Memorandum U.S. Deportment of Transportation

Federal Aviation Administration

Subject: ACTION: Program Guidance Letter 00-2 �

Date: �JUN 6 2000

From: Manager, Airports Financial Assistance Division, APP-500

Reply to Attn. of:

To: PGL Distribution List

00-2.1 The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century — Jim Borsari (202) 267-8822.

On April 5, 2000, the President signed into law the aforementioned Act, and Public Law Number 106-181 has been assigned. This is one of several program guidance letters that will address issues raised by the legislation. The legislation will be referred to as AIR-21.

00-2.1 Innovative Finance Demonstration Program Extension - Mark Beisse (202) 267-8826.

AIR-21 extends section 148 of the Federal Aviation Reauthorization Act of 1996, which established an innovative finance demonstration program (IFDP). During fiscal years 2000 through 2003 the IFDP extension allows an additional 20 airport development projects at small and non-hub airports as well as any non-primary commercial service or general aviation airport. Large and medium hub airports have been excluded.

The limitations on, and types of, financing techniques are the same as described in PGL 97-2.6. In addition, a technique allowing the use of State apportionment funds and/or passenger or cargo entitlements for the payment of principal and interest of terminal development costs incurred before enactment has been included. We anticipate using the IFDP review panel to screen projects as previously done for the fiscal years 1997 through 1998 program.

Criteria for projects are similar as contained in the above PGL. However, the financial completion end date no longer applies. Based on a colloquy between Representatives Mica and Shuster, we may decide to issue more than one grant at the same airport on the new reimbursement for terminal development.

- Memorandum

Canceled

U.S. Department of Transportation Federal Aviation Administration

subject: ACTION: Program Guidance Letter 00-2 Date: JUN 6 2000

From: Manager, Airports Financial Assistance Reply to Attn. of:Division. APP-500

PGL Distribution List

00-2.1 The Wendell H. Ford Aviation Investment and Reform Act for the 21 Century - Jim Borsari (202) 267-8822.

On April 5, 2000, the President signed into law the aforementioned Act, and Public Law Number 106-1 81 has been assigned. This is one of several program guidance letters that will address issues raised by the legislation. The legislation will be referred to as AI R-21.

00-2.1 Innovative Finance Demonstration Proqram Extension - Mark Beisse 1202) 267-8826.

AIR-21 extends section 148 of the Federal Aviation Reauthorization Act of 1996, which established an innovative finance demonstration program (IFDP). During fiscal years 2000 through 2003 the IFDP extension allows an additional 20 airport development projects at small and non-hub airports as well as any non-primary commercial service or general aviation airport. Large and medium hub airports have been excluded.

The limitations on, and types of, financing techniques are the same as described in PGL 97-2.6. In addition, a technique allowing the use of State apportionment funds and/or passenger or cargo entitlements for the payment of principal and interest of terminal development costs incurred before enactment has been included. We anticipate using the IFDP review panel to screen projects as previously done for the fiscal years 1997 through 1998 program.

Criteria for projects are similar as contained in the above PGL. However, the financial completion end date no longer applies. Based on a colloquy between Representatives Mica and Shuster, we may decide to issue more than one grant at the same airport on the new reimbursement for terminal development.

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Please send by July 15 the Attachment A letter to potential sponsors. It is not anticipated that any projects using discretionary funding will be awarded prior to next fiscal year. Projects using entitlement funding could be selected prior to FY 2001. Please forward to APP-510 your recommended IFDP candidates by October 30, and do not disclose your recommendation to sponsors or request project applications pending notification by APP-500 that a selection has been made. Regions may forward proposals and recommendations before October 30 or any other established deadline for a recommendation in succeeding years. When a deadline is established for a fiscal year, however, late proposals will likely be deferred until a future year and revisions may be required.

00-2.2 Block Grant Issues - Mark Beisse (202) 267-8826.

Section 138 of AIR-21 amends Title 49, United States Code (USC), to authorize another qualified State participant under the State Block Grant Program, for fiscal year 2002 and beyond.

As before, States currently using this feature of the Airport Improvement Program will continue unless we receive notice from you to the contrary. In fairness for the prospective State applicants, regions should promptly confer with current block grant states regarding their intentions to continue participation.

States that have been selected for the block grant program in the past have told us that new entrants need a long lead time in order to transition into the program. In order to provide this lead-time we plan to hold a State selection process early next year but defer participation of this new participant until October 1, 2001. This will give the selected participant a number of months to transition into a block grant operation. The original 3 pilot program selections made during 1989 (Illinois, Missouri and North Carolina) were augmented with 4 states in 1993 (Michigan, New Jersey, Texas, and Wisconsin) and 2 more when the program was made permanent by 1997 (Pennsylvania and Tennessee).

The information in Program Guidance Letter 96-1 is current on State application procedures. That guidance is on our Web Page. We anticipate having a draft of the ALP handbook provisions on block grants to regions for review later this year. However, the guidance is essentially the same as it has been from the beginning of the pilot program. Some later reports and memoranda have also been provided.

Please send by July 15 the Attachment B letter to State aviation officials, other than current participants, inviting them to apply for a block grant. This letter also should be sent to non-State entities defined as states by 49 USC 47102. The letters should be sent with the attachments to PGL 96-1 together with the two applicable sets of standard airport and noise project assurances.

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Please send by July 15 the Attachment A letter to potential sponsors. It is not anticipated that any projects using discretionary funding will be awarded prior to next fiscal year. Projects using entitlement funding could be selected prior to FY 2001. Please forward to APP-510 your recommended IFDP candidates by October 30, and do not disclose your recommendation to sponsors or request project applications pending notification by APP-500 that a selection has been made. Regions may forward proposals and recommendations before October 30 or any other established deadline for a recommendation in succeeding years. When a deadline is established for a fiscal year, however, late proposals will likely be deferred until a future year and revisions may be required.

00-2.2 Block Grant Issues - Mark Beisse (202) 267-8826.

Section 138 of AIR-21 amends Title 49, United States Code (USC), to authorize another qualified State participant under the State Block Grant Program, for fiscal year 2002 and beyond.

As before, States currently using this feature of the Airport Improvement Program will continue unless we receive notice from you to the contrary. In fairness for the prospective State applicants, regions should promptly confer with current block grant states regarding their intentions to continue participation.

States that have been selected for the block grant program in the past have told us that new entrants need a long lead time in order to transition into the program. In order to provide this lead-time we plan to hold a State selection process early next year but defer participation of this new participant until October 1, 2001. This will give the selected participant a number of months to transition into a block grant operation. The original 3 pilot program selections made during 1989 (Illinois, Missouri and North Carolina) were augmented with 4 states in 1993 (Michigan, New Jersey, Texas, and Wisconsin) and 2 more when the program was made permanent by 1997 (Pennsylvania and Tennessee).

