49 U.S.C. § 47110 — Allowable project costs
submitted 32 years ago by Pub. L. 103-272 to r/title-49-TRANSPORTATION · 2,917 words · no verdicts yet
This section lists which airport project costs the federal government will pay for and which it will not. A cost must be necessary, reasonable, and properly timed to qualify. The section also lets the Secretary promise future funding early through "letters of intent."
(a) General Authority — Except as section 47111 allows, the government may pay, or promise to pay, a project cost only if the Secretary of Transportation decides the cost is allowable.
(b) Allowable Cost Standards — A cost is allowable: (1)(A) if it is necessarily incurred to carry out the project under the grant agreement — including audit costs the Secretary requires and the cost of moving a federal facility that is in the way, as long as the rebuilt facility is the same size and type; or (1)(B) if it is an early-completion bonus paid to a contractor, but only if (i) it is no more than the smaller of 5 percent of the initial construction contract or $1,000,000; (ii) letting the contractor control or access the worksite to finish early does not hurt airport operations; (iii) the contract spells out how the bonus works if there are unforeseeable, non-weather delays beyond the contractor's control; (iv) nothing in the contract takes away the airport operator's responsibility for safety, efficiency, and capacity during the work; and (v) the Secretary decides the bonus will likely raise airport capacity or efficiency, or save money, by shortening the project.
(2) Timing rules — a cost is allowable (A) if incurred after the grant agreement is signed, for development or planning done after signing; (B) if incurred after June 1, 1989, by the airport operator for a government-approved noise compatibility program, including its planning costs, following all applicable rules, even before a grant agreement is signed; (C) if the government's share is paid only from specific apportioned funds under section 47114, and the cost was incurred after September 30, 1996, before the grant agreement, and in line with an approved airport layout plan and every rule that would have applied after signing; or (D) if it is a development cost incurred before the grant agreement but in the same fiscal year it is signed, and (i) the airport has a shortened construction season because of local climate; (ii) it followed an approved layout plan and all applicable rules, including a complete application filed with the FAA's regional office; (iii) the sponsor told the Secretary before work began; (iv) the sponsor has another funding source lined up; and (v) starting early does not change the project's priority for discretionary funds.
(3) The cost must be reasonable in amount. (4) The cost must not be for a project that already received other federal assistance. (5) Total allowed project costs cannot exceed the maximum the grant agreement states, except as section 47108(b) allows. (6) The cost may be for adding low-emission vehicles or ground support equipment at a commercial service airport, but only for the extra cost of the low-emission feature, as the Secretary decides. (7) The cost may be for improving an airport building's efficiency, such as meeting "high-performance green building" criteria under federal energy law, if (A) it is for airport development, (B) the building otherwise qualifies for construction assistance, and (C) any resulting cost increase is justified by savings expected over the building's life.
(c) Certain Prior Costs as Allowable Costs — The Secretary may allow a cost incurred before the grant agreement under (b)(2)(A) if it was (1) necessary to plan or prepare a development project, including surveys, plans, land or airspace rights, utility relocation, site preparation, and related administrative costs that would not have happened without the project; or (2) necessary and directly tied to shaping the scope of a planning project.
(d) Relocation of Airport-Owned Facilities — The Secretary may allow the cost of relocating or replacing an airport-owned facility only if (1) the government's share is paid from funds apportioned under section 47114 or distributed from the small airport fund under section 47116; (2) the move is required by a change in the Secretary's design standards; and (3) that change was beyond the sponsor's control.
