Shackelford, Bowen, McKinley & Norton, LLP https://shackelford.law Law Firm - Dallas, Nashville, Fort Worth & Austin Mon, 19 Sep 2022 19:57:07 +0000 en-US hourly 1 https://wordpress.org/?v=6.0.2 Fly and Comply – Aviation Law with David Norton https://shackelford.law/news/fly-and-comply-aviation-law/ https://shackelford.law/news/fly-and-comply-aviation-law/#respond Fri, 16 Sep 2022 18:19:36 +0000 https://shackelford.law/?p=3725 […]]]>
By  MARK ANNICK / DAVID NORTON – 

On this episode of Keep It Legal, we discuss Aviation Law with David Norton, partner and head of the aviation practice at Shackelford, Bowen, McKinley & Norton, LLP.

Mr. Norton focuses solely on aviation law and has an internationally recognized practice that encompasses a broad range of business aviation regulatory, risk management, transactional, tax and commercial dispute resolution matters.

Listen as this renowned lawyer walks us through how COVID-19 impacted the industry and how to properly purchase and own your own aircraft.

We also react to the viral list of celebrities with the most private jet Co2 emissions and other aviation headlines!

Learn more about David Norton here: https://shackelford.law/profiles/david-t-norton/#1533751819474-af1a5613-71d4

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Frank Amini to be recognized in the 2023 Edition of Best Lawyers: Ones to Watch in America https://shackelford.law/news/frank-amini-recognized-in-the-2023-edition-of-best-lawyers-ones-to-watch-in-america/ Wed, 24 Aug 2022 17:09:38 +0000 https://shackelford.law/?p=3713

HOUSTON – Frank Amini has been chosen to be recognized in the third edition of Best Lawyers: Ones to Watch in America™ for his work in Intellectual Property Law.

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DOT Revises Second-Half 2022 SIFL Rates https://shackelford.law/news-aviation/dot-revises-second-half-2022-sifl-rates/ Fri, 12 Aug 2022 12:37:18 +0000 https://shackelford.law/?p=3711
The U.S. Department of Transportation has revised the Standard Industry Fare Level (SIFL) rates for the six-month period from July 1, 2022 to December 31, 2022. These rates are needed in order to apply the IRS’s aircraft valuation formula to compute the value of non-business transportation aboard employer-provided aircraft and impute the income of the employee as required by the Internal Revenue Service Rules Section 1.61-21(g).
Due to the reduced airline seat miles resulting from the COVID-19 pandemic and government relief to the airlines, standard SIFL rates increased.
To account for this, DOT published alternative rates that take into account government relief received by the airlines.  These rates include the (1) unadjusted rates, (2) rates adjusted for PSP grants, and (3) rates adjusted for PSP grants and promissory notes.  The IRS has allowed operators to use any of the three published sets of SIFL rates.
The unadjusted SIFL rates for the six-month period from July 1, 2022 to December 31, 2022, are: 0500 miles $0.2417; 501-1,500 miles $0.1843; over 1,500 miles $0.1771; and Terminal Charge of $44.18.
The SIFL rates adjusted for PSP grants for the six-month period from July 1, 2022 to December 31, 2022, are: 0500 miles $0.2460; 501-1,500 miles $0.1875; over 1,500 miles $0.1803; and Terminal Charge of $44.97.
The SIFL rates adjusted for PSP grants and promissory notes for the six-month period from July 1, 2022 to December 31, 2022, are: 0500 miles $0.2562; 501-1,500 miles $0.1953; over 1,500 miles $0.1878; and Terminal Charge of $46.83.
The “aircraft multiples” (listed in Treas. Reg. § 1.61.21(g)(7)), which are determined by (1) whether the income is to be imputed to a control or non-control employee and (2) the maximum certified takeoff weight of the aircraft, have not changed.
If you are an employer and you fly an employee or a non-employee guest or family member on your aircraft, the flight is potentially taxable to the individual receiving the ride. The aircraft valuation formula applies on a per-flight, per-person basis and will be calculated using the distance in statute miles from where the individual boards the aircraft to where the individual deplanes.
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Shackelford Aviation Partner Greg Reigel Elected Lawyer-Pilots Bar Association President https://shackelford.law/news/greg-reigel-elected-pilots-bar-association-president/ Mon, 08 Aug 2022 14:57:22 +0000 https://shackelford.law/?p=3705 […]]]> DALLAS – Greg Reigel, an aviation partner in the Dallas office of Shackelford, Bowen, McKinley & Norton, has been elected president of the Lawyer-Pilots Bar Association. “I am honored to be selected to lead the Lawyer-Pilots Bar Association for the next year and look forward to continuing the legacy of past LPBA presidents whose leadership has contributed to and grown this unique and exemplary bar association,” said Mr. Reigel.

