Regulatory Alert: FAA Releases Updated Bipartisan Infrastructure Law FAQ Guidance; Schedules BIL-Focused Webinar for Airports
FAA Releases Updated Bipartisan Infrastructure Law FAQ Guidance; Schedules BIL-Focused Webinar for Airports
October 4, 2024
Today, the Federal Aviation Administration (FAA) released an updated frequently asked questions (FAQ) document that provides information for airport sponsors on the $20 billion that FAA has been administering over five years for airport infrastructure improvements under the Infrastructure and Investment and Jobs Act (IIJA), popularly known as the Bipartisan Infrastructure Law (BIL).
In the FAQs, FAA provides several notable updates regarding the BIL funding programs, including, among other things, (a) outlining deadlines for airports to use Airport Infrastructure Grant (AIG) Program allocations from fiscal year 2022 (FY22); (b) describing the process for distributing any unobligated or recovered AIG allocations, including the new AIG Funding Reallocation (AFR) Program; (c) explaining how the FAA Reauthorization Act of 2024 modifies the formulas for calculating AIG allocations for FY25 and FY26; and (d) expanding AIG project eligibility for certain electric vehicle/aircraft chargers on the airport and secondary runway projects.
You can view the updated FAQ guidance for FAA BIL funding here. AAAE has prepared this version of the updated document that highlights changes or additions that were made to the last iteration released earlier this year. A brief review of some of the changes are discussed further below. This is one of the more substantial updates that FAA has made to its BIL FAQ guidance. We highly encourage airports to review the updated document.
In addition to the updated FAQs, FAA also announced that the agency will be holding a webinar on Monday, October 21, at 2 p.m. ET, to provide an update on the BIL grant programs, including highlights from FY24, what to expect from BIL in FY25, additional funding expected under the FAA Contract Tower (FCT) Competitive Grant Program, the new AFR Program, and a review of the FAQs released today. You can sign up to participate in the webinar here.
Background and Summary of BIL Grant Programs
FAA’s FAQ guidance document provides guidance and answers to airports on a wide range of questions regarding the AIG Program, which provides $15 billion ($3 billion annually) via formula grants to airports; the Airport Terminal Program (ATP), which provides $5 billion ($1 billion annually) to airports via discretionary, competitive grants for eligible terminal projects; and the FCT Competitive Grant Program, which provides $100 million ($20 million annually) via discretionary, competitive grants for airports that own an FCT air traffic control tower. FAA has released multiple iterations of the document since 2022.
Overview of Updates to FAA’s BIL FAQs
Deadlines for Airports to Obligate AIG Funding. Under the AIG Program, FAA has provided about $8.7 billion in funding allocations to airports over the first three years of the program. Each airport’s allocation represents the amount that each airport is entitled to use for a grant to fund any AIP or PFC eligible project. Airports may combine multiple years’ allocations to fund a single project. However, airports have four fiscal years to apply for and receive a grant(s) to use a specific year’s allocation of AIG funds.
For FY22 AIG allocations, which were the first years’ allocations under the program, an airport must ensure its share of allocations are under grant by the end of FY25, or September 30, 2025. To ensure the September 30, 2025, deadline is met, FAA has established the following deadlines, as outlined in FAQ Q-9:
- May 1, 2025: Deadline to notify FAA of the airport’s intent to use expiring FY22 AIG funds.
- June 30, 2025: Airports must submit an application, based on bids, to the FAA for AIG projects that would use expiring FY22 AIG funds.
- September 30, 2025: FAA and airports must ensure any expiring FY22 AIG funds are obligated, or under grant, for a specific project.
Over $900 million of the $2.9 billion in FY22 AIG allocations remains unobligated. If your airport has any remaining FY22 AIG allocations, these deadlines are important to keep in mind. Also, it is worth noting that these deadlines will also apply in future years. For example, airports will have to notify FAA of their intent to use expiring FY23 AIG allocations by May 1, 2026, and submit applications, based on bids, by June 30, 2026.
FAA’s Process for Distributing Unobligated AIG Funding. In the updated FAQs, FAA explained how the unobligated AIG funding allocations will be redistributed. If an airport does not obtain a grant to use a specific year’s allocation of AIG funds after four fiscal years, FAA recovers those funds and redistributes them in the fifth year. For each year of recovered allocations, the first $100 million will be awarded as competitive grants under the FCT Competitive Grant Program. After the first $100 million, any remaining funds will be available through a new competitive grant program called the AIG Funding Reallocation (AFR) Program.
Details on the FAA’s AFR Program. Throughout the FAQs, FAA provided additional details about the AFR Program and how it will be administered:
- Amount of Funding Available: The amount of annual AFR Program funding available will depend on how much in AIG allocations are recovered for each of the five years of the program, with the possibility no funding will be available in a given year. For example, if airports do not obligate $100 million in FY22 AIG allocations, that $100 million would be made available through the FCT Competitive Grant Program in FY26, and no funding would be made available for the AFR Program. If airports were to not obligate $200 million in FY22 AIG allocations, $100 million would be available for the FY26 FCT Competitive Grant Program and $100 million would be available for the FY26 AFR Program.
- Eligible Projects: Eligible projects under the AFR Program include those that reduce airport emissions, reduce noise impact to the surrounding community, reduce dependence on the electrical grid, or provide general benefits to the surrounding community.
- Application Process: The process for an airport to apply for an AFR Program grant will be outlined annually through a notice of funding opportunity (NOFO). For the FY26 AFR Program (the first year of the program), we would expect FAA to release the NOFO sometime between July and September 2025. This assumes funding is available.
