Must a Tennessee flight school be authorized by THEC, and is that state oversight preempted by federal FAA and veterans benefits law?

Subject

Opinion No. 12-35, Authority of Tennessee Higher Education Commission (THEC) to Regulate Flight Training Schools, March 12, 2012

Plain-English summary

In 2012, Senator Bill Ketron asked the AG how Tennessee's postsecondary education law applied to flight training schools. Specifically: did a school that trained mostly avocational pilots, with FAA-approved courses, need to be authorized by the Tennessee Higher Education Commission (THEC) under the state's Postsecondary Education Authorization Act of 1974? And if so, was THEC's regulation preempted by federal laws like the Higher Education Act, FAA statutes and regs, or the Post-9/11 GI Bill amendments?

The AG answered both questions. Yes, THEC authorization was required. The Act's definition of "postsecondary educational institution" was broad enough to cover flight schools (an "other organization" offering "instruction or educational services" for an "educational objective," which here was learning to fly). And no, federal law did not categorically wipe out THEC's role. The preemption depended on what THEC was trying to regulate.

The line the AG drew: federal aviation law, given its pervasive reach, likely preempts state regulation of flight course content and instruction. But the Postsecondary Education Authorization Act is not really aimed at safety or curriculum. It is aimed at consumer protection: making sure that schools aren't fraudulent, that they market accurately, that they are fiscally solvent. Those protections, the AG concluded, are not preempted. They also do not conflict with FAA regulations, Department of Education student aid rules, or the 2010 Post-9/11 GI Bill amendments that automatically approved FAA-certified flight courses for veterans' benefits.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical background and statutory framework

The Postsecondary Education Authorization Act of 1974

The Act, codified at Tenn. Code Ann. §§ 49-7-2001 to -2020, declared its purpose at § 49-7-2002:

[T]o provide for the protection, education and welfare of the citizens of this state, its postsecondary educational institutions and its students, by: (1) Establishing minimum standards concerning quality of education, ethical and business practices, health and safety and fiscal responsibility, to protect against substandard, transient, unethical, deceptive or fraudulent institutions and practices; (2) Authorizing the granting of degrees, diplomas, certificates or other educational credentials . . . ; (3) Regulating the use of terminology in naming or otherwise designating educational institutions; (4) Prohibiting misleading literature, advertising, solicitation or representation . . . ; and (5) Providing certain rights and remedies to the consuming public and the commission necessary to effectuate the purposes of this part.

The Act gave THEC broad authority under § 49-7-2005 to set criteria, investigate, license, audit, promulgate rules with the force of law, subpoena records, and impose consequences. Section 49-7-2004 listed exemptions, but flight training schools did not fall within them.

The Act's definition of "postsecondary educational institution" at § 49-7-2003(11) was sweeping:

"Postsecondary educational institution" includes, but is not limited to, an academic, vocational, technical, online/distance learning, business, professional or other school, college or university, or other organization or person, offering educational credentials, or offering instruction or educational services, primarily to persons who have completed or terminated their secondary education or who are beyond the age of compulsory high school attendance, for attainment of educational, professional or vocational objectives.

A flight school fit cleanly: it was an "other organization" offering "instruction or educational services" for an "educational objective" (learning to fly).

Post-9/11 GI Bill and FAA-approved courses

Public Law 111-377, the Post-9/11 Veterans Educational Assistance Improvements Act of 2010, amended 38 U.S.C. § 3672 to "deem[] approved" for veterans' benefit purposes "[a] flight training course approved by the Federal Aviation Administration that is offered by a certified pilot school that possesses a valid Federal Aviation Administration pilot school certificate." Public Law 111-377, Sec. 203(a)(2)(A)(ii). So once a flight course was FAA-approved, federal law treated it as automatically approved for GI Bill payment; the state approving agency (THEC in Tennessee) did not have to separately bless the course content for benefit purposes.

