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Source: US Congressional Budget Office

The Airport Improvement Program (AIP) provides grants to airport sponsors for capital improvement projects related to airport safety, capacity, and security. S. 3958 would expand the definition of eligible AIP project costs for future grants to include contractor incentive payments. The payments would be capped at the lesser of $1 million or 5 percent of the project’s contract value.

S. 3958 would not provide additional contract authority (a mandatory form of budget authority) for the AIP or increase the program’s existing obligation limitations. Under current law, however, airport sponsors are authorized to use funds from other Federal Aviation Administration (FAA) grants for contractor incentive payments, including those newly provided under the CARES Act (Public Law 116-136).

In addition, based on information from the agency, CBO expects that the FAA would need to develop guidelines and amend grant language in order to implement the bill’s provisions. CBO estimates that the cost to do so would not be significant. Accordingly, CBO estimates that implementing the bill would have no significant effect on discretionary spending.