also may be subject to federal preemp- tion. 2. Preemption of Authority Over Prices, Routes, or Services of an Air Carrier As part of its deregulation of the airline industry in the late 1970s, Congress granted the Federal Govern- ment exclusive authority over prices, routes, and ser- vices of air carriers, so that “States would not undo fed- eral deregulation with regulation of their own.”146 In 1994, Congress recodified the Airline Deregulation Act’s preemption provision in the FAAA Act, which provided that states and local governments “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or ser- vice of an air carrier that may provide air transporta- tion….”147 142 Id. at 33 (July 8, 2009). 143 FAA’s decision was appealed to the D.C. Circuit and de- cided in City of Santa Monica v. Fed. Aviation Admin. The D.C. Circuit declined to decide the case on preemption grounds, and considered only grant assurances in deciding the case. City of Santa Monica v. FAA, 631 F.3d 550, 553 (D.C. Cir. 2011). 144 See 49 U.S.C. § 40103(a)(1) (“The United States Govern- ment has exclusive sovereignty of airspace of the United States”); 49 U.S.C. § 40103(b) (delegating responsibility to the FAA to “develop plans and policy for the use of the navigable airspace” and to “prescribe air traffic regulations on the flight of aircraft”); Nat’l Helicopter Corp. of Am. v. City of New York, 137 F.3d 81, 92 (2d Cir. 1998) (“the law controlling flight paths through navigable airspace is completely preempted”). 145 Nw. Airlines, Inc. v. Minnesota, 322 U.S. 292, 303, 64 S. Ct. 950, 956, 88 L. Ed. 1283, 1290 (1944) (Jackson, J., concur- ring) (“The moment a ship taxis onto a runway it is caught up in an elaborate and detailed system of controls.”). 146 Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378– 79, 112 S. Ct. 2031, 2034, 119 L. Ed. 2d 157, 164 (1992). 147 49 U.S.C. § 41713(b)(1) (this provision as adopted in 1994 amends and incorporates a similar provision found at § 1305(a)(1) of the Airline Deregulation Act (ADA)). Federal Aviation Administration Authorization Act of 1994, Pub. L. No. 103-305, § 601, 108 Stat. 1605 (1994).

18 The U.S. Supreme Court has defined “relating to” broadly, to include state actions “having a connection with, or reference to, airline ‘rates, routes, or ser- vices.’”148 Thus, the FAAA Act preempts states from undertaking a broader set of actions than only those that directly affect airlines prices, routes, or services.149 Preemption under this provision is not limited to state laws addressed to the airline industry.150 While the Court has acknowledged that there could be some state actions affecting airline fares in “too tenuous, remote, or peripheral a manner” to be preempted, it has declined to “draw the line” that might resolve borderline ques- tions.151 The FAAA Act expressly provides that its preemp- tion provisions do not apply to government authorities that are airport proprietors acting within the scope of their proprietary powers.152 The proprietor exception is rooted in airports’ liability for airports’ adverse impacts in surrounding communities. Proprietary acts that af- fect air carrier prices, routes, or services are not subject to analysis under the Commerce Clause because of their explicit congressional approval.153 Several courts have held that airports’ proprietary rights extend to regulation of environmental concerns, but the limits of this authority have not been clearly established.154 Two areas in which proprietary regula- tory rights have long been recognized are airport fuel- ing activities and perimeter rules enacted for the sake of congestion management. As the Fifth Circuit recently recognized, “Courts applying this standard have upheld route restrictions as within propriety powers when they are targeted at advancing a specific local interest…. In each of these cases [upholding route restrictions], the proposed restriction was targeted at alleviating an ex- isting problem at the airport or in the surrounding neighborhood.”155 Decisions about fueling activities on airport facilities are frequently treated as proprietary business deci- sions.156 For example, FAA has frequently upheld pro- prietors’ justifications regarding fuel tank locations, many of which reflect environmental interests similar 148 Morales, 504 U.S. at 384. 149 Id. at 385–86. 150 Id. at 386 (offering state benefit plans as an example of where regulation might affect airline prices, routes, or services and thus be preempted). 151 Morales, 504 U.S. at 390. 152 49 U.S.C. § 41713(b)(3). 153 Nat’l Helicopter Corp. of Am. v City of New York, 137 F.3d 81, 92 (2d Cir. 1998). 154 Reimer & Putnam, supra note 26, at 88–93. 155 Am. Airlines, Inc. v. Dep’t of Transp., 202 F.3d 788, 806 (5th Cir. 2000). 156 JODI HOWICK, ANALYSIS OF FEDERAL LAWS, REGULATIONS, AND CASE LAW REGARDING AIRPORT PROPRIETARY RIGHTS 30 (Airport Cooperative Research Pro- gram, Transportation Research Board, LRD Report No. 10, Sept. 2010), http://onlinepubs.trb.org/onlinepubs/acrp/acrp_ lrd_010.pdf. to those implicated by potential GHG-reduction meas- ures. A recent ACRP digest detailed justifications FAA has found sufficient to support fuel tank siting deci- sions, including: a desire to restrict fuel tanks to past locations; concerns that past tenants left underground tanks that the airport had to remove; a desire to use locations that accommodate future reversionary interests; taking actions based on the proprietor’s custodial view of the airport rather than just a private interest in tank locations; a history of past con- tamination resulting in expensive cleanup; concerns that bankruptcy might leave the proprietor the only solvent party; concerns that any contamination could divert air- port staff time; desires to centralize fuel capacity and minimize the risk of contamination; desires to prevent a proliferation of private tanks from reducing available hangar space; concerns that tank locations would inter- fere with airport development plans; and concerns that proposed tanks could be hit by aircraft.157 In a 1988 case applying proprietary analysis to the preemption context, Western Air Lines, Inc. v. Port Au- thority, a federal district court rejected the argument that airports are only permitted to impose restrictions relating to noise and upheld the Port Authority’s pe- rimeter rule as proper to manage congestion in a multi- airport system.158 The court observed that the Airline Deregulation Act does not expressly limit proprietary powers to the regula- tion of noise, although presumably Congress would have so limited the section if that is what it had in mind. As Judge Weinfeld said in Midway Airlines v. County of Westchester, 584 F. Supp. 436 (S.D.N.Y. 1984) “[t]he legis- lative history is unmistakably clear that Congress did not intend that the preemptive force of 49 U.S.C. § 1305(a)(1) would interfere with the ‘long recognized powers of the airport operators to deal with noise and other environ- mental problems at the local level.’” Id. at 440 n.18 (quot- ing 123 Cong. Rec. 37419 (1978) (remarks of Sen. Kennedy)).159 Similarly, the Second Circuit Court of Appeals ruled in National Helicopter v. City of New York160 that regu- lations addressing environmental and noise concerns are within the proprietor exception to preemption when they are “reasonable, nonarbitrary, and non- discriminatory.”161 It is not clear that the proprietor exception would exempt GHG-based actions from federal preemption, because there is no clear liability on the part of airports at this time for GHG emissions. Climate change is a 157 Id. at 31. 158 W. Air Lines, Inc. v. Port Auth. of N.Y. & N.J., 658 F. Supp. 952, 957–58 (S.D.N.Y. 1986). 159 Id. at 957 (S.D.N.Y. 1986). Note: 49 U.S.C. § 1305(a)(1) has been recodified at 49 U.S.C. § 41713(b)(1) (1994), which contains nearly identical language. 160 137 F.3d 81 (2d. Cir. 1998). 161 Id. at 88–89 (upholding curfews and reduction of opera- tions to restrict helicopter noise, but rejecting a ban on aircraft above a certain size as discriminatory and rejecting restrictions on air routes).

19 global problem, and it is not clear whether the nexus between local efforts to reduce GHGs and the local or global effects of climate change is strong enough to sup- port regulations affecting airline routes, rates, and ser- vices. Courts have not defined the extent to which local contributions to a global problem (even with local ef- fects) would support efforts that affect airline routes, rates, or services. Limitations on other harmful air emissions (like those that contribute to local smog) may be more clearly permissible, because airports face man- datory regulatory and other provisions that affect air- port liability and the ability to expand in the future. Regardless, actions that are proprietary and thus that are exempt from preemption under federal trans- portation and aviation statutes may still be subject to other FAA requirements, such as grant assurances and the Airport Noise and Capacity Act of 1990 (ANCA).162 As discussed below, the FAA has taken a very narrow view of proprietors’ power to affect airline or aircraft operations. 3. Preemption of Noise and Access Regulation Federal law relating to preemption of local efforts to regulate noise is also relevant to efforts to regulate GHGs, because the preemptive force of the ANCA and other provisions address some airport access restric- tions undertaken for reasons other than noise. Congress has asserted the Federal Government’s role in the regu- lation of aircraft noise since the 1960s.163 Local govern- ment operators of airports had long taken some respon- sibility for noise impacts through their police powers, and also as proprietors liable for noise impacts in sur- rounding communities.164 The scope of an airport’s proprietary power to re- strict aircraft operations was addressed through litiga- tion in subsequent years. In City of Burbank v. Lock- heed Air Terminal, Inc.,165 the U.S. Supreme Court ruled in 1973 that a local government that was not the airport proprietor was expressly preempted from re- stricting aircraft operations for the purposes of control- ling noise. The Court left open the question of whether airport proprietors may restrict aircraft operations for other purposes. Subsequent cases have held that air- port proprietors do retain some authority to enact noise or access regulations for their airports, subject to vary- ing limitations.166 The most commonly cited require- 162 See 49 U.S.C. §§ 14501(c) or 49 U.S.C. § 41713(b)(3). 163Aircraft Noise Abatement Act of 1968, Pub. L. No. 90- 411, 82 Stat. 395 (codified at 49 U.S.C. § 1431(b)(1) (1976); Noise Control Act of 1972, Pub. L. No. 92-574 (codified at 42 U.S.C. §§ 4901–4918 and 49 U.S.C. § 44715 1972). 164 City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 644–645, 93 S. Ct. 1854, 1865, 36 L. Ed. 2d 547, 560 (1973) (Rehnquist, J., dissenting). 165 Id. at 624. 166 See, e.g., British Airways Bd. v. Port Auth. of N.Y. & N.J., 558 F.2d 75 (2d. Cir. 1977); Santa Monica Airport Ass’n v. City of Santa Monica, 659 F.2d 100 (9th Cir. 1981); Pirolo v. City of Clearwater, 711 F.2d 1006 (11th Cir. 1983). ment is that the rules be reasonable, nonarbitrary, and nondiscriminatory.167 Examples of types of restrictions that were upheld as appropriate exercises of airport proprietary powers include night curfews on takeoffs and landings;168 prohibitions of certain low altitude ap- proaches on weekends;169 prohibitions on helicopter flight training;170 maximum single event noise exposure levels;171 temporary bans on particular types of air- craft;172 and reductions in the number of flights permit- ted at an airport.173 However, in 1990, Congress limited the scope of the proprietors’ authority to implement similar regulations when it adopted ANCA.174 ANCA and its implementing regulations impose requirements on airports that must be satisfied prior to implementation of certain types of noise or access rules. Some requirements are quite on- erous, such as the need for airports to obtain FAA ap- proval prior to enactment of noise restrictions affecting Stage 3 aircraft. The FAA’s process for approving opera- tional procedures under Part 161 of the Federal Avia- tion Regulations is difficult and complex.175 Determining whether a proposed action is subject to ANCA and Part 161 is itself a difficult question due to the breadth of the applicable language. ANCA defines “noise or access restrictions” very broadly, to include “any other limit on Stage 2 or Stage 3 aircraft that has the effect of controlling noise.”176 Additionally, FAA con- siders airport’s intentions in determining whether a violation has occurred, which necessarily introduces subjectivity into the process. The statute refers to noise or access restrictions, so it is possible that ANCA could apply to some restrictions designed to reduce GHG emissions such as limitations on high-GHG-emitting aircraft, GHG caps, or emissions budgets that could also have the effect of reducing noise. Under ANCA, an airport may only impose airport noise or access restrictions for Stage 3 aircraft if they are agreed to by the proprietor and all aircraft opera- tors, or if they are approved by the Department of 167 British Airways Bd. v. Port Auth. of N.Y. & N.J., 558 F.2d 75, 84 (2d. Cir. 1977). 168 Santa Monica Airport Ass’n, 659 F.2d at 102. 169 Id. 170 Id. 171 Id. 172 British Airways Bd. v. Port Auth. of N.Y. & N.J., 558 F.2d 75 (2d. Cir. 1977). 173 Alaska Airlines, Inc. v. City of Long Beach, 951 F.2d 977 (9th Cir. 1991) (ordinance not preempted by federal law, though invalidated on other grounds). 174 49 U.S.C. §§ 47521–47533. 175 LINDA LUTHER, ENVIRONMENTAL IMPACTS OF AIRPORT OPERATIONS, MAINTENANCE, AND EXPANSION 4, tbl. 1, CONG. RESEARCH SERV., RL 33949 (Apr. 5, 2007), available at http://www.fas.org/sgp/crs/misc/RL33949.pdf. 176 14 C.F.R. § 161.5 (emphasis added).

