Title 17 . Transportation and Public Facilities

Chapter 45 . Miscellaneous Provisions

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

17 AAC 45.420. 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, and when not prohibited by applicable law, the department will 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 under this chapter, or for airport planning and operational management. The lease will require the lessee to submit periodically a certified activity report that contains all information required in the lease.

(b) In a lease, permit, or concession that requires the lessee to submit a certified activity report the department will 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 activities that are subject to certified activity reporting under the lease, permit, or concession;

(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 department 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 lessor 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 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; in this paragraph, "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 for 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 and keep accessible all books and records, however recorded or stored, for the period of time described in the lease; the period of time to preserve all books and records in a lease will be a minimum of three years after the last entry of information into the respective book or record; 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" and each sublessee of the lessee, permittee, or concessionaire with respect to that sublessee's operations;

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

History: Eff. 3/28/2002, Register 161

Authority: AS 02.15.020

AS 02.15.060

AS 02.15.090

AS 02.15.220

Editor's note: As of Register 165 (April 2003), the regulations attorney made a technical revision under AS 44.62.125 (b)(6), to 17 AAC 45.420(b) (7)(B).