(e) Letters of Intent — (1) The Secretary may send a sponsor a letter of intent promising to obligate future money, up to the government's share, for a development project, including planning, at a primary or reliever airport, with a repayment schedule, if the sponsor carries out the project itself first. (2) This applies only if (A) the sponsor tells the Secretary of its plan before starting; (B) the project will follow every rule that would apply if it were funded normally; and (C) it meets the criteria in section 47115(d), and, for a medium or large hub airport, the Secretary decides it will meaningfully boost system-wide capacity. (3) A letter of intent is not a binding government obligation; real money can be committed only once Congress authorizes and appropriates it. (4) The total future obligations promised across all outstanding letters cannot exceed the amount authorized under section 48103, minus what the Secretary expects to need for other section 48103 grants not covered by letters. (5) The Secretary cannot require an airport to adopt a passenger facility charge just to obtain a letter of intent. (6) Nothing stops the Secretary from obligating letter-of-intent money the same year the letter is issued. (7) The Secretary may issue a letter to a "Partnership Program" airport sponsor whose application under section 47134(b) was approved in fiscal year 2019, if the project meets the chapter's other requirements.
(f) Nonallowable Costs — Except as subsection (d) and section 47118(f) allow, a cost is not allowable if it is for (1) building a public parking facility for cars; (2) building, altering, or repairing part of an airport building, unless that part is used directly for safety-related activities; (3) decorative landscaping; or (4) sculpture or art works.
(g) Use of Discretionary Funds — A project reimbursed under (b)(2)(C) does not get priority for discretionary funds under section 47115, even if the regular apportioned funds are not enough to cover the government's share.
(h) Nonprimary Airports — The Secretary may allow construction costs for revenue-producing aeronautical support facilities at a nonprimary airport if the government's share is paid only from certain funds under section 47114(c)(1)(D) or 47114(d)(2)(A), and the Secretary finds the sponsor has properly arranged financing for the airport's flight-side needs.
(i) Small Airport Letters of Intent — (1) The Secretary may issue a letter of intent for a development project, including planning costs, at a nonhub or non-primary airport. (2) The letter must set a repayment schedule for reimbursing the sponsor once it pays for the project itself. (3) The promised amount cannot exceed the larger of the government's normal cost share or $10,000,000. (4) Allowable costs can include debt-service payments on money borrowed to build the project. (5) The Secretary may issue the letter only if the sponsor notifies the Secretary of its plans before starting and requests the letter, and agrees to follow every rule that would apply to normally funded work. (6) In reviewing a request, the Secretary considers the airport's grant history, its passenger or operations numbers, and other factors it finds appropriate. (7) In setting priorities, the Secretary must (A) favor projects that cannot reasonably be funded from the airport's own apportioned money, even across several years, and that are necessary for safe operation or continued development; and (B) structure repayment schedules to avoid needlessly splitting projects into pieces. (8) A letter of intent is not a binding federal obligation; actual money still needs congressional authorization and appropriation. (9) Nothing stops the Secretary from obligating this money the same year the letter is issued.
(j) Pilot Program for Sound Insulation Repair and Replacements — (1) Within 120 days of enactment, the FAA Administrator must start a pilot program at up to two large hub public airports that fund extra noise insulation from non-aviation revenue. It gives a one-time waiver of the double-funding rule in (b)(4) for repairing or replacing sound insulation in a home that already got federal insulation help, if (A) the Secretary decides more help is justified because the earlier insulation qualifies under paragraph (2); (B) the home (i) currently sits in the 65 to 75 decibel noise zone on the latest noise map; (ii) sat in that zone when the original insulation went in, but a qualified noise auditor found it either damaged the home or was low-quality and has since broken down; and (iii) testing shows current indoor noise exceeds 45 decibels, and new insulation could cut noise by 5 decibels; and (C) the airport (i) is a large hub; (ii) sits in a dense area with at least 200,000 people within 5 miles; (iii) has run its own sound-insulation program for at least 30 years, starting in 1985; (iv) is in a metro area of at least 4,000,000 people; and (v) has at least 22,000,000 annual boardings. (2) To qualify, the applicant must (A) show that the applicant and homeowner made a good-faith effort to use any available warranty, insurance, or legal remedy first; (B) confirm the original federally funded insulation was installed before 2002; and (C) show, through a qualified noise auditor's inspection, that (i) the insulation caused structural damage not caused by the owner's poor upkeep or negligence, and (ii) that damage was not caused by the owner's or occupant's own actions. (3) The Secretary must also treat as an allowable cost periodic surveys of properties that got repaired or replaced insulation under this program, but only for properties whose owner wants a survey, to check how well the insulation still works and to identify other eligible properties.