The information in Program Guidance Letter 96-1 is current on State application procedures. That guidance is on our Web Page. We anticipate having a draft of the AIP handbook provisions on block grants to regions for review later this year. However, the guidance is essentially the same as it has been from the beginning of the pilot program. Some later reports and memoranda have also been provided.

Please send by July 15 the Attachment B letter to State aviation officials, other than current participants, inviting them to apply for a block grant. This letter also should be sent to non-State entities defined as states by 49 USC 47102. The letters should be sent with the attachments to PGL 96-1 together with the two applicable sets of standard airport and noise project assurances.

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Each region should forward no later than November 1 applications of up to two states meeting 49 USC 47128(b) and Part II application requirements as its recommendation based on the strength of State proposals. Do not disclose your recommendation to states. Regions should not approve any State block grant for new or current states without notice by APP-520 that an announcement can be made.

002.3 New Pavement Maintenance Eligibility - Mark Beisse (202) 267-8826.

Section 123 of AIR-21 adds a new section 47102(3)(H), permitting AlP funds to be used for routine work to preserve/extend useful life of runways, taxiways, and aprons at non-primary airports.

The new law repeals 49 USC 47132, which temporarily allowed pilot projects for pavement maintenance as described in Program Guidance Letter 97-3.2. The background of this test program is that in accordance with section 132 of the Airport and Airway Safety, Capacity, Noise Improvement and Intermodal Transportation Act of 1992, we reviewed pavement maintenance at non-hub and non-primary airports. This review resulted in a determination that the AlP eligibility of pavement maintenance at small airports would be cost effective.

Nine pavement maintenance pilot grants were made totaling $1,219,189. The grants were issued to five States and one airport sponsor during fiscal years 1997 to 4-999. During this time, 52 individual airports benefited from projects, and the overall average cost per airport is $23,446. For airports benefiting from the pilot program, see Attachment C. The six project sponsors had average costs per airport ranging from $10,310 to $66,667. The wide range of amounts result from two States and the airport sponsor having projects in both fiscal years 1997 as well as 1998. Only State apportionment funds were used.

The permanently expanded eligibility will be the first significant involvement of Federal airport financial assistance programs on a routine operations/maintenance cost. Capital improvement costs, rather than maintenance, have normally been associated with the AIP. As such, we need to be aware of the ramifications of blurring the line between maintenance versus capital costs with respect to grant obligations. Airports are obligated to operate and maintain their airfield in a safe and serviceable condition as the result of prior grants. The guidance for pavement maintenance projects below are based in part on this concern.

For purposes of the newly eligible projects, we have limited the definition of this work. Routine maintenance is the cleaning, filling, as well as sealing of longitudinal and transverse cracks on a periodic basis. This includes grading the edges of pavement, cleaning the drainage facilities, patching of the paved areas, seal coats, and airfield remarking. Related capital costs for major repair or reconstruction with a 20-year life cycle has been separately eligible. Ineligible

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Each region should forward no later than November 1 applications of up to two states meeting 49 USC 47128(b) and Part ll application requirements as its recommendation based on the strength of State proposals. Do not disclose your recommendation to states. Regions should not approve any State block grant for new or current states without notice by APP-520 that an announcement can be made.

002.3 New Pavement Maintenance Eliqibility - Mark Beisse (202) 267-8826.

Section 123 of AIR-21 adds a new section 471 02(3)(H), permitting AIP funds to be used for routine work to preservelextend useful life of runways, taxiways, and aprons at non-primary airports.

The new law repeals 49 USC 47132, which temporarily allowed pilot projects for pavement maintenance as described in Program Guidance Letter 97-3.2. The background of this test program is that in accordance with section 132 of the Airport and Airway Safety, Capacity, Noise Improvement and Intermodal Transportation Act of 1992, we reviewed pavement maintenance at non-hub and non-primary airports. This review resulted in a determination that the AIP eligibility of pavement maintenance at small airports would be cost effective.

Nine pavement maintenance pilot grants were made totaling $1,219,189. The grants were issued to five States and one airport sponsor during fiscal years 1997 to 4999. During this time, 52 individual airports benefited from projects, and the overall average cost per airport is $23,446. For airports benefiting from the pilot program, see Attachment C. The six project sponsors had average costs per airport ranging from $10,310 to $66,667. The wide range of amounts result from two States and the airport sponsor having projects in both fiscal years 1997 as well as 1998. Only State apportionment funds were used.

The permanently expanded eligibility will be the first significant involvement of Federal airport financial assistance programs on a routine operationslmaintenance cost. Capital irr~provement costs, rather than maintenance, have normally been associated with the AIP. As such, we need to be aware of the ramifications of blurring the line between maintenance versus capital costs with respect to grant obligations. Airports are obligated to operate and maintain their airfield in a safe and serviceable condition as the result of prior grants. The guidance for pavement maintenance projects below are based in part on this concern.

For purposes of the newly eligible projects, we have limited the definition of this work. Routine maintenance is the cleaning, filling, as well as sealing of longitudinal and transverse cracks on a periodic basis. This includes grading the edges of pavement, cleaning the drainage facilities, patching of the paved areas, seal coats, and airfield remarking. Related capital costs for major repair or reconstruction with a 20-year life cycle has been separately eligible. Ineligible

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pavement maintenance includes costs of what may commonly be more frequent sweeping to remove mud, dirt, sand, aggregate, debris, foreign objects, water, snow, ice, and other loose contaminants.

It will not be adequate for the airport's sponsor to determine the airport has insufficient financial capability of its own to make the new pavement maintenance projects eligible. Based on our evaluation of the pilot work, eligibility for projects is limited to the following airports:

• The airport sponsor must be unable to fund maintenance under the grant assurances using its own resources. This will include a determination that the transferring of necessary funds to the airport from other accounts of the sponsor was either illegal at the time of the applicable grant agreements or is not sufficient for adequately maintaining the pavements.

• The airport shall agree to undertake and keep current at least the minimum pavement maintenance program as required in PGL 95-2. The special condition of that PGL must be understood by the sponsor and included in maintenance projects. This will require continuing oversight by the region to ensure that an action plan is in place for forming partnerships with local or State entities on maintenance.

• Where the sponsor of a maintenance project is a State aviation agency, pavement condition tracking for the airports included should be a current part of the State's airport system planning.

Please contact APP-510 for assistance on the eligibility of pavement maintenance.

00-2.4 Use of Discretionary Funds to Continue a Multiyear project — Ken Ball (202) 267-7436.

