Government Affairs

ACPA Reports Construction Funding in CARES Act

As reported in our “3 Minutes on Monday” special report this week, the recently approved CARES Act includes $10 billion in grants for airports. 

Gary Mitchell reviewed the language and provides this overview:

We reported the grants would likely be used to service airport debt and to maintain operations. We initially stated that it was likely little, if any, of the grants would be used for construction projects. We have since done more research into the CARES Act and the following should help better explain what is in the bill. We encourage you to review this information carefully, and to refer to the FAA’s website, which includes additional information and answers to frequently-asked questions. Please see the links, which at the end of this article.

As it turns out, there is some funding in the bill to be used for airport construction. The $10 billion in funding is divided into four pots of money. At least $500 million is available to increase the Federal funding share to 100% for grants awarded under the fiscal year 2020 appropriations cycle for 2020 Airport Improvement Program (AIP) and 2020 Supplemental Discretionary grants. That means an airport sponsor should have incentive to proceed with construction projects as well as speed up some construction to take advantage of 100% funding instead of having to come up with funds in this tough fiscal environment.

Another $100 million of this $10 billion dollars is available for general aviation airports and could be used for any purpose for which airport revenues may be lawfully used.

CARES grant funding can be used for airport development on an airport. This could mean a general aviation airport would not have to come up with the local matching funds since a CARES grant is a 100% federal share. Coming up with the local share is often an issue for a small airport.
The funds are allocated based on the categories published in the most current Nation Plan of Integrated Airport System (NPIAS), reflecting the percentage of the total published eligible development costs for each category, and then dividing the allocated funds evenly among the eligible airport in each category. So the money must be spread around and may not be a large amount, depending on all the request.

At least $7.4 billion of the funds are available to Commercial Service Airports for any lawful purpose and another $2 billion is available for large, medium and small hub airports and non-hub airports for any lawful purpose.

So while most of the money is dedicated to airports that would likely use the funds to service debt and maintain operations, up to $600 million is set aside that could be used to promote construction projects. To be eligible for a grant under the CARES Act, an airport must be part of the NPIAS.

We view this news as positive since the $500 million will likely be used to amend the 2020 AIP and discretionary grants to eliminate local matching shares, which will be an incentive to keep airport construction moving forward.

Additionally, this may present smaller airports with the opportunity to implement concrete overlay projects they originally thought were too expensive, because they would not have to provide matching funds and since traffic may be lower than normal. Any development projects would still need to go through the local FAA Airport District Office (ADO) and Region to assure it meets all FAA requirements.

FAA weblinks:

ACPA to FHWA: Four Suggestions Could Reduce Adverse Impacts

In one of the latest efforts to support the concrete pavement industry during the current pandemic crisis, ACPA has proposed several actions to the FHWA.

In a message to Alex Etchen, FHWA Associate Administrator for Highway Policy and External Affairs, ACPA offers four suggestions that could address COVID-19 related health and economic issues impacted contractors and others in the industry. The full text of the message, penned by Leif Wathne, follows below:  

  1. Issue FHWA guidance that clearly and unambiguously classifies highway construction workers as “Essential Critical Infrastructure Workers” under the CISA memorandum. Additional FHWA guidance in this regard can be helpful in ensuring that vitally important highway construction work continues. As underscored by all our transportation stakeholders, maintaining the transportation construction sector is vital to our nation’s ability to continue delivering needed medical supplies, food and goods, clean water and energy to the American people as we address this pandemic.
  2. Issue FHWA guidance that makes clear that relief funds under the CARES Act are eligible for reimbursement of costs incurred by highway contractors to protect their workers by adhering to the CDC-recommended social distancing guidance during the pandemic while continuing critically important infrastructure construction functions (e.g. such items as increased per diem, additional site vehicles, enhanced PPE, added hand washing stations, additional jobsite toilets,  etc.). Contractors are fully committed to workforce safety and adhering to U.S. Government social distancing guidance during these unprecedented times comes at additional, unanticipated costs, and should therefore be explicitly eligible for reimbursement.     
  3. FHWA should issue guidance to suspend state/local match requirement on federal aid projects (i.e. 100% federal Share) for a two-year period to allow the federal investment to be put to work without delay, as state/local budget revenue losses will threaten their ability to meet any state/local match requirement. Such a suspension of state/local match requirements will allow the federal investment to be put to work more quickly, putting our ranks of unemployed to work in a matter of weeks, rather than years. This will be especially important if federal recovery legislation (Phase 4 or later) includes a substantial increase in infrastructure investment, as state DOTs would not be able in a position to meet the state match requirement. 
  4. FHWA should issue guidance that encourages state DOTs to increase flexibility in contracting mechanisms employed during this crisis (e.g. design-build and other innovative contracting mechanisms). Such flexibility will enable states to accelerate lettings and construction projects so more people are again put to work more quickly. This will be especially important if federal recovery legislation includes a substantial increase in infrastructure investment, as state DOTs are not currently staffed to handle such an increase in workload in a timely manner. 

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Follow this link to see ACPA’s government affairs repository.

Update on Highway Materials Group Actions

As we reported last week, ACPA continues to participate in DC construction coalitions to discuss ongoing COVID-19 relief and recovery legislative packages and how infrastructure investment priorities can be best positioned for consideration.

Following the Highway Materials Group meeting, members penned a letter to Congressional leadership.  Click here to read the letter, which was finalized shortly before our previous newsletter was published last week.

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The Highway Materials Group is comprised of eleven national associations, representing companies that provide the construction materials and equipment essential to building America’s roads, highways and bridges. The HMG associations’ members employ tens of thousands of men and women in well-paying American jobs, and support increased investment in America’s surface transportation network.  Members include: American Coal Ash Association; America Concrete Pavement Association; American Traffic Safety Services Association; Associated Equipment Distributors; Association of Equipment Manufacturers; Concrete Reinforcing Steel Institute; National Asphalt Pavement Association; National Ready Mixed Concrete Association; National Stone, Sand & Gravel Association; Portland Cement Association; and Precast/Prestressed Concrete Institute.

Follow this link to see ACPA’s government affairs repository.

Revisiting AHUA Committee Priorities

As a follow-up to our story last week about the AHUA Policy and Government Affairs committee meeting, we are including a link to the letter we mentioned would be sent to House & Senate Leaders. 

Click here to read the letter, which urges Congress to provide emergency funds to State highway and transportation departments and to pass a long-term and robustly funded highway and transportation reauthorization bill.

We also reported on AHUA’s Top Priorities for Highway Reauthorization. This document was also finalized after our newsletter was published. Click here to view it.

The committee is co-chaired by Leif Wathne of ACPA and Ashley Jackson of NAPA. 

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Follow this link to see ACPA’s government affairs repository.

FHWA and Stakeholders Discuss Workshop

FHWA Long-Term Infrastructure Program (LTIP) officials and industry stakeholders met by conference call last week to begin planning for a future workshop, says Larry Scofield. The goal of the workshop is to set priorities for conducting the remaining FHWA Long-Term Pavement Performance (LTPP) data analysis projects. 

The current LTPP strategic plan for data analysis (“tablecloth”) was developed almost a decade ago, so the group agrees they need to update the current plan. The existing plan has nine strategic objectives and a list of data analysis projects under each strategic objective. 

The purpose of the future workshop is to help the LTIP staff set priorities for the 100 or so identified data analysis projects that have yet to receive funding. The conference call provided background to the stakeholders for planning the future workshop. Leif Wathne is ACPA’s LTIP representative, and along with Scofield, participated in the call. 

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