Summary

This responds to a Congressional request for our legal opinion regarding the authority of the Federal Aviation Administration (FAA) to auction airport arrival and departure slots. As part of its efforts to reduce congestion in the national airspace, in April and May 2008, FAA issued proposed regulations to conduct such auctions at three New York-area airports--LaGuardia Airport (LaGuardia), John F. Kennedy International Airport (JFK), and Newark Liberty International Airport (Newark)--at some time in the future. In August 2008, FAA announced that it was proceeding to auction two specific slots at Newark on September 3, an action that has since been administratively stayed. On September 16, 2008, FAA announced that "[i]n accordance with rulemaking activity that is not yet complete" and "if the rule is adopted," it may auction slots at Newark, LaGuardia, and JFK starting on January 12, 2009. As agreed with your staff, this opinion addresses whether FAA has authority to auction slots and if it does, whether it may retain and use funds obtained through such auctions.

We conclude that FAA currently lacks authority to auction arrival and departure slots, and thus also lacks authority to retain and use auction proceeds. For the first time since it began regulating U.S. navigable airspace nearly 40 years ago, FAA now asserts that it may assign the use of that airspace using its general property management authority. According to FAA, slots are intangible "property" that it "constructs," owns, and may "lease" for "adequate compensation" under 49 U.S.C. 106 (l)(6) and (n) and 40110(a)(2). An examination of those statutes read as a whole, however, makes clear that Congress was using the term "property" to refer to traditional forms of property. It was not referring to FAA's regulatory authority to assign airspace slots, no matter how valuable those slots may be in the hands of the regulated community. Related case law confirms our conclusion. The only other source of authority for FAA to raise funds in connection with its slot assignments is the Independent Offices Appropriations Act (IOAA), 31 U.S.C. 9701, commonly referred to as the "user fee statute," but that authority is currently unavailable. Since 1998, Congress has, through annual appropriations restrictions, specifically prohibited FAA from imposing "new aviation user fees," and we conclude that proceeds from FAA's proposed auctions would constitute such a fee. Accordingly, in our opinion, FAA lacks a legal basis to go forward with the Newark auction or any other auction, and if FAA were to go forward with auctioning slots without obtaining the necessary authority and retained and used the proceeds, GAO would raise exceptions under its account settlement authority for violations of the "purpose statute," 31 U.S.C. 1301(a), and the Antideficiency Act, 31 U.S.C. 1341(a)(1)(A).