The LPBA is an international, non-profit bar association with membership comprised primarily of attorneys, pilots and former pilots who hold airman’s certificates with a shared interest in aviation law and safety.

For more than two decades, Mr. Reigel has represented and counseled U.S. and international aviation industry clients on complex regulatory compliance and enforcement issues. He works with airlines, charter companies, fixed base operators, airports, repair stations, pilots, mechanics, and other aviation businesses in aircraft purchase and sale transactions, contract negotiation, airport grant assurances, airport leasing, aircraft related agreements, wet leasing, dry leasing, FAA certificate and civil penalty actions, and general aviation and business law matters.

In addition to his legal practice, he holds a commercial pilot certificate (single-engine land, single-sea and multi-engine land) with an instrument rating. Dedicated to helping prepare the next generation of aviation and legal professionals, Mr. Reigel has taught aviation law, aviation transactions, aviation security, and business law and trial advocacy courses. He also is a noted speaker, having presented at multiple conferences and to numerous groups throughout his career about aviation regulatory, security and legal issues. He also regularly writes on these same issues for a variety of aviation and legal publications.

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Attorney Matthew L. Motes Inducted as the 70th President for the Western Fort Worth Rotary Club https://shackelford.law/news/attorney-matthew-l-motes-inducted-as-the-70th-president-for-the-western-fort-worth-rotary-club/ Tue, 05 Jul 2022 22:27:37 +0000 https://shackelford.law/?p=3694 […]]]> July 5, 2022

shackelford attorney Matt Motes inducted as 70th president for the western fort worth rotary club two men with recognition banner in hand both wearing suit and ties

Shackelford Attorney, Matthew L. Motes, and Dan Steele, the District Governor for District 5790

FORT WORTH – Shackelford attorney, Matthew L. Motes, has been inducted as the 70th president of the Western Fort Worth Rotary Club. Mr. Motes will serve as president from July 1, 2022 – June 30, 2023.

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Trial Attorneys Join Houston Office ofShackelford, Bowen, McKinley & Norton https://shackelford.law/news/new-attorneys/trial-attorneys-join-houston-office-of-shackelford-bowen-mckinley-norton/ Tue, 07 Jun 2022 16:02:55 +0000 https://shackelford.law/?p=3682 […]]]>  June 7, 2022

DALLAS – Trial and appellate lawyer Brannon Dillard recently joined Shackelford, Bowen, McKinley & Norton, LLP as a partner in the firm’s Houston office.

Over the past 18 years, Mr. Dillard has represented businesses and individuals in a variety of litigation matters and appeals in state and federal courts across the country. His extensive litigation experience includes representing energy, oilfield services, insurance, automotive, distribution, real estate, and financial services clients in contractual, business tort, insurance coverage, partnership, real estate, intellectual property, and trade secret disputes, among others. His experience also includes handling arbitrations, including both customer and industry disputes before the Financial Industry Regulatory Authority (FINRA). He has tried cases to the bench, jury, and arbitration panels.

