The Local Airport Loan Program provides discretionary State loans to eligible airports for projects that enhance an airport’s ability to provide general aviation services (hangars, General Aviation (GA) terminals, utilities, GA fueling facilities, Acquisition and Development (A&D)-eligible projects, etc.) A loan may also provide the local share for an AIP grant. Such a loan can be used in conjunction with a State-funded AIP Matching grant. The maximum term of a loan is 17 years.
Interest rates match the latest California General Obligation Bond sale interest rate.
The Department approves the amount of the loan in accordance with the project’s feasibility and the sponsor’s financial situation. For details including eligibility, please see the publication, State Dollars for Your Airport (PDF), Chapter 2; and the California Code of Regulations, Title 21, Division 2.5, Chapter 5, California Airport Loan Program.
There are three different types of loans available under this program:
- Revenue Generating (Form DOA-0020 - Revenue Generating Loan – Application (PDF)),
- Matching Funds (Form DOA-0019 - Matching Funds Loan – Application (PDF)), and
- Airport Development (Form DOA-0013 - Airport Development Loan – Application (PDF)).
Local Airport Loan Program - Sponsor Eligibility
The airport must be owned by an eligible public agency (e.g., a city, county, or airport district).
The sponsor must:
- Ensure that the airport is open to the public without restriction.
- Have a valid State permit for the airport.
- Adopt rules that give it sufficient control over the operation of the airport.
- Have height restrictions around the airport which are adequate to ensure that operations can be conducted without any hazardous obstructions.
- Certify eligibility with a Form DOA-0007 - California Air to Airports Program Certification that is provided by the Department.
- Have local government approval (Resolution or minute order - Sample [PDF]) as described in Section 4072.1(a).
Local Airport Loan Program – Restrictions
- Loans are available for revenue generating projects such as hangars and fueling facilities. Loans can also be made for airport development projects. Finally, loans can be made to assist the sponsor with the local match for an AIP project. “Land banking,” automobile access roads, automobile parking areas, and facilities to accommodate airlines are not eligible for a State loan.
- For a revenue-generating project, a separate account must be established to receive income from the project. Expenses for maintaining the project may be paid from this separate account, but revenues received must be held in an amount equal to one year’s repaying of the loan.
- No limit on the size of a loan has been established in either law or regulation. The Department determines the amount for each individual loan in accordance with the feasibility of the project and the sponsor’s financial status. Economic feasibility is an especially strong factor in the approval of loans for revenue generating projects such as hangars and fueling facilities. A checklist for demonstrating economic feasibility is on the second page of the Form DOA-0020 - Revenue Generating Loan Application.
Local Airport Loan Program - Pay-Back Requirements
A pay-back schedule is included in each Loan Agreement. Generally, the term of a loan is 17 years unless a shorter term is requested by the sponsor. Loans may be repaid early without penalty. Simple interest is charged on the outstanding balance of the loan’s principal. Interest rates match the latest California General Obligation Bond sale interest rate conducted prior to preparing the Loan Agreement.
Local Airport Loan Program - Funding Level
Funding depends upon the available balance in the Local Airport Loan Account.
Local Airport Loan Program - Audits
Loans are subject to State audit. Records that substantiate the expenditure of loan monies should be retained until three years after the retirement of the loan. Funds may have to be repaid by the sponsor if an audit finds that State law or generally accepted accounting principles have been violated.
Please submit your application and supporting documentation via email to: AeronauticsGL@dot.ca.gov