20 Transportation.177 The Secretary of Transportation may approve restrictions only after finding that: (A) the restriction is reasonable, nonarbitrary, and non- discriminatory; (B) the restriction does not create an unreasonable bur- den on interstate or foreign commerce; (C) the restriction is not inconsistent with maintaining the safe and efficient use of the navigable airspace; (D) the restriction does not conflict with a law or regula- tion of the United States; (E) an adequate opportunity has been provided for public comment on the restriction; and (F) the restriction does not create an unreasonable bur- den on the national aviation system.178 Airports demonstrate compliance with these re- quirements through an extensive cost-benefit study and public involvement process.179 An airport may impose airport noise or access re- strictions for Stage 2 aircraft without FAA approval, but only after a study and public comment period. The study must address the costs and benefits of the pro- posed restrictions, as well as alternative measures con- sidered.180 Although FAA is not statutorily authorized under ANCA to disprove of regulations, FAA asserts that it retains the authority to challenge airport noise and access restrictions it views as “discriminatory, un- reasonable, or [as] impos[ing] an undue burden on in- terstate commerce.”181 ANCA may apply to some restrictions aimed at re- ducing GHG emissions, such as limiting access of older aircraft that emit a disproportionate amount of GHG emissions. If ANCA does apply, airports would have to follow rigorous procedural and substantive require- ments before imposing restrictions. In particular, air- ports would need to demonstrate that the limitations are “reasonable, nonarbitrary, and nondiscriminatory” and not unduly burdensome; undertake a cost-benefit analysis of the proposed restrictions; and offer an op- portunity for public comment. C. Federal Legal Restrictions on Rates, Charges, and Use of Revenue Federal restrictions on the use of airport revenue and the ability to levy charges may also be important limitations on the ability of airports to engage in some types of GHG-reduction efforts, especially those that would physically take place off-site or levy fees on pas- sengers. 177 49 U.S.C. § 47524(c). 178 49 U.S.C. § 47524(c)(2). 179 PETER J. KIRSCH, AIRPORT NOISE: A GUIDE TO THE FAA REGULATIONS UNDER THE AIRPORT NOISE AND CAPACITY ACT 15–17 (4th ed. 2001). 180 49 U.S.C. § 47524(b). 181 Notice and Approval of Airport Noise and Access Restric- tions, 56 Fed. Reg. 48,661, 48,662 (Sept. 25, 1991) (FAA reply to comments on local Stage 2 restrictions under the rules). 1. Anti-Head Tax Act Under the Federal Anti-Head Tax Act, airports gen- erally may not levy or collect taxes, fees, head charges, or other charges on air passengers, the transportation of air passengers, the sale of air transportation, or gross receipts from air transportation.182 This law likely bars U.S. airports from imposing mandatory climate-related fees on passengers, which have been proposed or im- plemented in other countries. 2. Grant Assurance 25—Revenue Diversion Federal revenue diversion provisions are important to airports’ consideration of GHG-reduction or offset measures because any GHG-reduction efforts involving the use of airport revenue will need to be tied to a le- gitimate aeronautical purpose. FAA only offers grants to airports that agree, in writing through Grant Assur- ance 25, to limits on the use of airport revenues to the capital and operating costs of the airport.183 FAA’s Air- port Compliance Manual defines airport revenue as “the fees, charges, rents or other payments received by or accruing to the sponsor from air carriers, tenants, concessionaires, lessees, purchasers of airport proper- ties, airport permit holders making use of the airport property and services, etc.”184 Airport revenues are con- strued broadly to include virtually all of the funds gen- erated by an airport sponsor from any source.185 There are severe penalties for diverting airport revenue.186 Assurance 25 provides that “all revenues generated by the airport…will be expended by it for the capital or operating costs of the airport; the local airport system; or other local facilities…which are directly and substan- tially related to the actual air transportation of passen- gers or property; or for noise mitigation purposes….”187 Thus, a critical threshold question for any airport- related GHG project at a grant-obligated airport is whether it is a reasonable capital or operating cost of the airport, i.e., directly and substantially related to the air transportation of passengers or freight. In a statement of policy concerning the use of airport revenue, Policies and Procedures Concerning the Use of Airport Revenue (Airport Revenue Policies), FAA has offered a list of permitted and forbidden uses of airport revenue.188 This list does not explicitly discuss expendi- 182 49 U.S.C. § 40116(b). 183 49 U.S.C. §§ 47107(b), 47133. 184 FEDERAL AVIATION ADMINISTRATION, Order 5190.6B, AIRPORT COMPLIANCE MANUAL § 15.6 (Sept. 30, 2009), avail- able at http://www.faa.gov/documentLibrary/media/Order/ 5190_6b.pdf. 185 See FAA, Policy and Procedures Concerning the Use of Airport Revenue, 64 Fed. Reg. 7696 (Feb. 16, 1999). 186 E.g., 49 U.S.C. § 47107(n). 187 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 25–Airport Reve- nues), available at http://www.faa.gov/airports/aip/grant_ assurances/media/airport_sponsor_assurances_2012.pdf. 188 FAA, Policy and Procedures Concerning the Use of Air- port Revenue, 64 Fed. Reg. 7696 (Feb. 16, 1999).

21 tures aimed at reducing GHG emissions or addressing environmental concerns. However, the policies regard- ing rates and charges that may be assessed to aeronau- tical users represent a more restrictive set of tests than for the use of airport revenue, and many environmental costs may be included in the aeronautical rate base.189 These are discussed in the subsection below. A straightforward case of allowable expenditures would be a GHG-mitigation measure that a sponsor reasonably believes would reduce the costs of providing aeronautical services in the short or long term. For ex- ample, if an airport were to implement energy-efficiency projects that would reduce the costs of energy over their life cycle, there are no plausible revenue diversion con- cerns. Similarly, investment in alternative sources of energy that may be more expensive in the short term could be justified as prudent expenses if they would be less expensive in the long run than traditional fossil- fuel-derived utility power. Beyond these simple situations, the Airport Revenue Policies have explicitly approved using revenue for some costs associated with connecting an airport to mass transit lines.190 In particular, airports are author- ized to provide airport property for less than fair mar- ket value for public transit terminals, right-of-way, and related facilities.191 Section IV.G.1 discusses the appli- cation of this guidance. In the absence of additional guidance regarding en- vironmental expenditures, there is some revenue- diversion risk associated with environmental mitigation efforts that have a weaker nexus with “the actual air transportation of passengers or property.” This is par- ticularly true for off-airport GHG-mitigation efforts, such as purchasing offsets or financing offsite emis- sions-reducing activities (e.g., spending airport funds to retrofit school buses to offset on-airport GHG emis- sions), that are not the subject of mandatory require- ments or necessary elements of airport project approv- als. Some government entities that operate airports can and have used nonairport revenues to purchase offsets for airport activities. This is permissible, but it is unlikely to occur frequently due to fiscal limitations of most airport operators. 3. Airport Rates and Charges for Aeronautical Users Similarly, the federal aviation rules that govern the ability to levy fees on aeronautical users also may limit some airport spending for GHG reductions or offsets that would be charged back to aeronautical users. Fed- eral law regarding rates and charges requires that rates and charges charged to aeronautical users be based on the cost of service and also be reasonable and nondis- 189 FAA, Policy Regarding Airport Rates and Charges, 61 Fed. Reg. 31994, 32018 (June 21, 1996) (note that other por- tions of this policy were vacated in Air Transport Ass’n of America v. Dep’t of Transp., 119 F.3d 38 (D.C. Cir. 1997). 190 Id. at 7719. 191 Id. at 7721. criminatory.192 The FAA defines “aeronautical use” as “all activities that involve or are directly related to the operation of aircraft, including activities that make the operation of aircraft possible and safe. Services located on the airport that are directly and substantially re- lated to the movement of passengers, baggage, mail, and cargo are considered aeronautical uses.”193 Under FAA’s Policy Regarding Airport Rates and Charges (Rates and Charges Policy), airports may in- clude “reasonable environmental costs” in their rate base and recover those costs through fees charged for providing airfield aeronautical services and facilities.194 Resulting revenues are subject to the requirements on the use of airport revenue discussed above.195 “Reason- able environmental costs” permitted in the Rates and Charges Policy may not encompass the full range of possible measures to address GHG emissions. The ex- amples provided by the Rates and Charges Policy are costs of addressing environmental contamination, costs of mitigating the environmental impact of an airport development project, the cost of noise abatement and mitigation measures, and the costs of insuring against future environmental liability for contamination.196 These are measures tied to specific airport regulatory obligations, development, and liability. While the Rates and Charges Policy provides a nonexclusive list of ex- amples, it is meant to be instructive of the range of permissible activities that can be charged to aeronauti- cal users.197 The Rates and Charges Policy authorizes the inclu- sion in rates and charges of the cost of mitigating the environmental impact of an air- port development project (if the development project is one for which costs may be included in the rate base), at least to the extent that these costs are incurred in order to secure necessary approvals for such projects, including but not limited to approvals under the National Envi- ronmental Policy Act198 and similar state statutes.199 This authority could potentially be used to support ef- forts to mitigate GHG emissions associated with devel- opment projects. Nevertheless, the wording of FAA’s policy is not comprehensive and does not specifically address GHG- 192 FAA, Policy Regarding Airport Rates and Charges, 61 Fed. Reg. 31994, 32018 (June 21, 1996) (note that other por- tions of this policy were vacated in Air Transport Ass’n of America v. Dept. of Transp., 119 F.3d 38 (D.C. Cir. 1997). 193 FEDERAL AVIATION ADMINISTRATION, Order 5190.6B, AIRPORT COMPLIANCE MANUAL § 18.3(a) (2009), available at http://www.faa.gov/documentLibrary/media/Order/5190_6b. pdf. 194 Id. § 18.10. 195 Id. 196 FAA, Policy Regarding Airport Rates and Charges, 61 Fed. Reg. at 32019–20. 197 Id. 198 The National Environmental Policy Act of 1969, as amended, Pub. L. No. 91-190, 42 U.S.C. § 4321–4347. 199 Id.

