Regulatory Alert: FAA Updates Grant Agreements; Grants Expected to Resume Soon
FAA Updates Grant Agreements; Grants Expected to Resume Soon
April 28, 2025
Based on a series of events that have occurred late this week, AAAE wanted to provide an update on the status of grant funding provided to airport sponsors by the Federal Aviation Administration (FAA) under the Airport Improvement Program and Infrastructure Investment and Jobs Act (IIJA), including the grant agreement that airport sponsors will be asked to execute for any new grants moving forward.
There are three major takeaways. First, the U.S. Department of Transportation (DOT) and FAA have completed their updates to the agreement governing grant funding. Two new, notable conditions that will be included in the agreement focus on ending diversity, equity, and inclusion (DEI) programs that violate federal civil rights laws and ensuring airport sponsors cooperate with federal authorities on immigration enforcement. Second, FAA has released a notification requesting comments on the updated grant assurances that are included in the updated agreement. However, it is important to note that the updated assurances are separate from the conditions focusing on DEI programs and immigration enforcement. And finally, with the updated grant agreement completed, FAA is expected to begin issuing grants very soon, starting with formulaic grants through the Airport Infrastructure Grant (AIG) Program and AIP.
Additional information is provided below on each of these points. The full text of the updated grant agreement has not been publicly released, although it should be available early next week. However, the updated grant assurances, which only comprise a portion of the agreement, are publicly available here. Comments on the grant assurances (not the grant agreement) may be filed with FAA on or before Friday, May 9. We encourage airport sponsors to review these updates before executing any new grant agreements.
FAA released the grant agreement template for FY25 AIP and IIJA grants, which can be viewed here. In the template, FAA highlighted in yellow the areas under "conditions" where changes have been made in comparison to the previous version.
Background. Under federal law, airport sponsors that have accepted federal financial assistance under the AIP or any of the three airport-related programs under IIJA agree to comply with certain terms and conditions outlined in grant agreements executed with FAA. As part of each grant agreement, airport sponsors must comply with, among other things, (1) a series of “conditions” and “special conditions,” and (2) grant assurances that are appended to the agreement. Grant assurances primarily reflect statutory obligations in 49 U.S.C. § 47107, while conditions may, in part, reflect administration priorities.
Based on our conversations with FAA, we have been informed that the grant agreement has been updated and finalized and will be made publicly available early next week. The agreement will include updated “conditions” and grant assurances and be used for issuing or obligating any new grants moving forward under AIP or IIJA.
Grant Agreement Conditions. In terms of grant conditions, yesterday, DOT Secretary Sean Duffy sent a letter to all federal grant recipients, outlining some of the legal requirements that will be included in the updated agreement governing grant funding for airport sponsors. You can read the letter here. We expect the agreement will contain, among other things, two new conditions relating to DEI programs and immigration enforcement:
- DEI Programs: Under Executive Order 14173, issued on January 21, federal agencies were directed to ensure that all grant recipients, including airport sponsors, “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” This condition is expected to be in the agreement. In yesterday’s letter from Secretary Duffy, DOT elaborated on expectations for compliance and indicated that grant recipients “must ensure that the personnel practices (including hiring, promotions, and terminations) within their organizations are merit-based and do not discriminate based on prohibited categories.” The certification requirement was originally subject to a nationwide preliminary injunction in February. However, in March, the U.S. Court of Appeals for the Fourth Circuit lifted the injunction and allowed it to take effect.
- Immigration Enforcement: Under Executive Orders 14159 and 14218, the administration was directed to ensure that, to the maximum extent possible, “so-called ‘sanctuary’ jurisdictions, which seek to interfere with the lawful exercise of Federal law enforcement operations, do not receive access to Federal funds.” In accordance with the order, DOT Secretary Duffy indicated in his letter yesterday that grant recipients will be required to generally cooperate “with Federal authorities in the enforcement of Federal law, including cooperating with and not impeding U.S. Immigration and Customs Enforcement (ICE) and other Federal offices and components of the Department of Homeland Security in the enforcement of Federal immigration law.” Yesterday, a federal court in California issued an injunction, preventing the administration from withholding federal funding from 16 different cities and counties. However, the injunction does not specifically mention DOT or FAA grant programs, and it is unclear at this stage whether that injunction will affect or not affect airport sponsors.
- Review of Changes: Based on our initial review, the update to the grant assurances is more straightforward in comparison to the grant conditions. The update removed references to executive orders issued by former President Biden and added the new orders issued by President Trump. In addition, the assurances reflect changes made by the FAA Reauthorization Act of 2024, which added a new provision on not restricting or prohibiting the sale of 100LL aviation gasoline. It also incorporates some of the changes to FAA’s review of airport layout plans in accordance with section 743 of the law.
- FAA’s Request for Comment: Under 49 U.S.C. § 47107(h), FAA must publish a notice of proposed modification of grant assurances and provide an opportunity for comment on the proposal. In accordance with this requirement, FAA’s notice was published in the Federal Register today, triggering a 14-day comment period. The deadline to respond is Friday, May 9. We encourage you to review the updated grant assurances and consider providing feedback to FAA before the deadline.
- Effective Date: In today’s notice, FAA noted that the agency is “implementing these modified grant assurances upon publication of this notice to expedite processing Fiscal Year 2025 grants.” However, FAA also indicated that further revisions to the grant assurances may be made based on the comments received.
Status of FAA Grant Funding. Since President Trump took office, FAA has not issued any AIP or IIJA grants to airport sponsors primarily because the agency has been reviewing discretionary grant awards that were announced prior to January 20 and updating the grant agreement to reflect administration priorities. There are two updates to share as it relates to grant funding:
- Entitlement/Formulaic Grants: Now that the grant agreement has been finalized, AAAE has been informed that airport sponsors should expect to receive agreements to execute formulaic grants in the near future, including under the AIG Program, as soon as next week. The updated agreement should also help FAA move forward with issuing FY25 AIP entitlement grants soon.
- Discretionary Grants: FAA is still conducting its ongoing internal review of discretionary grant awards that were announced last year, including FY25 Airport Terminal Program (ATP) grants, FY25 FAA Contract Tower (FCT) Competitive grants, and FY23 supplemental discretionary grants. As FAA completes its review of these awards, the agency will move forward issuing agreements for each of these grants.
As a reminder, we have developed a one-page overview of the various grant programs and funds being administered by FAA, including relevant timelines, to help airports navigate the opportunities available for infrastructure funding.
