Regulatory Alert: FAA Releases Notice of Funding Opportunity for FY22 Supplemental Discretionary Grants
December 28, 2022
The Federal Aviation Administration (FAA) released on December 28 the notice of funding opportunity (NOFO) that outlines how airports can apply for a share of approximately $268.7 million in fiscal year 2022 (FY22) supplemental discretionary grant funding, which was made available by Congress in March through the FY22 omnibus appropriations bill. In the NOFO, FAA outlines how airports can apply for a FY22 supplemental discretionary grant and how the agency will evaluate applications and proposed projects. 
Based on our initial review, while FAA intends to use their regular Airport Improvement Program (AIP) process for evaluating, rating, and selecting proposed projects, the NOFO provides that the agency will also consider certain qualitative criteria and prioritize environmental projects that reduce emissions or increase energy efficiency or reliability. It is important to note that FAA expects airports to submit a new application—which conforms to the requirements in the NOFO—even if the airport already applied for FY22 AIP discretionary funding earlier this year. 
The NOFO will be officially published in the Federal Register tomorrow, but you can view a pre-publication version here. The agency has set Tuesday, January 31, 2023, at 5 p.m. ET, as the deadline for submitting applications. FAA did not indicate when the agency expects to announce which projects have been selected for funding. 
Background on Supplemental Discretionary Funding. As part of the FY22 omnibus appropriations bill, which was passed in March, Congress included almost $554.2 million in supplemental discretionary funding for airport development projects in addition to “regular“ AIP funding. Of that amount, approximately $279.2 million was reserved for earmarks, known as “Community Project Funding“ requests, and $268.7 million was reserved for supplemental discretionary grants. These discretionary grants will be awarded in accordance with the process outlined in the NOFO. 
In the FY23 omnibus appropriations bill, which was passed last week, Congress provided $558.6 million in supplemental discretionary funding, including $283.6 million for earmarks and another approximately $275 million for discretionary grants. However, it is unclear as of now when FAA may release a NOFO and begin issuing FY23 supplemental discretionary grants. Please refer to our December 20 Airport Alert for additional information. 
Overview of Supplemental Discretionary Grant Program. The NOFO provides an overview and detailed information regarding supplemental discretionary grants that are available for airports pursuant to the FY22 omnibus appropriations bill and congressional directives. Under the program, FAA will be providing $268.7 million to airports via discretionary, competitive grants for eligible projects. These are the key details of which airports should be aware: 
• Distribution by Hub Size: FAA indicated that between $20 million and $70 million in supplemental discretionary grants will be awarded to small hub, nonhub, reliever, and nonprimary airports. That means between $198.7 million and $248.7 million will be awarded to medium and large hubs. 
• Eligible Projects: Airports can apply for funding for any AIP eligible project, including improvements related to enhancing airport safety, capacity, security, environmental sustainability, planning, or any combination of these, including terminal development. 
• Preferences and Priorities: FAA is required to make at least $25 million available for the Voluntary Airport Low Emissions (VALE) Program and Zero-Emission Vehicle and Infrastructure (ZEV) Program. FAA is also required to prioritize noise planning and noise mitigation projects. 
• Local Match: The federal cost share for supplemental discretionary grants ranges between 70% and 95% depending on the airport size and type of project, the same as regular AIP grants. 
Application Process. Applications for a FY22 supplemental discretionary grant must be submitted to FAA using the same general process and forms that airports traditionally use to apply for AIP discretionary funding. However, the NOFO directs airports to complete the following additional information in the application: 
• Identify Type of Project: FAA requires applicants to identify the type of project to which the application refers. There are only four types and only one can be selected: (1) airport noise planning and noise mitigation projects (Group N); (2) environmental projects that reduce emissions or increase energy efficiency or reliability (Group E); (3) VALE or ZEV projects (Group VZ); or (4) airport development or terminal development projects (Group I). 
• Provide Project-Specific Details: FAA requires applicants to respond to a series of detailed questions depending on the type of project. For example, for environmental projects that reduce emissions (Group E), airports must provide (a) a description of the project and the benefits the project will provide; (b) a cost estimate; (c) total project cost per tons of emissions reductions (as applicable); (d) estimated reduction of greenhouse gas that the project (other than proposals for plans and audits only) will produce; and (e) other environmental sustainability benefits, among other things. 
We highly encourage members to carefully review the application instructions in the NOFO, which outlines all the information that must be provided depending on the type of project that an airport is proposing. FAA expects airports to submit a new application with this additional information even if the airport already applied for FY22 AIP discretionary funding. 
