(1)    Secretary may accept. The secretary may cooperate with the government of the United States, and any agency or department thereof in the acquisition, construction, improvement, maintenance and operation of airports and other air navigation facilities in this state, and comply with the laws of the United States and any regulations made thereunder for the expenditure of federal moneys upon such airports and other air navigation facilities, and may enter into any contracts necessary to accomplish such purpose. The secretary may accept, receive and receipt for federal moneys and other moneys, either public or private, for and in behalf of this state or any municipality thereof, for training and education programs, for the acquisition, construction, improvement, maintenance and operation of airports and other aeronautical facilities, whether such work is to be done by the state or by such municipalities, or jointly, aided by grants of aid from the United States, upon such terms and conditions as are or may be prescribed by laws of the United States and any rules or regulations made thereunder, and the secretary may act as agent of any municipality of this state or the owner of any public-use airport upon the request of such municipality or the owner of the public-use airport, in accepting, receiving and receipting for such moneys in its behalf for airports, and in contracting for the acquisition, improvement, maintenance or operation of airports financed either in whole or in part by federal moneys, and the governing body of any such municipality or the owner of the public-use airport may designate the secretary as its agent for such purposes and enter into an agreement with the secretary prescribing the terms and conditions of such agency in accordance with federal laws, rules and regulations and with this chapter. Such moneys as are paid over by the U.S. government shall be retained by the state or paid over to said municipalities or to the owners of the public-use airports under such terms and conditions as may be imposed by the U.S. government in making such grants.

   (3)   Contracts. All contracts for the acquisition, construction, improvement, maintenance and operation of airports and other aeronautical facilities, made by the secretary of transportation either as the agent of this state or as the agent of any municipality or as the agent of the owner of a public-use airport, shall be made pursuant to the laws of this state governing the making of like contracts; provided, however, that where the acquisition, construction, improvement, maintenance and operation of any airport or landing strip and other aeronautical facilities is financed or partially financed with federal moneys, the secretary of transportation, as agent of the state or of any municipality thereof or of the owner of a public-use airport, may let contracts in the manner prescribed by the federal authorities, acting under the laws of the United States, and any rules or regulations made thereunder, notwithstanding any other state law to the contrary.

   (4)   Disposition of federal funds. All moneys accepted for disbursement by the secretary of transportation pursuant to this section shall be deposited in the state treasury, and, unless otherwise prescribed by the authority from which the money is received, kept in separate funds, designated according to the purpose for which the moneys were made available, and held by the state in trust for such purposes. All such moneys are appropriated for the purposes for which the same were made available to be expended in accordance with federal laws and regulations and with this chapter. The secretary of transportation, whether acting for this state or as the agent of any of its municipalities or as the agent of the owner of a public-use airport, or when requested by the U.S. government or any agency or department thereof, may disburse such moneys for the designated purposes, but this shall not preclude any other authorized method of disbursement.

   (5)   Local projects and funds; secretary’s functions. No county, city, village or town, whether acting singly or jointly with a county, city, village or town, shall submit to a federal aeronautical agency or department any project application requesting federal assistance, for any airport improvement, aeronautical facility or planning study, unless the project and the project application have been first approved by the secretary. No such county, city, village or town shall directly accept, receive, receipt for or disburse any funds granted by the United States for the project, but it shall designate the secretary as its agent and in its behalf to accept, receive, receipt for and disburse such funds. It shall enter into an agreement with the secretary prescribing the terms and conditions of the secretary’s functions under such agency in accordance with federal laws, rules and regulations and applicable laws of this state.