Except as provided in section 47111 of this title, the United States Government may pay or be obligated to pay, from amounts appropriated to carry out this subchapter, a cost incurred in carrying out a project under this subchapter only if the Secretary of Transportation decides the cost is allowable.
A project cost is allowable—
if the cost necessarily is incurred in carrying out the project in compliance with the grant agreement made for the project under this subchapter, including any cost a sponsor incurs related to an audit the Secretary requires under section 47121(b) or (d) of this title and any cost of moving a Federal facility impeding the project if the rebuilt facility is of an equivalent size and type; or
if the cost is an incentive payment incurred in carrying out the project described in subparagraph (A) that is to be provided to a contractor upon early completion of a project, if—
such payment does not exceed the lesser of 5 percent of the initial construction contract amount or $1,000,000;
the level of contractor’s control of, or access to, the worksite necessary to shorten the duration of the project does not negatively impact the operation of the airport;
the contract specifies application of the incentive structure in the event of unforeseeable, non-weather delays beyond the control of the contractor;
nothing in any agreement with the contractor prevents the airport operator from retaining responsibility for the safety, efficiency, and capacity of the airport during the execution of the grant agreement; and
the Secretary determines that the use of an incentive payment is likely to increase airport capacity or efficiency or result in cost savings as a result of shortening the project’s duration;
if the cost is incurred after the grant agreement is executed and is for airport development or airport planning carried out after the grant agreement is executed;
if the cost is incurred after June 1, 1989, by the airport operator (regardless of when the grant agreement is executed) as part of a Government-approved noise compatibility program (including project formulation costs) and is consistent with all applicable statutory and administrative requirements;
if the Government’s share is paid only with amounts apportioned under paragraphs (1) and (2) of section 47114(c) or section 47114(d)(3)(A) 1 and if the cost is incurred—
after September 30, 1996;
before a grant agreement is executed for the project; and
in accordance with an airport layout plan approved by the Secretary and with all statutory and administrative requirements that would have been applicable to the project if the project had been carried out after the grant agreement had been executed; or
if the cost is for airport development and is incurred before execution of the grant agreement, but in the same fiscal year as execution of the grant agreement, and if—
the cost was incurred before execution of the grant agreement because the airport has a shortened construction season due to climatic conditions in the vicinity of the airport;
the cost is in accordance with an airport layout plan approved by the Secretary and with all statutory and administrative requirements that would have been applicable to the project if the project had been carried out after execution of the grant agreement, including submission of a complete grant application to the appropriate regional or district office of the Federal Aviation Administration;
the sponsor notifies the Secretary before authorizing work to commence on the project;
the sponsor has an alternative funding source available to fund the project; and
the sponsor’s decision to proceed with the project in advance of execution of the grant agreement does not affect the priority assigned to the project by the Secretary for the allocation of discretionary funds;
to the extent the cost is reasonable in amount;
if the cost is not incurred in a project for airport development or airport planning for which other Government assistance has been granted;
if the total costs allowed for the project are not more than the amount stated in the grant agreement as the maximum the Government will pay (except as provided in section 47108(b) of this title);
if the cost is for a project not described in section 47102(3) for acquiring for use at a commercial service airport vehicles and ground support equipment owned by an airport that include low-emission technology, but only to the extent of the incremental cost of equipping such vehicles or equipment with low-emission technology, as determined by the Secretary; and
if the cost is incurred on a measure to improve the efficiency of an airport building (such as a measure designed to meet one or more of the criteria for being considered a high-performance green building as set forth under section 401(13) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17061(13))) and—
the measure is for a project for airport development;
the measure is for an airport building that is otherwise eligible for construction assistance under this subchapter; and
if the measure results in an increase in initial project costs, the increase is justified by expected savings over the life cycle of the project.