22 related expenditures. Thus, airport operators should carefully consider the Rates and Charges Policy in the context of such projects. Inquiries into whether GHG- mitigation efforts can be included in aeronautical rate bases will necessarily be fact-specific and require air- ports to carefully characterize and justify individual projects. For instance, certain increased capital costs incurred in the interest of reducing GHG emissions (e.g., through energy-efficiency projects) from an airport development project might be analogized to the costs associated with the architectural elements of capital projects, which airports are generally permitted to pass on. Similarly, on-airport renewable energy projects in which the energy is used on the airport probably could be covered as operational and capital costs of an airport, so long as the costs were not wholly disproportionate to the costs of conventional power. Off-airport projects that do not provide direct benefits to the airport (e.g., offset or sequestration projects) are likely to entail greater risk. As a separate rates and charges issue, the Depart- ment of Transportation and FAA have recognized the legitimacy of congestion pricing and other narrowly structured peak-period pricing mechanisms in limited circumstances. Recent FAA guidance also allows pro- prietors at certain congested airports to include the costs of secondary airports in fees that they charge at a congested airport during peak times.200 GHG-related fees or charges could conceivably be used to reduce con- gestion-related emissions or otherwise disincentivize GHG emissions. Airports also may increase landing fees during peak periods of congestion if overall fees are limited to the recovery of historic costs.201 To date, these mechanisms have not been imposed or evaluated for the express purpose of reducing GHG emissions. Such mechanisms may also trigger the provisions of ANCA, discussed above at Section III.B.3. 4. Self-Sustaining Airport Requirement Federal law and Grant Assurance 24 also require that airport owners or operators maintain a schedule of charges that will make the airport as self-sustaining as possible, given the airport’s circumstances.202 Pursuant to these requirements, FAA requires that rates charged for nonaeronautical uses of an airport must be based on 200 FEDERAL AVIATION ADMINISTRATION, Order 5190.6B, AIRPORT COMPLIANCE MANUAL § 18.3(a) (2009), available at http://www.faa.gov/documentLibrary/media/Order/5190_6b. pdf. 201 FAA, Policy Regarding Airport Rates and Charges, 73 Fed. Reg. 40,430 (July 14, 2008); see also FAA, Policy Regard- ing Airport Rates and Charges, 73 Fed. Reg. 3310 (Jan. 17, 2008); Howick, supra note 156. 202 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 24–Fee and Rental Structure), available athttp://www.faa.gov/airports/aip/grant_ assurances/media/airport_sponsor_assurances_2012.pdf. fair market value.203 Particularly expensive GHG- related mitigation costs could raise concerns regarding airport self-sustainability. Similarly, allowing the use of airport property for renewable energy or sequestration projects undertaken by third parties should be evalu- ated to ensure compliance with self-sustaining airport requirements, including consideration of whether the airport has received fair market rentals, the power pro- duced by a project, or other similar consideration. 5. Fees and Charges on Off-Airport, Nonaeronautical Businesses Seeking Access to the Airport Fees or charges (as well as conditions of service) on nonaeronautical uses that access or otherwise use the airport such as taxi services could also be structured to reduce vehicle trips or fund GHG-reduction efforts. Air- ports may impose access fees and charges on off-airport, nonaeronautical businesses that are seeking access to the airport, such as parking and other concessions or users of collateral land.204 These fees are not subject to the Anti-Head Tax Act, which “was intended to protect passengers transported by aircraft.”205 Examples of 203 FEDERAL AVIATION ADMINISTRATION, Order 5190.6B, AIRPORT COMPLIANCE MANUAL § 17-4 (2009), available at http://www.faa.gov/documentLibrary/media/Order/5190_6b. pdf. 204 See, e.g., Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Auth., 906 F.2d 516 (11th Cir. 1990) (airport’s resolu- tion requiring off-airport car rental companies to pay 10 per- cent of their gross receipts derived from airport customers was constitutional); Park Shuttle N Fly, Inc. v. Norfolk Airport Auth., 352 F. Supp. 2d 688 (E.D. Va. 2004) (imposition of a privilege fee on off-airport parking operations was constitu- tional); Enterprise Leasing Co. of Detroit v. County of Wayne et al., Nos. 98-1278, 98-1398, 1999 U.S. App. LEXIS 22992 (6th Cir. Sept. 14, 1999) (airport’s user fee charged to off-airport rental companies was constitutional); Club Car Rentals of Gainesville, Inc. d/b/a Budget Rent-A-Car of Gainesville v. City of Gainesville Regional Airport Auth., Case No. GCA 85-0177- MMP, 1988 U.S. Dist. LEXIS 18654 (N.D. Fla., May 6, 1988) (fee imposed on plaintiff’s off-airport car rental business, which was also charged to on-airport rental companies, was constitu- tional); General Rent-A-Car, Inc. v. Roberts et al., No. 87-8345- CIV, 1988 U.S. Dist. LEXIS 18653 (S.D. Fla. Sept. 15, 1988) (imposition of a gross receipt fee on all off-airport car rental companies picking up deplaning passengers at an airport was constitutional). 205 City & County of Denver v. Continental Air Lines, Inc., 712 F. Supp. 834, 837 (D. Colo. 1989) (citing Salem Transp. Co. v. Port. Auth., 611 F. Supp. 254 (S.D.N.Y. 1985) (Section 1513(a) of the Anti-Head Tax Act does not apply to ground transportation services used by airline passengers at New York metropolitan airports); Airline Car Rental, Inc. v. Shreveport Airport Auth., 667 F. Supp. 293, 298–99 (W.D. La. 1986) (Sec- tion 1513 was not meant to apply to shuttle services provided by non-tenant rental car agency used by airline passengers); Arizona v. Cochise Airlines, 126 Ariz. 432, 626 P.2d 596 (Ariz. Ct. App. 1980) (Arizona transaction privilege tax, to the extent it imposes a tax on the transportation of freight and not per- sons in air commerce, does not violate the Anti-Head Tax Act).

23 situations where the Anti-Head Tax does not apply in- clude city parking taxes and fuel dispensing fees.206 Additionally, fees on off-airport, nonaeronautical businesses are not subject to the “reasonable and non- discriminatory” grant assurance (Assurance 22) re- quirement applicable to aeronautical users, and legal challenges to such fees have generally been unsuccess- ful.207 Airports may be able to use this power to achieve GHG-reduction goals, e.g., through incentives for air- port access vehicles like taxis, rental cars, buses, and shuttles to operate on alternative fuels. However, such fees may be subject to state regulation and Dormant Commerce Clause principles (e.g., fees must not be ex- cessive and disproportionate to the needs of the impos- ing authority).208 D. Federal Airport Improvement Program, Voluntary Airport Low Emissions Program, and Passenger Facility Charges The limitations on imposition of charges and revenue use discussed above apply generally to airports receiv- ing federal financial assistance. Two important sources of federally-allowed funding for airport projects are the Airport Improvement Program (AIP) and Passenger Facility Charge (PFC) programs. Some GHG-reducing projects are likely to qualify for AIP and PFC funding, but others may not be eligible because of limitations in these programs. AIP and PFC eligibility standards and guidelines do not explicitly address the eligibility of projects to reduce GHG emissions, but they do contain a number of indi- rect limitations on such projects. Eligibility is typically determined by the nature of the project, e.g., the type of airport development.209 The allowable uses of PFC revenues are broader than the uses of AIP funds, but narrower than the uses of general airport revenue. Vol- untary Airport Low Emissions (VALE) funding ex- pressly targets air quality; many projects that qualify for such funding also reduce GHG emissions. 206 Burbank-Glendale-Pasadena Airport Auth. v. City of Burbank, 64 Cal. App. 4th 1217, 76 Cal. Rptr. 2d 297 (Cal. Ct. App. 1998) (city parking tax not prohibited by the Anti-Head Tax Act); In re Menier, 59 B.R. 588 (Bankr. N.D. Ohio 1986) (fuel dispensing fee not subject to the Anti-Head Tax Act). 207 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 22–Economic Non- discrimination), available at http://www.faa.gov/airports/ aip/grant_assurances/media/airport_sponsor_assurances_2012. pdf; See, e.g., Four T’s, Inc. v. Little Rock Mun. Airport Comm’n, 108 F.3d 909 (8th Cir. 1997) (refusing to interfere with concession fees charged by airport to rental car compa- nies; Airport and Airway Improvement Act of 1982 was not “intended to benefit nonaeronautical parties such as car rental concessionaires”). 208 See, e.g., Arrow Airways, Inc., et al. v. Dade County, 749 F.2d 1489 (11th Cir. 1985). 209 See 49 U.S.C. §§ 40117 (PFC), 47106 (AIP). 1. Airport Improvement Program Grants AIP grants are, in general, the most restricted funds available for airports. Airport funds must be used for capital projects that meet the definition of “airport de- velopment” in 49 U.S.C. § 47102(3). Types of projects that may be eligible for AIP funding and also provide GHG-reduction benefits include the following: • Runway, taxiway, hold pad, and other airfield im- provements that would reduce GHG emissions by re- ducing airfield congestion. 210 • Energy assessments on new buildings or on the expansion of an existing building, funded as incidental elements of the building design.211 • Some energy-efficient terminal development pro- jects, including baggage claim delivery areas, auto- mated baggage-handling equipment, public-use corri- dors to boarding areas, central waiting rooms, restrooms, holding areas, foyers and entryways, and passenger loading bridges.212 • On-airport rapid transit systems and multimodal terminal buildings under certain circumstances.213 2. Passenger Facility Charge Programs Airports are authorized by 49 U.S.C. § 40117 to im- pose PFC charges, which are charges of up to $4.50 on enplaning passengers.214 PFC charges are an exception to the general ban on airport taxes, fees, or head charges on air passengers and air transportation, but they must be used for specified purposes, such as safety-related projects, noise reduction projects, and projects to increase air carrier competition.215 The eligibility of terminal development projects is broader under the PFC program than under the AIP program.216 “Eligible airport-related project” is defined at Section 40117(a)(3) and explicitly includes conversion of ground support equipment to low-emission technol- ogy.217 Airline ticketing areas, check-in facilities, and gates located at hub airports are PFC-eligible, even though they are not AIP-eligible.218 In addition, 49 U.S.C. § 40117(a)(3)(F) expanded PFC eligibility of gates and related areas, such that some projects ad- 210 FEDERAL AVIATION ADMINISTRATION, Order 5100.38C, AIRPORT IMPROVEMENT PROGRAM HANDBOOK ch. 5 (2005), available at http://www.faa.gov/airports/resources/ publications/orders/media/aip_5100_38c.pdf. 211 Id. § 607. 212 Id. § 601. 213 Id. §§ 612, 622. 214 49 U.S.C. § 40117(b)(4). 215 See 49 U.S.C. § 40117(b). 216 FEDERAL AVIATION ADMINISTRATION, Order 5500.1, PASSENGER FACILITY CHARGE § 4-6 (2001), available at http://www.faa.gov/documentLibrary/media/Order/PFC_55001. pdf. 217 See 49 U.S.C. § 40117(a)(3). 218 49 U.S.C. § 40117(a)(3)(G).

24 dressing air carrier or airport operations space, conces- sion space, and aircraft fueling facilities may qualify for PFC funding.219 Some airport ground access projects are also eligible for PFC funding.220 GHG-related improvements in these areas could be funded with PFCs, including preconditioned air at gates and more energy-efficient terminal spaces. 3. Voluntary Airport Low Emissions Program The FAA’s VALE program permits airports to use AIP and PFC funds to finance low-emission vehicles, refueling and recharging stations, gate electrification, and other airport air quality improvements, under cer- tain conditions.221 The VALE program is currently tied to a requirement to create air quality credits for tradi- tional air pollutants (like ozone or particulate matter) in nonattainment areas.222 Nonattainment areas are those areas designated by EPA as having air pollution levels that persistently exceed one or more of the CAA’s national ambient air quality standards.223 Many pro- jects that can reduce traditional air pollutants would also reduce GHGs. Airports outside of nonattainment areas are currently unable to qualify for VALE funding. FAA requires airport sponsors to obtain airport emissions reduction credits (AERCs) based on a statu- tory concern that airports and airlines must receive an aeronautical benefit for the expenditure by helping to facilitate future projects.224 The AERCs are established 219 FEDERAL AVIATION ADMINISTRATION, Order 5500.1, PASSENGER FACILITY CHARGE § 4-6 (2001), available at http://www.faa.gov/documentLibrary/media/Order/PFC_55001. pdf. 220 Id.; see also Southeast Queens Concerned Neighbors v. FAA, 229 F.3d 387 (2d. Cir. 2000) (upholding FAA’s approval, after remand, of PFC funding for the JFK airport light rail system). 221 FEDERAL AVIATION ADMINISTRATION, VOLUNTARY AIRPORTS LOW EMISSIONS PROGRAM (VALE), available at http://www.faa.gov/airports/environmental/vale/ (last visited June 13, 2012); see 49 U.S.C. § 40117(c)(3)(G). 222 FEDERAL AVIATION ADMINISTRATION, VOLUNTARY AIRPORTS LOW EMISSIONS PROGRAM (VALE), available at http://www.faa.gov/airports/environmental/vale (last visited June 13, 2012). 223 See U.S. ENVIRONMENTAL PROTECTION AGENCY, THE GREEN BOOK OF NONATTAINMENT AREAS FOR CRITERIA POLLUTANTS, http://www.epa.gov/airquality/greenbook/index. html (last visited June 13, 2012); see also U.S. Environmental Protection Agency, Fine Particle Designations FAQs, http://www.epa.gov/pmdesignations/faq.htm#4. States and tribes submit recommendations to EPA regarding which areas should be designated as nonattainment. After considering this data and working with states and tribes, EPA designates cer- tain areas as nonattainment. 224 U.S. ENVIRONMENTAL PROTECTION AGENCY, GUIDANCE ON AIRPORT EMISSION REDUCTION CREDITS FOR EARLY MEASURES THROUGH VOLUNTARY AIRPORT LOW EMISSION PROGRAMS 3 (2004), http://www.epa.gov/oar/genconform/ documents/aerc_040930.pdf. through state or EPA assurances.225 Through these as- surances, project sponsors must demonstrate that • Reduction measures are independently verifiable. • They have adopted a complete schedule for imple- mentation and verification. • Violations of AERC requirements are practically enforceable. • Liability for violations can be identified. • All airport emissions-related information is made publicly available.226 Airport sponsors may then use the earned emissions credits to satisfy General Conformity and New Source Review requirements under the CAA.227 While the VALE program targets criteria air pollut- ants for which National Ambient Air Quality Stan- dards228 have been established under the CAA, many VALE projects would also reduce GHGs (e.g., electrifi- cation of GSE or gate electrification). VALE may pro- vide a useful mechanism to fund some projects with simultaneous GHG and air pollutant benefits. E. Federal Legal Restrictions on Exclusive Rights and the Imposition of Conditions and Standards The Federal Government restricts the manner in which airports can structure competitive conditions or impose requirements on aircraft users and aeronautical businesses at an airport. These requirements may, in some circumstances, affect the extent to which an air- port can impose GHG-related conditions on its tenants and users. 1. Exclusive Rights Airports may not grant an exclusive right to provide aeronautical services.229 Exclusive rights issues may arise in a handful of GHG contexts. For example, pro- spective providers of biofuels for aircraft may seek as- surances regarding market share or exclusivity that airports cannot legally provide. Similarly, an airport cannot limit FBO (providers of on-airport general avia- tion services) services based on a single FBO that has electrified GSE. 2. Reasonable Terms and Conditions Airports may impose only reasonable terms and con- ditions on aeronautical users of an airport.230 The classes of users subject to this requirement include air 225 49 U.S.C. § 47139(b). 226 Id. at 12–13. 227 Id. at 1 (2004). 228 National Ambient Air Quality Standards, available at http://www.epa.gov/air/criteria.html. 229 49 U.S.C. § 40103(e); FAA, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 23–Exclusive Rights), http://www.faa.gov/airports/aip/grant_assurances/ media/airport_sponsor_assurances_2012.pdf. 230 49 U.S.C. § 47107(a)(1).