The NOFO has instructions on how to submit to FAA for consideration. However, all applications must be submitted electronically to the following email address by January 31, 2023: 9-ARP-AIPSupp@faa.gov. 
Grant Selection Criteria. In the NOFO, FAA outlines the criteria by which applications for a FY22 supplemental discretionary grant will be rated and selected. Generally speaking, FAA will quantitatively rate projects using its well-established Airport Capital Improvement Plan (ACIP) process, which prioritizes eligible AIP airport development projects by importance. However, FAA also outlines a wide range of qualitative criteria that the agency will use to evaluate proposed projects depending on the type of project (e.g., airport noise planning project, terminal development project, environmental project that reduces emissions). Airports should carefully review the criteria as they complete their applications. 
Based on our review, FAA also highlighted several other key factors that will be considered when rating and selecting projects for supplemental discretionary grant funding:
• Reducing Emissions and Promoting Sustainability: FAA emphasized throughout the NOFO that the agency will prioritize projects that advance the Biden Administration's goal of achieving net-zero emissions by 2050 and the agency's Airport Climate Challenge, which was launched in April. Proposed projects that help reduce emissions, address climate change, or promote sustainable infrastructure are likely to be well received by FAA during the review process. 
• Completing Usable-Units-of-Work: FAA will prioritize funding projects that are complete usable-units-of-work, such as construction of eligible airport development, acquisition and installation of eligible equipment, acquisition and commissioning of eligible rolling-stock equipment, and procurement of actionable plans, including sustainability plans, energy planning and noise compatibility planning. 
• Project Readiness for Grant: FAA expects selected projects to be ready for a grant no later than May 15, 2024. This means the airport has secured the necessary environmental approvals, complied with federal civil rights requirements, and obtained construction bids or negotiated fees. FAA also indicated that the airport must be ready to begin the project by or on June 30, 2024. 
What's Next? Applications for FY22 supplemental discretionary grants must be submitted electronically no later than 5 p.m. ET on January 31, 2023. FAA did not indicate when the agency expects to announce which projects have been selected for funding. However, we will keep members apprised of any additional information regarding timing of potential FY22 supplemental discretionary grant awards and how FAA plans to manage the process for issuing FY23 supplemental discretionary grants. 
The Federal Aviation Administration (FAA) released on December 28 the notice of funding opportunity (NOFO) that outlines how airports can apply for a share of approximately $268.7 million in fiscal year 2022 (FY22) supplemental discretionary grant funding, which was made available by Congress in March through the FY22 omnibus appropriations bill. In the NOFO, FAA outlines how airports can apply for a FY22 supplemental discretionary grant and how the agency will evaluate applications and proposed projects. 
Based on our initial review, while FAA intends to use their regular Airport Improvement Program (AIP) process for evaluating, rating, and selecting proposed projects, the NOFO provides that the agency will also consider certain qualitative criteria and prioritize environmental projects that reduce emissions or increase energy efficiency or reliability. It is important to note that FAA expects airports to submit a new application—which conforms to the requirements in the NOFO—even if the airport already applied for FY22 AIP discretionary funding earlier this year. 
The NOFO will be officially published in the Federal Register tomorrow, but you can view a pre-publication version here. The agency has set Tuesday, January 31, 2023, at 5 p.m. ET, as the deadline for submitting applications. FAA did not indicate when the agency expects to announce which projects have been selected for funding. 
Background on Supplemental Discretionary Funding. As part of the FY22 omnibus appropriations bill, which was passed in March, Congress included almost $554.2 million in supplemental discretionary funding for airport development projects in addition to “regular“ AIP funding. Of that amount, approximately $279.2 million was reserved for earmarks, known as “Community Project Funding“ requests, and $268.7 million was reserved for supplemental discretionary grants. These discretionary grants will be awarded in accordance with the process outlined in the NOFO. 
In the FY23 omnibus appropriations bill, which was passed last week, Congress provided $558.6 million in supplemental discretionary funding, including $283.6 million for earmarks and another approximately $275 million for discretionary grants. However, it is unclear as of now when FAA may release a NOFO and begin issuing FY23 supplemental discretionary grants. Please refer to our December 20 Airport Alert for additional information. 