The Secretary may decide that a project cost under subsection (b)(2)(A) of this section incurred before the date the grant agreement is executed is allowable if it is—
necessarily incurred in formulating or preparing for an airport development project, including costs incurred for field surveys, plans and specifications, property interests in land or airspace, utility relocation, work site preparation, and administration or other incidental items that would not have been incurred except for the project; or
necessarily and directly incurred in developing the work scope of an airport planning project.
The Secretary may determine that the costs of relocating or replacing an airport-owned facility are allowable for an airport development project at an airport only if—
the Government’s share of such costs will be paid with funds apportioned to the airport sponsor under section 47114 or distributed from the small airport fund under section 47116;
the Secretary determines that the relocation or replacement is required due to a change in the Secretary’s design standards; and
the Secretary determines that the change is beyond the control of the airport sponsor.
The Secretary may issue a letter of intent to the sponsor stating an intention to obligate from future budget authority an amount, not more than the Government’s share of allowable project costs, for an airport development project (including costs of formulating the project) at a primary or reliever airport. The letter shall establish a schedule under which the Secretary will reimburse the sponsor for the Government’s share of allowable project costs, as amounts become available, if the sponsor, after the Secretary issues the letter, carries out the project without receiving amounts under this subchapter.
Paragraph (1) of this subsection applies to a project—
about which the sponsor notifies the Secretary, before the project begins, of the sponsor’s intent to carry out the project;
that will comply with all statutory and administrative requirements that would apply to the project if it were carried out with amounts made available under this subchapter; and
that meets the criteria of section 47115(d) and, if for a project at a medium hub airport or large hub airport, the Secretary decides will enhance system-wide airport capacity significantly.
A letter of intent issued under paragraph (1) of this subsection is not an obligation of the Government under section 1501 of title 31, and the letter is not deemed to be an administrative commitment for financing. An obligation or administrative commitment may be made only as amounts are provided in authorization and appropriation laws.
The total estimated amount of future Government obligations covered by all outstanding letters of intent under paragraph (1) of this subsection may not be more than the amount authorized to carry out section 48103 of this title, less an amount reasonably estimated by the Secretary to be needed for grants under section 48103 that are not covered by a letter.
The Secretary may not require an eligible agency to impose a passenger facility charge under section 40117 in order to obtain a letter of intent under this section.
Nothing in this section shall be construed to prohibit the obligation of amounts pursuant to a letter of intent under this subsection in the same fiscal year as the letter of intent is issued.
The Secretary may issue a letter of intent under this subsection to an airport sponsor with an approved application under section 47134(b) if—
the application was approved in fiscal year 2019; and
the project meets all other requirements set forth in this chapter.
Except as provided in subsection (d) of this section and section 47118(f) of this title, a cost is not an allowable airport development project cost if it is for—
constructing a public parking facility for passenger automobiles;
constructing, altering, or repairing part of an airport building, except to the extent the building will be used for facilities or activities directly related to the safety of individuals at the airport;
decorative landscaping; or
providing or installing sculpture or art works.
A project for which cost reimbursement is provided under subsection (b)(2)(C) shall not receive priority consideration with respect to the use of discretionary funds made available under section 47115 of this title even if the amounts made available under paragraphs (1) and (2) of section 47114(c) or section 47114(d)(3)(A) 1 are not sufficient to cover the Government’s share of the cost of the project.
The Secretary may decide that the construction costs of revenue producing aeronautical support facilities are allowable for an airport development project at a nonprimary airport if the Government’s share of such costs is paid only with funds apportioned to the airport sponsor under section 47114(c)(1)(D) or section 47114(d)(2)(A) and if the Secretary determines that the sponsor has made adequate provision for financing airside needs of the airport.