In addition to his diverse litigation practice, Mr. Dillard regularly provides clients with insurance coverage analysis and advice on property, liability, and other types of insurance, as well as assistance navigating the insurance claim process. He also assists clients with entity formation and related corporate governance, business guidance and planning, pre-dispute risk analysis and management, and litigation avoidance counseling.

A Fellow of the Texas Bar Foundation, Mr. Dillard joins the firm from Winstead PC, where he had practiced since 2011. He began his career in 2004 at Beirne, Maynard & Parsons, LLP after receiving his J.D. from Baylor Law School, where he was a member of the Order of Barristers. He obtained his B.B.A. in Management from Baylor University in 2000.

“Clients know they can rely on Brannon’s tenacity and creative problem solving to successfully represent their interests when facing litigation,” says firm founder John Shackelford. “His expertise will complement the firm’s existing work to better serve the needs of our clients.”

Steve Wedemeyer, the managing partner of the firm’s Houston office, praised Mr. Dillard’s addition to the firm. “I have practiced with Brannon for over 15 years, and he is a seasoned business litigator and trusted advisor to his clients. He has deep Houston roots, and his addition will help expand the breadth of services we are able to provide our clients on their legal needs in Texas and beyond.”

Also joining Shackelford’s Houston office is litigation associate Joseph Colvin Jr. Mr. Colvin’s practice focuses on matters involving fiduciary duty issues, commercial disputes, non-competition agreements, fraud, trade secrets, contract disputes, and bankruptcy litigation. Mr. Colvin has significant trial experience in both state and federal courts and has taken jury trials to verdict.

Mr. Colvin joins Shackelford from Hughes Watters Askanase LLP. He earned his J.D. from South Texas College of Law, graduating cum laude in 2011. He obtained his B.A. in Philosophy from the University of St. Thomas, graduating summa cum laude in 2008.

In describing Mr. Colvin, Mr. Wedemeyer noted, “Joseph is a skilled litigator whose impressive resumé already includes substantial trial experience.”

“We are thrilled to add Brannon and Joseph to our growing Houston office and litigation team,” Mr. Shackelford added.

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Now Less Private: Business Aircraft Operations’ Pilot Records https://shackelford.law/news-aviation/now-less-private-business-aircraft-operations-pilot-records/ Thu, 05 May 2022 23:11:19 +0000 https://shackelford.law/?p=3672

By Gregory J. Reigel

Business aircraft operators’ private flight operations under 14 C.F.R. part 91 (Part 91) are now a little less private. Under newly promulgated 14 C.F.R. part 111 (Part 111), certain Part 91 business aircraft operators must now comply with a number of requirements under the Pilot Records Improvement Act (PRIA), as amended, and the electronic Pilot Records Database (PRD) regulations. These operators must now disclose, upon request, records they maintain with respect to their pilot hiring, training and checks, and employment termination.

Specifically, aircraft operators conducting flights under Part 91 using two or more aircraft in furtherance of, or incidental to, their business where the aircraft either (a) require a type rating or (b) are turbine helicopters (business aircraft operators) are now subject to several of the requirements under PRIA and the PRD. In order to understand how the sharing of pilot histories, which had previously only been applicable to information maintained by air carriers, came to apply to more private flight operations, it is helpful to look at the legislative and regulatory history that has led up to what these operators are facing today.

PRIA History

PRIA was enacted in 1997 in response to a series of accidents attributed to pilot error.1 The ensuing discussion revealed that much of a pilot’s history was not shared with hiring airlines because requests were never made of prior employers or because of employer liability concerns around sharing negative employment records. Before PRIA, employers were routinely advised by their counsel to limit or avoid giving employee references and to simply provide facts such as date of hire, position held, and date of employment termination.

