(a) Acceptance Authorized; Conditions. Except as otherwise provided by law, every municipality is authorized to accept, receive, receipt for, disburse and expend federal and state moneys and other moneys, public or private, made available by grant or loan or both to accomplish in whole or in part any of the purposes of this chapter. All federal moneys accepted under this section shall be accepted and expended by the municipality upon such terms and conditions as are prescribed by the United States and as are consistent with state law; and all state moneys accepted under this section shall be accepted and expended by the municipality upon such terms and conditions as are prescribed by the state. Unless otherwise prescribed by the agency from which such moneys were received and except as otherwise provided by law, the chief financial officer of the municipality shall, on its behalf, deposit all moneys received pursuant to this section and shall keep them in separate funds designated according to the purposes for which the moneys were made available, in trust for such purposes.

(b) Department as Agent for Municipalities in Receiving Certain Federal Funds; Exceptions.

(1) The department shall act as agent for each municipality for the purposes of applying for, receiving and disbursing federal funds made available pursuant to the former Airport and Airway Development Act of 1970, 84 Stat. 219, 49 U.S.C., § 1701 et seq. [repealed], or any amendment thereto, unless the municipality owns an airport having a minimum of twenty-five thousand (25,000) originating enplanements annually on regularly scheduled airline carriers as certified by the federal civil aeronautics board, in which event the municipality may act as principal with respect to any airport owned by it, or may designate the department as its agent for such purposes. All funds received by the department shall be deposited in the state treasury to be kept and disbursed in a manner consistent with federal requirements.

(2) Whenever the department acts as agent, it may do so for an individual municipality or municipalities acting jointly and the applicable provisions of § 42-2-203(c) shall apply under either circumstance.