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CARES Act Information for Airports

CARES Act Information for Tennessee General Aviation Airports
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748, Public Law 116-136), signed into law by the President on March 27, 2020, includes $10 billion in funds to be awarded as economic relief to eligible U.S. airports affected by the prevention of, preparation for, and response to the COVID-19 pandemic. CARES Act contains four separate funding sources for Tennessee airports. Tennessee general aviation airports will be eligible for funding provided in Parts 1 and 4.

Part 1 - The CARES Act provides funds to increase the federal share to 100 percent for Airport Improvement Program (AIP) and supplemental discretionary grants already planned for fiscal year 2020/2021.
Part 2 – All commercial service airports will receive funds based on the number of passengers that board aircraft there, the amount of debt an airport has, and the amount of money the airport has in reserve.
Part 3 – Primary commercial service airports, with more than 10,000 annual passenger boardings, will receive additional funds based on the number of annual boardings, in a similar way to how they currently receive AIP entitlement funds.
Part 4 – General aviation airports will receive funds based on their airport categories, such as National, Regional, Local, Basic and Unclassified.

CARES Act Airport Presentation

CARES Act Part 1 funding will increase Tennessee’s annual block grant, and potentially any discretionary grants, to provide additional federal share for the normally required local participation (10%) on federal AIP Projects. The amount of CARES Act Part 1 funding provided to Tennessee will be based on the amount of Non-Primary Entitlements (NPE) and State Apportionment the State receives in total for Fiscal Year (FY) 2020. Therefore, Tennessee will receive a block grant totaling $19,191,159, which will include 3 components: NPE, State Apportionment and CARES Act Part 1 funding.

State Block Grant Total:          $19,191,159
Non-Primary Entitlements:   $13,800,000
State Apportionment:             $3,472,043
CARES Act Part 1:                      $1,919,116

Due to the basis of award for CARES Act Part 1 funding, there will not be enough funding to provide the 100% federal share for every programmed project in Tennessee. Therefore, The CARES Act Part 1 funding will be awarded using a first come - first served approach until the funds are exhausted. As stated, the CARES Act Part 1 funding was granted to Tennessee based on the amount of NPE and State apportionment awarded in the FY 2020 block grant and not based on the TDOT approved Airport Capital Improvement Plan submitted to the FAA for FY 2020/2021.

Project Eligibility
Congress recognizes that the economic effects of the COVID-19 Pandemic could stall many projects due to the reduction and uncertainty of revenue coming into local and state governments. According to the FAA, the legislative intent of CARES Act Part 1 is to ensure airports can execute and complete planned/programmed projects on schedule by reducing the need for local participation during the economic crisis. The FAA has given Block Grant States a pool of money to be distributed within federal guidance. In order to meet the intent of the funding, TDOT Aeronautics will use the CARES Act Part 1 funding to provide an additional 10% of the available federal portion programmed for funding on the 2020 and/or 2021 ACIP. This will apply to grant contracts awarded by TDOT Aeronautics on or after March 27, 2020 and continue until the $1,919,116 CARES Act Part 1 funds are exhausted. When the funds are exhausted, TDOT will return to standard AIP funding requirements.

Remember the intent of this funding is to keep planned projects on schedule during the COVID crisis. All current TDOT Aeronautics business rules apply to projects utilizing CARES Act Part 1 funding.

• Projects must be on the programmed 2020/2021 ACIP projects list programmed by TDOT.

• Projects must be on the airports current approved ALP, if applicable.

• Projects must follow TDOT Aeronautics phased approach to project development. Steps cannot be skipped simply to take advantage of 100% federal funding.

• Funding requests for routine projects will be reviewed and approved by the Tennessee Aeronautics Division. Funding requests for non-routine projects (over $100,000) will be reviewed by the Tennessee Aeronautics Commission at their next scheduled meeting.

Application Process

Airports may request CARES Act Part 1 funding in the project funding request letter submitted in BlackCat. TDOT Aeronautics will be contacting airports with projects approved for funding on or after March 27, 2020, which include federal funds. Awarded contracts will be amended to provide eligible CARES Act funding and return impacted local participation amounts. Please note, due to the basis of award for CARES Act Part 1 funding, there will not be enough funding to provide the 100% federal share for every FY 2020/2021 programmed project.

Airports will still be required to provide the 5% local share for additional state funds needed on a project.  Some funding examples are below.
 

Example Project

Project Total

NPE

State

 

CARES Act Part 1

Required Local Participation

AIP Project w/o CARES Act Funding

$350,000.00

$315,000

$17,500

$ 0

$17,500.00

AIP Project w/ CARES Act Funding

$350,000.00

$315,000

$ 0

$35,000

$ 0

Airport sponsors will still be required to pay the 5% local participation for state funding allotted to a project.  Please see the example provided below.  

