```

                                                                 
Aviation Finance: Distribution of Airport Grant Funds Complied	 
with Statutory Requirements (30-APR-02, GAO-02-283).		 
                                                                 
The Federal Aviation Administration (FAA) administers the Airport
Improvement Program (AIP), which provides billions of dollars in 
federal grants to airports for planning and development projects.
The total funds awarded by FAA was consistent with the total	 
amount of AIP funds available for obligation for fiscal years	 
1996 through 2000. FAA also made available or awarded AIP grant  
funds in accordance with the statutory formulas and set-asides	 
contained in the authorization acts for the five fiscal years	 
reviewed. In some cases, FAA awarded more funding than required  
to some airports and projects when it distributed the remaining  
AIP discretionary funds, which are not subject to statutory	 
formulas or set-asides. GAO also found that small airports	 
received greater amounts than large airports.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-283 					        
    ACCNO:   A03193						        
  TITLE:     Aviation Finance: Distribution of Airport Grant Funds    
Complied with Statutory Requirements				 
     DATE:   04/30/2002 
  SUBJECT:   Appropriated funds 				 
	     Budget obligations 				 
	     Federal funds					 
	     Federal grants					 
	     Airports						 
	     FAA Airport Improvement Program			 

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GAO-02-283
     
A

Report to the House Committee on Transportation and Infrastructure

April 2002 AVIATION FINANCE Distribution of Airport Grant Funds Complied
with Statutory Requirements

GAO- 02- 283

Letter 1 Results in Brief 1 Background 3 Total Amount of AIP Grants Awarded
Equaled Total Amount

Available for Obligation 5 AIP Grant Funds Were Awarded According to
Statutory Requirements 7

AIP Funding to Small Airports Increased More Than Funding to Large Airports
8 Scope and Methodology 9 Agency Comments 10

Appendixes

Appendix I: Comparison of Statutory Formulas with AIP Grant Funds 11

Appendix II: Amount of AIP Grants By Airport Type 16

Appendix III: Categories of U. S. Airports 19 Glossary 20 Tables Table 1:
Summary of Available and Awarded AIP Funds for Fiscal Years 1996- 2000, as
of September 30 of Each Fiscal Year 6

Table 2: Comparison of Formula Amounts with AIP Grant Amount as of September
30, 1996, for Fiscal Year 1996 11 Table 3: Comparison of Formula Amounts
with AIP Grant Amount

as of September 30, 1997, for Fiscal Year 1997 12 Table 4: Comparison of
Formula Amounts with AIP Grant Amount

as of September 30, 1998, for Fiscal Year 1998 13 Table 5: Comparison of
Formula Amounts with AIP Grant Amount

as of September 30, 1999, for Fiscal Year 1999 14 Table 6: Comparison of
Formula Amount with AIP Grant Amount as of September 30, 2000, for Fiscal
Year 2000 15

Table 7: Amount of AIP Grants as of September 30, 1996, Awarded for Fiscal
Year 1996 by Airport Type 16

Table 8: Amount of AIP Grants as of September 30, 1997, Awarded for Fiscal
Year 1997 by Airport Type 17 Table 9: Amount of AIP Grants as of September
30, 1998, Awarded

for Fiscal Year 1998 by Airport Type 17 Table 10: Amount of AIP Grants as of
September 30, 1999, Awarded

for Fiscal Year 1999 by Airport Type 18 Table 11: Amount of AIP Grants as of
September 30, 2000, Awarded

for Fiscal Year 2000 by Airport Type 18 Figures Figure 1: Total Amount of
AIP Grant Funds Available for Obligation

and Awarded 2 Figure 2: Amount of Required Funding from the Small Airport
Fund

to Small Airports and Awarded by FAA, Fiscal Years 1996- 2000 8 Figure 3:
AIP Grants Awarded by FAA to Large and Small Airports,

Fiscal Years 1996 through 2000, as of September 30, of Each Fiscal Year 9

Lett er

April 30, 2002 The Honorable Don Young Chairman The Honorable James L.
Oberstar Ranking Democratic Member Committee on Transportation

and Infrastructure House of Representatives

The Federal Aviation Administration (FAA) administers the Airport
Improvement Program (AIP), which provides billions of dollars in federal
grants to airports for airport planning and development projects. FAA is
required by law to distribute a significant portion of AIP funds according
to statutory formulas and set- asides established by Congress. You asked
that we provide information on how FAA distributed AIP grants for fiscal
years 1996 through 2000. As agreed with your staff, we are addressing the
following questions:

 How did the total amount of AIP grants awarded compare with the total
amount available for obligation? 1

 Were AIP grant funds made available or awarded in accordance with the
statutory formulas and set- asides established by Congress?

 What was the distribution of AIP grants by airport type? Results in Brief
The total amount of AIP funds awarded by FAA was consistent with the

total amount of AIP funds available for obligation for fiscal years 1996
through 2000, as shown in figure 1.

1 These terms and others used in this report are defined in a glossary at
the end of this report.

Figure 1: Total Amount of AIP Grant Funds Available for Obligation and
Awarded 3000

Dollars in millions 2000 1000

0 1996 1997 1998 1999 2000

Amount available for obligation Amount awarded

Source: GAO analysis of FAA AIP data.

FAA made available or awarded AIP grant funds in accordance with the
statutory formulas and set- asides contained in the authoritization acts for
the five fiscal years we reviewed. In addition, in some cases, FAA awarded

more funding than required to some types of airports and projects when it
distributed the remaining AIP discretionary funds, which are not subject to
statutory formulas or set- asides. For example, the amount of AIP grant
funds to small airports was consistently greater than Congress required for
fiscal years 1996 through 2000. Specifically, during this period, Congress

required FAA to award $623 million from the small airport fund to small
airports. FAA actually awarded $2 billion in discretionary funds, more than
3 times the $623 million reserved for small airports in the small airport
fund.