The Secretary may issue a letter of intent to a sponsor stating an intention to obligate an amount from future budget authority for an airport development project (including costs of formulating the project) at a nonhub airport or an airport that is not a primary airport.
In the letter issued under paragraph (1), the Secretary shall establish a schedule under which the Secretary will reimburse the sponsor for the Government’s share of allowable project costs, as amounts become available, if the sponsor, after the Secretary issues the letter, carries out the project without receiving amounts under this subchapter.
The amount the Secretary intends to obligate in a letter of intent issued under this subsection shall not exceed the larger of—
the Government’s share of allowable project costs; or
$10,000,000.
Allowable project costs under paragraphs (1) and (2) may include costs associated with making payments for debt service on indebtedness incurred to carry out the project.
The Secretary shall issue a letter of intent under paragraph (1) only if—
the sponsor notifies the Secretary, before the project begins, of the intent of the sponsor to carry out the project and requests a letter of intent; and
the sponsor agrees to comply with all statutory and administrative requirements that would apply to the project if it were carried out with amounts made available under this subchapter.
In reviewing a request for a letter of intent under this subsection, the Secretary shall consider the grant history of an airport, the enplanements or operations of an airport, and such other factors as the Secretary determines appropriate.
In issuing letters of intent under this subsection, the Secretary shall—
prioritize projects that—
cannot reasonably be funded by an airport sponsor using funds apportioned under section 47114(c), 47114(d)(2)(A), or 47114(d)(6), including funds apportioned under such sections in multiple fiscal years pursuant to section 47117(b)(1); and
are necessary to the continued safe operation or development of an airport; and
structure the reimbursement schedules under such letters in a manner that minimizes unnecessary or undesirable project segmentation.
A letter of intent issued under this subsection is not an obligation of the Government under section 1501 of title 31, and the letter is not deemed to be an administrative commitment for financing.
An obligation or administrative commitment may be made only as amounts are provided in authorization and appropriation Acts.
Nothing in this section shall be construed to prohibit the obligation of amounts pursuant to a letter of intent under this subsection in the same fiscal year as the letter of intent is issued.
Not later than 120 days after the date of enactment of this subsection, the Administrator of the Federal Aviation Administration shall establish a pilot program at up to two large hub public-use airports for local airport operators that have established a local program to fund secondary noise insulation using nonaeronautical revenue that provides a one-time waiver of the requirement of subsection (b)(4) for a qualifying airport as applied to projects to carry out repair and replacement of sound insulation for a residential building for which the airport previously received Federal assistance or Federally authorized airport assistance under this subchapter if—
the Secretary determines that the additional assistance is justified due to the residence containing any sound insulation treatment or other type of sound proofing material previously installed under this subchapter that is determined to be eligible pursuant to paragraph (2);
the residence—
falls within the Day Night Level (DNL) of 65 to 75 decibel (dB) noise contours, according to the most recent noise exposure map (as such term is defined in section 150.7 of title 14, Code of Federal Regulations) available as of the date of enactment of this subsection;
fell within such noise contours at the time the initial sound insulation treatment was installed, but a qualified noise auditor has determined that—
such sound insulation treatment caused physical damage to the residence; or
the materials used for sound insulation treatment were of low quality and have deteriorated, broken, or otherwise no longer function as intended; and
is shown through testing that current interior noise levels exceed DNL 45 dB, and the new insulation would have the ability to achieve a 5 dB noise reduction; and
the qualifying airport—
is a large hub airport (as defined in section 40102 of title 49, United States Code);
is located in a dense residential area, with a minimum population of 200,000 residents within a 5-mile radius of the airport;
has an established residential sound insulation program that has been operational for at least 30 years and began in the year 1985;
is located in a metropolitan statistical area with a population of at least 4,000,000 people; and
has at least 22,000,000 enplanements annually.