But automatic approval of the course for benefit purposes did not mean automatic approval of the school under Tennessee's licensing regime. The AG saw these as separate inquiries.

Preemption framework

The AG laid out the Supremacy Clause and Tennessee's preemption framework from Wadlington v. Miles, Inc., 922 S.W.2d 520, 522 (Tenn. Ct. App. 1996): preemption can arise from (1) express preemption, (2) field preemption where Congress occupies the field, (3) impossibility preemption, or (4) obstacle preemption where state law impedes federal objectives.

Aviation safety has long been treated as a field where federal law occupies the regulatory space. Air Transport Ass'n of America v. Cuomo, 520 F.3d 218, 225 (2d Cir. 2008); Greene v. B.F. Goodrich Avionics, 409 F.3d 784, 794-795 (6th Cir. 2005); Abdullah v. American Airlines, Inc., 181 F.3d 363, 369-371 (3d Cir. 1999); Air Evac EMS v. Robinson, 486 F. Supp. 2d 713, 724 (M.D. Tenn. 2007). FAA regulations comprehensively cover aviation safety, pilot certification, pilot schools, and training centers.

But preemption is not absolute. Dalton v. Little Rock Family Planning Services, 516 U.S. 474, 475-477 (1996) (per curiam), held that state law is preempted only "to the extent it actually conflicts with federal law" and "no further." See also Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 502 (1985).

Where preemption ends and state authority begins

The AG distinguished between regulating aviation safety, instruction, and course content (preempted territory) and regulating business practices, marketing, and fiscal soundness of a flight school (not preempted).

34 C.F.R. § 668.8 actually supports state regulation. The federal student aid regulations require an "eligible program" of flight training to hold a valid FAA certification, but the regulations explicitly defer to state agencies (and accreditors) when evaluating institutional policies and credit hour determinations. 34 C.F.R. § 668.8(l)(2). Federal regulations expressly contemplated state regulation of postsecondary educational institutions.

20 U.S.C. § 1098 established an Independent Advisory Committee on Student Financial Assistance, addressing financial practices of banks and educational institutions in federal student loan programs, but contained nothing that would conflict with the Postsecondary Education Authorization Act.

The FAA statutes and regulations covered registration, certification, insurance, facilities, personnel, research, and safety regulation. None addressed the marketing, business practices, or fiscal soundness of flight schools as institutions.

The result

A flight school operating in Tennessee had to be authorized by THEC. THEC's regulatory authority was preempted as to course content and instruction (federal aviation law occupied that field). THEC could still regulate the school's marketing, business practices, and fiscal soundness, because no federal law occupied or conflicted with that space.

Common questions

My local flight school says it doesn't need state authorization because the FAA approves it. Was that correct in 2012?

According to this AG opinion, no. FAA certification did not exempt a Tennessee flight school from the Postsecondary Education Authorization Act. The school still had to be authorized by THEC. FAA certification covered the school's safety, training procedures, and instructor qualifications. THEC covered its business operations, advertising, and financial soundness.

Could THEC fine a flight school for misleading ads about job placement?

Under the Act, yes. Section 49-7-2002 expressly identifies "prohibiting misleading literature, advertising, solicitation or representation" as a purpose, and § 49-7-2005 gives THEC investigative and rulemaking authority. The AG's analysis explicitly preserves this kind of state authority as not preempted.

Could THEC tell a flight school how many hours of instruction count for a credit hour, or how to structure its training syllabus?

The opinion suggests this is the edge case. Pure course content rules would likely fall into the preempted zone. But the federal student aid rules (34 C.F.R. § 668.8(l)(2)) cross-reference state agency credit-hour standards, so there is overlap. The AG didn't draw a precise line; the answer depends on whether the rule looks more like a curriculum dictate (preempted) or an institutional standard (not preempted).

What about flight schools just teaching avocational pilots, not professional ones?

The Act's definition includes "vocational objectives," and learning to fly recreationally still qualifies as an "educational objective." THEC's authority did not turn on whether the students were career-track or hobbyists.

