Title 17 . Transportation and Public Facilities

Chapter 42 . Miscellaneous Provisions

Section 420. Terms for a lease, permit, or concession for operations that require certified activity reports

17 AAC 42.420. Terms for a lease, permit, or concession for operations that require certified activity reports

(a) In addition to the other applicable requirements of this chapter, the airport manager shall include, as applicable, in a lease, permit, or concession a means for collection of data necessary for receipt of certain federal money, for participation in a federal aviation program, for determination of fees payable under the lease or the fee schedule established under 17 AAC 42.125, or for airport planning and operational management. The lease shall require the lessee to submit periodically a certified activity report stating the lessee's gross sales, fuel deliveries, passenger and cargo volumes, number and CMGTW of landings, or other specified information regarding the lessee's operations and activity at the airport.

(b) In a lease, permit, or concession that requires the lessee to submit certified activity reports, the airport manager shall include provisions that

(1) require the lessee to submit periodically to the lessor on an airport form or in another form acceptable to the lessor certified activity reports that contain all information required under the lease;

(2) require the lessee to accurately and contemporaneously document in the lessee's records all information required under the lease;

(3) require the lessee to establish and maintain books and records in accordance with generally accepted accounting principles;

(4) reserve to the lessor the right to audit, during regular business hours, the lessee's books, records, including electronic data and text files, and supporting data and documents regarding the lessee's operations on an airport;

(5) require the lessee to either transport the necessary books and records to a location on the airport for inspection and copying or allow the audit to be performed at the location where the lessee maintains the books and records; the manager may also include provisions in the lease that provide that the lessor may, upon reasonable notice, require the lessee to give an auditor designated by the manager access to relevant books and records where and as the lessee maintains the documents;

(6) require that a lessee who elects to, but not a lessee who is required to, have an audit performed at the location where the lessee maintains the records must pay the lessor, within 30 days of the billing date, the audit costs the lessor incurs; in this paragraph, "audit costs" include round trip air and ground transportation from the auditor's duty station to the location where the lessee maintains the books and records and per diem at the State of Alaska rate for each day of travel and on site audit work; "audit costs" do not include salary and benefit costs of an auditor;

(7) require the lessee to pay, within 30 days of the billing date, any underpayment disclosed by an audit plus

(A) interest at the rate provided in AS 45.45.010 from the date payment was required to be made on the relevant activity had it been accurately and timely reported;

(B) any actual costs and attorney fees that the lessor incurs to collect the underpayment; and

(C) if the underpayment is more than $5,000 in any fiscal year, all audit costs that the lessor incurs, including salary and benefit costs of the auditor;

(8) require the lessor to credit a lessee's account if an audit discloses that the lessee has overpaid for the audit period;

(9) require the lessee annually to furnish the lessor with a special purpose financial statement, certified as true and correct and signed by an independent certified accountant or the lessee's chief financial officer; the financial statement must

(A) reflect the lessee's gross sales, fuel deliveries, passenger volumes, or other information required under the lease, as applicable, during the year and for which certified activity reports are required under the lease; and

(B) certify whether the lessee is maintaining accounting records in accordance with the lease;

(10) require the lessee to preserve all books and records for the period of time described in the lease; the period of time to preserve all books and records in a lease shall be a minimum of three years; notwithstanding the minimum period of time set out in this paragraph, if the lessor objects to any report or statement submitted by the lessee, the lessee shall preserve all books and records until the objection is resolved or for the period of time described in the lease, whichever is longer; and

(11) require the lessee to furnish other financial or statistical reports as the lessor may reasonably require regarding any business of the lessee for which the lease requires certified activity reports.

(c) In this section, unless the context otherwise requires,

(1) "lease" includes "permit" and "concession";

(2) "lessee" includes "permittee" and "concessionaire";

(3) "lessor" means the department as the grantor in permits and concessions, as well as leases.

History: Eff. 1/14/2001, Register 157

Authority: AS 02.15.020

AS 02.15.060

AS 02.15.090

AS 02.15.220

Editor's note: As of Register 159 (October 2001), the regulations attorney made a technical revision under AS 44.62.125 (b)(6), to 17 AAC 42.420(b) (10).