Airport Alert: FAA Releases Guidance on Airport Coronavirus Response Grant Program
January 19, 2021
Airport members will find that the FAQ document released today is similar in many regards to the guidance that has been developed by FAA for airports participating in the Coronavirus Aid, Relief, and Economic Security (CARES) Act grant program. However, there are key distinctions between the programs of which airports should be aware. A summary of the FAA FAQ guidance on ACRGP is provided below, including meaningful differences from CARES Act grants. We have also provided a quick recap of how CRRSA requires FAA to distribute the $2 billion.
Coronavirus Relief Funding
Commercial Service Airports. Of the total amount available for airports, CRRSA provided $1.75 billion for commercial service and certain cargo airports. Funds will be distributed based on a modified AIP apportionment run. The cargo set-aside will remain intact, and there will be no maximum grant amount or PFC turnback. CRRSA preserves doubled entitlements and retains the $1 million minimum entitlement for smaller primary airports. Remaining funds, to the extent there are any, would be distributed based on enplanements.
Non-Primary Commercial Service/General Aviation/Contract Tower Airports. CRRSA included up to $45 million for nonprimary commercial service and general aviation airports. Of that amount, not less than $5 million will be divided equally among nonprimary airports that participate in the contract tower program to cover lawful expenses to support operations.
Concessionaires. CRRSA also provided $200 million to primary airports based on enplanements "to provide relief from rents and minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal airport concessions."
FAQ Guidance on Airport Coronavirus Response Grant Program
Grant Awards, Applications and Agreements. In the FAQ, FAA indicated that the agency plans to announce grant awards soon, but did not outline a specific timeline. After the announcement, FAA personnel will reach out to each airport sponsor to provide an opportunity to submit a grant application. FAA will then make a simplified grant agreement available for execution within days of receiving a completed application from the airport. The deadline for applying for a grant under the ACRGP is June 30, 2021.
Permissible Uses of Grant Funds. FAA's FAQ provided some guidance on how the agency is interpreting the scope of permissible uses for ACRGP funds. FAA has largely deferred to its established policy on the use of airport revenue to interpret what types of costs are reimbursable under the new grant program.
Q-U1: How can an airport sponsor use Airport Coronavirus Response Grant Program funds?
A: An airport sponsor may use these funds for costs related to operations, personnel, cleaning, sanitization, janitorial services, combating the spread of pathogens at the airport, and debt service payments. Grant recipients should follow FAA's Policy and Procedures Concerning the Use of Airport Revenues ("Revenue Use Policy"), 64 Federal Register 7696 (64 FR 7696), as amended by 79 Federal Register 66282 (79 FR 66282). The Revenue Use Policy document provides guidance regarding permitted and prohibited uses of airport revenue. In addition, while CRRSA limits the use of funds to certain stated eligible costs, it states that funds may not be used for any purpose not directly related to the airport. Grant recipients also should review the Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations for clarifying COVID-19 revenue use guidance.
Q-U2: Can Airport Coronavirus Response Grant Program funds be used to reimburse operational expenses?
A: Yes. FAA will reimburse sponsors for operational expenses directly related to the airport incurred on or after January 20, 2020. Operational expenses are those expenses necessary to operate, maintain, and manage an airport. They include expenses such as payroll, utilities, service contracts, and items generally having a limited useful life, including personal protective equipment and cleaning supplies.
Q-U3: Can Airport Coronavirus Response Grant Program funds be used to reimburse debt service payments?
A: Yes. FAA will reimburse sponsors for debt service payments directly related to the airport that are due on or after December 27, 2020, which is the date of enactment of CRRSA.
Use of Funds for Airport Development. As airports are aware, CRRSA, the coronavirus relief package approved by Congress, required that airports use the grant funds largely for operational expenses and debt service payments. However, FAA indicated in the FAQ released today that airport development projects aimed at combating the spread of pathogens would be reimbursable under the ACRGP. Similar to the CARES Act grant program, airports will be required to execute a Development Addendum if the airport wants to use its ACRGP funds for this purpose.
Q-U5: Can Airport Coronavirus Response Grant Program funds be used for new airport development on the airport?
A: Yes. However, there are limitations on the type of development for which the funding can be used. Any development-related costs must be associated with combating the spread of pathogens at the airport. Examples of eligible development would be replacing or upgrading a heating, ventilation, and air conditioning (HVAC) system; reconfiguring the terminal to accommodate increased social distancing; or reconfiguring terminal space or other facilities to accommodate health screening. A sponsor seeking to use the funds for new airport development or construction should contact its local Airports District Office or Airports Regional Office. That office will ensure that such development is consistent with requirements for airport development. The Airports District Office or Airports Regional Office also will assist the airport sponsor with executing a Development Addendum for its intended project.