Section 135 of AIR-21 permits the Secretary to continue to offer a grant to pay the United States Government's share of a not yet completed multiyear project's costs from the discretionary fund if an airport's status drops from a primary to nonprimary airport. Under multiyear arrangements, the project is funded from an airport's passenger entitlement funding but if an airport falls below 10,000 enplanements, the airport is not apportioned passenger entitlements.

Similarly, AIR-21 permits the Secretary to continue to support a terminal project, if a commercial service airport is undertaking terminal development on a phased funding basis and the airport becomes a general aviation (GA) airport before project completion. Even though GA airports may not receive grants for terminal development, this provision would permit project completion. This provision is subject to the availability of discretionary funds and would be limited to the $200,000 annual limitation for terminal development at commercial service

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pavement maintenance includes costs of what may commonly be more frequent sweeping to remove mud, dirt, sand, aggregate, debris, foreign objects, water, snow, ice, and other loose contaminants.

It will not be adequate for the airport's sponsor to determine the airport has insufficient financial capability of its own to make the new pavement maintenance projects eligible. Based on our evaluation of the pilot work, eligibility for projects is limited to the following airports:

The airport sponsor must be unable to fund maintenance under the grant assurances using its own resources. This will include a determination that the transferring of necessary funds to the airport from other accounts 'of the sponsor was either illegal at the time of the applicable grant agreements or 'is not sufficient for adequately maintaining the pavements.

The airport shall agree to undertake and keep current at least the minimum pavement maintenance program as required in PGL 95-2. The special condition of that PGL must be understood by the sponsor and included in maintenance projects. This will require continuing oversight by the region to ensure that an action plan is in place for forming partnerships with local or State entities on maintenance.

Where the sponsor of a maintenance project is a State aviation agency, pavement condition tracking for the airports included should be a current part of the State's airport system planning.

Please contact APP-510 for assistance on the eligibility of pavement maintenance.

00-2.4 Use of Discretionary Funds to Continue a Multiyear project - Ken Ball 1202) 267-7436.

Section 135 of AIR-21 permits the Secretary to continue to offer a grant to pay the United States Government's share of a not yet completed multiyear project's costs from the discretionary fund if an airport's status drops from a primary to nonprimary airport. Under multiyear arrangements, the project is funded from an airport's passenger entitlement funding but if an airport falls below 10,000 enplanements, the airport is not apportioned passenger entitlements.

Similarly, AIR-21 permits the Secretary to continue to support a terminal project, if a commercial service airport is undertaking terminal development on a phased funding basis and the airport becomes a general aviation (GA) airport before project completion. Even though GA airports may not receive grants for terminal development, this provision would permit project completion. This provision is subject to the availability of discretionary funds and would be limited to the $200,000 annual limitation for terminal development at commercial service

5

airports. For this portion, the letter transmitting the initial grant offer should include the following statement, "This grant is the initial phase of a phased funding arrangement for terminal development. In the event that the airport no longer meets the definition of a commercial service airport as defined in section 47102(7) of title 49, United States Code, with respect to the number of passenger boardings, during the phased funding arrangement, the airport will remain eligible for grants to complete the phased arrangement under section 47108(e)(2) of title 49, United States Code, subject to the availability of funds."

00-2.5 Use of State Highway Specifications for Airfield Pavement — Ken Ball (202) 267-7436.

This new provision allows the Secretary to permit the use of State highway specifications for airfield pavement construction at small airports only if the Secretary determines that safety will not be negatively affected and the life of the pavement will not be shorter than it would be if constructed using FAA pavement standards. The provision is limited to construction at nonprimary airports with runways of 5,000 feet or shorter serving aircraft that do not exceed 60,000 pounds gross weight. Regions and ADOs must coordinate these findings with the Engineering Specifications Division, AAS-200, prior to permitting these specifications.

The use of this provision will also require a special condition to the grant. This special condition must state that use of the State highway specifications for airfield pavement construction will prohibit the sponsor from seeking Al P grant funds for the rehabilitation or reconstruction of any such airfield pavement for a period of 10 years after construction is completed unless the Secretary determines that the rehabilitation or reconstruction is required for safety reasons.

This new provision should not be confused with Advisory Circular 150/5100-13A, Development of State Standards for Nonprimary Airports, which provides a procedure for approval of state standards that is permitted under section 47105(c) of title 49, United States Code. Where prior approval of State Standards have been received under this provision, use of the recommended pavement design structural sections contained therein do not require a special condition.

00-2.6 Eligibility of Windshear Detection Equipment and Stainless Steel Adjustable Lighting Extensions as Airport Development — Ken Ball (202) 267-7436.

AIR-21 amends the definition of airport development to include certified windshear detection equipment and stainless steel adjustable lighting extensions that are approved by the Administrator. These items are now AIP Program eligible as airport development projects.

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airports. For this portion, the letter transmitting the initial grant offer should include the following statement, "This grant is the initial phase of a phased funding arrangement for terminal development. In the event that the airport no longer meets the definition of a commercial service airport as defined in section 471 02(7) of title 49, United States Code, with respect to the number of passenger hoardings, during the phased funding arrangement, the airport will remain eligible for grants to complete the phased arrangement under section 47108(e)(2) of title 49, United States Code, subject to the availability of funds."

00-2.5 Use of State Hiqhwav Specifications for Airfield Pavement - Ken Ball 1202) 267-7436.

This new provision allows the Secretary to permit the use of State highway specifications for airfield pavement construction at small airports only if the Secretary determines that safety will not be negatively affected and the life of the pavement will not be shorter than it would be if constructed using FAA pavement standards. The provision is limited to construction at nonprimary airports with runways of 5,000 feet or shorter serving aircraft that do not exceed 60,000 pounds gross weight. Regions and ADOs must coordinate these findings with the Engineering Specifications Division, AAS-200, prior to permitting these specifications.

The use of this provision will also require a special condition to the grant. This special condition must state that use of the State highway specifications for airfield pavement construction will prohibit the sponsor from seeking AIP grant funds for the rehabilitation or reconstruction of any such airfield pavement for a period of 10 years after construction is completed unless the Secretary determines that the rehabilitation or reconstruction is required for safety reasons.

This new provision should not be confused with Advisory Circular 1 50151 00-1 3A, Development of State Standards for Nonprimary Airports, which provides a procedure for approval of state standards that is permitted l~nder section 471 05(c) of title 49, United States Code. Where prior approval of State Standards have been received under this provision, use of the recommended pavement design structural sections contained therein do not require a special condition.

00-2.6 Eliqibility of Windshear Detection Equipment and Stainless Steel Adiustable Liqhtinq Extensions as Airport Development - Ken Ball (202) 267- 7436.

AIR-21 amends the definition of airport development to include certified windshear detection equipment and stainless steel adjustable lighting extensions that are approved by the Administrator. These items are now AIP Program eligible as airport development projects.

