49 USC 47110 - Allowable project costs

(a) General Authority.— 
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.
(b) Allowable Cost Standards.— 
A project cost is allowable
(1) 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;

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(A) 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;
(B) 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 compatability[1] program (including project formulation costs) and is consistent with all applicable statutory and administrative requirements;
(C) if the Governments share is paid only with amounts apportioned under paragraphs (1) and (2) of section 47114 (c) or section 47114 (d)(3)(A) and if the cost is incurred
(i) after September 30, 1996;
(ii) before a grant agreement is executed for the project; and
(iii) 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
(D) if the cost is incurred after September 11, 2001, for a project described in section 47102 (3)(J), 47102 (3)(K), or 47102 (3)(L)2 and shall not depend upon the date of execution of a grant agreement made under this subchapter;
(3) to the extent the cost is reasonable in amount;
(4) if the cost is not incurred in a project for airport development or airport planning for which other Government assistance has been granted;
(5) 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); and

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(6) 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.
(c) Certain Prior Costs as Allowable Costs.— 
The Secretary may decide that a project cost under subsection (b)(2)(A) of this section incurred after May 13, 1946, and before the date the grant agreement is executed is allowable if it is
(1) necessarily incurred in formulating an airport development project, including costs incurred for field surveys, plans and specifications, property interests in land or airspace, and administration or other incidental items that would not have been incurred except for the project; or
(2) necessarily and directly incurred in developing the work scope of an airport planning project.
(d) Terminal Development Costs.— 

(1) The Secretary may decide that the cost of terminal development (including multi-modal terminal development) in a nonrevenue-producing public-use area of a commercial service airport is allowable for an airport development project at the airport
(A) if the sponsor certifies that the airport, on the date the grant application is submitted to the Secretary, has
(i) all the safety equipment required for certification of the airport under section 44706 of this title;
(ii) all the security equipment required by regulation; and
(iii) provided for access, to the area of the airport for passengers for boarding or exiting aircraft, to those passengers boarding or exiting aircraft, except air carrier aircraft;
(B) if the cost is directly related to moving passengers and baggage in air commerce within the airport, including vehicles for moving passengers between terminal facilities and between terminal facilities and aircraft; and
(C) under terms necessary to protect the interests of the Government.
(2) In making a decision under paragraph (1) of this subsection, the Secretary may approve as allowable costs the expenses of terminal development in a revenue-producing area and construction, reconstruction, repair, and improvement in a nonrevenue-producing parking lot if
(A) except as provided in section 47108 (e)(3), the airport does not have more than .05 percent of the total annual passenger boardings in the United States; and
(B) the sponsor certifies that any needed airport development project affecting safety, security, or capacity will not be deferred because of the Secretarys approval.
(e) Letters of Intent.— 

(1) 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 Governments 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 Governments 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.
(2) Paragraph (1) of this subsection applies to a project
(A) about which the sponsor notifies the Secretary, before the project begins, of the sponsors intent to carry out the project;
(B) 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
(C) that meets the criteria of section 47115 (d) and, if for a project at a commercial service airport having at least 0.25 percent of the boardings each year at all such airports, the Secretary decides will enhance system-wide airport capacity significantly.
(3) 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.
(4) 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.
(5) Letters of intent.— 
The Secretary may not require an eligible agency to impose a passenger facility fee under section 40117 in order to obtain a letter of intent under this section.
(6) Limitation on statutory construction.— 
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.
(f) Nonallowable Costs.— 
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
(1) constructing a public parking facility for passenger automobiles;
(2) 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;
(3) decorative landscaping; or
(4) providing or installing sculpture or art works.
(g) Use of Discretionary Funds.— 
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) are not sufficient to cover the Governments share of the cost of the project.
(h) Nonprimary Airports.— 
The Secretary may decide that the costs of revenue producing aeronautical support facilities, including fuel farms and hangars, are allowable for an airport development project at a nonprimary airport if the Governments share of such costs is paid only with funds apportioned to the airport sponsor under section 47114 (d)(3)(A) and if the Secretary determines that the sponsor has made adequate provision for financing airside needs of the airport.
[1] So in original. Probably should be “compatibility”.
[2] See References in Text note below.