MDT Aeronautics Division Airport Loan and Grant Program

The Montana Department of Transportation (MDT) Aeronautics Division administers a loan and grant program designed to support public-use, publicly owned airports and aviation facilities throughout Montana. This initiative aims to improve aviation infrastructure across the state by offering financial assistance in the form of grants and low-interest loans. These funds can be applied toward a wide range of aviation-related improvement projects, including pavement maintenance and construction, lighting and communications infrastructure, terminal and pilot lounge construction, and fuel system upgrades. A notable feature of the program is its flexibility; both prospective and retroactive applications are accepted, meaning airports can seek reimbursement for already initiated or completed projects. The Aeronautics Division grants are primarily funded through a 4.5-cent-per-gallon tax on general aviation fuel. The revenue from this tax fluctuates annually, which directly impacts the total amount of funding available each year. Grants may cover up to 100% of an airport’s share of costs for federally funded projects or non-federally funded projects. Loans can also fund up to 100% of project costs and are offered at a low interest rate, calculated as half of the national prime lending rate as reported by the Montana Board of Investments each January. Loan repayment terms are structured over a ten-year period with annual installments, and early repayment incurs no penalties. To be considered, applications must be submitted by November 15 of each year and can be mailed, hand-delivered, or submitted online. Applications may be completed by engineers, consultants, construction firms, or other representatives on behalf of an airport sponsor, with proper authorization. Once submitted, the applications are reviewed and forwarded to the Montana Aeronautics Board. A public board meeting is held in January where members evaluate and decide which projects to fund, the type of funding to allocate, and the amount. Applicant participation in this meeting is optional but encouraged. Decisions are finalized during this session, and applicants are subsequently notified. For projects leveraging Federal Aviation Administration (FAA) Airport Improvement Program (AIP) funds, which typically cover up to 90% of project costs, MDT Aeronautics grants or loans can be used to fulfill the remaining 10% local match requirement. This is especially beneficial as AIP-funded projects are usually high-cost and adhere to strict federal guidelines. NPIAS (National Plan of Integrated Airport Systems) eligibility is required for FAA funding, and most medium to large general aviation airports in Montana meet this requirement. Non-NPIAS airports or those undertaking non-FAA eligible projects are still fully eligible for MDT Aeronautics support, potentially receiving up to 100% of project costs through grants, loans, or a combination of both. Airports approved for funding must submit additional documentation before funds are disbursed, including FAA grant acceptance letters, notices to proceed, loan resolutions, and legal certifications. Funds are released no earlier than the start of the state fiscal year (July 1), and all offers expire after one year unless a formal extension request is approved by the Board. There is no limit on the number of extensions that may be requested, but these must be submitted by the third Friday in May for consideration in June. In summary, the MDT Aeronautics Division’s loan and grant program is an essential funding source for both federally and non-federally supported airport projects in Montana. It aims to enhance aviation safety and infrastructure across the state while providing considerable financial flexibility to airport sponsors.