25 carriers, general aviation aircraft owners and operators, and FBOs.231 Airports may seek to impose GHG-related provisions in leases, regulations, and other governing documents (e.g., requirements for energy-efficient sys- tems in buildings or bans on unnecessary idling of GSE). However, aeronautical users may raise questions whether particular terms and conditions are reasonable or are applied in a nondiscriminatory fashion. Grant Assurance 22 requires that aeronautical ac- cess to the airport be available on fair and reasonable terms and without unjust discrimination. FAA has used this provision to challenge limitations on airport access imposed by airport proprietors on the basis of noise and safety.232 FAA has argued that restrictions against aeronautical operators that are “not necessary” and that are unjustly discriminatory are not reasonable.233 Accordingly, airports seeking to impose such restric- tions should carefully and reasonably justify the need for such regulations. 3. Self-Service An air carrier must be permitted to service itself or use any FBO allowed by the airport to service any car- rier at the airport.234 It is possible that issues associated with the right to self-service could arise, among other contexts, in the context of biofuels that may be provided at airports to reduce GHG emissions. If, for example, an airport decided to exercise a proprietary exclusive right to provide fuel at an airport, the airport could not pro- hibit airlines from bringing in their own supply of fuel, subject to self-service limits identified by FAA guidance. Accordingly, airports should ensure that any arrange- ments with biofuels or other alternative fuel projects or providers are consistent with fuel self-service rights pursuant to statute and the grant assurances.235 Where airports seek to impose equipment requirements, such as requiring the use of alternative vehicles or lower- emitting vehicles, airport users should be able to pro- cure their own conforming equipment or lease equip- ment rather than using equipment from a specified provider. 4. Minimum Standards Airports enact and enforce minimum standards in furtherance of their proprietary responsibility to ensure that commercial businesses provide appropriate and adequate aeronautical services to airport users. Such minimum standards may address prohibited on-airport 231 N.Y. Airlines, Inc. v. Dukes County, 623 F. Supp. 1435, 1446–47 (D. Mass. 1985) (citing 49 U.S.C. § 2210, recodified as 49 U.S.C. § 47107). 232 City of Santa Monica v. FAA, 631 F.3d 550, 554 (D.C. Cir. Jan. 21, 2011). 233 Id. 234 49 U.S.C. § 47107(a)(6). 235 FEDERAL AVIATION ADMINISTRATION, Order 5190.6B, AIRPORT COMPLIANCE MANUAL § 8.8 (2009), available at http://www.faa.gov/documentLibrary/media/Order/5190_6b. pdf. conduct, environmental management, aircraft operating restrictions, ground movement of aircraft, and fuel storage and handling. Minimum standards are gener- ally organized by the type of aeronautical service and address both full-service FBOs and less-than-full- service providers. They typically do not address nonaeronautical activities.236 Minimum standards typically cover air taxi and charter, fuel service, aircraft maintenance and repair, aircraft sales and rental, flight training, commercial aircraft storage, and flying clubs. Minimum standards could conceivably include GHG-related provisions relat- ing to requirements for ground-based aircraft power systems, idling, energy efficiency, and recycling. Minimum standards must be reasonable, relevant, attainable, and uniformly applied.237 Including GHG- related provisions in minimum standards may help pro- tect airports from unjust discrimination and other claims that could be made by users of the airport. At the same time, requiring GHG-reduction measures in minimum standards should be carefully drafted and supported to ensure the reasonableness of the proposed measures. F. Federal Requirements Concerning Airport Design, Construction, Security, and Hazards Federal law requires that grant recipients and some other airports comply with an array of airport design and hazard requirements, including requirements relat- ing to pavement strength, materials, height, security, wildlife attractants, and other hazards. Some of these provisions may be triggered by GHG-reduction projects. For example, utility-scale wind turbines in the vicin- ity of airports can pose height concerns and interfere with airport radar systems, implicating airport duties to mitigate airport hazards.238 Similarly, certain concen- trating solar systems (in contrast to photovoltaic (PV) systems) can cause potentially dangerous levels of glare 236 See id. § 10.2 (2009) (“There is no requirement to include nonaeronautical activities (such as restaurants or car rental) in minimum standards since those activities are not covered un- der the grant assurances.”), Id.; FEDERAL AVIATION ADMINISTRATION, ADVISORY CIRCULAR 150/5190-7, MINIMUM STANDARDS FOR COMMERCIAL AERONAUTICAL ACTIVITIES § 1.2(d) (2007), available at http://www.faa.gov/document Library/media/advisory_circular/150-5190-7/150_5190_7.pdf. 237 See FAA, Director’s Determination, Roger Leonard Car- dinal’s Pilot Shop, Inc. v. Chesapeake Airport Auth., FAA Docket No. 16-01-06 (Oct. 22, 2002) (finding terms of minimum standards to be unreasonably burdensome). 238 Clark County v. FAA, 522 F.3d 437, 442–43 (D.C. Cir. 2008); Wind Farms: Compatible with Military Readiness?: Hearing on the Impact of Wind Farms on Military Readiness Before the Subcomm. on Readiness and the H. Comm. on Armed Services, 111th Cong. 3 (2010) (statement of Nancy Kalinowski, Vice President, Air Traffic Organization, FAA) (explaining how wind turbines interfere with radar detection), available at http://www.windaction.org/?module=uploads& func=download&fileId=2051.

26 in the vicinity of airport operations.239 Placement of natural gas fueling stations in or outside of the secured portion of the airfield will have significant effects on the use of the facility due to federal security requirements. 1. Airport Design Standards FAA provides guidelines for airport design in Advi- sory Circular 150/5300-13 that apply to airports that have received federal funds.240 These design guidelines restrict placement of structures and activities near runways, taxiways, and other locations that could affect airport safety, including: • A Building Restriction Line identifying suitable building area locations on airports. • Clearway areas connecting to and extending be- yond runway ends for 500 to 1,000 ft. • Object Free Zones necessary for air navigation or ground maneuvering purposes. • Runway Protection Zones off the runway ends. • Runway Safety Areas and Taxiway Safety Areas, in which no objects can be sited unless required to be there by their function. • Taxiway Object Free Areas adjacent to Taxiways.241 Restrictions on objects in particular areas and visi- bility requirements could affect airport projects to re- duce GHG emissions that require physical infrastruc- ture or affect the natural landscape. For example, FAA generally recommends that solar projects not be sited within the Runway Protection Zone and requires that solar projects not be sited within an Obstacle Free Zone, a Runway Safety Area, a Taxiway Object Free Area, or a Taxiway Safety Area.242 2. Airport Layout Plans and Land Use Releases To receive AIP funds, airports must maintain an air- port layout plan (ALP) approved by FAA and any changes to airport layout (regardless of funding source) generally must be made in accordance with the ALP.243 Many projects intended to reduce GHG emissions may require ALP amendments, such as: 239 FEDERAL AVIATION ADMINISTRATION, TECHNICAL GUIDANCE FOR EVALUATING SELECTED SOLAR TECHNOLOGIES ON AIRPORTS 9 (2010), http://www.faa.gov/airports/ environmental/policy_guidance/media/airport_solar_guide.pdf. See also § IV.K.2 in this digest. 240 FEDERAL AVIATION ADMINISTRATION, ADVISORY CIRCULAR 150/5300-13 AIRPORT DESIGN (1989), available at http://www.faa.gov/documentLibrary/media/Advisory_Circular /150_5300_13.pdf. 241 FEDERAL AVIATION ADMINISTRATION, supra note 239, at 27–28; see also FEDERAL AVIATION ADMINISTRATION, ADVISORY CIRCULAR 150/5370-10E, STANDARDS FOR SPECIFYING CONSTRUCTION OF AIRPORTS (2009), available at http://www.faa.gov/documentLibrary/media/advisory_ circular/150-5370-10E/150_5370_10e.pdf. 242 FEDERAL AVIATION ADMINISTRATION, supra note 239, at 28. 243 49 U.S.C. § 47107(a)(16). • Changes to airfield design to improve efficiency of airfield operations. • Solar installations that are not co-located on exist- ing structures and co-located installations that substan- tially change the footprint of the building or struc- ture.244 • Mass transit facilities, like rail stations. In addition, airport sponsors are obligated to protect airports from incompatible land uses under Grant As- surance 21.245 Project sponsors must ensure that a pro- posed project will not negatively affect existing aviation and airport activities.246 Failure to take prudent steps to preserve the aeronautical utility of an airport could result in a loss of future federal funding for sponsors.247 Under FAA Orders 5100.38 and 5190.6A, ALPs must include an Exhibit “A” map delineating all airport- owned property, regardless of whether such property was acquired with Federal Government funding.248 “Any land identified on the Exhibit ‘A’ map may not be disposed of or used for any different purpose without FAA consent.”249 Use of airport property for some GHG- mitigation purposes, such as renewable energy genera- tion or forestry-based sequestration projects, is likely to require FAA consent. Leases of land for nonaeronauti- cal uses may require FAA review.250 In Grant Assurance 31, FAA also requires that air- port sponsors secure fair rental value from nonaeronau- tical leases of airport property.251 This requirement may be relevant to the lease of property to solar project de- velopers or projects for carbon sequestration. The lack of a feasible alternative use for property may keep rental values low, but airports must be prepared to jus- tify low lease values, if offered. 244 FEDERAL AVIATION ADMINISTRATION, supra note 239, at 30. 245 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 21–Compatible Land Use), http://www.faa.gov/airports/aip/grant_assurances/ media/airport_sponsor_assurances_2012.pdf. 246 Id. 247 FEDERAL AVIATION ADMINISTRATION, supra note 239, at 24. 248 FEDERAL AVIATION ADMINISTRATION, Order 5190.6B, AIRPORT COMPLIANCE MANUAL § 7.19 (2009), available at http://www.faa.gov/documentLibrary/media/Order/5190_6b. pdf. 249 Id. 250 See, e.g., FEDERAL AVIATION ADMINISTRATION, supra note 239, at 30; see also FEDERAL AVIATION ADMINISTRATION, EASTERN REGION AIRPORTS DIVISION SPONSOR GUIDE § 3–Land Release Requirements (2009), available at http://www.faa.gov/ airports/eastern/aip/sponsor_guide/media/SGSect3.doc (Last visited June 13, 2012). 251 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 31–Disposal of Land), http://www.faa.gov/airports/aip/grant_assurances/ media/airport_sponsor_assurances_2012.pdf.