Q-GA10: How does an airport sponsor use Airport Coronavirus Response Grant Program funds for airport development?
A: Funding eligibility under CRRSA for airport development is limited (as discussed in Q-U5). However, an airport sponsor seeking to use its grant funds for eligible near-term airport development may amend its initial Grant Agreement and execute a Development Addendum. This process ensures that a sponsor understands the additional reviews and requirements involved (as discussed in Q-U5). An airport sponsor should be able to complete airport development projects within the four-year budget period of its initial grant. An airport sponsor should not delay or forgo expenditure of grant funds for ongoing airport operational expenses and debt service payments, which are the primary purposes of funds under CRRSA.
Deadline for Using Funds. In the FAQ, FAA stated that the budget period for the ACRGP is four years. As a result, a sponsor may charge to the grant only allowable costs incurred during this four-year budget period.
Payment Requests/Reimbursement Process. FAA indicated that they will be using the same process to submit payment requests to obtain reimbursements as they are using for CARES Act grants. This will allow airports to submit a summary of an invoice instead of submitting underlying payment request documentation. You can view our December 3 Airport Alert for additional information.
Relief for Concessionaires. In the FAQ, FAA provided very few details on how airport sponsors can claim the allocation that is available to them for providing relief to concessionaires. The agency indicated that this guidance will be issued in the near future. However, it did address the situation where state or local laws or trust indentures prohibit an airport from providing relief to concessionaires.
Q-CR1: How does an airport sponsor claim its allocation available to provide relief to airport concessions?
A: An airport sponsor seeking to use CRRSA funds to provide relief from rent and minimum annual guarantees (MAG) obligations to eligible airport concessions may apply for that allocation in an application for an Airport Coronavirus Response Grant Program grant agreement. FAA will issue additional guidance concerning claiming and using these funds in the near future.
Q-CR2: How do airport sponsors provide relief to airport concessions?
A: If an airport sponsor accepts its CRRSSA allocation for concession relief, the sponsor must provide relief from rent and MAG to on-airport car rental, on-airport parking, and in-terminal airport concessions (as defined in 49 CFR part 23) from December 27, 2020, the date CRRSA was enacted, until the sponsor has provided relief equaling the total allocation amount less its administration expenses.
Q-CR3: What if State laws, local laws, or applicable trust indentures prohibit an airport sponsor from providing relief from rent and MAG to airport concessions?
A: If an airport sponsor is prohibited from providing relief from rent and MAG, it should decline the allocated funds before executing an Airport Coronavirus Response Grant Program grant agreement.
Workforce Retention Requirements. FAA's FAQ on the ACRGP provides information for airports on the law's workforce retention requirements, when reporting must occur, where to submit reports, waivers available for airports, and consequences for failing to meet the retention requirements, among other information. The process for airports to report their compliance with the retention requirement is very similar to the existing process that airports use to comply with the CARES Act grant program. However, FAA provided an update on when certification of compliance must occur and when retention reporting must be submitted.
Q-WF1: Are there specific workforce retention requirements for accepting Airport Coronavirus Response Grant Program funds?
A: Yes. A sponsor of a small, medium, or large hub airport must continue to employ, through February 15, 2021, at least 90% of the number of individuals employed (after making adjustments for retirements or voluntary employee separations) as of March 27, 2020. This requirement is an extension of the workforce retention requirement under the CARES Act. Airport sponsors must certify compliance with the CARES Act and CRRSA workforce retention requirements at the time of grant execution. The workforce retention requirement does not apply to non-hub or non-primary airports.
Q-WF2: When do small, medium, and large hub airport sponsors report their respective compliance with the employee retention requirement?
A: Provided an airport sponsor is current with its workforce retention reporting under the CARES Act, it must report only employment totals as of February 15, 2021, by no later than March 1, 2021.
Q-WF3: Where should CRRSA workforce retention reports be submitted?
A: CRRSA workforce retention reports should be submitted to CARESAirports@faa.gov. Please include "Workforce Retention Report" and your airport's city, State, and airport location identifier in the email subject line.
Administration of Funds Under State Block Grant Program. FAA responded to fourteen questions regarding how the ACRGP funds would be distributed under the State Block Grant Program (SBGP). Similar to CARES Act grant funds, FAA indicated that they will aggregate the amounts announced for each sponsor into a single award for participating states. These states will use a streamlined application and grant agreement process similar to what FAA is proposing to use for all ACRGP funds.
Grant Closeouts. In the FAQ, FAA indicated that they will follow the same grant closeout process for ACRGP funds as they are doing for CARES Act grants. You can view our December 3 Airport Alert for additional information. The agency has published on its website a sample grant closeout report.