Congress enacted PRIA to ensure that air carriers are able to adequately investigate each pilot’s employment background and other information pertaining to pilot performance before making a hiring decision and allowing that individual to serve as a flight crew member in air carrier operations. Importantly, the requirements of PRIA initially applied only to air carriers—that is, aircraft operators certificated under 14 C.F.R. part 119 (Part 119) and authorized to conduct 14 C.F.R. part 121 (Part 121) or 14 C.F.R. part 135 (Part 135) operations. Originally and for two decades, PRIA did not apply to Part 91 operators.

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Improper Aircraft “Dry” Leasing and Other Illegal Charter https://shackelford.law/news-aviation/improper-aircraft-dry-leasing-and-other-illegal-charter/ Thu, 05 May 2022 22:55:40 +0000 https://shackelford.law/?p=3667

By David T. Norton

One of the most confusing issues facing business and general aviation aircraft operators is the question of whether they can operate their aircraft solely under the Federal Aviation Administration’s (FAA) general, or noncommercial, operating rules, or whether they must also obtain certification as a commercial operator and operate their aircraft under the applicable commercial rules. This is especially complicated when their aircraft are leased to other parties. Although the FAA’s position on this question has been consistent since the 1970s, its enforcement of these rules has been sporadic. This has recently begun to change, however, as the FAA has recognized that it needs to pay more attention to this industry segment to ensure that the appropriate regula-tions are being followed.

This article provides an analysis for determining whether an operator who is conducting flights under the noncommercial rules may face an FAA administrative or legal enforcement action because the FAA has determined that the operator should be complying with its commercial rules. The analysis primarily focuses on situations where an operator is conducting improper “dry” leasing but also touches upon other common forms of illegal charter.

Basic Regulatory Concepts and Requirements

Our Focus: Regulation of Smaller Aircraft Our focus is on the FAA’s federal aviation regulations (FAR, codified in Part 14 of the Code of Federal Regulations (C.F.R.), Parts 1–199)1 that apply to the operations of aircraft ranging from small, single-engine pistons up through, but not including, piston and turbine or jet airplanes with a passenger seating configuration of 20 or Improper Aircraft “Dry” Leasing and Other Illegal Charter more or a maximum payload capacity of 6,000 pounds or more. Think, for example, of a small Cessna 172 aircraft up through a Gulfstream G700 aircraft, but not a Boeing 737 or larger aircraft outfitted for maximum seating capacity.

Who Is the “Operator”?
When assessing which operational rules must be followed, the first step is to determine exactly who is the “operator” of the aircraft. The starting presumption is that the registered owner of the aircraft is the operator, but, as this article points out, the operator can become a different party through an agreement, such as a lease or operating agreement, with the owner. A third party such as an aircraft manager may also effectively become the operator when a lease is not involved.

Although the FAR does not define the term “operator” directly, it does provide that “Operate, with respect to aircraft, means use, cause to use or authorize to use aircraft, for the purpose . . . of air navigation including the piloting of aircraft, with or without the right of legal control (as owner, lessee, or otherwise).”2 The FAR further provides that “Operational control, with respect to a flight, means the exercise of authority over initiating, conducting or terminating a flight.”3 Thus, the “operator” of an aircraft is the person, be it a natural person or some form of corporate entity, exercising operational control over the aircraft in order to operate it in the national airspace. The tests that the FAA applies in determining who actually has operational control of the aircraft are discussed in more detail below, but suffice it to say that the person who is determining where…