27 3. Hazard Identification and Avoidance Grant assurances, including Assurance 20, also re- quire airports to take appropriate action to address ac- tivities or objects that may be airport hazards.252 Assur- ance 20 provides that an airport will take appropriate action to assure that such terminal airspace as is required to protect instrument and visual operations to the airport (including established minimum flight altitudes) will be adequately cleared and protected by removing, lowering, relocating, marking, or lighting or otherwise mitigating existing airport hazards and by pre- venting the establishment or creation of future airport hazards.253 Additionally, the airport certification process governed by 14 C.F.R. Part 139 requires airports to take certain steps to avoid wildlife hazards, including the risk that birds will congregate near runways and strike an air- craft.254 Part 77 establishes standards and notification re- quirements for objects affecting navigable airspace.255 14 C.F.R. § 77.13 requires the sponsor of proposed con- struction or alterations exceeding heights 200 ft above ground level to notify FAA, and 14 C.F.R. § 77.23 pro- vides standards for obstructions to air navigation. Submission of a Part 77 Notice of Proposed Construc- tion Form 7460 may be required for some GHG emis- sions reduction projects requiring construction (such as wind turbines increasing the height of buildings), even where such projects are co-located on existing struc- tures.256 A number of GHG-related projects could create physical, electronic, or wildlife hazards. For example, large wind turbines can interfere with airport radar systems and penetrate height restriction surfaces. For- estry or agricultural carbon sequestration projects could result in trees that exceed height standards or vegeta- tion that creates wildlife attractants. Similarly, an on- or near-airport project to grow oilseeds for use in avia- tion biofuels could attract birds and other wildlife in the vicinity of aircraft operations. 4. Pavement and Other Maintenance and Operation Grant assurances, including Assurances 11 and 19, provide specific obligations for airports to maintain pavement and other facilities for their useful lives. The airport and all facilities which are necessary to serve the aeronautical users of the airport, other than facilities owned or controlled by the United States, shall be oper- ated at all times in a safe and serviceable condition and 252 49 U.S.C. § 47107(a)(9). 253 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 20–Hazard Re- moval and Mitigation), available at http://www.faa.gov/ airports/aip/grant_assurances/media/airport_sponsor_ assurances_2012.pdf. 254 14 C.F.R. § 139.337. 255 14 C.F.R pt. 77. 256 FEDERAL AVIATION ADMINISTRATION, supra note 239, at 34. in accordance with the minimum standards as may be re- quired or prescribed by applicable Federal, state and local agencies for maintenance and operation…. It will suitably operate and maintain the airport and all facilities thereon or connected therewith….257 Further, for some pavements, an airport must “assure[] or certif[y] that it has implemented an effective airport pavement maintenance-management program and [] that it will use such program for the useful life of any pavement constructed, reconstructed or repaired with Federal financial assistance at the airport.”258 To the extent that some proposed sustainable pave- ment approaches, like warm-mix asphalt, could affect the useful life, safety, or maintainability of pavement, they may raise pavement-related grant assurance is- sues. 5. Security Especially since the terrorist attacks of September 11, 2001, airports work within an extensive and evolv- ing system of security. While an extensive discussion of security is beyond the scope of this digest, it is impor- tant to consider security implications associated with the siting of certain GHG-related activities. One exam- ple is the siting of alternative-fuel fueling infrastruc- ture like a compressed natural gas (CNG) station. The location of a CNG station within the secured areas of the airfield would make the station accessible and use- ful for GSE and other airside equipment. However, se- curity considerations would practically make the sta- tion less useful or unusable by ground access vehicles or other public CNG-fueled vehicles. On the other hand, locating a station outside of secured portions of the air- port may make it more useful for ground access fleets but impractical for GSE that may not be street legal. Similarly, the location of renewable energy facilities in or out of the secured areas of the airport will affect the security requirements associated with construction, operations, and maintenance. G. State Laws and Regulations Governing GHG Targets and Reporting of GHG Emissions Due to the lack of a comprehensive statutory pro- gram for GHGs on the federal level, some states and local entities have begun to explore and implement GHG programs that could affect some elements of air- port operations. These programs may expand signifi- cantly in upcoming years. 257 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 19–Operation and Maintenance), http://www.faa.gov/airports/aip/grant_ assurances/media/airport_sponsor_assurances_2012.pdf. 258 FEDERAL AVIATION ADMINISTRATION, AIRPORT SPONSOR ASSURANCES (Mar. 2005) (Grant Assurance 11–Pavement Pre- ventative Maintenance), http://www.faa.gov/airports/aip/ grant_assurances/media/airport_sponsor_assurances_2012. pdf.

28 1. GHG Emissions Target Legislation As of 2010, 21 states had adopted statewide emis- sions targets and goals for one or more GHGs.259 Laws containing only reporting requirements are unlikely to affect an airport’s ability to implement GHG-reduction initiatives. However, some laws go beyond reporting and require actual GHG emissions reductions. California offers a prime example. The state’s Global Warming Solutions Act of 2006 (A.B. 32)260 was one of the earliest and most far-reaching examples of state climate change legislation. A.B. 32 requires California to reduce statewide emissions of GHGs to 1990 levels by 2020.261 The law delegates formulation of detailed regu- lations to the CARB, and specifies that these regula- tions are to take effect in 2012. CARB has chosen to implement a cap-and-trade pro- gram as the centerpiece of A.B. 32. As explained in Sec- tion III.A.3.a, cap-and-trade is a method by which a government establishes a cap on the total pollution and allocates emissions permits to polluting entities. Cali- fornia’s program would apply to emissions produced within the state. The entities must hold permits equiva- lent to their level of pollution and can purchase permits from other entities to satisfy this requirement. California’s cap-and-trade program has faced legal challenges, but, so far, CARB has been able to proceed in the rulemaking process.262 In December 2011, CARB adopted final cap-and-trade regulations, which will take effect in January 2013.263 It is expected that these regu- lations will face new legal challenges in the courts. Po- tential plaintiffs are likely to argue that cap-and-trade violates CARB’s authorizing statutes and the U.S. Con- stitution. While the future of cap-in-trade in California is not entirely certain, it is important for airports to consider the program’s potential impacts if implemented. As written, the California cap-and-trade rules do not apply 259 PEW CENTER ON GLOBAL CLIMATE CHANGE & PEW CENTER ON THE STATES, CLIMATE CHANGE 101: STATE ACTION 7 (Jan. 2009), available at http://www.pewclimate.org/doc Uploads/Climate101-State-Jan09_0.pdf. 260 A.B. 32, California Global Warming Solutions Act of 2006, 2005-06 Leg. (Cal. 2006); CAL. HEALTH & SAFETY CODE § 38550. 261 Id. 262 A state court judge enjoined CARB from taking further action on cap-and-trade in Ass’n of Irritated Residents v. Cal. Air Res. Bd., CPF-09-509562 (Sup. Ct. Cal. Mar. 18, 2011). The injunction was later overturned by the California Supreme Court and CARB was allowed to proceed. Ass’n of Irritated Residents v. Cal. Air Res. Bd., S195112, 2011 Cal. LEXIS 9547 (Cal. Sept. 28, 2011). 263 CARB, Rulemaking to Consider the Adoption of a Pro- posed California Cap on Greenhouse Gas Emissions and Mar- ket-Based Compliance Mechanisms Regulation, Including Compliance Offset Protocols, http://www.arb.ca.gov/regact/ 2010/capandtrade10/capandtrade10.htm (last visited June 14, 2012). to airports themselves, but they do apply to cogenera- tion plants, which some airports have.264 Aside from cap-and-trade, CARB has also been de- veloping other strategies that affect airports, including requirements for emissions reductions in various vehi- cles used by airports, imposition of statewide restric- tions on the use of refrigerants, and requirements for greater energy-efficiency measures and renewable en- ergy use.265 In the future, a variety of state standards designed to achieve emissions-reduction targets may emerge, but many elements of such standards would likely be pre- empted by federal law. Nonetheless, these requirements may shape how airports report and credit GHG reduc- tion projects. They may also support airport arguments that GHG emissions efforts are proprietary in nature— the argument would be that airport GHG-reduction measures promote compliance with existing or future environmental laws and regulations that might other- wise constrain operations or growth. 2. State Low-Carbon Fuels Programs States may also seek to reduce GHG emissions pro- duced by combustion engines through low-carbon fuel requirements. Once again, California has been a leader in the development of low-carbon fuels initiatives. Fol- lowing California’s lead, 11 Northeast and Mid-Atlantic states have signed a memorandum of agreement to adopt a regional low-carbon-fuel framework.266 How- ever, as explained below, recent litigation challenging California’s low-carbon rules has cast some doubt on states’ ability to implement such measures. California’s Executive Order S-01-07 ordered the es- tablishment of a Low Carbon Fuel Standard for trans- portation fuels. It directed several state agencies and entities, including CARB, to develop protocols for measuring the “life-cycle carbon intensity” of transpor- tation fuels.267 In April 2010, CARB adopted a final Low Carbon Fuel Standard regulation requiring lower car- bon content in transportation fuels used in California.268 Under the Low Carbon Fuel Standard, if a fuel pro- vider’s carbon intensity score falls below a statewide standard, it generates credits. If a provider’s score is above the standard, it generates a deficit, which must 264 CAL. CODE REGS. tit. 17, § 95811(a)(2). 265 CARB, Facts About California’s Climate Plan (Dec. 25, 2010), available at http://www.arb.ca.gov/cc/cleanenergy/ clean_fs2.pdf. 266 Northeast/Mid-Atlantic States Low Carbon Fuel Stan- dard Program (Dec. 31, 2008), available at http://www. nescaum.org/documents/northeast-and-mid-atlantic-states-lcfs- letter-of-intent.pdf/ (Connecticut, Delaware, Maine, Maryland, Massachusetts, New York, New Hampshire, New Jersey, Pennsylvania, Rhode Island, and Vermont). 267 CAL. EXEC. ORDER NO. S-01-07 (Jan. 18, 2007), available at http://www.arb.ca.gov/fuels/lcfs/eos0107.pdf. 268 Rocky Mountain Farmers Union v. Goldstene, cv-F-09- 2234 LJO DLB, at 3–4, 2011 U.S. Dist. LEXIS 149593 (E.D. Cal. Dec. 29, 2011).

29 be paid for by the provider’s own accumulated credits or by purchasing credits from other entities.269 Although this rule exempts transportation fuel used in aircraft,270 it applies to gasoline or diesel used in airport vehicles. If implemented, the rule could affect airports by estab- lishing a new emissions baseline that would reduce the potential scope of credits from other airport-related emissions-reducing activities. It could also affect the aviation fuel market by affecting the price and market- ability of other products refined from crude oil. Enforcement of the Low Carbon Fuel Standard has been subject to legal challenge. In December 2011, a federal district court in California found that the Low Carbon Fuel Standard was unconstitutional and prohib- ited its enforcement.271 The court held that the Low Carbon Fuel Standard violated the dormant Commerce Clause because it discriminated against out-of-state corn ethanol producers and impermissibly regulated beyond the borders of California.272 Under the Low Car- bon Fuel Standard, Midwest ethanol providers’ carbon intensity scores were higher because of the additional GHG emissions associated with transporting their fuel from out of state and because of the heavy use of coal to generate electricity in the Midwest.273 CARB appealed this decision to the Ninth Circuit Court of Appeals, which recently lifted the injunction, allowing enforce- ment to continue while the case moves forward on the merits.274 H. Federal and State Regulations and Requirements Relating to Renewable Energy Projects Federal and state laws applicable to energy projects and utilities generally could affect some larger renew- able energy projects at airports, especially if they pro- vide power to the electricity grid beyond the airport. Federal and state laws, regulations, and policies may also create financial incentives for renewable energy production. 1. Federal Laws a. Federal Energy Regulatory Commission.—The Federal Energy Regulatory Commission (FERC) has regulatory jurisdiction over facilities for the transmis- sion of electric energy in interstate commerce and the sale of electric energy at wholesale in interstate com- merce. FERC does not generally have jurisdiction over facilities used for the generation of electric energy, for 269 Id. at 5. 270 CAL. CODE REGS. tit. 17, § 95480.1(d)(i). 271 Rocky Mountain Farmers Union, 2011 U.S. Dist. LEXIS 149593. 272 Id. 273 Id. 274 Rocky Mountain Farmers Union, et al. v. Goldstene, No. 1:09-cv-02234-LJO GSA (9th Cir. Apr. 23, 2012); CARB, LCFS Enforcement Injunction is Lifted, available at http://www. arb.ca.gov/fuels/lcfs/LCFS_Stay_Granted.pdf (Apr. 24, 2012). local distribution, for transmission of electric energy in intrastate commerce, or facilities for transmission of electric energy consumed wholly by the transmitter.275 However, FERC does have authority over the rates charged for transportation of jet fuel and other products via interstate pipelines. It is unclear at this time whether this will become an issue for future bio-jet fuel projects. FERC authority is unlikely to apply to airport- related renewable energy projects, but should still be considered to ensure that FERC requirements are not triggered. b. Public Utility Regulatory Policies Act of 1978.—The Federal Public Utility Regulatory Policies Act of 1978 (PURPA)276 encourages small-scale power production and requires electric utilities to purchase electricity from certain qualifying small facilities that produce power. Qualifying small power production facilities un- der PURPA are defined as generating facilities of 80 megawatts or less whose primary energy sources are renewable, biomass, waste, or geothermal, and that meet other regulatory requirements, as well as some cogeneration facilities.277 PURPA has created a market for power generated by qualifying facilities where such generation is cost-competitive with conventional utility- generated power. PURPA sets the wholesale price for qualifying facility-generated energy to the “incremental cost to the utility of alternative energy sources.”278 Qualifying facilities under PURPA may also be relieved of certain obligations under a variety of state or federal regulations.279 Some airports contemplating renewable power pro- jects may be able to benefit from PURPA, because it provides a market and regulated pricing structure for some generated renewable or cogeneration power. This can reduce some of the market and regulatory uncer- tainty associated with investments in this type of power. 2. State Laws a. Public Utility Regulation.—State and federal regu- lations often critically affect project economics for re- newable projects. As a general matter, state public util- ity laws may apply to airport renewable energy projects to the extent that the project sponsor is regulated as a public utility or if the project would be connected to the system of a regulated public utility. State laws differ regarding the scope of potential regulation and applica- bility. 275 16 U.S.C. § 824(b)(1). 276 See 16 U.S.C. § 824a-3(a)(2). 277 FERC, What Is a Qualifying Facility?, http://www.ferc.gov/industries/electric/gen-info/qual-fac/what- is.asp (Last visited June 14, 2012). 278 16 U.S.C. § 824a-3(b). 279 FERC, What are the Benefits of QF Status?, http://www.ferc.gov/industries/electric/gen-info/qual-fac/ benefits.asp (Sept. 30, 2010) (listing of relief from regulatory burdens for qualifying facilities).

