American Rescue Plan Act of 2021 (ARPA): COVID Relief Funding for Airports
The Federal Aviation Administration (“FAA”) recently established the Airport Rescue Grant program to distribute the American Rescue Plan Act (“ARPA”) funding that was approved and signed into law last month. Although the FAA is working quickly to distribute funding to eligible airports to support the economic recovery of the national airport system, what effect will the American Rescue Plan Act have on these airports?
The coronavirus pandemic has had a significant impact on airports and the entire aviation industry, with a 71.5 percent decline in domestic departures in May 2020 compared to the same month the previous year. The American Rescue Plan will increase the total amount of airport-related coronavirus relief funding from the Federal government from $12 billion to $20 billion over the past year. The ARPA includes $8 billion to assist airports, $800 million of which is designated for concessionaires to prevent, prepare for, and respond to the coronavirus, and extends the Payroll Support Program. Consistent with the Coronavirus Response and Relief Supplemental Appropriations Act, an airport allocated more than four times its annual operating expenses under the CARES Act would not be eligible for funding through this Plan.
Of the $8 billion, $6.5 billion is reserved for costs associated with operations, personnel, cleaning, sanitization, janitorial services, combating the spread of pathogens, and debt service payments at primary airports, with no matching requirements. For non-primary commercial service airports and general aviation airports, the bill includes $100 million with no matching requirements. Airports should also note that eligible expenses under previous relief acts should not be applied to additional relief funds or other federal sources of revenue.
To assist airports that are continuing to make improvements to airport safety, capacity, security, and environmental concerns, the ARPA also includes $608 million to increase the Airport Improvement Program Federal share to 100 percent for grants awarded in fiscal year 2021 for airfield capital improvements or rehabilitation projects. Fiscal year 2020 awards could also increase the Federal share to 100 percent, if currently below that threshold.
The $800 million to provide concessionaires relief from rents and minimum annual guarantees will be split between small airports ($640 million), many of whose concessionaires are Disadvantaged Business Enterprises, and large airports ($160 million).
The bill also extends the Payroll Support Program through September 30, 2021, with $14 billion for airline workers and $1 billion for contractors. Airports that receive funding from the American Rescue Plan Act will be required to employ at least 90 percent of employees from March 27, 2020, through September 30, 2021, with adjustments for retirements or voluntary employee separations.