6

The Statement of Managers accompanying the final legislation encourages the FAA to review the possibility of using a Light Detection and Ranging (LIDAR) system capable of measuring and predicting windshear using eye safe wavelengths. The Committee urges the FAA to continue to review and proceed with certification activities for LIDAR and other windshear detection devices where appropriate.

As of this date LIDAR is currently in a research, development, and testing phase. When the system is ready for fielding system standards, specifications, and equipment certification must be completed. At that time AIP programming may be accomplished. Until that time no LIDAR systems are to be programmed.

If a sponsor requests another type of windshear detection equipment, such as a Low-Level Windshear Alert System (LLWAS) the project must be referred to APP-510 for an eligibility determination on a case-by-case basis. This is an F&E program and the Sponsor must meet the requirements contained in Order 7031.2C, Airway Planning Standard Number One Terminal Air Navigation Facilities And Air Traffic Control Services. The data provided by the equipment must be directly provided to pilots. Equipment providing data to air traffic control would not be eligible.

The stainless steel adjustable lighting extensions are currently allowable as Type II L-868 field fabricated extensions. However, a more definitive performance specification will be written and included in a future advisory circular. This will permit the certification of a prefrabicated stainless steel extension within its own equipment type certification. The manufacturer has obtained 3rd party equipment certification and is listed in the Addendum to AC 150/5345-53B.

00-2.7 Informational notice concerning a court injunction — Ken Ball (202) 267-7436

We have been advised that the United States District Court for the Southern District of Texas has issued a court order prohibiting Schenzhen CIMC-Tianda Airport Support, LTD. from directly or indirectly manufacturing, co-producing, marketing, selling, or attempting to sell any apron-drive passenger loading bridge anywhere in the world other than of its own design until May 22, 2006.

This information is provided only to avoid potential contracting difficulties. FAA personnel should not take any action regarding this court injunction other than to provide the information to airport sponsors. For additional information on the prohibited equipment please see attachment D (the court order).

00-2.8 State Apportionment and System Planning Projects — Mark Beisse (202) 267-8826.

The Statement of Managers accompanying the final legislation encourages the FAA to review the possibility of using a Light Detection and Ranging (LIDAR) system capable of measuring and predicting windshear using eye safe wavelengths. The Committee urges the FAA to continue to review and proceed with certification activities for LIDAR and other windshear detection devices where appropriate.

As of this date LIDAR is currently in a research, development, and testing phase. When the system is ready for fielding system standards, specifications, and equipment certification must be completed. At that time AIP programming may be accomplished. Until that time no LIDAR systems are to be programmed.

If a sponsor requests another type of windshear detection equipment, such as a Low-Level Windshear Alert System (LLWAS) the project must be referred to APP-510 for an eligibility determination on a case-by-case basis. This is an F&E program and the Sponsor must meet the requirements contained in Order 7031.2C, Airway Planning Standard Number One Terminal Air Navigation Facilities And Air Traffic Control Services. The data provided by the equipment must be directly provided to pilots. Equipment providing data to air traffic control would not be eligible.

The stainless steel adjustable lightirlg extensions are currently allowable as Type 11 L-868 field fabricated extensions. However, a more definitive performance specification will be written and included in a future advisory circular. This will permit the certification of a prefrabicated stainless steel extension within its own equipment type certification. The manufacturer has obtained 3rd party equipment certification and is listed in the Addendum to AC 15015345-53B.

00-2.7 Informational notice concerninq a court injunction - Ken Ball (202) 267- 7436

We have been advised that the United States District Court for the Southern District of Texas has issued a court order prohibiting Schenzhen CIMC-Tianda Airport Support, LTD. from directly or indirectly manufacturing, co-producing, marketing, selling, or attempting to sell any apron-drive passenger loading bridge anywhere in the world other than of its own design until May 22, 2006.

This information is provided only to avoid potential contracting difficulties. FAA personnel should not take any action regarding this court injunction other than to provide the information to airport sponsors. For additional information on the prohibited equipment please see attachment D (the court order).

00-2.8 State Apportionment and System Planning Proiects -Mark Beisse (202) 267-8826.

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Section 104(c)(6) of AIR-21 amends section 47114(d) to permit the use of State apportionment funds in system plans that involve one or more primary airports. Under the previous restrictions, State apportionments could only be used for nonprimary commercial service, general aviation, and reliever airports.

Use of the entitlement fund on system planning projects for nonprimary airports was first allowed by policy during fiscal year 1994. This provision will simplify the funding of system planning so planning elements and activities related to any primary airport can be funded with State apportionment funds.

For assistance on the funding category used in system plan projects, contact APP-510.

T . a7) Barry L. olar

Section 104(c)(6) of AIR-21 amends section 471 14(d) to permit the use of State apportionment funds in system plans that involve one or more primary airports. Under the previous restrictions, State apportionments could only be used for nonprimary commercial service, general aviation, and reliever airports.

Use of the entitlement fund on system planning projects for nonprimary airports was first allowed by policy during fiscal year 1994. This provision will simplify the funding of system planning so planning elements and activities related to any primary airport can be funded with State apportionment funds.

For assistance on the funding category used in system plan projects, contact APP-510.

+5'@%Barry L. olar

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Attachment A

Dear

I invite the [sponsor name] to express interest in being selected for an Airport Improvement Program project as part of the innovative finance demonstration program (IFDP) under Title 49, United States Code, section 47135.

A new technique has been added to the program allowing use of State apportionment funds and passenger or cargo entitlements for the payment of

• principal and interest of the terminal development costs incurred before April 5; 2000.

The other techniques included in the IFDP during fiscal years 1997 and 1998 continue to be:

• Payment of interest;

• Commercial bond insurance and other credit enhancement associated with airport bonds for eligible airport development; and

• Flexible non-Federal matching requirements.

Should you wish to be considered for this demonstration program, please reply in writing identifying your strategy and the innovation in the financing proposed. Proposals should be short, but you need to conceptually explain the anticipated beneficial effects of the financing mechanism to be implemented. Your proposal should include a short prospectus with the project description, innovative finance techniques, and anticipated benefits. We are most interested in proposals that will accelerate necessary projects and leverage small amounts of Federal funds with State, local, or private funding. Several successful candidates in the past have entered into airport borrowing to accomplish this objective.

If you wish to be considered for selection in Fiscal Year 2001, you should begin developing your proposal as soon as possible. At the current time, we anticipate being asked to submit our recommendations in October or November. In order for us to meet this deadline, you should forward your proposal no later than � . [Regions/ADO should insert an appropriate date] Requests for entitlement funds can be submitted earlier. Projections for time or cost savings in the prospectus should be as detailed as possible. However, please do not prepare a complete project application until we have determined the concept meets statutory criteria.