30 Many states require power generation and transmis- sion facilities larger than a de minimis size to comply with public utilities regulations in the state. For exam- ple, public utilities commissions may require developers of some proposed energy generation, distribution, or transmission projects meeting certain thresholds to apply for certificates of convenience and necessity.280 In some states, municipal power producers (as opposed to investor-owned utilities) are subject to little or no state public utilities commission oversight. State laws may also require utility companies to purchase power pro- duced by small producers, consistent with PURPA, as well as regulate the terms by which such connections will be made.281 The process through which renewable energy systems connect directly with the electric distri- bution grid is known as interconnection and is gener- ally governed at the state level.282 Forty states have established statewide interconnection standards.283 Examples of some additional issues or utility pro- grams that might impact airport renewable energy pro- jects are discussed below. b. Demand Side Management.—State laws may re- quire utilities to engage in demand side management (DSM), which seeks to reduce electricity use through means such as education or offering financial incentives for conservation. Where airports purchase power from utilities subject to DSM requirements, they may be able to take advantage of financial incentives for energy con- servation or efficiency upgrades. DSM programs may also offer free or reduced-cost energy audits to help identify opportunities to improve energy efficiency. c. Energy Service Companies.—Many states have ac- tive energy service companies, which are private busi- nesses that, among other activities, frequently investi- gate, plan, develop, install, and arrange financing for projects to generate energy savings for a client. Clients generally pay energy service companies fees for these services out of realized energy savings, creating a strong financial incentive for energy service companies to seek energy savings. Energy service companies may be able to offer airports up-front financing for energy- efficiency projects and some sharing of risks associated with project payback. d. Renewable or Alternative Energy Portfolio Stan- dards.—As of 2010, 36 states have implemented renew- able portfolio standards (RPS) or alternative energy portfolio standards (AEPS) requiring that electric utili- ties generate or purchase some proportion of electricity they sell from renewable or alternative energy 280 See, e.g., IDAHO CODE ANN. § 61-526; 4 COLO. CODE REGS. § 723-3102. 281 See, e.g., CONN. GEN. STAT. § 16-243a; 4 COLO. CODE REGS. §§ 723-3900, et seq. 282 NETWORK FOR NEW ENERGY CHOICES AND THE VOTE SOLAR INITIATIVE, FREEING THE GRID 7 (2009), http://www.newenergychoices.org/uploads/FreeingTheGrid2009 .pdf. 283 Id. at 12. sources.284 In some cases, state standards include re- quirements associated with the type of power (e.g., solar versus wind) and create incentives for particular types of renewable power. RPSs and AEPS’s could have a significant effect on the economics of airport-related renewable power projects. Utility compliance with RPS or AEPS requirements is often demonstrated through transactions in which renewable or alternative energy generators provide utilities with renewable energy credits (REC). RECs reflect the generation of a certain amount of renewable electricity and can be unbundled from the sale of elec- tricity itself. Utilities subject to an RPS or AEPS collect or buy RECs to demonstrate compliance. Some RECs are also purchased voluntarily by companies, govern- ments, or individuals. Frequently, third parties pur- chase and sell RECs in the open trading market. In areas with REC markets, airports sponsoring renew- able-power projects may be able to sell RECs directly to utilities to help them meet RPS or AEPS requirements, where relevant, or on the open market. Alternatively, power purchase agreements for power projects on air- ports will specify who will own the RECs for purposes of meeting state RPS requirements. These REC provisions can significantly affect project economics, because they are valuable to utilities subject to RPS and AEPS re- quirements, as well as some other parties seeking to encourage renewable power development.285 e. Feed-In Tariffs/Net Metering.—Net metering pro- grams and feed-in tariffs promote renewable energy production. Net metering is a program for energy con- sumers who generate energy and are connected to the grid. When local energy production exceeds the power needed at the time by the producer (like a house or an airport), the power is available for use in the larger grid. Net metering allows system owners to receive re- tail credit for energy generated in excess of energy con- sumed. This retail credit can be much more lucrative than wholesale power prices that would otherwise be available. This can significantly improve the economics of a power project at an airport. As of 2009, 42 states had net metering programs.286 Similarly, in some states, feed-in tariffs allow nonutility energy generators to supply power to the electric grid and sell energy produced to local utilities 284 Pew Center on Global Climate Change & Pew Center on the States, Renewable & Alternative Energy Portfolio Stan- dards (Oct. 27, 2010), available at http://www.pewclimate.org/ sites/default/modules/usmap/pdf.php?file=5907; see, e.g., 4 COLO. CODE REGS. §§ 723-3650–723-3699. RPS requirements in Colorado and Minnesota have been challenged judicially, but no decisions have been rendered as of the end of 2011. 285 See ACRP Report 57, The Carbon Market: A Primer for Airports, for a more detailed discussion of REC and carbon markets, and the potential opportunities and challenges to an airport’s participation in these markets. http://onlinepubs.trb.org/onlinepubs/acrp/acrp_rpt_057.pdf. 286 NETWORK FOR NEW ENERGY CHOICES AND THE VOTE SOLAR INITIATIVE, FREEING THE GRID 8 (2009), http://www. newenergychoices.org/uploads/FreeingTheGrid2009.pdf.

31 through long-term contracts at preferential prices. Feed-in tariffs may have a broader reach than PURPA, discussed above at Section III.H.1.b. To the extent that this is true, public utilities commissions may be able to establish prices higher than under PURPA, for exam- ple, to further incentivize renewable power produc- tion.287 f. Siting.—There is great variety among state permit- ting programs for renewable (and conventional) energy projects, although many of these state programs apply only to very large projects with greater generation ca- pacity than that of typical airport projects. However, as airports implement larger, more aggressive projects, it is possible that airports may cross some of these thresh- olds. In some states, a state agency has primary siting authority over renewable energy projects, while in other states, local governments take the lead role in manag- ing siting through application of zoning or land use powers.288 The types of state agencies that may have authority over siting of renewable energy projects include public utilities commissions, land-use authorities, municipali- ties, state siting boards, and environmental agencies. As an example, Ohio vests siting authority in the Ohio Power Siting Board for wind projects with generating capacity greater than or equal to 50 megawatts.289 Ohio’s siting process requires an application by the pro- ject sponsor, a staff investigation of the project, a public hearing near the proposed site, an adjudicatory hearing by the Ohio Power Siting Board, and Board issuance of a certificate.290 In some cases, a state-issued permit or certificate may serve as a “one-stop” comprehensive or consolidated permit that obviates the need to secure other state or local permits.291 g. Local Siting Laws and Ordinances.—A variety of local ordinances and requirements can impact renew- able energy projects, and local approvals may be re- quired before these projects can move forward. Local zoning laws may prescribe rules that affect the poten- tial for renewable energy generation. They might limit certain land uses (such as utility-scale power genera- tion) to prescribed areas; govern the height, orientation, and size of structures; establish setbacks; specify the percentage of a development area that may be occupied by structures; govern the intensity of land use; and 287 National Rural Electric Cooperative Association, Feed-In Tariffs 3 (2010), available at http://www.docstoc.com/ docs/26031562/Feed-In-Tariffs-Issue-Paper (follow download instructions). 288 See, e.g., COLO. REV. STAT. §§ 29-20-101 to -108 (granting localities authority to regulate land uses by utilities). 289 AMERICAN WIND ENERGY ASSOCIATION, WIND ENERGY SITING HANDBOOK 4-33 (2008), available at http://www.awea. org/sitinghandbook/downloads/Chapter_4_Regulatory_Frame work.pdf. 290 Ohio Power Siting Board, Ohio Power Siting Statute Process Flowchart (2010), available at http://www.opsb.ohio. gov/emplibrary/files/OPSB/flowchart.pdf. 291 AMERICAN WIND ENERGY ASSOCIATION, supra note 289, at 4-35. even address the potential for utilization of renewable energy sources.292 For example, biofuel plants may be considered to be an industrial use that may or may not be allowed on or near an airport. Local governments sometimes impose, as an exercise of their zoning and land use power, a moratorium on certain renewable energy projects. Local governments may bar such projects in some zones, classify such pro- jects as a conditional use, require a special permit or variance, or subject projects to overlay zone require- ments or landscaping requirements. h. Local Safety Standards.—In general, local gov- ernments have significant leeway to require safety standards for airports and other entities through build- ing, mechanical, and safety codes; local governments may also require permits for use of local access roads. This power generally does not extend to the airfield and aircraft operations, but can cover terminals, buildings, and landside infrastructure. Exercise of this authority in these contexts is generally not preempted by federal law. Local safety standards could include mechanical, building, and electrical codes that affect smaller wind turbines, solar arrays, and other facilities. For example, some state and local governments require use of the National Electrical Code293 for construction projects. Article 690 of the National Electrical Code provides standards for solar PV systems. The State of Florida’s building code contains a number of requirements re- lated to rooftop structures, which could affect rooftop wind turbines or PV systems.294 Some building owners in nonairport contexts have experienced difficulties with permitting small-scale wind projects due to code-driven concerns about whether turbines on buildings could throw ice frag- ments, drop broken parts, or pose other safety threats. I. State and Local Land Use and Zoning Authority Over Airport Development (Other than Renewable Energy) 1. Land Use and Zoning Power State and local entities may attempt to exercise land use and zoning authority over airport-related GHG- mitigation projects other than renewable energy efforts. For example, in Colorado, the Areas and Activities of State Interest Act allows local governments to desig- nate certain areas and activities, including site selec- tion for airports and mass transit facilities, as “matters of state interest” and to require permits for designated activities.295 Similarly, the California Public Utilities Code Section 21661.6 requires airports seeking to ex- 292 See, e.g., N.J. STAT. ANN. § 40:55D-65. 293 National Fire Protection Association, National Electrical Code of 2008, http://www.garnernc.gov/Publications/ Inspections/2008%20National%20Electrical%20Code.pdf. 294 FLA. BLDG. CODE ch. 15 (2007). 295 COLO. REV. STAT. §§ 24-65.1-101 to -502.