If I'm a veteran using my Post-9/11 GI Bill, does the school still need state authorization for me to use my benefits?

The 2010 amendments deemed FAA-approved flight courses automatically approved for veterans' assistance purposes. So the benefit eligibility piece was federal. But the school as an institution still had to be authorized to operate in Tennessee under THEC's regime, separate from benefit eligibility.

Did this opinion say flight schools are "schools" rather than businesses?

It said they are both. Under the Act, they fit the broad definition of "postsecondary educational institution." That meant THEC's regulatory authority over postsecondary institutions, with all its consumer-protection focus, applied. That did not displace the FAA's safety jurisdiction; the two coexisted with different focus areas.

Citations

• Tenn. Code Ann. §§ 49-7-2001 to -2020 (Postsecondary Education Authorization Act of 1974)
• Tenn. Code Ann. § 49-7-2002 (purposes)
• Tenn. Code Ann. § 49-7-2003(11) (definition of "postsecondary educational institution")
• Tenn. Code Ann. § 49-7-2004 (exemptions)
• Tenn. Code Ann. § 49-7-2005 (THEC powers)
• 20 U.S.C. § 1098 (Independent Advisory Committee on Student Financial Assistance)
• 34 C.F.R. § 668.8 (eligible programs)
• 38 U.S.C. §§ 3671, 3672 (veterans' education benefits)
• Public Law 111-377 (Post-9/11 Veterans Educational Assistance Improvements Act of 2010)
• Wadlington v. Miles, Inc., 922 S.W.2d 520 (Tenn. Ct. App. 1996)
• Air Transport Ass'n of America v. Cuomo, 520 F.3d 218 (2d Cir. 2008)
• Greene v. B.F. Goodrich Avionics, 409 F.3d 784 (6th Cir. 2005)
• Abdullah v. American Airlines, Inc., 181 F.3d 363 (3d Cir. 1999)
• Air Evac EMS v. Robinson, 486 F. Supp. 2d 713 (M.D. Tenn. 2007)
• Dalton v. Little Rock Family Planning Services, 516 U.S. 474 (1996)
• Brockett v. Spokane Arcades, Inc., 472 U.S. 491 (1985)
• Auburn Univ. v. S. Ass'n of Colleges & Schs., Inc., 489 F. Supp. 2d 1362 (N.D. Ga. 2002)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-035.pdf

Original opinion text

March 12, 2012
Opinion No. 12-35
Authority of Tennessee Higher Education Commission (THEC) to Regulate Flight Training Schools

QUESTIONS

1. Must a flight training school that provides training primarily to avocational students and whose programs are regulated by the Federal Aviation Administration be authorized to operate as a postsecondary education institution under the Postsecondary Education Authorization Act of 1974?

2. Would regulation of a flight training school under the Act by the Tennessee Higher Education Commission (THEC) be preempted by any of the following:
   a. 20 U.S.C. § 1098 of the Higher Education Act;
   b. 34 C.F.R. 668.8 - Eligible Programs;
   c. Federal Aviation Administration Statutes and Regulations; or
   d. Title 38 of the United States Code, specifically Section 203 of Public Law 111-377 of the Post-9/11 Veterans Education Assistance Improvement Act of 2010?

OPINIONS

1. If such a flight training school operates in Tennessee it must be authorized to operate by THEC under the Act.

2. Regulation of the content and instruction of the flight training courses would likely be preempted by federal law and regulations. However, THEC's regulation of other aspects of the flight school pursuant to the Act, such as the school's marketing, business practices, and fiscal soundness, would not be preempted.