AIP Project w/o CARES Act Funding

$350,000.00

$150,000

$182,000

$ 0

$17,500

AIP Project w/ CARES Act Funding

$350,000

$150,000

$174,167

$16,667

$9,166

Tennessee will receive $2,562,000 in CARES Act Part 4 funding for GA Airports in a separate Block Grant award from the FAA. Airport award amounts are determined by formula based on the categories published in the most current National Plan of Integrated Airport Systems NPIAS Report.  A listing of award amounts for Tennessee's Airports can be found here.

CARES Act Part 4 funds can be used for any purpose for which airport revenues may lawfully be used. CARES grant recipients should follow the FAA’s Policy and Procedures Concerning the Use of Airport Revenues (“Revenue Use Policy”). The Revenue Use Policy document defines permitted and prohibited uses of airport revenue. In addition to the detailed guidance in the Revenue Use Policy, the CARES Act makes clear that the funds may not be used for any purpose not related to the airport.

Eligibility
Congress recognizes that the economic effects of the COVID-19 Pandemic impacted airport operations creating a reduction and uncertainty of revenue coming into local and state governments. It is important to remember that the primary purpose and intent of Part 4 CARES Act funding is to keep airports open (employee salaries, utilities, debt service etc.). New airport development is also eligible with prior approval from TDOT Aeronautics and the FAA.

What are examples of operational costs? Operational costs are costs that are incurred as a result of normal airport operations. Examples include, but are not limited to: airport employee payroll, utility bills, supplies, equipment purchases, building repairs, mowing, debt service, and other non-construction costs.

What are examples of development costs? Development costs are costs that are incurred as a result of the planning, design, and/or construction of new airport infrastructure or expansion of existing infrastructure or airport property. Cost incurred as development are those that must meet safety and security standards, meet National Environmental Policy Act (NEPA), prevailing wage, Buy American, Veterans’ Preference, and Disadvantaged Business Enterprise Program requirements. Examples of development costs include but are not limited to: planning, design, and/or construction costs of a new fuel farm/apron/taxiway/runway/hangar, environmental review/documentation, and land acquisition.
 

Application Process
The application must contain a request letter, documentation for intended use of the funds, and a proposed funding drawdown schedule. Two sample request letters are posted below. Please complete and submit the appropriate letter for your intended use of the funds - operational or development. TDOT is currently authorized to issue CARES Act Part 4 funding for operation and maintenance of the airport. The FAA has not authorized CARES Act Part 4 funding for airport development at this time.

Airports will submit CARES Act funding requests in TDOT’s BlackCat system. Additional instructions are posted here. 

Award and Reimbursement – Operational Expense
Grant funds may be used to reimburse airport operational and maintenance expenses directly related to the airport incurred no earlier than January 20, 2020. Grant funds also may be used to reimburse Grantee’s payment of debt service where such payments occur on or after April 14, 2020.

CARES Act grants are 100% reimbursable grants. Airports will submit an invoice, including all required documentation and provide proof of payment, to receive reimbursement from TDOT. Required documentation will vary depending on the expense. The FAA is currently developing criteria and minimal documentation requirements to meet the intent of the law.

Award and Reimbursement – Airport Development Expense
The FAA has not yet authorized CARES Act Part 4 funding for airport development. When guidance is provided TDOT will provide additional instruction to the airports. Please be aware that the FAA has designated reimbursement of local share for an AIP project as a development expense.
 

 

Airports may request CARES Act Part 1 funding in the project funding request letter submitted in BlackCat. TDOT Aeronautics will be contacting airports with grants awarded on or after March 26, 2020 which include federal funds. Awarded contracts will be amended to provide eligible CARES Act funding and return impacted local participation amounts. Please note, due to the basis of award for CARES Act Part 1 funding, there will not be enough funding to provide the 100% federal share for every FY 2020/2021 programmed project. instructions for submitting a funding request for CARES Act funding can be found here.

Airports may request CARES Act Part 4 funding by submitting a funding request in BlackCat. The application must contain a request letter, documentation for intended use of the funds, and a proposed funding drawdown schedule. Two sample request letters are posted on the TDOT website. Please complete and submit the appropriate letter for your intended use of the funds - operational or development. TDOT is currently authorized to issue CARES Act Part 4 funding for operation and maintenance of the airport. The FAA has not authorized CARES Act Part 4 funding for airport development at this time.

Example Request letters:

Part 4 Operational use

Part 4 Development use