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Aircraft Hangar Lease: What Can A Tenant Expect? https://shackelford.law/news-aviation/aircraft-hangar-lease-what-can-a-tenant-expect/ Thu, 28 Apr 2022 23:29:32 +0000 https://shackelford.law/?p=3645
If you own an airplane, you probably keep it in a hangar. You may own the hangar and lease the airport property beneath the hangar, you may lease both the hangar and the land beneath it, or you may simply lease space within a hangar that is owned/leased by a third-party. And the terms of your hangar lease will depend upon your specific leasing arrangement. In order to protect you and your aircraft, you need to pay careful attention to the terms of your lease agreement.
Here are some of the key lease terms and issues to consider when negotiating your lease:
Rent. While rent is usually one of the first terms a potential tenant considers, it can be a little more complicated than simply “how much do I pay per month?” First, the lease may require a set monthly or annual rental payment for the property. This is often referred to as “base rent.” However, this is not the bottom line for what the lease will cost. Additional fees which increase and can exceed the base rent include assessments, taxes, and license fees to name a few. It is imperative that you determine up front what additional fees for which you may be responsible and precisely how those fees are calculated. Depending upon the total of the additional fees, you may be able to negotiate the base rent amount.
Similarly, if the lease provides the lessor with the ability to raise or decrease the rent, be sure to understand when this can happen and upon what such a change is based. Although you may not be able to control whether or not an increase or decrease in the rent is imposed, by understanding the circumstances upon which this change may take place, you will be able to plan for and possibly forecast this change in rent.
Lease Term. This provision deals with the duration of the lease. Specifically, you need to know when the lease actually starts. This may be important when new construction of a hangar, building or other improvements are involved which may prevent your use of the property until the work is completed. To obtain the fullest use of the property, you may want the actual lease term to begin when construction is completed and you are actually able to put your aircraft in the hangar, rather than making lease payments during construction even though you do not have full use of the property.
It is also important to understand how long the lease will last. Is the lease month-to-month or for a set number of months? Further, is the lease renewable? If so, will it renew automatically, or must you exercise the option of extending or renewing the lease? If you must exercise an option, make sure you know how far in advance of the lease’s termination you must give notice that you are extending or renewing the lease.
Knowing the potential duration of your lease becomes especially important in situations where the lessor does not have an obligation to renew or extend the lease. If the lease does not provide otherwise, a lessor could have the ability to not renew or extend a lease even after you have invested in building a hangar or other improvements to the property. Although this may seem unfair, the language of the lease will govern your rights. Thus, understanding this information up front is essential because it will allow you to assess the financial feasibility of recouping any investment you may wish to make in the property during the lease.
Use of the Property. The lease will likely have language specifying or limiting the types of activities for which the property may be used. Make sure the terms of the lease allow you to use the property the way you have planned. If you plan to sub-lease part of the space to another aircraft owner or intend to run some type of business from the property, you will need to ensure that the lease allows your intended use. This may be done with language which specifically allows your intended use, or with general language that will allow a wider variety of uses, including your intended use.
After you sign the lease, if the language of the lease does not allow you to use the hangar in the manner you wish, you may need to obtain permission from the lessor.
It is much easier to include the appropriate language in the lease prior to signing, rather than attempting to change the lease or obtain the lessor’s permission after the fact. Thus, you will need to have a good idea as to how you intend to use the property, both at the beginning and throughout the term of the lease.
Also keep in mind that the Federal Aviation Administration (“FAA”) has a policy on aeronautical use of hangars that applies to airports where the airport sponsor receives funds from the FAA through the Airport Improvement Program (“AIP”). If your hangar is on an airport that does not receive AIP funds, then any restrictions or limitations on use of your hangar would likely be dictated within your lease with the airport owner or operator.
However, even if the lease does not contain AIP restrictions and limitations, once the airport sponsor receives AIP grants and airport land designated for aeronautical use is made available for construction of hangars, the hangars built on the land are subject to the airport sponsor’s obligation to use the land for aeronautical purposes.
According to the FAA, permitted aeronautical uses for hangars include:
  • Storage of active aircraft.
