State Funding

The Commonwealth Airport Fund (CAF) and the Aviation Special Fund provide the financial resources for the programs established and administered by the The Virginia Aviation Board (VAB) and the Virginia Department of Aviation. The CAF receives its revenue from an annual allocation made by the Commonwealth Transportation Board to the Virginia Aviation Board. The Code of Virginia specifies that CAF resources shall be allocated to airports on the basis of their service role as identified in the Virginia Transportation System Plan (VATSP). Entitlement and discretionary funds are made available from the CAF and are used under the Airport Capital Program.

From the CAF, state entitlement funds are allocated annually to sponsors of airports that have scheduled air carrier service in accordance with Code of Virginia 58.1-638.A3, which also specifies that no air carrier airport shall receive less than $50,000 or more than $2 million per fiscal year in state entitlement funds. When an air carrier airport sponsor has unobligated state entitlement funds at the end of a fiscal year, the unobligated funds are added to the balance of state entitlement funds awarded to the sponsor for the following fiscal year.

Sponsors eligible for state entitlement funds must submit a Commonwealth Airport Fund Entitlement Utilization Report for VAB approval each year in order to qualify for state discretionary funding. These reports provide an annual accounting of the previous fiscal year’s state entitlement fund expenditures. DOAV reviews the reports and makes recommendations to the VAB. Following VAB action on the reports, DOAV will notify sponsors of the VAB’s decisions regarding the utilization reports.

The VAB has determined that state funding should be expended on specific elements of airport planning and development projects. State funding should be allocated to sponsors who meet requirements established by the Virginia Aviation Regulations or board policy. It is VAB policy to allocate funding for airport improvement in order to:

• meet regulatory and policy obligations
• maximize benefits to the public
• improve access to airports

Code of Virginia 58.1-638.A3 directs the VAB to allocate funds to air carrier, reliever, and general aviation airports on a discretionary basis. These funds are known as discretionary funds. It is the expressed intent of the VAB that an air carrier airport sponsor totally obligates its state entitlement funds prior to that sponsor receiving any state discretionary fund allocations. DOAV encourages sponsors to use other available federal, state, and local funding options, such as passenger facility charges, before applying for state discretionary funds.

To insure that state discretionary funds are being used to the greatest benefit to the state air transportation system, DOAV will track the allocations of the state discretionary funds to the sponsors of air carrier and reliever airports and the distribution between funded projects and unfunded projects due to the lack of an available balance for the capital program. DOAV will report its findings and recommendations regarding funding policy to the VAB each May.

State entitlement funds can be used for any project eligible under the Airport Capital Program, Facilities and Equipment Program, and Maintenance Program. Operational costs are not eligible under any state funding program. If it is determined during the review of an entitlement utilization report that a sponsor used entitlement funds for eligible facilities and equipment projects or maintenance projects, and also used Facilities and Equipment Program or Maintenance Program funds for other projects eligible under the respective programs, the sponsor must reimburse the state for the Facilities and Equipment Program or Maintenance Program grants or allocations approved within that fiscal year.

Certain projects have been determined to be eligible only for the expenditure of state entitlement funds, referred to as entitlement only projects. Sponsors cannot request state discretionary funds for these projects. Projects that fall into this category include but are not limited to: 

• debt service retirement
• aircraft removal systems
• construction of ARFF simulator facilities and the provision of their related equipment, such as simulator pad, airfield access, and propane
• maintenance contracts and repairs related to systems and equipment
• purchase of equipment for snow and ice removal and treatment that exceeds a snow removal equipment plan for a FAR Part 139 airport
• purchase of firearms and body armor for law enforcement officers employed by the airport
• procurement of equipment, videos, and consultant services used to meet FAR Part 139 and TSAR 1542 training requirements
• improvements and training needed for OSHA compliace

The Aviation Special Fund (ASF) is used for facilities and equipment, general aviation security, maintenance, aviation promotion, and air service development programs.

Certain projects have been determined to be outside of normal project expenditures. If the sponsor of an air carrier airport uses state entitlement funds for such a project, the state’s share of the project cost will be counted against new request for state discretionary funding. DOAV will maintain an accounting of project activity outside of normal project expenditures. When a sponsor for an air carrier airport requests state discretionary spending, the balance in the accounting will be deducted from the state’s share of the requested project. Projects that fall into this category include but are not limited to:

• aviation promotion projects
• air service development projects
• landside passenger shuttles
• recurring operational costs
• airport personnel salaries and benefits

The DOAV may participate in the funding of a project with an airport sponsor either as part of a federally funded project or a state funded project. For most federally funded projects, DOAV and the sponsor will each fund a share of eligible costs not covered by the federal participation. DOAV’s funding portion is 60 percent of the non-federal share when state discretionary funds are involved. For most state funded projects, DOAV and the sponsor will each fund a share of eligible costs. State participation percentages are based on the type of project undertaken and the state funding program used for the project. For example, DOAV may participate in a site preparation construction project at a rate of 80 percent and a general aviation security sign installation project at a rate of 90 percent.

If a sponsor is applying for funding to rebuild or repair facilities or equipment covered by insurance, state participation would be 80 percent of either the sponsor’s deductible or the uninsured amount, whichever is less. For terminal buildings, the state’s participation is based on the public-use space ratio. If only a portion of the terminal building is involved, the state’s participation is based on the percentage of public-use space in that area. For whole building systems for terminal buildings, the state’s participation is based on the public-use space ratio.

Sponsors may no longer need property originally acquired with state funds to meet their aeronautical and operating needs. Examples to this property are land, maintenance equipment, and loading bridges. If a sponsor disposes of such property and receives a payment from the sale of the property, the sponsor must reimburse the state with a percentage of the selling price. That percentage must match the state’s participation rate in the grant agreement for the property.