32 pand their boundaries for airport purposes to seek and secure the approval of the underlying jurisdiction with land use authority.296 Notwithstanding the federal preemption of state and local regulation of prices, routes, and services of air carriers, local governments generally may use their zoning and land use authority to control the siting of new airports and the physical expansion of airports onto new land, unless such efforts affect aircraft opera- tions.297 Several courts have upheld local zoning and land use regulations that affected the expansion of an airport onto property outside the existing airport’s boundaries.298 There is little judicial guidance regarding whether federal preemption would affect the ability of local entities to regulate nonaeronautical activities and land use on an airport (e.g., rental car facilities, carbon sequestration projects, or transit facilities). 2. Local Safety Standards As with renewable energy projects, local building, electrical, mechanical, and safety codes are likely to apply to airport GHG-mitigation projects. Local codes may not account for or reflect up-to-date energy effi- ciency or other measures and could stop or slow down the implementation of some measures. Alternatively, local codes may require more stringent efficiency meas- ures than airports had planned. For example, in early 2010, the California Building Standards Commission approved the mandatory Green Building Standards Code,299 which will require all new buildings in the state, including those at airports, to be more energy efficient and environmentally responsible. The Code will require each new building to install low pollutant- emitting materials, and will require each new nonresi- dential building over 10,000 ft to undergo a design-to- construction “commissioning” process, to ensure that the building meets the owner’s project requirements, which include efficiency goals.300 Airports will need to examine whether particular projects may be subject to state and local zoning, siting, and permitting requirements, as well as whether some of these requirements may be preempted by federal regulation. 296 CAL. PUB. UTIL. CODE § 21661.6; see also City of Burbank v. Burbank-Glendale-Pasadena Airport Auth., 72 Cal. App. 4th 366, 85 Cal. Rptr. 28 (1999). 297 See 49 U.S.C. § 41713(b)(1); Price v. Charter Twp. of Fenton, 909 F. Supp. 498, 503–04 (E.D. Mich. 1995) (township could not attempt to regulate flight operations under the guise of using its zoning power). 298 See, e.g., City of Cleveland v. City of Brook Park, 893 F. Supp. 742 (N.D. Ohio 1995); City of Burbank v. Burbank- Glendale-Pasadena Airport Auth., 72 Cal. App. 4th 366, 85 Cal. Rptr. 2d 28 (1999). 299 CALIFORNIA BUILDING STANDARDS COMMISSION, 2010 CALIFORNIA GREEN BUILDING STANDARDS CODE (2010), avail- able at http://www.documents.dgs.ca.gov/bsc/CALGreen/2010 _CA_Green_Bldg.pdf. 300 Id. J. Federal National Environmental Policy Act and Comparable State-Level Requirements Both federal and state environmental review re- quirements will affect many airport projects designed to reduce GHGs. Many GHG-reducing projects will not have significant effects on the environment, so these environmental review requirements will be minimal. However, other projects, like airfield improvements, could involve environmental effects that require much more extensive review. 1. Federal National Environmental Policy Act a. Generally.—Major airport projects that require amendment of the ALP, AIP funding, approval of PFC use authority, or certain other federal approvals can trigger National Environmental Policy Act (NEPA) re- quirements. NEPA compliance is governed by both Council on Environmental Quality (CEQ) and FAA regulations. CEQ regulations require the preparation of an Environmental Impact Statement (EIS) for “major Federal actions significantly affecting the quality of the human environment.”301 A federal action must be a “le- gally relevant cause” of the effect to be subject to NEPA.302 Environmental analyses must address not only direct effects, but also indirect effects that are “reasonably foreseeable.”303 Cumulative impacts, “which result[] from the incremental impact of the action when added to other past, present, and reasonably foresee- able future actions regardless of what agency (Federal or non-Federal) or person undertakes such actions,” must also be considered.304 If there are no significant impacts or there is uncer- tainty regarding whether there are significant impacts, agencies may prepare Environmental Assessments (EAs) to determine whether a full-scale EIS is required. Where the agency finds that the project will not have a significant impact on the environment, no EIS is neces- sary.305 In addition, for classes of actions that do not “individually or cumulatively have a significant effect on the environment,” agencies may develop categorical exclusions. Categorical exclusions are specified in agency regulations or orders and involve minimal effort, as compared to EISs or EAs.306 Some GHG-reduction projects are likely to involve great enough impacts to resources that they would re- quire EAs or EISs under NEPA, including projects that may significantly affect air emissions, endangered spe- cies, wetlands, or other protected resources. However, many projects may be eligible for categorical exclusions. FAA Order 5050.4B, National Environmental Policy Act (NEPA) Implementing Instructions for Airport Actions, 301 42 U.S.C. § 4332. 302 U.S. Dep’t of Transp. v, Public Citizen, 541 U.S. 752, 769, 124 S. Ct. 2204, 2216, 159 L. Ed. 2d 60, 80 (2004). 303 40 C.F.R § 1508.8. 304 40 C.F.R. § 1508.7. 305 40 C.F.R. § 1501.4. 306 40 C.F.R. § 1508.4.

33 provides FAA’s NEPA policies and procedures for air- ports.307 These regulations authorize categorical exclu- sions for some categories of projects that include poten- tial GHG emissions-reduction projects, including: • Minor airfield improvements: aircraft parking ar- eas, roads, and storage areas. • Airfield lighting. • Construction or expansion of cargo buildings. • General landscaping. • Low emission technology equipment. • Parking areas. • Passenger handling buildings. • Repair and maintenance. • Replacement structures.308 However, it is important to note that even if a project fits within one of these categories, a categorical excep- tion would not be available if there are extraordinary environmental circumstances, including the presence of endangered species, certain wetland impacts, or effects on historic resources. b. Consideration of Climate Change Under NEPA.— The effects of projects on energy use and GHG emis- sions should be considered in the NEPA process. CEQ regulations have long provided that NEPA analyses should address the “[e]nergy requirements and conser- vation potential of various alternatives and mitigation measures.”309 More recently, CEQ has considered how to address climate impacts under NEPA. In January 2012, the FAA also issued a guidance memorandum on considering GHGs under NEPA.310 CEQ’s attention to climate impacts follows litigation challenging NEPA actions for lack of consideration of climate change impacts.311 In perhaps the most impor- tant federal appellate decision on climate change analy- ses, the Ninth Circuit held that NHTSA had to address the effects of a fuel economy regulation on climate change during its environmental review process.312 The 307 FEDERAL AVIATION ADMINISTRATION, Order 5050.4B, NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) IMPLEMENTING INSTRUCTIONS FOR AIRPORT PROJECTS (2006), available at http://www.faa.gov/airports/resources/ publications/orders/environmental_5050_4/. 308 Id. at 6–8, tbl. 6-1. 309 40 C.F.R. § 1502.16. 310 Memorandum from Julie Mark, Manager, Environ- mental Policy and Operations, prepared by Thomas Cuddy, FAA, Considering Greenhouse Gases and Climate Under the National Environmental Policy Act (NEPA): Interim Guidance (Jan. 12, 2012), available at http://www.faa.gov/about/ office_org/headquarters_offices/apl/environ_policy _guidance/guidance/media/NEPA_GHG_Guidance_Final.pdf. 311 For a comprehensive discussion of early NEPA-related climate change litigation, see MICHAEL B. GERRARD, GLOBAL CLIMATE CHANGE AND U.S. LAW, ABA SECTION OF ENVIRONMENT, ENERGY, AND RESOURCES, ABA Pub. (2007). 312 Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172 (9th Cir. 2007); see also Mid States Coal. for Progress v. Sur- face Transp. Bd., 345 F.3d 520 (8th Cir. 2003) (EIS for a project court overturned NHTSA’s decision not to conduct an EIS because petitioner environmental groups demon- strated a “substantial question of whether the Final Rule may significantly affect the environment” through climate change impacts.313 “The impact of GHG emis- sions on climate change is precisely the kind of cumula- tive impacts analysis that NEPA requires agencies to conduct.”314 In August 2011, the Ninth Circuit issued another opinion that shed light on the evaluation of climate change in NEPA documents relating to airport projects. In that case, the court upheld an FAA EA and its de- termination that it did not need to undertake an EIS for the expansion of an airport runway. The EA had stated that the new runway would not cause significant GHG emissions because operations at the airport represented less than 1 percent of U.S. aviation activity.315 The plaintiffs asserted that the EA was inadequate because the GHG analysis was not specific to the location. The court rejected this argument.316 The court stated that while “ample evidence” existed to demonstrate a causal connection between GHGs and global warming, the FAA’s EA was adequate because the runway’s GHG impact would not be “locally-quantifiable…given the global nature of climate change.”317 In February 2010, the CEQ issued draft guidance regarding how GHGs should be considered in NEPA documents.318 The CEQ guidance confirmed an expand- ing practice that climate-related issues should be ad- dressed in NEPA documents and provided some addi- tional guidance regarding how it should be done. Among other things, the draft CEQ guidance stressed the need to consider alternatives and mitigation meas- ures that reduce climate impacts.319 This draft guidance will drive greater consideration of GHG-reduction measures for some airfield, terminal, and other projects. Recently, FAA also issued similar guidance.320 to build a rail line to transport coal from mines in Wyoming to power plants in Minnesota and South Dakota should have considered air emissions, including CO2, from the power plants). 313 Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172, 1225 (9th Cir. 2007) (emphasis in original). 314 Id. at 1217. 315 Barnes v. U.S. Dep’t of Transp., 655 F.3d 1124, 1130 (9th Cir. 2011). 316 Id. at 1139. 317 Id. at 1140. 318 Memorandum from Nancy Sutley, Chair, Council on En- vironmental Quality, for Heads of Federal Departments and Agencies, Re: Draft Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions (Feb. 18, 2010), available at http://ceq.hss.doe.gov/nepa/regs/ Consideration_of_Effects_of_GHG_Draft_NEPA_Guidance_ FINAL_02182010.doc. 319 Id. 320 Memorandum from Julie Mark, Manager, Environ- mental Policy and Operations, prepared by Thomas Cuddy, FAA, Considering Greenhouse Gases and Climate Under the

34 2. State Environmental Review Requirements (“Little NEPAs”) State environmental review requirements will also often apply to projects to mitigate GHGs at airports. They may also require the application of such mitiga- tion measures for other projects at airports. Fifteen states and the District of Columbia have enacted “little NEPAs” modeled on the federal NEPA. Some little NEPAs apply only to state agencies, while others also apply to local agencies, including in California, New York, Massachusetts, Washington, and Minnesota.321 State and local operators of airports may be subject to environmental review requirements, depending on the state. As of 2009, at least 16 states, the District of Colum- bia, and two U.S. territories required some level of en- vironmental review: Arkansas, California, Connecticut, District of Columbia, Georgia, Guam, Hawaii, Indiana, Maryland, Massachusetts, Minnesota, Montana, New Jersey, New York, North Carolina, Puerto Rico, South Dakota, Washington, and Wisconsin.322 A comprehensive examination of all state NEPA-like statutes is beyond the scope of this digest. However, a brief discussion of four states’ environmental review requirements follows for illustrative purposes. a. California Environmental Quality Act.323— California’s Environmental Quality Act (CEQA) re- quires state and local agencies to prepare impact re- ports on “any project which they propose to carry out or approve that may have a significant effect on the envi- ronment.”324 A “project” is defined as an “activity which may cause either a direct physical change in the envi- ronment, or a reasonably foreseeable indirect physical change in the environment.”325 For review to be re- quired, projects must be undertaken or supported by a public agency or involve the issuance of certain permits or entitlements.326 National Environmental Policy Act (NEPA): Interim Guidance (Jan. 12, 2012), available at http://www.faa.gov/about/ office_org/headquarters_offices/apl/environ_policy_guidance /guidance/media/NEPA_GHG_Guidance_Final.pdf. 321 DANIEL R. MANDELKER, NEPA LAW & LITIGATION § 12.1- 12.2, Clark, Boardman, Callaghan (2010). 322 ARK. CODE ANN. § 8-1-101; CAL. PUB. RES. CODE §§ 21000 to 21177; CONN. GEN. STAT. ANN. §§ 22a-1 to 22a-1h; D.C. CODE ANN. §§ 8-109.1 to 8-109.11; GA. CODE ANN. §§ 12- 16-1 to 12-16-8; GUAM EXEC. ORDER NO. 96-26 (1996); HAW. REV. STAT. §§ 343-1 to 343-8; IND. CODE ANN. §§ 13-12-4-1 to 13- 12-4-10; MD. CODE ANN. NAT. RES. §§ 1-301 to 1-305; MASS. GEN. LAWS ANN. ch. 30, §§ 61, 62 to 62H; MINN. STAT. ANN. §§ 116D.01 to 116D.11; MONT. CODE ANN. §§ 75-1-101 to 75-1-105; 75-1-201 to 75-1-208; N.J. EXEC. ORDER NO. 215 (1989); N.Y. ENVTL. CONSERV. LAW §§ 8-0101 to 8-0117; N.C. GEN. STAT. §§ 113A-1 to 113A-13; P.R. LAWS ANN. tit. 12, §§ 1121 to 1127; S.D. CODIFIED LAWS §§ 34A-9-1 to 34A-9-13; WASH. REV. CODE §§ 43-21C.010 to 43-21C.910; WIS. STAT. ANN. §§ 1.11 et seq. 323 CAL. PUB. RES. CODE §§ 21000–21177. 324 Id. § 21100(a). 325 Id. § 21065. 326 Id. § 21065. California’s environmental review requirement con- tains an action-forcing element that NEPA lacks. CEQA states that “public agencies should not approve projects as proposed if there are feasible alternatives or feasible mitigation measures available which would substan- tially lessen the significant environmental effects of such projects….”327 However, the statute also provides that “in the event specific economic, social, or other conditions make infeasible such project alternatives or such mitigation measures, individual projects may be approved in spite of one or more significant effects thereof.”328 This requirement could be significant to GHG-reducing projects if they involve significant im- pacts to other resources, like species or wetlands. CEQA’s mitigation requirement is likely to drive more attention to measures that could reduce the GHG im- pacts of airport projects in California. California Senate Bill 97, enacted in 2007, amended CEQA to clearly establish that GHG emissions and the effects of GHG emissions are appropriate subjects for CEQA analysis.329 The legislation directed the Office of Planning and Research to develop draft CEQA Guide- lines “for the mitigation of GHG emissions or the effects of GHG emissions.”330 The California Natural Resources Agency adopted these amendments, which took effect on March 18, 2010.331 Under these guidelines, “[l]ead agencies should de- termine whether GHGs may be generated by a proposed project, and if so, quantify or estimate the GHG emis- sions by type and source.” 332 Agencies must also “assess whether those emissions are individually or cumula- tively significant.”333 Determinations of significance thresholds are left to agencies, and should include a good faith effort to “describe, calculate, or estimate the amount of greenhouse gas emissions resulting from a project.”334 In accordance with the action-forcing nature of CEQA, the agency “must investigate and implement ways to avoid, reduce, or otherwise mitigate the im- pacts of those emissions” if GHG emissions from the project as proposed are “potentially significant.”335 An example of how these regulations have played out in the airport context is useful. Beginning in 2006, the San Diego Regional Airport Authority undertook an 327 Id. § 21002. 328 Id. § 21002. 329 STATE OF CALIFORNIA, GOVERNOR’S OFFICE OF PLANNING AND RESEARCH, TECHNICAL ADVISORY: CEQA AND CLIMATE CHANGE: ADDRESSING CLIMATE CHANGE THROUGH CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) REVIEW 3 (June 19, 2008), available at http://www.capcoa.org/climatechange/ upload/documents/Document-06-27-2008-OPR-Technical- Advisory-Publication-Ready-June-19-2008[1].pdf. 330 Id. 331 California Natural Resources Agency, CEQA Guidelines, http://ceres.ca.gov/ceqa/guidelines/ (last visited June 14, 2012). 332 STATE OF CALIFORNIA, supra note 329, at 5. 333 Id. 334 CAL. CODE REGS. tit. 14, § 15064.4. 335 STATE OF CALIFORNIA, supra note 329, at 5.