- Years Funding Available: The AFR Program will occur over a five-year period between FY26 and FY30. As explained above, the amount of available funding each year will depend on how much in unobligated AIG allocations are recovered by FAA.
Changes to Formulas for Calculating FY25 and FY26 AIG Allocations. Under the BIL, Congress directed FAA to calculate each years’ AIG allocations based, in part, on how FAA calculates entitlement funding under the Airport Improvement Program (AIP). In the FAA reauthorization law, however, Congress made changes to AIP, including adjusting the formulas for entitlement funding. Those formula changes may impact how much primary airports are expected to receive in FY25 and FY26 AIG allocations. As explained in FAQ Q-F1, there are three major changes that will be made to how FAA calculates AIG allocations for FY25 and FY26:
- Use of Enplanement Data: For FY22 through FY24, FAA calculated AIG allocations based on the “best of” enplanement data from the previous three calendar years. However, beginning in FY25, FAA will use enplanement data based on the previous full calendar year. Calendar year 2023 and 2024 enplanements will be used for purposes of FY25 and FY26 AIG allocations, respectively.
- Minimum Allocation Amount for Primary Airports: Based on the FAA reauthorization law, the minimum AIG allocation amount will increase from $1 million to $1.3 million for FY25 and FY26. This is consistent with the changes made to the minimum AIP entitlement amount.
- Allocations for Cargo Airports: Under the AIG allocation calculation, primary cargo airports receive an additional amount based on the AIP cargo entitlement formula, which was modified in the FAA reauthorization law. Specifically, the threshold weight was reduced from 100 million to 25 million pounds of cargo for airports to qualify, and the allocation of funding for such airports increased (from 3.5 to 4 percent). In short, the change means qualifying primary cargo airports could receive an increased AIG allocation in comparison to previous years.
In terms of nonprimary airports, we do not expect any changes to the calculation of AIG allocations. However, it is important to note that the calculation of AIG allocations for nonprimary airports is based on (a) the role of the airport, as designated in the latest National Plan of Integrated Airport Systems (NPIAS) report, and (b) development costs for all airports within that role. Earlier this week, FAA published its latest NPIAS report. Your nonprimary airport’s AIG allocation may be impacted if the airport’s role changed and/or based on the amount of development costs for all airports in that role.
Reduced Local Match for FY25 and FY26 AIG Allocations. Based on a change included in the FAA reauthorization law, the federal share for FY25 and FY26 AIG grants has increased from 90 to 95 percent for nonhub and nonprimary airports. Conversely, the local match decreased from 10 to 5 percent for these airports.
Expanded Project Eligibility for AIG Funds. In FAQ Q-U74 and Q-R4, FAA indicated that AIG funding may be used for electric vehicle and aircraft chargers on the airport, subject to certain conditions, and addressed the ability for airports to use AIG funding for secondary runway projects:
Q-U74: Can AIG funding be used for electric vehicle/aircraft chargers on the airport?
AIG funding can be used to increase the capacity of an existing fuel farm, with justification, and fund the addition of a new fuel tank for an alternative fuel type. Airport development projects to construct or modify airport facilities to provide low-emission fuel systems and the acquisition of low-emission technology are considered eligible. By extension of the Department of Energy’s definition of “low-emission technology” this includes reliance on alternative fuel types such as electric or hydrogen.
Q-R4: Did the 2024 Reauthorization provide an exception for secondary runway projects using BIL funds?
Yes. Section 741 states that BIL funding may be used to extend secondary runways at nonhub or small hub primary airports- notwithstanding the level of operational activity that would benefit a longer runway. It should be noted that this expanded eligibility and justification for runway extensions applies to only AIG funding. The criteria for AIP eligibility remains unchanged for both the secondary runway designation and runway length. Therefore, sponsors should proceed with caution if there is not sufficient BIL funding to complete the project and they cannot meet AIP eligibility requirements. The sponsor will be responsible for completing the project with other non-Federal funding sources. Please work with your ADO/RO to ensure a complete funding plan is in place.
It is important to note that AIG allocations may be used to fund any AIP or PFC eligible project. In the FAA reauthorization law, Congress expanded the eligibility list of AIP and PFC projects. These projects will also be eligible under the AIG Program. However, FAA did not address this expanded eligibility in the updated FAQs.
What's Next? FAA BIL Webinar and Upcoming Announcements
Airports should be aware of several notable updates and developments expected in the months ahead as it relates to BIL grant funding programs:
- FAA BIL-Focused Webinar: FAA will be holding a webinar on Monday, October 21, at 2 p.m. ET, to provide an update on the BIL grant programs, including highlights from FY24, what to expect from BIL in FY25, additional funding expected under the FCT Competitive Grant Program, the new AFR Program, and a review of the FAQs released today. You can sign up to participate in the webinar here.
- FY25 AIG Allocations: FAA is expected to announce FY25 AIG allocations for airports in the coming months, likely in October or November.
- FY25 ATP Grants: The period for airports to apply for a share of $1 billion in FY25 ATP funding for terminal development projects closed at the end of July. FAA received 577 total applications for approximately $8.1 billion. FAA has indicated that the agency expects to announce projects selected for FY25 ATP grants by the end of October.
- FY25 FCT Competitive Grant Program: The period for airports to apply for a share of $20 million in FY25 FCT Competitive Grants closed in mid-September. FAA received about 80 total applications for approximately $220 million. FAA is expected to announce projects selected for FY25 FCT Competitive Grants by the end of the year.