Airport members will find that the FAQ document released today is similar in many regards to the guidance that has been developed by FAA for airports participating in the Coronavirus Aid, Relief, and Economic Security (CARES) Act grant program. However, there are key distinctions between the programs of which airports should be aware. A summary of the FAA FAQ guidance on ACRGP is provided below, including meaningful differences from CARES Act grants. We have also provided a quick recap of how CRRSA requires FAA to distribute the $2 billion.
Coronavirus Relief Funding
Commercial Service Airports. Of the total amount available for airports, CRRSA provided $1.75 billion for commercial service and certain cargo airports. Funds will be distributed based on a modified AIP apportionment run. The cargo set-aside will remain intact, and there will be no maximum grant amount or PFC turnback. CRRSA preserves doubled entitlements and retains the $1 million minimum entitlement for smaller primary airports. Remaining funds, to the extent there are any, would be distributed based on enplanements.
Non-Primary Commercial Service/General Aviation/Contract Tower Airports. CRRSA included up to $45 million for nonprimary commercial service and general aviation airports. Of that amount, not less than $5 million will be divided equally among nonprimary airports that participate in the contract tower program to cover lawful expenses to support operations.
Concessionaires. CRRSA also provided $200 million to primary airports based on enplanements "to provide relief from rents and minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal airport concessions."
FAQ Guidance on Airport Coronavirus Response Grant Program
Grant Awards, Applications and Agreements. In the FAQ, FAA indicated that the agency plans to announce grant awards soon, but did not outline a specific timeline. After the announcement, FAA personnel will reach out to each airport sponsor to provide an opportunity to submit a grant application. FAA will then make a simplified grant agreement available for execution within days of receiving a completed application from the airport. The deadline for applying for a grant under the ACRGP is June 30, 2021.
Permissible Uses of Grant Funds. FAA's FAQ provided some guidance on how the agency is interpreting the scope of permissible uses for ACRGP funds. FAA has largely deferred to its established policy on the use of airport revenue to interpret what types of costs are reimbursable under the new grant program.
Q-U1: How can an airport sponsor use Airport Coronavirus Response Grant Program funds?
A: An airport sponsor may use these funds for costs related to operations, personnel, cleaning, sanitization, janitorial services, combating the spread of pathogens at the airport, and debt service payments. Grant recipients should follow FAA's Policy and Procedures Concerning the Use of Airport Revenues ("Revenue Use Policy"), 64 Federal Register 7696 (64 FR 7696), as amended by 79 Federal Register 66282 (79 FR 66282). The Revenue Use Policy document provides guidance regarding permitted and prohibited uses of airport revenue. In addition, while CRRSA limits the use of funds to certain stated eligible costs, it states that funds may not be used for any purpose not directly related to the airport. Grant recipients also should review the Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations for clarifying COVID-19 revenue use guidance.
Q-U2: Can Airport Coronavirus Response Grant Program funds be used to reimburse operational expenses?
A: Yes. FAA will reimburse sponsors for operational expenses directly related to the airport incurred on or after January 20, 2020. Operational expenses are those expenses necessary to operate, maintain, and manage an airport. They include expenses such as payroll, utilities, service contracts, and items generally having a limited useful life, including personal protective equipment and cleaning supplies.
Q-U3: Can Airport Coronavirus Response Grant Program funds be used to reimburse debt service payments?
A: Yes. FAA will reimburse sponsors for debt service payments directly related to the airport that are due on or after December 27, 2020, which is the date of enactment of CRRSA.
Use of Funds for Airport Development. As airports are aware, CRRSA, the coronavirus relief package approved by Congress, required that airports use the grant funds largely for operational expenses and debt service payments. However, FAA indicated in the FAQ released today that airport development projects aimed at combating the spread of pathogens would be reimbursable under the ACRGP. Similar to the CARES Act grant program, airports will be required to execute a Development Addendum if the airport wants to use its ACRGP funds for this purpose.
Q-U5: Can Airport Coronavirus Response Grant Program funds be used for new airport development on the airport?
A: Yes. However, there are limitations on the type of development for which the funding can be used. Any development-related costs must be associated with combating the spread of pathogens at the airport. Examples of eligible development would be replacing or upgrading a heating, ventilation, and air conditioning (HVAC) system; reconfiguring the terminal to accommodate increased social distancing; or reconfiguring terminal space or other facilities to accommodate health screening. A sponsor seeking to use the funds for new airport development or construction should contact its local Airports District Office or Airports Regional Office. That office will ensure that such development is consistent with requirements for airport development. The Airports District Office or Airports Regional Office also will assist the airport sponsor with executing a Development Addendum for its intended project.