OFFICIAL FILE COPY

Attachment A

Dear -:

I invite the [sponsor name] to express interest in being selected for an Airport Improvement Program project as part of the innovative finance demonstration program (IFDP) under Title 49, United States Code, section 47135.

A new technique has been added to the program allowing use of State apportionment funds and passenger or cargo entitlements for the payment of principal and interest of the terminal development costs incurred before April 5,' 2000.

The other techniques included in the IFDP during fiscal years 1997 and 1998 continue to be:

Payment of interest;

Corrlmercial bond insurance and other credit enhancement associated with airport bonds for eligible airport development; and

Flexible non-Federal matching requirements.

Should you wish to be considered for this demonstration program, please reply in writing identifying your strategy and the innovation in the financing proposed. Proposals should be short, but you need to conceptually explain the anticipated beneficial effects of the financing mechanism to be implemented. Your proposal should include a short prospectus with the project description, innovative finance techniques, and anticipated benefits. We are most interested in proposals that will accelerate necessary projects and leverage small amounts of Federal funds with State, local, or private funding. Several successful candidates in the past have entered into airport borrowing to accomplish this objective.

If you wish to be considered for selection in Fiscal Year 2001, you should begin developing your proposal as soon as possible. At the current time, we anticipate being asked to submit our recommendations in October or November. In order for us to meet this deadline, you should forward your proposal no later than

. [RegionsIADO should insert an appropriate date] Requests for entitlement funds can be submitted earlier. Projections for time or cost savings in the prospectus should be as detailed as possible. However, please do not prepare a complete project application until we have determined the concept meets statutory criteria.

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You may telephone me directly at �with a comment or question about this program.

Sincerely,

Airports Division [or District Office] Manager

OFFICIAL FILE COPY

You may telephone me directly at -with a comment or question about this w program.

Sincerely,

Airports Division [or District Office] Manager

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OFFICIAL FILE COPY

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Attachment B

Dear

I invite the State of �to compete for selection as a State to be added to the block grant program under the Airport Improvement Program (AIP) as authorized by Title 49, United States Code (USC), section 47128.

We anticipate adding another State for participation beginning in fiscal year 2002. Your application should be sent to me for receipt by October 1 this year. The application forms and the instructions that were used for selecting the last two states are enclosed.

One change we have recently made is that no further exemption from the regulatory prohibition on using Al P funds for program administrative costs is likely to be granted. We intend to select the strongest State aviation agency and avoid the expense of using A1P funds for this purpose if possible.

Criteria to be used by the Federal Aviation Administration for selecting the State from applications are those identified in 49 USC 47128. The selection is to be made by January 15, 2001.

You may telephone me directly at �with a comment or question about this program.

Sincerely,

Airports Division Manager

OFFICIAL FILE COPY

Attachment B

Dear -:

I invite the State of -to compete for selection as a State to be added to the block grant program under the Airport Improvement Program (AIP) as authorized by Title 49, United States Code (USC), section 47128.

We anticipate adding another State for participation beginning in fiscal year 2002. Your application should be sent to me for receipt by October 1 this year. The application forms and the instructions that were used for selecting the last two ' states are enclosed.

One change we have recently made is that no further exerr~ption from the regulatory prohibition on using AIP funds for program administrative costs is likely to be granted. We intend to select the strongest State aviation agency and avoid the expense of using AIP funds for this purpose if possible.

Criteria to be used by the Federal Aviation Administration for selecting 'the State from applications are those identified in 49 USC 47128. The selection is to be made by January 15,2001.

You may telephone me directly at -with a comment or question about this program.

Sincerely,

Airports Division Manager

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ATTACHMENT C

AIRPORTS BENEFITING FROM A PILOT MAINTENANCE PROJECT

Airport Associated City

Airport Role Based Aircraft

Berlin Municipal Berlin, NH General Aviation 26 Boire Field Nashua, NH Reliever 384 Claremont Municipal

Claremont, NH

General Aviation 23

Concord Municipal Concord, NH General Aviation 66 Dillant-Hopkins Keene, NH General Aviation 54 Laconia Municipal Laconia, NH General Aviation 97 Mt. Washington Regional

Whitefield, NH General Aviation 25

Skyhaven Rochester, NH General Aviation 79 Edward F. Knapp State

Barre- Montpelier, VT

General Aviation 61

Franklin County State

Highgate, VT General Aviation 23

Middlebury State Middlebury, VT

General Aviation 55

Morrisville-Stowe State

Morrisville, VT General Aviation 28

Newport State Newport, VT General Aviation 18 Rutland State Rutland, VT Non-Primary

Commercial Service 41

Springfield State/Hartness

Springfield, VT

General Aviation 37

William H. Morse State

Bennington, VT

General Aviation 43

Bibb County Centreville, AL General Aviation 2 Blackwell Field Ozark, AL General Aviation 69 Centre Municipal Centre, AL General Aviation 15 Fairhope Municipal Fairhope, AL General Aviation 35 Foley Municipal Foley, AL

Greenville, AL General Aviation General Aviation

35 10

24

Greenville Municipal Headland Municipal

Headland, AL General Aviation

Posey Field Haleyville, AL General Aviation 14 Robbins Field Oneonta, AL General Aviation 15 Rountree Field Hartselle, AL General Aviation 13 Russellville Municipal

Russellville, AL

General Aviation 21

II

OFFICIAL FILE COPY

ATTACHMENT C

AIRPORTS BENEFITING FROM A PILOT MAINTENANCE PROJECT

Airport Associated Airport Role I I : ICitvI

Berlin Municipal Berlin, NH General Aviation 26 Boire Field Nashua. NH Reliever 384

1 Claremont I Claremont, I General Aviation 23 1 Municipal NH Concord Munici~al Concord. NH General Aviation 66 Dillant-Hopkins Keene, NH General Aviation 54 Laconia Municipal Laconia, NH General Aviation 97 Mt. Washington Whitefield, NH General Aviation 25

B i o n a l S kvhaven Rochester. NH General Aviation 79

I II Edward F. Knapp 1 Barre- 1 General Aviation 6' I State , Franklin County 23 State Middlebury State Middlebury, General Aviation

VT Morrisville-Stowe Morrisville, VT General Aviation 28 State Newport State Newport, VT General Aviation 18 Rutland State Rutland, VT Non-Primary 4 1

