What does the CARES Act mean for GA airports?
Posted in: Aviation
As our nation faces an ongoing crisis, it becomes increasingly vital for aviation professionals to obtain some clarity on what the effects will be for our industry. The aviation industry is one of the most affected by the shutdowns and stay-at-home orders. As part of the recent Federal Coronavirus Aid, Relief and Economic Security (CARES) Act, approximately $10 billion in grants are being made available for airports across our nation. Of this $10 billion, at least $100 million is earmarked for General Aviation airports.
I’ve compiled some answers from FAA guidance to questions that may be helpful.
What happens to AIP grants?
FY 2020 AIP grants and FY 2020 Supplementary Discretionary grants will now be 100% federally funded. According to the FAA, “At least $500 million is available to increase the Federal share to 100% for grants awarded under the fiscal year (FY) 2020 appropriations cycle for FY 2020 AIP and FY 2020 Supplemental Discretionary grants. The Federal share for FY 2018 and 2019 Supplemental Discretionary grants will not increase.”
Will we receive CARES funds for our airport?
The CARES Act will provide additional funding for General Aviation airports. The FAA will provide more guidance on the distribution of the approximately $100 million soon. For now the FAA states that “funds are allocated based on the categories published in the most current NPIAS, reflecting the percentage of the aggregate published eligible development costs for each such category, and then dividing the allocated funds evenly among the eligible airports in each category, rounded up to the nearest thousand dollars.” It is important to understand that with more than three thousand NPIAS airports the amount for each airport will be moderate at best.
How can our airport use these funds?
The funds are intended for the operational stability of airports during this crisis. However, according to FAA guidance, airport owners/sponsors “may use these funds for any purpose for which airport revenues may be lawfully used.” The FAA goes on to state that according to the CARES Act, these funds “may not be used for any purpose not related to the airport.”
Can we use these funds for new airport development?
The funds can be used for airport development if the FAA ADO is notified and the development meets safety and security standards, environmental requirements, prevailing wage and Buy American requirements, etc. The FAA clarifies this further, stating that to make these funds available as quickly as possible, “the FAA is issuing non-construction grants that permit expenditure for airport operating expenses (such as payroll) and to pay airport debt service.” Furthermore, they state that if a recipient of a CARES grant wants to use the funds for new airport development or construction, they should contact their local Airports District Office or Airports Regional Office.
In addition to this CARES Act, congress is considering both an additional Relief Act, and then likely a Recovery Act. This would be a stimulus bill that could include substantial funds for infrastructure development, including airports.
So, what can we as aviation professionals do now in this time of uncertainty? Now would be a good time to prepare for these additional funds by readying your ACIP and their associated justifications to complete and submit grant applications. Our aviation team at Mead & Hunt is dedicated to staying focused on future developments in the aviation industry, so we can all be as prepared as possible as we face the future. We are all in this together.
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