ANALYSIS

1. The purpose of the Tennessee "Postsecondary Education Authorization Act of 1974" (the Act), codified at Tenn. Code Ann. §§ 49-7-2001 to -2020, is to provide for the protection, education and welfare of the citizens of this state, its postsecondary educational institutions and its students, by:

(1) Establishing minimum standards concerning quality of education, ethical and business practices, health and safety and fiscal responsibility, to protect against substandard, transient, unethical, deceptive or fraudulent institutions and practices;

(2) Authorizing the granting of degrees, diplomas, certificates or other educational credentials by postsecondary educational institutions and prohibiting the granting of false or misleading educational credentials;

(3) Regulating the use of terminology in naming or otherwise designating educational institutions;

(4) Prohibiting misleading literature, advertising, solicitation or representation by educational institutions or their agents; and

(5) Providing certain rights and remedies to the consuming public and the commission necessary to effectuate the purposes of this part.

Tenn. Code Ann. § 49-7-2002. To accomplish this goal, the Tennessee Higher Education Commission (THEC) is empowered to:

(1) Establish minimum criteria . . . including quality of education, ethical and business practices, health and safety and fiscal responsibility, that applicants for authorization to operate, or for an agent's permit, shall meet before the authorization or permit may be issued, and to continue the authorization or permit in effect. . . .

(2) Receive, investigate as it may deem necessary and act upon applications for authorization to operate postsecondary educational institutions and applications for agent's permits;

(3) Maintain a list of postsecondary educational institutions and agents authorized to operate in this state under this part. . . .

(4) Negotiate and enter into interstate reciprocity agreements with similar agencies in other states. . . .

(5) Receive and cause to be maintained as a permanent file, copies of academic records in conformity with § 49-7-2016;

(6) Promulgate rules, regulations, performance standards and procedures necessary or appropriate for the conduct of its work and the implementation of this part, which rules and regulations shall have the force of law, and to hold hearings as it deems advisable or as required by law in developing the rules, regulations and procedures or in aid of any investigation or inquiry;

(7) Investigate as it deems necessary, on its own initiative or in response to any complaint lodged with it, any person, group or entity subject to, or reasonably believed by the commission to be subject to, the jurisdiction of this part. . . .

(8) Exercise other powers and duties implied but not enumerated in this subsection (a), but in conformity with this part that, in the judgment of the commission, are determined necessary in order to carry out this part; and

(9) May require as part of the application for initial authorization of a postsecondary educational institution a full set of fingerprints of all owners and directors of the institution to enable a criminal background investigation to be conducted. . . .

Tenn. Code Ann. § 49-7-2005(a). Broad regulatory and enforcement powers are thus conferred upon THEC by the Act, which is directed at the regulation of postsecondary educational institutions within the State of Tennessee. Tenn. Code Ann. § 49-7-2003(11). As a review of the above-quoted statutes indicates, many of the regulatory functions applicable to postsecondary educational institutions are designed to protect consumers from fraudulent or unethical business practices and misleading representations and to insure that schools are fiscally sound.

A private or proprietary flight training school would fall within the Act's definition of "postsecondary educational institution" and would not fall within one of the exemptions set forth in the Act. See Tenn. Code Ann, § 49-7-2004(a). A "postsecondary educational institution" is broadly defined under the Act as follows:

"Postsecondary educational institution" includes, but is not limited to, an academic, vocational, technical, online/distance learning, business, professional or other school, college or university, or other organization or person, offering educational credentials, or offering instruction or educational services, primarily to persons who have completed or terminated their secondary education or who are beyond the age of compulsory high school attendance, for attainment of educational, professional or vocational objectives.

Tenn. Code Ann. § 49-7-2003(11).

Accordingly, a flight school would qualify as a "school" or "other organization" offering "instruction or educational services" for "attainment of educational objectives," namely the objective of learning to fly an airplane.