Commercial S 3 Springfield Springfield, General Aviation 37 StateIHartness VT Williarr~ H. Morse Bennington, General Aviation I 43 State VT Bibb County Centreville, AL General Aviation Blackwell Field Ozark, AL General Aviation Centre Municipal Centre, AL General Aviation Fairhope Municipal Fairhope, AL General Aviation Foley Municipal Foley, AL General Aviation Greenville Greenville. AL General ~ v ~ t i ~ n * Municipal

b a n d Headland, AL General

Canceled

Posey Field Haleyville, AL General Aviation Robbins Field Oneonta. AL General Aviation Rountree Field Hartselle, AL General Aviation Russellville Russellville, General Aviation p+p

OFFICIAL FILE COPY

Shelby County Alabaster, AL Reliever 88 St. Clair County Pell City, AL Reliever 83 Canton Municipal Canton, SD General Aviation 7 Gettysburg Municipal

Gettysburg, SD

General Aviation 17

Great Planes Tea, SD General Aviation 35 Harding County Buffalo, SD General Aviation 4 Martin Municipal Martin, SD General Aviation 9 Parkston Municipal Parkston, SD

Springfield, SD

General Aviation � General Aviation

8 7 Springfield

Municipal Webster Municipal Webster, SD General Aviation Allen Parish Oakdale, LA General Aviation 2 Beauregard Parish DeRidder, LA General Aviation 23 DeQuincy Industrial Airpark

DeQuincy, LA General Aviation 12

George R. Carr Memorial

Bogalusa, LA General Aviation 31

Hart Many, LA General Aviation 6 Homer Municipal Homer, LA

Jennings, LA General Aviation General Aviation

4 23 Jennings

Rayville Municipal Rayville, LA General Aviation 22 Red River Coushatta, LA General Aviation 7 Slidell Slidell, LA Reliever 87 South Lafourche Galliano, LA General Aviation 2 Vivian Vivian, LA General Aviation 6 Portland-Hillsboro Hillsboro, OR Reliever 405 Portland-Mulino Mulino, OR Reliever 63 Portland-Troutdale Troutdale, OR Reliever 182

12

OFFICIAL FILE COPY

---

--

/ Shelby County I Alabaster, AL Reliever 88 ( St. Clair County Pell City, AL Reliever 83 1 Canton Munici~al Canton. SD General Aviation 7 1 Gettysburg Gettysburg, General Aviation

I

General Aviation 35 Harding County Buffalo, SD General 4 Martin Munici~al Martin. SD General Aviation ' Parkston Municipal Parkston, SD

h g field Springfield,1 1~ - u n i G ~ a l SD -

Webster Munici al Webster, SD General Aviation 6 Allen Parish Oakdale, LA General Aviation 2 Beauregard Parish DeRidder, LA General Aviation DeQuincy DeQuincy, LA General Aviation k

1 lndustrial ~ i r ark George R. Carr Bogalusa, LA General Aviation Memorial --- 'i

1 Hart I Manv. LA General Aviation General Aviation 4 General Aviation General Aviation General Reliever

1 1 ----General Aviation

Vivian Vivian, LA -- General Aviation 6

Portland-Hillsboro Hillsboro. OR Reliever 405 Portland-Mulino Mulino, OR Reliever 63 Portland-Troutdale Troutdale, OR Reliever 182

Canceled

is 09: Oc1A

69 09:00 FAX 281 5914102 11 - Carr- �

409-22 -C770 FMC Energy t; Trans Equip - Latf-CtlIct6en1

10/19/99 11:02 FAX 281 5914102 � FMC Energy & Tran6 EquIP � YJ vt.,

low FITLEilt GHT CHOI 7-27-1g89 10!5 PAGE 3/4 �RightFAx

UNI �I to STATES DISTRICT COURT SOUTHERN MSTRECT OF Texas

FMC CORPORATION,

verSIIS

Hair it'll.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT CIF TEXAS

ENTERED

JUL27 1995 •

Michael N. Mllby, Clerk 6

Civil_ AcTioil H-98-1007

SHErizi-1214 Catvi C-TIAN DA AIRPORT SiiePotrt LTD_, et 11,

Delen.clants.

Order Dissolving Preliminary Lnjuuction. and

Recognizing and Enforcing Arbicral. Award

Under the arilit:ration. trilannars June z4, x999, award on issues ocher than casts

and on FM C Corporation's application,

Thr.: preliminary infuoaction originally entered by this courc 011 August 3,1998, a-s -1.1..koainedL on August. �1998, and on January / 5, I cl9g, is dissolved and.

z_ �This coat. conErnas the Final Award on Issues Other Than Cosa

Until May 3a, 2006 Shenzhen CEMC - Tutrada. Airport Support Ltd_ is eiajcrin.ed from directly or indirectly rri-Intlfzcarrimg, co-producing, Marketing. selling or attempting to all any apron-drive passenger loading 11in 0bridge anywhere in. the world other than of 115 CFC•711 irkatplaciciar. citLiVa, 1.11COrparEttillag„ a-s such., any our or more of Thr- following Jctway clesigu_s -

Rotunda )3ase having - Torque bow rigid fratri, to crib-In:0a connection. Adjustable floor,

b. � C �having Cantilc'vered roof and ceiling sysvca c Coilizg roller support sys-LL-na

- -- - - - - 10/19/99 11:02 FAX 281 5914102 .

-

PAGE- 3 / 4

Canceled

U N E b $rAES alSTqlCT GOURT S(]UTHERFJ OISTRICT OF TEXAS

FlVTEREO

3 U L 27 1999 . Michael N.Mlby, Clerk

Order Dksolving Pr- Lnjuncdou and

Re-&zing and Enforcing A r b i d Award

U a d e thenibitradon~tdnmaIrs on od-;crt h a c n s ~June 14.1999,a-d i au~

and on F M C Co~aration'sapplidon,

1 . 3%: pre*ry injunctionorigidlp entered+ this courr onAWL 3,r998,as -,odificd oo and onJanuary IS, 1999, Isdi s so lvcd :dAugus 37,~ ~ 9 8 ,

L. This a ~ t chFtnd Award an Issue Oder Tbn CO=m-

Undl M a y za. a w 6 Shenzhen CLMC - T i i Airpan Supporr LL& is =Joined ham direrdy or i o & d y m h c c u r i n p . co-produdng, n~arked= dhngoracrrmpthg rn4anykpran-drivep a s s e n ~ l o a d i n g

- - w e in &e world o k &an of Iu opmr indcpndcnca~xobx-idge d--, incorpwating assuch, any one ormDre of h z fanawingJ m y d d g n ~--

a R-da Base h a w - T o w e box r i g i d b e to c m l m connecdon:-Adjwtable floor,-

b. Racg~da&of C& haYing --Candlcvered roof aud &g T -c T- - ~ a i l i z groller support

99 09:00a �JeFFr e

198 09:01 FAX Z81 5811102

td_ Cat r �409-321-077E3

FStC Etierktv & Trans Equip 4 Law-Chic(get-) teJLI U .Ir ti

111111° F ta.,IiR I CRT ( HO ) � 7 Z7 1999 10:35 � PAGE kfti �Rig'htFissx

Laving - Clevis tuniael pin. rumnel to rotu:atitz cottnectirm tit floor Level: Hockey puck shaped tunnel Literati stal:alizat pacts on lapiscr rigid frama; Removable lifting Its F_atetior screw and tab idles tarra adjttsctaent Curtain sitpport alignment roller.