  • Final assembly of aircraft under construction.
  • Non-commercial construction of amateur-built or kit-built aircraft. In expanding its policy to include all amateur/kit-built construction, rather than just final assembly, the FAA recognized that “[i]t may be more difficult for those constructing amateur-built or kit-built aircraft to find alternative space for construction or a means to ultimately transport completed large aircraft components to the airport for final assembly, and ultimately for access to taxiways for operation.”
  • Maintenance, repair, or refurbishment of aircraft, but not the indefinite storage of non-operational aircraft. The FAA does not establish an arbitrary time period beyond which an aircraft is no longer considered operational. Rather, the FAA leaves it to the airport sponsor to decide whether a particular aircraft is likely to become operational in a reasonable time; and
  • Storage of aircraft handling equipment (e.g., towbars, glider tow equipment, workbenches, and tools and materials used in the servicing, maintenance, repair or outfitting of aircraft).
Non-aeronautical use within a hangar that is used primarily for aeronautical purposes, may still be permitted, provided that use does not interfere with the aeronautical use of the hangar. What does that mean? The FAA will consider certain uses to be interfering with the aeronautical use if they:
  • Impede the movement of the aircraft in and out of the hangar or impede access to aircraft or other aeronautical contents of the hangar.
  • Impede access to aircraft or other aeronautical contents of the hangar; or
  • Or if vehicles are stored in violation of the airport sponsor’s rules and regulations, lease provisions, building codes or local ordinances.
Note: The hangar owner may park a vehicle inside the hangar while he or she is using the aircraft and the FAA will not consider that to be displacing the aircraft.
But what about that “pilot lounge” or “man/woman cave” within the hangar? Is that a permitted use? Unfortunately, the FAA’s policy does not provide a “bright line” answer. According to the policy, the FAA “differentiates between a typical pilot resting facility or aircrew quarters versus a hangar residence or hangar home. The former is designed to be used for overnight and/or resting periods for aircrew, and not as a permanent or even temporary residence.”
Although the FAA then goes on to state that a hangar may not be used as a residence, it does not explain what that means. As a result, in the absence of a clear definition, it is likely that this type of determination would be made on a case-by-case basis. So, while some form of pilot lounge or office is likely permitted, at what point that area within the hangar becomes an unpermitted, non-aeronautical use will be decided based upon the facts of each case.
Buildings and Construction. If you are leasing property without a hangar or buildings and you intend to have the hangar, buildings or other improvements constructed yourself, you will need to make sure the lease protects this investment. First, you will want the right to remove the hangar, buildings, or improvements from the property upon termination of the lease. Although this may not provide you with the full value of your investment in the property, it will allow you to recoup some of your equity.
If you are financing any of the construction, the bank or other source of financing will probably want the ability to mortgage or otherwise use the improvements as security for the financing. The lease will need to allow this. If you are arranging financing prior to signing the lease, you may wish to provide the bank or financing source with a copy of the proposed lease to confirm that the lease allows them to protect their financing.
General Provisions. In reviewing the lease, make sure the lease refers to parties consistently. Names of persons or entities should be spelled correctly and where used should refer to the appropriate party. If the lessee will be an entity, such as a partnership or corporation, the lease will need to refer to that entity as the lessee and not to you individually. To the extent that you as an individual are required to sign the lease, you will want the lease to refer to you in your capacity as an officer or partner of the particular entity who is the lessee. However, if a personal signature is required as an additional lessee or as a guarantor, this distinction may still be required, but may ultimately be immaterial to your personal liability under the lease.
Finally, it is essential that you carefully review all of the provisions of any aircraft hangar lease before you sign. Consultation with an experienced aviation attorney beforehand can keep your dream from turning into a nightmare. By taking the time to understand the hangar lease you are signing, you can avoid being left hanging.
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Earn $ in Your Plane? FAR 61.113 & Holding Out Discussion with Greg Reigel – InTheHangar https://shackelford.law/news/earn-in-your-plane-far-61-113-holding-out-discussion-with-greg-reigel-inthehangar/ Thu, 28 Apr 2022 16:14:32 +0000 https://shackelford.law/?p=3652

Aviation Attorney Greg Reigel comes back to the show to sit down with Dan (@TakingOffDan) to discuss the whole can or worms with taking money as a private pilot, starting with FAR 61.113 and also a discussion on what Holding Out is. Greg Reigel: https://www.shackelford.law Email: GReigel@shackleford.law

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