2. Public Law 111-377 (the Bill), also known as the "Post-9/11 Veteran's Educational Assistance Improvements Act of 2010," was enacted by Congress on January 4, 2011. The Bill amended the "Post-9/11 Veteran's Educational Assistance Act of 2008," commonly called the "Post-9/11 GI Bill," as well as a number of other veterans' educational assistance programs. The Bill, as it relates to this opinion request, amended the definition of courses of education eligible to be covered and paid for by the Veteran's Educational Assistance Act. The Post-9/11 GI Bill currently defines approved courses in pertinent part as follows:

An eligible person or veteran shall receive the benefits of this chapter and chapters 34 and 35 of this title while enrolled in a course of education offered by an educational institution only if (1) such course is approved as provided in this chapter and chapters 34 and 35 of this title by the State approving agency for the State where such educational institution is located or by the Secretary, or (2) such course is approved (A) for the enrollment of the particular individual under the provisions of section 3536 of this title or (B) for special restorative training under subchapter V of chapter 35 of this title. Approval of courses by State approving agencies shall be in accordance with the provisions of this chapter and chapters 34 and 35 of this title and such other regulations and policies as the State approving agency may adopt. Each State approving agency shall furnish the Secretary with a current list of educational institutions specifying courses which it has approved, and, in addition to such list, it shall furnish such other information to the Secretary as it and the Secretary may determine to be necessary to carry out the purposes of this chapter and chapters 34 and 35 of this title. Each State approving agency shall notify the Secretary of the disapproval of any course previously approved and shall set forth the reasons for such disapproval.

38 U.S.C. § 3672(a).

The Bill added language that would deem approved a flight training course approved by the Federal Aviation Administration, stating as follows:

Subject to sections 3675(b)(1) and (b)(2), 3680A, 3684, and 3696 of this title, the following programs are deemed to be approved for purposes of this chapter. . . . A flight training course approved by the Federal Aviation Administration that is offered by a certified pilot school that possesses a valid Federal Aviation Administration pilot school certificate.

Public Law 111-377, Sec. 203(a)(2)(A)(ii) (codified at 38 U.S.C. § 3672(b)(2)(A)(ii)). Generally most remaining courses covered by veteran's benefits must be approved by the "State approving agency," which in Tennessee is THEC. See 11 U.S.C. §§ 3671 & 3672. See generally Auburn University v. Southern Ass'n of Colleges and Schools, Inc., 489 F. Supp. 2d 1362, 1367-68 (N.D. Ga. 2002) (discussing history of federal government's involvement in the accreditation process).

As noted above, however, the role of THEC to regulate and license postsecondary schools such as flight training schools extends well beyond approval of the content and instruction of the flight training course. Automatic approval of FAA-approved flight training courses under the terms of the Bill therefore does not obviate the functions and authority of THEC under State law to regulate and license proprietary postsecondary schools such as flight training schools with regard to matters such as their business practices or fiscal soundness. Consequently, the issues of whether a flight school will be authorized to operate under State law, and whether federal law automatically approves a flight training course for veterans' assistance, are separate and distinct.

Under current federal law, FAA-approved flight training course are automatically approved for federal veterans' assistance. In light of the Bill, a court would likely conclude that regulation of the actual course content and instruction of the flight training offered at the school are preempted by federal law. Regardless of the automatic approval of flight training course for federal veterans' assistance, however, proprietary flight schools within the State of Tennessee must still meet all other regulatory requirements imposed upon such schools by the Act. This is because there appear to be no federal laws or regulations specifically aimed at regulating matters such as the business practices and fiscal soundness of flight schools.

Congressional power to preempt state law arises from the Supremacy Clause, which provides that "the Laws of the United States shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. art. 6, cl. 2. Congressional intent determines whether a federal statute preempts state law. Wadlington v. Miles, Inc. 922 S.W.2d 520, 522 (Tenn. Ct. App. 1996). The Supremacy Clause results in federal preemption of state law when: (1) Congress expressly preempts state law; (2) Congress has completely supplanted state law in that field; (3) adherence to federal and state law is impossible; or (4) the state law impedes the achievements of the objectives of Congress. Wadlington, 922 S.W.2d at 522.