Tuner Struttune having - Opert runnel floor in overlapping r for Witeway cable carrier below larger tunnel section; Compact tunnel roller systktra;

-c. �Cab and_ Canopy coad,,Stairs having - Clarriain witl.dcrws; Pie-atecl canopy curtain (with Seven Inttumecilate supports): Nylon canopy curtain alignmtlat sctaps; Shi.' hinge verrir--4 canopy support mechanism mounted on support. plate; Kickback spring Ccandlay protection Est aircrcfi lcrarling); Canorgeir ftrzguard_; Service .5rat,-, with double bottom stringer: Service Stairs wi fh lateral bracing:

f_ �Vt6:rticzl, Drive Svstena having - �• Ind_epencleln lift ceilurrnic mounting system; Ball screw drive operating mechanist:la; Pop out place protection against rack cO•naltion; ZiajtztaibLe

plates; Four bolt atiachancni � bearing pads cover plates-,

Eloal--Tm t tat �Stem having Indep entlent electric drive whcd rotation sysra,4.11., Adjustable motor na.oux115; Chain guard: Lift c_olunin cross cube in outttin,g plates on cross rube.: Mer-1,-ao10-RI stay totel-s-ter protrr-tiori- Square Stkrivel tithe: Swivel tube saddle; or Trunnion pins through saddle and cocl.c. t3.113e_

Slipx.exi July 23, 1999, at 1-tolt_st.ola,

Lynn N. au.gli States Di_scrict edge

- 2 -

39 09:OOa J e F F r - 3 Lr- caF,-+09-321-0778 - . / h s 0S:al F A X 281 5Blt102 F%c E h e r o & Trans E ~ ~ L p ~ L 6 ~ - C h L c ( g e n l- - --- 43 UUJ, L

. - - - - - - ---------- -.

R i g k x t F aw F U L ( ~ 0 )~ ~ ~ -~ - ~ ~ PAGE- -7-27-1588 10:35 4 f 4

Canceled

KL Rgtundq a d T-eK ccumed~b a h g -Clhris t u d p k -el ro nxunda comedian Q C LOO^ 1ehvelrHockey puck &.aped mmd laced ~~abilizm- pa& on appcr rigid frame; Remav-abk W g 1- ExMor scrm and mb idlahtrd djclstmeut. Curtdn support alignmeat mUs;

-d T v m d S m a e having-

O p k w d soar ~IIovdapping region; Ws-y able car- below larger cunnd secGon; Compacr.runnd m h

-

.c. _Cab Cgnopy anGrair9haping -C~rcai.n--aws; P k e d canopy curtain (Grh S- t n r m c d f a t l l ~ l l p p o r ~ . ~ ) ; sclaps;- Side btage vcrdralNyFan canopy curtah al&ma.&r canopy suppart rnechmkm m o ~ ~ c e d -on suppurr place. Kirkback spring <canopyprwte- &crrtEr I&; Canopy firceguard; ScMce. st ah^ with doublkbouool snlngat: Smhx $t&zi *pi& b m g

JL V-dd Drlve Svstem hawing -I a d E p ~ d w tlift calartms munling syscbn; B d ~ttmdrive operaring me-- Pop outpkw pmcccdon agahsc nick cbnditfoh;~ d - b k m~mtingplares; Fourhalt auachmroc +-tic bear&g .pads c o w p lae .

&- o+ X I ~- t-dve 5- havmg--gdepeadenr exec& Mvr wheel r o e ~ i o nsyrrsrtl; Adjus&Ie =LOT

moudt--,Cbain gtrard:LlCc -1- tacr& mbcmaumingplates on= o n Me- s t q b v e - e protmzaorl; Square be: Swivel

mbe &dlq or I W o n phs througft Bddlr -be.

I-ynn N.Hugh UnikdStaccs -

CIMC-TianDa's use of Proprietary U.S. Technology

Summary: In 1993, FMC Corporation-Jetway Systems, an Ogden, Utah, subsidiary of FMC Corporation, entered into an agreement with Shenzhen CIMC-TianDa Airport Support Ltd. ("TianDa") to share Jetway technology for the purposes of manufacturing and sale in China. TianDa is a subsidiary of China International Marine Container Ltd., a Chinese state owned or controlled corporation. IQ 1996, the relationship was severed after FMC found evidence of breeches of the contract; i.e., that TianDa was producing and selling Passenger Boarding Bridges (PBB's) using FMC technology in clear violation of its contractual obligations. Based upon an action brought by FMC, both a U.S. District Court and an international arbitrator under U.N. convention, have enjoined TianDa from such action.

Proposal: In order to reinforce the order of the U.S. Court system and the decision of an international arbitration panel, Congress should consider the following language be added to H.R. 2400, "The Airport Improvement Act for the 21st Century:"

None of the Funds provided under this Act may be used to purchase Passenger Boarding Bridges directly or indirectly from any company which has failed to comply with a recognized international arbitration award or U.S. court order.

Chronology

February 12,1993 FMC- Jetway (a U.S. based manufacturer in Ogden Utah) entered into a ten year agreement for the co-production of passenger bridges with TianDa (a major Chinese construction firm). The agreement allowed Jetway to gain market access to China and TianDa to gain access to Jetway's proprietary design, engineering, marketing and name recognition. Jetway forwarded some 600 detailed plans to TianDa and sent manufacturing experts and engineers to China to teach Jetway techniques to TianDa.

The agreement restricted TianDa's use of Jetway designs for purposes other than the agreement (i.e. bridge construction and sale in China), and had a ten year non-compete provision for post-termination activities.

July 8, 1996 The Co-Production agreement was terminated after discovering that TianDa violated it. Since 1995, TianDa had been actively engaged in selling Passenger Boarding Bridges (PBB's) in China incorporating various Jetway design elements.

In mid-1997 TianDa, also in clear violation of the agreement, began bidding for U.S. projects using Jetway's electromechanical bridge design. Through these efforts TianDa was awarded contracts for PBB's by Southwest Airlines for St. Louis and Providence, as well as contracts from the Houston and Greensboro airport authorities. In addition, in San Francisco, a contract award to TianDa was anticipated but did not materialize once it was determined that TianDa had overstated its qualifications.

