The “CV3” Bill’s $10 Billion in Airport Grants – How Will It Work?

The “CV3” Bill’s $10 Billion in Airport Grants – How Will It Work?

March 26, 2020  | Jeff Davis

The third coronavirus response bill appropriates $10 billion from the general fund of the Treasury for ” an additional amount for ‘Grants-In-Aid for Airports’…to prevent, prepare for, and respond to coronavirus, to remain available until expended…Provided further, That funds provided under this heading in this Act may not be used for any purpose not directly related to the airport…”

Eligibility is limited to sponsors of airports as defined in 49 U.S.C. §47102 and the $10 billion is not bound by any of the funding restrictions in chapter 471 of title 49 except for the prevailing wage requirement in §47112(b).

There is one other major requirement for any recipients of this funding:

…That all airports receiving funds under this heading in this Act shall continue to employ, through December 31, 2020, at least 90 percent of the number of individuals employed (after making adjustments for retirements or voluntary employee separations) by the airport as of the date of enactment of this Act: Provided further, That the Secretary may waive the workforce retention requirement in the previous proviso, if the Secretary determines the airport is experiencing economic hardship as a direct result of the requirement, or the requirement reduces aviation safety  or security: Provided further, That the workforce retention requirement shall not apply to nonhub airports or nonprimary airports receiving funds under this heading in this Act:

The bill provides that the $10 billion be broken up into several piles, each to be distributed in a different way:

Gross Minus To Be
Total Oversight Apportioned
Apportioned by CY 2018 Enplanements 3,700.0 -3.7 3,696.3
Apportioned by FY 2018 Debt Service 3,700.0 -3.7 3,696.3
Apportioned by Regular AIP Formula 2,000.0 -2.0 1,998.0
Increase FY20 AIP Fed. Share to 100% 500.0 -0.5 499.5
Apportioned to General Aviation Airports 100.0 -0.1 99.9
TOTAL PROGRAM 10,000.0 -10.0 9,990.0

The federal cost share of all of the money is 100 percent, except for the $500 million that is included in order to bring each airport’s share of the regular $3.35 billion Airport Improvement Program apportionment up to a 100 percent cost share. That $500 million can only go towards projects eligible for funding under the regular AIP program (which focuses on capital projects on the “airside” of an airport, not the “groundside”). Presumably the FAA tailors each grant under this $500 million based on the dollar amount of their required matching share for FY20 AIP grants.

But the rest of the money – the other $9.5 billion – is specifically available “for any purpose for which airport revenues may lawfully be used.” That is a lot of discretion given to airport sponsors.

Regarding how the rest of the money is to be distributed to airports:

Apportioned by calendar year 2018 enplanements. This is very straightforward. Specifically, the funding is to be “allocated among all commercial service airports based on each sponsor’s calendar year 2018 enplanements as a percentage of total 2018 enplanements for all commercial service airports.”

To figure out how much your airport will get, just go to the FAAs’s passenger boarding data page and click on the CY 2018 commercial service airport table (which is ranked in order) of 2018 enplanements, find your 2018 total, then divide that by the total CY 2018 CSA enplanement total (899,710,601 persons) to get your share. Multiply that share times $3,696.3 million to get your total.

The biggest airport (Atlanta Hartsfield) had 51,865,797 boardings in 2018, or 5.7647% of the total, which would give then $213.1 million out of this pot of money. My hometown airport (Knoxville McGhee-Tyson) had 1,069,565 enplanements in 2018 (0.1189% of the total), so it would get $4.4 million from this pot.

Apportioned by fiscal year 2018 debt service. This one is much more complicated: to be “allocated among all commercial service airports based on an equal combination of each sponsor’s fiscal year 2018 debt service as a percentage of the combined debt service for all commercial service airports and each sponsor’s ratio of unrestricted reserves to their respective debt service.”

Figuring this out involves going to the FAA’s CATS report webpage. Pick your airport and the year 2018 from the drop-down menu, then pull up Form 127. For the ratio of an airport’s debt service to total debt service, the problem is that we don’t know whether the FAA will use the total in Line 15.1 (“Debt service, excluding coverage”) as the numerator or Line 15.2 (“Debt service, net of PFCs and Offsets”). Then those numbers for each airport must be divided by the FY18 national totals for Line 15.1 ($7,079,405,356) or Line 15.2 ($5,037,299,647) as the case may be.

Then, it gets even more complicated. You then have to determine the airport’s “ratio of unrestricted reserves to their respective debt service.” That appears to be Line 13.0 in Form 127, which you then divide by your Line 15.1 (or 15.2) total. This varies widely by airport – Atlanta Hartsfield’s ratio is a little over 3.0 to 1 (Line 13.0 divided by Line 15.1) while Detroit Wayne County’s ratio is just 1.02 to 1. We are honestly not sure how these ratios are supposed to be multiplied against an airport’s share of total debt and then, what, ranked nationally?

In any case, there are also some holes in the Form 147 dataset. So this half of the $7.4 billion may take longer to apportion than the rest of the money, if the FAA wants to get some money into airport hands post haste.

Apportioned by regular AIP formula. The regular AIP distribution formula is in 49 U.S.C. §47114. But the text of the appropriations bill makes some tweaks to that basic formula, saying the $2 billion shall:

  1. be apportioned as set forth in section 47114(c)(1)(C)(i), 47114(c)(1)(C)(ii), or 47114(c)(1)(H) of title 49, United States Code;
  2.  not be subject to the reduced apportionments of 49 U.S.C. 47114(f); and
  3. have no maximum apportionment limit, notwithstanding 47114(c)(1)(C)(iii) of title 49.

The effect of all that is to boost a lot of minimum apportionments for airports and make clear that this money is in addition to the $3.35 billion regular AIP apportionment for FY 2020.

If any of the $2 billion is left over after this distribution, it is to be distributed the same way as the $7.4 billion (half CY 2018 enplanements, half FY 2018 debt service ratios).

(This $2 billion was originally in the Senate bill as regular AIP funding that would have been focused on capital projects, not operations, and subject to all the bells and whistles of chapter 471. But the final bill made it subject to the same funding conditions as the $7.4 billion, just apportioned via a different formula.)

Apportioned to general aviation airports. The last $100 million is for general aviation airports, “based on the categories published in the most current National Plan of Integrated Airport Systems, 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, rounding up to the nearest thousand dollars…”

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