Overview of Supplemental Discretionary Grant Program. The NOFO provides an overview and detailed information regarding supplemental discretionary grants that are available for airports pursuant to the FY22 omnibus appropriations bill and congressional directives. Under the program, FAA will be providing $268.7 million to airports via discretionary, competitive grants for eligible projects. These are the key details of which airports should be aware: 
• Distribution by Hub Size: FAA indicated that between $20 million and $70 million in supplemental discretionary grants will be awarded to small hub, nonhub, reliever, and nonprimary airports. That means between $198.7 million and $248.7 million will be awarded to medium and large hubs. 
• Eligible Projects: Airports can apply for funding for any AIP eligible project, including improvements related to enhancing airport safety, capacity, security, environmental sustainability, planning, or any combination of these, including terminal development. 
• Preferences and Priorities: FAA is required to make at least $25 million available for the Voluntary Airport Low Emissions (VALE) Program and Zero-Emission Vehicle and Infrastructure (ZEV) Program. FAA is also required to prioritize noise planning and noise mitigation projects. 
• Local Match: The federal cost share for supplemental discretionary grants ranges between 70% and 95% depending on the airport size and type of project, the same as regular AIP grants. 
Application Process. Applications for a FY22 supplemental discretionary grant must be submitted to FAA using the same general process and forms that airports traditionally use to apply for AIP discretionary funding. However, the NOFO directs airports to complete the following additional information in the application: 
• Identify Type of Project: FAA requires applicants to identify the type of project to which the application refers. There are only four types and only one can be selected: (1) airport noise planning and noise mitigation projects (Group N); (2) environmental projects that reduce emissions or increase energy efficiency or reliability (Group E); (3) VALE or ZEV projects (Group VZ); or (4) airport development or terminal development projects (Group I). 
• Provide Project-Specific Details: FAA requires applicants to respond to a series of detailed questions depending on the type of project. For example, for environmental projects that reduce emissions (Group E), airports must provide (a) a description of the project and the benefits the project will provide; (b) a cost estimate; (c) total project cost per tons of emissions reductions (as applicable); (d) estimated reduction of greenhouse gas that the project (other than proposals for plans and audits only) will produce; and (e) other environmental sustainability benefits, among other things. 
We highly encourage members to carefully review the application instructions in the NOFO, which outlines all the information that must be provided depending on the type of project that an airport is proposing. FAA expects airports to submit a new application with this additional information even if the airport already applied for FY22 AIP discretionary funding. 
The NOFO has instructions on how to submit to FAA for consideration. However, all applications must be submitted electronically to the following email address by January 31, 2023: 9-ARP-AIPSupp@faa.gov. 
Grant Selection Criteria. In the NOFO, FAA outlines the criteria by which applications for a FY22 supplemental discretionary grant will be rated and selected. Generally speaking, FAA will quantitatively rate projects using its well-established Airport Capital Improvement Plan (ACIP) process, which prioritizes eligible AIP airport development projects by importance. However, FAA also outlines a wide range of qualitative criteria that the agency will use to evaluate proposed projects depending on the type of project (e.g., airport noise planning project, terminal development project, environmental project that reduces emissions). Airports should carefully review the criteria as they complete their applications. 
Based on our review, FAA also highlighted several other key factors that will be considered when rating and selecting projects for supplemental discretionary grant funding:
• Reducing Emissions and Promoting Sustainability: FAA emphasized throughout the NOFO that the agency will prioritize projects that advance the Biden Administration's goal of achieving net-zero emissions by 2050 and the agency's Airport Climate Challenge, which was launched in April. Proposed projects that help reduce emissions, address climate change, or promote sustainable infrastructure are likely to be well received by FAA during the review process. 
• Completing Usable-Units-of-Work: FAA will prioritize funding projects that are complete usable-units-of-work, such as construction of eligible airport development, acquisition and installation of eligible equipment, acquisition and commissioning of eligible rolling-stock equipment, and procurement of actionable plans, including sustainability plans, energy planning and noise compatibility planning. 
• Project Readiness for Grant: FAA expects selected projects to be ready for a grant no later than May 15, 2024. This means the airport has secured the necessary environmental approvals, complied with federal civil rights requirements, and obtained construction bids or negotiated fees. FAA also indicated that the airport must be ready to begin the project by or on June 30, 2024. 
What's Next? Applications for FY22 supplemental discretionary grants must be submitted electronically no later than 5 p.m. ET on January 31, 2023. FAA did not indicate when the agency expects to announce which projects have been selected for funding. However, we will keep members apprised of any additional information regarding timing of potential FY22 supplemental discretionary grant awards and how FAA plans to manage the process for issuing FY23 supplemental discretionary grants. 