To be eligible for waiver under this subsection for repair or replacement of sound insulation treatment projects, an applicant shall—
ensure that the applicant and the property owner have made a good faith effort to exhaust any amounts available through warranties, insurance coverage, and legal remedies for the sound insulation treatment previously installed on the eligible residence;
verify the sound insulation treatment for which Federal assistance was previously provided was installed prior to the year 2002; and
demonstrate that a qualified noise auditor, based on an inspection of the residence, determined that—
the sound insulation treatment for which Federal assistance was previously provided has resulted in structural deterioration that was not caused by failure of the property owner to repair or adequately maintain the residential building or through the negligence of the applicant or the property owner; and
the condition of the sound insulation treatment described in subparagraph (A) is not attributed to actions taken by an owner or occupant of the residence.
Notwithstanding any other provision of law, the Secretary shall consider a cost allowable under this subchapter for an airport to conduct periodic surveys of properties in which repair and replacement of sound insulation treatment was carried out as described in paragraph (1) and for which the airport previously received Federal assistance or Federally authorized airport assistance under this subchapter. The surveys shall be conducted only for those properties for which the airport has identified a property owner who is interested in having a survey be undertaken to assess the current effectiveness of the sound insulation treatment. Such surveys shall be carried out to identify any properties described in the preceding sentence that are eligible for funds under this subsection.
Source credit: (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1264; Pub. L. 103–305, title I, § 115, Aug. 23, 1994, 108 Stat. 1579; Pub. L. 103–429, § 6(64), Oct. 31, 1994, 108 Stat. 4385; Pub. L. 104–264, title I, § 144, Oct. 9, 1996, 110 Stat. 3222; Pub. L. 106–181, title I, § 127, Apr. 5, 2000, 114 Stat. 76; Pub. L. 107–71, title I, § 119(a)(2), Nov. 19, 2001, 115 Stat. 628; Pub. L. 108–176, title I, §§ 145, 149(b), 159(c), Dec. 12, 2003, 117 Stat. 2504, 2505, 2511; Pub. L. 109–115, div. A, title I, § 176(b), Nov. 30, 2005, 119 Stat. 2427; Pub. L. 112–95, title I, §§ 111(c)(2)(A)(ii), 138, Feb. 14, 2012, 126 Stat. 18, 25; Pub. L. 115–254, div. B, title I, § 184(b), title V, § 539(n), Oct. 5, 2018, 132 Stat. 3234, 3371; Pub. L. 117–186, § 2, Oct. 10, 2022, 136 Stat. 2199; Pub. L. 118–63, title VII, §§ 709–710(b)(1), May 16, 2024, 138 Stat. 1252, 1253; Pub. L. 119–60, div. H, title LXXXVIII, § 8801(b), Dec. 18, 2025, 139 Stat. 1969.)
- 1994Enacted · Pub. L. 103-272 · 108 Stat. 1264
- 1994Amended · Pub. L. 103-305 · 108 Stat. 1579
- 1994Amended · Pub. L. 103-429 · 108 Stat. 4385
- 1996Amended · Pub. L. 104-264 · 110 Stat. 3222
- 2000Amended · Pub. L. 106-181 · 114 Stat. 76
- 2001Amended · Pub. L. 107-71 · 115 Stat. 628
- 2003Amended · Pub. L. 108-176 · 117 Stat. 2504, 2505, 2511
- 2005Amended · Pub. L. 109-115 · 119 Stat. 2427
- 2012Amended · Pub. L. 112-95 · 126 Stat. 18, 25
- 2018Amended · Pub. L. 115-254 · 132 Stat. 3234, 3371
- 2022Amended · Pub. L. 117-186 · 136 Stat. 2199
- 2024Amended · Pub. L. 118-63 · 138 Stat. 1252, 1253
- 2025Amended · Pub. L. 119-60 · 139 Stat. 1969
A history note hasn’t been published yet. The record shows enactment by Pub. L. 103-272 on 1994-07-05.
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