Q-GA10: How does an airport sponsor use Airport Coronavirus Response Grant Program funds for airport development?
A: Funding eligibility under CRRSA for airport development is limited (as discussed in Q-U5). However, an airport sponsor seeking to use its grant funds for eligible near-term airport development may amend its initial Grant Agreement and execute a Development Addendum. This process ensures that a sponsor understands the additional reviews and requirements involved (as discussed in Q-U5). An airport sponsor should be able to complete airport development projects within the four-year budget period of its initial grant. An airport sponsor should not delay or forgo expenditure of grant funds for ongoing airport operational expenses and debt service payments, which are the primary purposes of funds under CRRSA.
Deadline for Using Funds. In the FAQ, FAA stated that the budget period for the ACRGP is four years. As a result, a sponsor may charge to the grant only allowable costs incurred during this four-year budget period.
Payment Requests/Reimbursement Process. FAA indicated that they will be using the same process to submit payment requests to obtain reimbursements as they are using for CARES Act grants. This will allow airports to submit a summary of an invoice instead of submitting underlying payment request documentation. You can view our December 3 Airport Alert for additional information.
Relief for Concessionaires. In the FAQ, FAA provided very few details on how airport sponsors can claim the allocation that is available to them for providing relief to concessionaires. The agency indicated that this guidance will be issued in the near future. However, it did address the situation where state or local laws or trust indentures prohibit an airport from providing relief to concessionaires.
Q-CR1: How does an airport sponsor claim its allocation available to provide relief to airport concessions?
A: An airport sponsor seeking to use CRRSA funds to provide relief from rent and minimum annual guarantees (MAG) obligations to eligible airport concessions may apply for that allocation in an application for an Airport Coronavirus Response Grant Program grant agreement. FAA will issue additional guidance concerning claiming and using these funds in the near future.
Q-CR2: How do airport sponsors provide relief to airport concessions?
A: If an airport sponsor accepts its CRRSSA allocation for concession relief, the sponsor must provide relief from rent and MAG to on-airport car rental, on-airport parking, and in-terminal airport concessions (as defined in 49 CFR part 23) from December 27, 2020, the date CRRSA was enacted, until the sponsor has provided relief equaling the total allocation amount less its administration expenses.
Q-CR3: What if State laws, local laws, or applicable trust indentures prohibit an airport sponsor from providing relief from rent and MAG to airport concessions?
A: If an airport sponsor is prohibited from providing relief from rent and MAG, it should decline the allocated funds before executing an Airport Coronavirus Response Grant Program grant agreement.
Workforce Retention Requirements. FAA's FAQ on the ACRGP provides information for airports on the law's workforce retention requirements, when reporting must occur, where to submit reports, waivers available for airports, and consequences for failing to meet the retention requirements, among other information. The process for airports to report their compliance with the retention requirement is very similar to the existing process that airports use to comply with the CARES Act grant program. However, FAA provided an update on when certification of compliance must occur and when retention reporting must be submitted.
Q-WF1: Are there specific workforce retention requirements for accepting Airport Coronavirus Response Grant Program funds?
A: Yes. A sponsor of a small, medium, or large hub airport must continue to employ, through February 15, 2021, at least 90% of the number of individuals employed (after making adjustments for retirements or voluntary employee separations) as of March 27, 2020. This requirement is an extension of the workforce retention requirement under the CARES Act. Airport sponsors must certify compliance with the CARES Act and CRRSA workforce retention requirements at the time of grant execution. The workforce retention requirement does not apply to non-hub or non-primary airports.
Q-WF2: When do small, medium, and large hub airport sponsors report their respective compliance with the employee retention requirement?
A: Provided an airport sponsor is current with its workforce retention reporting under the CARES Act, it must report only employment totals as of February 15, 2021, by no later than March 1, 2021.
Q-WF3: Where should CRRSA workforce retention reports be submitted?
A: CRRSA workforce retention reports should be submitted to CARESAirports@faa.gov. Please include "Workforce Retention Report" and your airport's city, State, and airport location identifier in the email subject line.
Administration of Funds Under State Block Grant Program. FAA responded to fourteen questions regarding how the ACRGP funds would be distributed under the State Block Grant Program (SBGP). Similar to CARES Act grant funds, FAA indicated that they will aggregate the amounts announced for each sponsor into a single award for participating states. These states will use a streamlined application and grant agreement process similar to what FAA is proposing to use for all ACRGP funds.
Grant Closeouts. In the FAQ, FAA indicated that they will follow the same grant closeout process for ACRGP funds as they are doing for CARES Act grants. You can view our December 3 Airport Alert for additional information. The agency has published on its website a sample grant closeout report.