Canceled

CIMC-TianDa's use of Proprietarv U.S. Technoloqyw Summary: I n 1993, FMC Corporation-Jetway Systems, an Ogden, Utah, subsidiary of FMC Corporation, entered into an agreement with Shenzhen CIMC-TianDa Airport Support Ltd. ("TianDa1') to share Jetway technology for the purposes of manufacturing and sale in China. TianDa is a subsidiary of China International Marine Container Ltd., a Chinese state owned or co~trolled corporation. IF 1996, the relationship was severed after FMC found evidence of breeches of the contract; i.e., that TianDa was producing and selling Passenger Boardirrg Bridges (PBB's) using FMC technology in clear violation of its contractual obligations. Based upon an action brought by FMC, both a U.S. District Court and an international arbitrator under U.N. convention, have enjoined TianDa from such action.

Proposal: I n order to reinforce the order of the U.S. Court system and the decision of an international arbitration panel, Congress should consider the following language be added to H.R. 2400, "The Airport Improvement Act for the 21St Century:"

None of the Funds provided under this Act may be used to purchase Passenger Boarding Bridges directly or indirectly from any company which has failed to comply with a recognized international arbitration award or U.S. court order.

Chronoloqy

w February 12,1993 FMC- Jetway (a U.S. based manufacturer in Ogden Utah) entered into a ten year agreement for the co-production of passenger bridges with TianDa (a major Chinese construction firm). The agreement allowed Jetway to gain market access to China and TianDa to gain access to Jetway's proprietary design, engineering, marketing and name recognition. Jetway forwarded some 600 detailed plans to TianDa and sent manufacturing experts and engineers to China to teach Jetway techniques to TianDa.

The aqreement restricted TianDa's use of Jetwav desiqns for purposes other than the aqreement (i.e. bridqe construction and sale in China), and had a ten year non-compete provision for post-termination activities.

July 8,1996 The Co-Production agreement was terminated after discovering that TianDa violated it. Since 1995, TianDa had been actively engaged in selling Passenger Boarding Bridges (PBB's) in China incorporating various Jetway design elements.

I n mid-1997 TianDa, also in clear violation of the aqreement, beqan biddinq for U.S. proieds usinq Jetwav's electromechanical bridqe desiqn. Throuqh these efforts TianDa was awarded contracts for PBB's by Southwest Airlines for St. Louis and Providence, as well as contracts from the Houston and Greensboro airport authorities. In addition, in San Francisco, a contract award to TianDa was anticipated but did not materialize once it was determined that TianDa had overstated its qualifications.

C

April 7, 1998 FMC filed an action in U.S. District Court in Texas seeking injunctive and other relief for contractual breaches and for the enforcement of various statutory rights. During the course of discovery in this litigation FMC learned of rapid ramping up of market activities of TianDa in the U.S. under its U.S. entity, CIMC-TianDa.

CIMC-TianDa has offered PBB's to the U.S. and international markets at prices substantially undercutting FMC's prices, and which appear to be below fully allocated costs when all transaction costs are included.

August 4, 1998 The United States District Court for the Southern District of Texas issued a worldwide injunction against any direct or indirect TianDa activities based on the FMC design or designs. According to the Court's order:

"...an injunction is extraordinary relief, but the facts of this case, which are largely undisputed, compellingly show that TianDa has misled Jetwa into a transfer of its business and design information, committing not industrial espionage, but grand larceny."

June 14, 1999 Based on a contractual arbitration provision, FMC initiated an arbitration in Singapore on May 8,1998 under authority of the United Nations Commission on International Trade Law (UNCITRAL). On June 14, 1999 a final award was issued by an arbitration panel which had heard arguments on this matter. China is a signatory to the New York Convention requiring signatories to recognize and enforce arbitration awards

The award grants FMC a 10 year injunction against CIMC TianDa, precluding TianDa from using any of 33 designs for various components of FMC's Jetway apron drive, electromechanicalpassenger boarding bridges anywhere in the world.

In addition, the arbitration panel awarded FMC $1.314 million in attorneys fees and costs as a result of the action s of TianDa in violation of their contractual obligations.

July 27, 1999 Because of the action of the International Arbitration Panel, the U.S. District Court in Houston subsequently issued a permanent injunction enjoining TianDa from:

"...directly or indirectly manufacturing, coproducing, marketing, selling or attempting to sell any apron-drive passenger loading aerobridge anywhere in the world other than its own independent design..."

Contacts: Jerry Prout, FMC Corporation �

202-956-5209 David Whitestone, Holland and Knight LLP

�202-457-7080

C

April 7, 1998 e FMC filed an action in U.S. District Court in Texas seeking injunctive and other relief for contractual breaches and for the enforcement of various statutory rights. During the course of discovery in this litigation FMC learned of rapid ramping up of market activities of TianDa in the U.S. under its U.S. entity, CIMC-TianDa.

CIMC-TianDa has offered PBB's to the U.S. and international markets at prices substantiallv undercuttinq FMC's prices, and which appear to be below fullv allocated costs when all transaction costs are included.

Auqust 4,1998 The United States District Court for the Southern District of Texas issued a worldwide injunction against any direct or indirect TianDa activities based on the FMC design or designs. According to the Court's order:

"...an injunction is extraordinary relief, but the facts of this case, which are larqely undisputed, compellinqlv show that TianDa has misled Jetwav into a transfer of its business and desiqn information, committinq not industrial espionage, but qrand larceny."

June 14,1999 Based on a contractual arbitration provision, FMC initiated an arbitration in Singapore on May 8,1998 under authority of the United Nations Commission on International Trade Law (UNClTRAL). On June 14, 1999 a final award was issued by an arbitration panel which had heard arguments on this matter. China is a signatory to the New York Convention requiring signatories to recognize and enforce arbitration awards

The award qrants FMC a 10 vear injunction aqainst CIMC TianDa, ~recludinq TianDa from usinq any of 33 desiqns for various components of FMC's Jetwav apron drive, electromechanical passenqer boardinq bridqes anvwhere in the world.

I n addition, the arbitration panel awarded FMC $1.314 million in attorneys fees and costs as a result of the action s of TianDa in violation of their contractual obligations.

July 27, 1999 Because of the action of the International Arbitration Panel, the U.S. District Court in Houston subsequently issued a permanent injunction enjoining TianDa from:

"...directly or indirectlv manufacturinq, co-producinq, marketinq, sellinq or attemptinq to sell any apron-drive passenqer loadinq aerobridqe anywhere in the world other than its own independent desiqn ..."

Contacts: Jerry Prout, FMC Corporation 202-956-5209 David Whitestone, Holland and Knight LLP 202-457-7080

Canceled