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A Tac Air hanger at the Chattanooga Metropolitan Airport. Tac Air and airport officials disagree over the need for new general aviation facilities and a new fixed base operator.

NASHVILLE - A dispute between a Texas-based company providing aviation services at Chattanooga's airport and the local airport authority board has taken flight and landed in the middle of the Tennessee Legislature.

TAC Air, a company providing fuel and hangar space for private airplanes at the Chattanooga Metropolitan Airport, is backing a bill that jumps into the dispute.

It would block future use of grants from the state's Transportation Equity Fund to "compete" against "existing, privately owned" fixed-base operators such as TAC Air.

Three House members and a senator from outside Hamilton County are sponsoring the bill, which is scheduled to come up in the House Transportation Subcommittee and Senate Transportation Committee later this week.

The company has been fighting with the airport since officials in 2010 unveiled plans to spend $10 million on new facilities for corporate tenants and personal aircraft with the operation run by another company. Airport officials said the facilities, on which some $5 million in grants have been expended, were needed because of complaints about TAC Air.

But TAC Air executives have accused Lovell Field officials of using taxpayer money to effectively ground its existing business.

Pam McAllister, TAC Air's Chattanooga general manager, said Monday the company is being forced to compete against its own "landlord," the quasi-governmental airport authority, at taxpayer expense.

"How can we compete fairly when we don't have access to the funds they do?" she said.

Christian Sasfai, TAC Air's vice president and chief operating officer, said the situation is "somewhat unprecedented in the United States where we've been forced, we think unfairly, to compete against our landlord."

The company has 14 fixed-base operator facilities in 11 states. There are two in Tennessee, at the airports in Chattanooga and Knoxville.

Christina Siebold, director of the airport authority's marketing and communications, said the facility's attorney told them about the legislation.

"As a rule, airports would prefer that this be handled at the local level, where we are closely connected with our communities and understand how best to meet their aviation needs," she said.

Siebold said "it is our understanding that future legislation would not impact active state grants to develop the facilities, nor would it impact ongoing operations."

As for TAC Air's complaint about taxpayer dollars getting used to compete with private business, Siebold said the Transportation Equity Fund is made up of fees from aviation fuel customers.

"So only citizens who fueled their planes in the state of Tennessee helped pay for the facility, which is only fair, since they are now benefiting from the lower prices and improved service" at the airport, she said.

"It is also important to note that many of the facilities managed by TAC Air were funded using airport and/or government dollars," she said. "Airports regularly develop infrastructure to spur economic development on their premises."

She said that while the operations may be managed by a third party, "the airport certainly has a vested interest in providing the service their community needs."

The airport's own fixed-base operation is run under contract with Wilson Air.

TAC Air general manager McAllister said the airport's competing venture has lost $886,000 in 16 months. Siebold countered airport officials anticipated losses during the first years of operation.

State Ethics Commission filings show TAC Air in August hired a three-person lobbying team from Nashville law firm Bass Berry & Sims, paying them between $25,000 to $50,000, according to a report filed last month.

The lobbyists include Lee Barfield, an attorney and brother-in-law of former U.S. Senate Majority Leader Bill Frist, R-Tenn., and one-time Tennessee Democratic Party Chairman Dick Lodge.

Sen. Frank Nicely, R-Strawberry Plain, a bill sponsor, said Monday night that he is "trying to get them [TAC Air and Siebold] to come to the table and work something out. ... I hear both sides are starting to talk."

He acknowledged that Lodge had spoken to him about the bill but was vague on who brought him the legislation. House sponsors are Rep. Judd Matheny, R-Tullahoma; Rep. Vance Dennis, R-Savannah; and Rep. Terri Lynn Weaver, R-Lancaster.