Numerous courts have held that state regulation of matters involving aviation safety is preempted by the extensive federal laws and regulations that "occupy the field" in that area. See, e.g., Air Transport Ass'n of America v. Cuomo, 520 F.3d 218, 225 (2d Cir. 2008); Greene v. B.F. Goodrich Avionics, 409 F.3d 784, 794-795 (6th Cir. 2005), cert. denied, 547 U.S. 1003 (2006); Abdullah v. American Airlines, Inc., 181 F.3d 363, 369–371 (3d Cir. 1999); Air Evac EMS v. Robinson, 486 F. Supp. 2d 713, 724 (M.D. Tenn. 2007).

Nevertheless, the United States Supreme Court has held that although state law is preempted to the extent it actually conflicts with federal law, it is preempted to that extent and no further. Dalton v. Little Rock Family Planning Services, 516 U.S. 474, 475-477 (1996) (per curiam) (citing Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 502 (1985)). In this instance, while federal law and regulations provide authority for the proposition that Congress intended to occupy the field of oversight and regulation of the instruction and content of flight training courses, there is no similar authority for federal preemption of the regulatory oversight of flight schools' business practices and fiscal soundness.

The same reasoning applies to the other federal laws and regulations identified in the opinion request. 20 U.S.C. § 1098 of the Higher Education Act establishes within the federal Department of Education "an Independent Advisory Committee on Student Financial Assistance which shall provide advice and counsel to the authorizing committees and to the Secretary on student financial aid matters." 20 U.S.C. § 1098. While the provisions under 20 U.S.C. § 1098 address the financial practices of banks and other financial and educational institutions involved in the various federal student loan programs, this Office finds nothing in these provisions that conflicts with the regulation of postsecondary educational institutions under the Act.

34 C.F.R. § 668.8 is the section of the Code of Federal Regulations that defines the federal Department of Education's requirements for an educational program to qualify as an "eligible program" for purposes of federal student assistance. After setting forth general requirements for educational programs that are eligible for federal student assistance, 34 C.F.R. § 668.8(i) states:

(i) Flight Training. In addition to satisfying other relevant provisions of this section, for a program of flight training to be an eligible program, it must have a current valid certification from the Federal Aviation Administration.

34 C.F.R. § 668.8(i) (2012) (emphasis added).

Subsequently in paragraph (l)(2) of the same section, this regulation sets forth the method of computing the number of credit hours in an educational program. The following language provides:

(2) The institution's conversions to establish a minimum number of clock hours of instruction per credit may be less than those specified in paragraph (l)(1) of this section, if the institution's designated accrediting agency, or recognized State agency for the approval of public postsecondary educational vocational institutions, for participation of title IV, HEA programs has not identified any deficiencies with the institution's policies and procedures, or their implementation, for determining the credit hours, as defined in 34 CFR 600.2, that the institution awards for programs and courses, in accordance with 34 CFR 602.24(f), or, if applicable, 34 CFR 603.24(c) . . . .

34 C.F.R. § 668.8(l)(2) (2012) (emphasis added). Accordingly, not only is THEC regulation of such educational institutions consistent with this federal regulatory scheme, but the federal regulations expressly rely upon state regulation of such postsecondary educational institutions in determining eligibility for federal loan programs.

These federal statutes and regulations do not conflict with state requirements for licensing of proprietary postsecondary schools. Rather, they are primarily directed at a different goal — that of assuring that federal student assistance be directed toward educational programs that meet federal educational standards. Nor does an examination of the Federal Aviation Administration statutes and regulations reveal a basis for finding that the State regulatory statutes are preempted by federal law or regulations.

Consequently, this Office concludes that, aside from the actual course content and instruction of flight training courses that are likely preempted by federal law as discussed above, the remaining regulatory functions of THEC pursuant to the Act — those concerned with proper business practices and fiscal soundness — are not preempted and thus are applicable to private or proprietary flight instruction schools operating in the State of Tennessee.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

KEVIN STEILING
Deputy Attorney General

Requested by:
The Honorable Bill Ketron
Majority Caucus Chairman
5 Legislative Plaza
Nashville, TN 37243-0213