Airport Improvement Program Grant Requirements and Assurances
By Jeff Wagner, Shareholder
Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C.
Every airport that receives assistance from the federal government must comply with a panoply of obligations imposed under various statutes, regulations and Executive Orders. These obligations are listed in the Grant Assurances that an airport sponsor¹ must execute and attach to each application for assistance from the Federal Aviation Administration (FAA) under the Airport Improvement Program (AIP). In addition, these Grant Assurances also apply for funding received under the Infrastructure Investment and Jobs Act, Public Law 117-58, popularly called the “Bipartisan Infrastructure Law.” Once a grant is awarded, the Grant Assurances become a part of the grant agreement between the FAA and the airport.
From time to time, the FAA will revise the Grant Assurances to include new requirements or modify existing requirements. The FAA most recently modified the Grant Assurances in May 2022 when it added several new regulatory requirements and clarified the application of several existing requirements.
Every airport that receives federal funding should be aware that the Grant Assurances not only directly affect the project being funded, including any contracts executed by the airport in furtherance of the project, but also impose obligations on the airport for an extended period of time after the project is complete. Requirements with respect to the former include, among others, wage requirements for laborers (e.g., the Davis-Bacon Act, Federal Fair Labor Standards Act, etc.); non-discrimination requirements (including the obligation to have a Disadvantaged Business Enterprise program and, as applicable, an Airport Concessions Disadvantaged Enterprise Program); the manner of selecting architects, engineers and other design professionals (by requiring qualifications-based selection procedures comparable to those required under the Brooks Act) and environmental requirements (e.g., compliance with the National Historic Preservation Act of 1966, the Clean Air Act, etc.). Requirements with respect to the latter include, among others, obligations to develop a rate structure that makes the airport as economically self-sustaining as possible, to maintain the airport in a good and serviceable condition, to use airport revenues only for airport development and operating costs and to avoid granting any exclusive rights at or to the use of the airport. These requirements generally have a life of twenty years, except the non-exclusive use and airport revenue assurances which remain as long as the airport is operated as a public airport.
Unfortunately, many airport operators are unfamiliar with the extent of the requirements in the Grant Assurances, often relying on a design professional to ensure that the airport meets all requirements. Although the architects and engineers that I have worked with on AIP-funded projects are aware of the general requirements under the Grant Assurances, at least as far as the project being funded is concerned, ensuring compliance with all Grant Assurance requirements is outside their professional expertise. The FAA’s AIP website page contains a wealth of information (including required or model contract clauses), and the FAA’s Airports District Office is a great source of information and knowledge and can help with questions or issues under the Grant Assurances (and must be involved in certain cases such as when a new Davis-Bacon wage determination is needed for a project). In addition, and as a shameless plug for my fellow members of the bar, a knowledgeable airport lawyer is generally well worth his or her cost on Grant Assurance compliance issues.
¹This article only addresses airport sponsor Grant Assurances. Separate Grant Assurances apply to Planning Agency Sponsors, Non-Airport Sponsors Undertaking Noise Compatibility Program Projects, and Aviation State Block Grant Program.
Jeff Wagner is a shareholder in the Jackson, Mississippi, office of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., and may be reached at (601) 973-3610 or by email.
MISSISSIPPI AIRPORTS ASSOCIATION
P.O. Box 16803, Jackson, MS 39236 | 877-397-3929