35 Airport Master Plan revision, including a Proposed Air- port Land Use Plan designating future airport land uses. As part of this process, the airport considered un- dertaking several capacity expansion projects (such as construction of a new parking terminal). This process was subject to CEQA. In 2007, subsequent to the pas- sage of Senate Bill 97, but prior to the update of Cali- fornia’s CEQA regulations to reflect its requirements, the San Diego County Regional Airport Authority promulgated a revised Draft Environmental Impact Review for the master planning process. The revised Draft Environmental Impact Review discussed and ana- lyzed existing and likely future GHG emissions from airport operations and growth, stating that the decision to do so was motivated by the possibility of future legis- lation.336 However, the San Diego Regional Airport Au- thority did not include mitigation measures specifically designed to reduce GHG emissions associated with ca- pacity increases at the airport.337 In response to the lack of proposed mitigation meas- ures, and with a stated desire to avoid future litigation between the parties, California’s Attorney General ne- gotiated a memorandum of agreement with the San Diego Regional Airport Authority binding it to numer- ous GHG emissions-reduction commitments not in- cluded in the revised Draft or Final Environmental Im- pact Reviews.338 b. Massachusetts Environmental Policy Act.339—In Massachusetts, state entities are required by law to evaluate the environmental impact of state activities and use “all practicable means and measures to mini- mize environmental damage.”340 In 2007, the Massa- chusetts Executive Office of Energy and Environmental Affairs developed a Greenhouse Gas Emissions Policy after the Secretary of Energy and Environmental Af- fairs determined that environmental damage under the Massachusetts Environmental Policy Act (MEPA) “in- cludes the emissions of greenhouse gases [GHGs] caused by projects subject to NEPA review.”341 For cov- ered projects, the policy required quantification of pro- ject-related GHG emissions, and also required consid- 336 SAN DIEGO COUNTY REGIONAL AIRPORT AUTHORITY, AIRPORT MASTER PLAN DRAFT ENVIRONMENTAL IMPACT REPORT 5.19-2 (Oct. 2007), http://www.san.org/documents/ amp/DEIR/_Final_San_Diego_EIR.pdf. 337 Id. 338 State of California, Office of the Attorney General, Brown Announces San Diego Airport Emissions Agreement (May 8, 20008), available at http://oag.ca.gov/news/press_ release?id=1556 (last visited June 14, 2012). 339 MASS. GEN. LAWS. ch. 30, §§ 61–62H. 340 Id. § 61. 341 MASSACHUSETTS EXECUTIVE OFFICE OF ENERGY AND ENVIRONMENTAL AFFAIRS, SUMMARY OF THE FINAL REVISIONS TO THE MEPA GREENHOUSE GAS EMISSIONS POLICY AND PRO- TOCOl 1 (May 5, 2010), available at http://www.env.state.ma. us/mepa/downloads/GHG%20Policy%20FINAL%20Summary. pdf (last visited June 14, 2012). eration of mitigation measures or project alternatives to reduce GHGs.342 In 2008, the Massachusetts General Assembly codi- fied the Secretary’s decision through enactment of the Massachusetts Global Warming Solutions Act of 2008, which provided: “[i]n considering and issuing permits, licenses and other administrative approvals and deci- sions, the respective agency, department, board, com- mission or authority shall also consider reasonably foreseeable climate change impacts, including addi- tional greenhouse gas emissions, and effects, such as predicted sea level rise.”343 The Massachusetts Executive Office of Energy and Environmental Affairs revised the Greenhouse Gas Emissions Policy in 2010, specifying that it applies to most projects subject to analysis under MEPA, exclud- ing projects for which emissions are minimal.344 Under the recently revised MEPA Greenhouse Gas Emissions Policy, project proponents are generally required to quantify direct and indirect GHG emissions associated with the preferred alternative, as well as to commit to and quantify the reductions benefits of mitigation measures.345 The Secretary of Energy and Environ- mental Affairs may also exempt particular projects from emissions quantification requirements.346 Examples of the types of projects that might qualify include renew- able energy installations or zero-net energy projects.347 Project sponsors must also certify that they have completed mitigation to the Massachusetts Environ- mental Policy Office.348 The GHG Emissions Policy ex- presses a preference for direct, on-site mitigation of GHGs; however, it also allows for the use of offsets when direct mitigation is not feasible.349 c. New York State Environmental Quality Review Act.350—Under New York State’s State Environmental Quality Review Act (SEQRA), state and local agencies must prepare an EIS “on any action they propose or approve which may have a significant effect on the en- vironment.”351 Impact statements should address the “effects of the proposed action on the use and conserva- tion of energy resources, where applicable and signifi- cant.”352 State and local agencies in New York are in- creasingly paying attention to projects or plans that will increase GHG emissions. 342 Id. 343 MASS. GEN. LAWS. ch. 30, § 61. 344 MASSACHUSETTS EXECUTIVE OFFICE OF ENERGY AND ENVIRONMENTAL AFFAIRS, REVISED MEPA GREENHOUSE GAS EMISSIONS POLICY AND PROTOCOL 2-3 (2010), http://www.env. state.ma.us/mepa/downloads/GHG%20Policy%20FINAL.pdf. 345 Id. at 2. 346 Id. at 12. 347 Id. 348 Id. 349 Id. 350 N.Y. ENVTL. CONSERV. §§ 8-0101 to 8-0117. 351 Id. § 8-0109(2). 352 Id. § 8-0109(2)(g).

36 The New York State Department of Transportation was the first state department of transportation in the nation to require consideration of GHGs and energy in metropolitan planning organization analyses of their transportation plans.353 The stated authority for this requirement is the 2002 State Energy Plan, which sets forth a goal of reducing statewide GHG emissions to 5 percent below 1990 levels by 2010 and 10 percent below 1990 levels by 2020.354 In a 2009 decision, the New York Fourth Appellate Division indicated that the effect of a proposed cogene- ration plant on air emissions was a proper considera- tion under SEQRA.355 The court held that the town planning board did not act arbitrarily or capriciously in denying the plant’s application based on its conclusion that “serious increases in harmful emissions” from the plant would result in an “unacceptable adverse im- pact.”356 Carbon emissions were a focus of the town’s findings, which examined even potential emissions from nonlocal fuel sources in determining that the plant could not achieve climate neutrality.357 d. Washington State Environmental Policy Act.358— Washington’s State Environmental Policy Act (SEPA) uses the same language as NEPA to require state and local agencies to prepare impact statements on major actions that significantly affect the quality of the envi- ronment.359 SEPA requires agencies to consider the ef- fects of proposed projects on the environment, including the climate.360 The Washington Department of Ecology has devel- oped recommendations on how existing SEPA require- ments can be used to identify climate impacts.361 In Washington State, a project checklist guides SEPA analysis.362 Several checklist elements can be used to identify GHG emissions, including air emissions, vehi- 353 TRANSPORTATION RESEARCH BOARD, TRANSPORTATION, LAND USE, AND AIR QUALITY CONFERENCE: SUMMARY OF PEER EXCHANGE, Orlando, Florida (July 9–11, 2007), available at http://climate.dot.gov/state-local/integration/chapter_05.html (last visited Jan. 27, 2011). 354 Michael B. Gerrard, SEQRA and Climate Change 2 (draft, April 24, 2008), available at http://www.lawseminars. com/materials/08LUCCNY/luccny%20m%20gerrard%20revised _a.pdf. 355 Matter of Laidlaw Energy and Envtl., Inc. v. Town of El- licottville, 59 A.D. 3d 1084, 1085, 873 N.Y.S.2d 814, 815 (2009). 356 Id. 357 Silverberg Zalantis LLP, New York State Says SEQRA Review Properly Considered Impacts of Greenhouse Gases, CLIMATE CHANGE ATTORNEY BLOG (Mar. 1, 2009), http://www.climatechangeattorney.com/2009/03/new_york_ court_says_seqra_revi.html. 358 WASH. REV. CODE §§ 43.21C.010–43.21C.910 (2009). 359 WASH. REV. CODE § 43.21C.030(c) (2009). 360 WASH. ADMIN. CODE § 197-11-444 (2003). 361 WASHINGTON DEPARTMENT OF ECOLOGY, GREENHOUSE GAS EMISSIONS AND SEPA–WORKING PAPER (2010), available at http://www.ecy.wa.gov/climatechange/sepa.htm. 362 WASH. ADMIN. CODE § 197-11-960 (2003). cle trips per day, and energy use.363 The Department of Ecology has also assembled a library of SEPA and SEPA-like analyses that have considered GHG emis- sions.364 For emissions quantification estimation methodolo- gies, the Department of Ecology suggests that project sponsors look to the guidance of King County, which has an executive order that “requires and empowers King County Departments to evaluate the climate im- pacts of those actions being evaluated under authority of the State Environmental Policy Act (SEPA).”365 Pro- ject sponsors may also develop their own methodologies. Agencies must consider whether an action will result in “probable adverse significant impacts.”366 The De- partment of Ecology recognizes the difficulty in estab- lishing bright-line significance thresholds, and suggests that project sponsors may mitigate emissions in efforts to have impacts deemed nonsignificant.367 K. General Environmental Laws that May Apply to Development or Energy Projects, Including at Airports In addition to environmental review requirements, there are many substantive environmental laws that may apply to particular projects, such as the Endan- gered Species Act (ESA)368 and the Clean Water Act (CWA).369 Because of the wide potential range of GHG- reduction projects and project settings, the following discussion of laws are exemplary rather than exhaus- tive. 1. Endangered Species Act The Federal ESA regulates activities affecting threatened and endangered species and their habitat.370 Airport projects seeking to reduce GHG emissions may affect species, and thus implicate the ESA. For exam- 363 WASHINGTON DEPARTMENT OF ECOLOGY, GREENHOUSE GAS EMISSIONS AND SEPA–WORKING PAPER 2 (2010), available at http://www.ecy.wa.gov/climatechange/sepa.htm. 364 Washington Department of Ecology, SEPA and GHG Emissions–Resources and Links, http://www.ecy.wa.gov/ climatechange/sepa_resources.htm (last visited Feb. 3, 2012). 365 WASHINGTON DEPARTMENT OF ECOLOGY, GREENHOUSE GAS EMISSIONS AND SEPA–WORKING PAPER 3 (2010), available at http://www.ecy.wa.gov/climatechange/sepa.htm; KING COUNTY, PUT 7-10-1 (AEO), EXECUTIVE ORDER ON THE EVALUATION OF CLIMATE CHANGE IMPACTS THROUGH THE STATE ENVIRONMENTAL POLICY ACT (Oct. 15, 2007), http://www.kingcounty.gov/operations/policies/executive/utilitie saeo/put7101aeo.aspx. 366 WASHINGTON DEPARTMENT OF ECOLOGY, GREENHOUSE GAS EMISSIONS AND SEPA–WORKING PAPER 4 (2010), available at http://www.ecy.wa.gov/climatechange/sepa.htm. 367 Id. 368 Pub. L. No. 93-205, 87 Stat. 84 (1973), codified at 16 U.S.C. § 1531 et seq. 369 Pub. L. No. 92-500, 86 Stat. 816 (1972), codified at 33 U.S.C. § 1251 et seq. 370 16 U.S.C. §§ 1531–44.

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State and Federal Regulations That May Affect Initiatives to Reduce Airports’ GHG Emissions Get This Book
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TRB’s Airport Cooperative Research Program (ACRP) Legal Research Digest 17: State and Federal Regulations that May Affect Initiatives to Reduce Airports’ GHG Emissions addresses issues that are relevant to implementing greenhouse gas (GHG) mitigation measures at airports.

The report also provides a compilation of carbon reduction initiatives at airports that distinguish between green building requirements and other building code directives, and efforts directed at reducing aircraft GHG emissions. The report also identifies and discusses the range of federal, state, and local legal issues that may be associated with the implementation of these types of measures.

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