From fiscal year 1996 through 2000, the amount of AIP grant funds to small
airports was greater than funds to large airports. 2 The amount of AIP funds
awarded to small airports increased from $769 million in fiscal year 1996 to
a high of $1. 2 billion in fiscal year 1999. The amount of AIP funding
awarded to large airports also increased from $596 million in fiscal year
1996 to a high of $739 million in fiscal year 1999. In fiscal year 2000, the

amount of AIP funding provided to both small and large airports decreased to
$1.1 billion and $720 million, respectively, because the total amount of AIP
funding available for obligation was less than that in fiscal year 1999.
Background The AIP grant program is authorized under Title 49 U. S. C 48103
and has

provided grants for airport planning and development projects since the
passage of the Airport and Airway Improvement Act in 1982. In administering
the AIP grant program, FAA has to comply with various statutory formulas and
set- asides in authorization acts that specify how AIP

grant funds are to be distributed among airports. For example, some AIP
funds are apportioned to each primary airport based on the number of
passenger enplanements at the airport per year, while cargo airports are
apportioned 3 percent of the AIP funds, and states are apportioned 18.5
percent of AIP funds. 3

2 For this analysis, we used FAA?s definition of large and small airports,
whereby the category of large airports includes large and medium hub
airports or airports that have at least .25 percent of all passenger
boardings, and all other airports are considered small. Also included in the
small airport category for funding purposes are state block grants, which go
to states to be distributed among certain small airports in each state. 3
Recipients of apportionment funds include (1) primary airports, or airports
that have 10, 000 or more annual enplanements from scheduled commercial
service; (2) cargo airports, or airports that are served by aircraft
providing air transportation of cargo above a certain weight threshold; (3)
the Alaska supplement, whereby funds are apportioned for certain Alaskan
airports to ensure that they are apportioned a minimum amount of funding;
and (4) all 50 states, the District of Columbia, Puerto Rico, and the
insular areas. For more detail on these and other funding categories, see
the glossary at the end of this report.

Each year FAA uses the statutory formulas to determine how much in
apportionment funds are to be made available to each airport or state. Once
these amounts have been determined, FAA issues a memorandum informing each
airport or state of the amount of funding available for that year. However,
these funds do not automatically go to the airport sponsor.

In order to receive the funds it is entitled to, an airport or state has to
submit a valid grant request to FAA. In addition, under the act, individual
airports and states do not have to use these funds in the year they are made
available. The act gives most airports and states up to 3 years and nonhub
airports 4 up to 4 years to use their apportionment funds. Once the
apportionment funds are determined, the remaining amount of AIP funds is
deposited in the discretionary fund. 5 The discretionary fund consists of
set- asides and other distributions. Set- asides, which are established by
statute, specify the minimum amount of funding FAA is to award to airports
each year for certain types of projects. For example, in fiscal year 2000,
noise mitigation and reduction projects were to receive at least 34 percent
of the discretionary fund, and the military airport program was to receive 4
percent. Once the set- aside money has been distributed, statutory formulas
require that 75 percent of the remaining discretionary fund is to be used
for preserving and enhancing capacity, safety, and

security, and for carrying out noise planning and mitigation projects at
primary and reliever airports. 6 The remaining 25 percent of the
discretionary fund is considered purely discretionary and is available for
distribution at the discretion of FAA for any eligible project at any
eligible airport. In fiscal years 1996 and 1998, Congress also specified the
maximum amount of AIP grant funds that were to be awarded to the military
airport program, reliever airports, and noise planning and mitigation
projects.

4 Nonhub airports are the smallest primary airports, with over 10, 000
annual enplanements but less than .05 percent of all annual enplanements. 5
Discretionary funding categories include (1) noise mitigation and reduction
projects to reduce airport- related noise or mitigate its effects; (2) the
military airport program, whereby funds are provided for certain types of
projects at current or former military airports; and (3) projects to
preserve or enhance capacity, safety, security of airports, or to carry out

noise compatibility planning and programs at certain airports. 6 Reliever
airports are general aviation airports that have been designated by FAA to
relieve congestion at a commercial service airport.

In addition to apportionment and discretionary funds, there is the small
airport fund. 7 This nondiscretionary fund was established by Congress in
1990 and includes funds that are returned by large and medium airports that
collect Passenger Facility Charges (PFC). 8 Airports charging a PFC of $3.
00 or less must return up to one- half of their AIP apportionment funds,

and airports charging a PFC of over $3.00 must return up to 75 percent of
their AIP apportionment funds. The AIP apportionment funds that are returned
as a result of PFC collections are divided between the small airport fund,
which is to receive 87. 5 percent, and the discretionary fund, which is to
receive the remaining 12.5 percent. Each year, Congress placed an obligation
limitation on the amount of AIP

grant funds that could be obligated. Since at least 1970, FAA has added
funds recovered from prior year projects to the statutory obligation
limitation to determine the total funds that could be awarded during the
year, either as new grants or as grant increases to existing projects. The
Office of Management and Budget (OMB) placed an annual ceiling on the amount
of recoveries that FAA could use. FAA was required to get approval from OMB
to use recoveries in excess of the established ceiling.

Total Amount of AIP As shown in table 1, the total amount of AIP funds
awarded was consistent Grants Awarded with the total amount of AIP funds
available for obligation for fiscal years 1996 through 2000. Equaled Total
Amount Available for Obligation

7 Funding categories for the small airport fund include (1) nonhub/ other
commercial service airports, which include nonhub airports and other
commercial service airports with between 2,500 and 10, 000 annual passenger
enplanements; (2) general aviation

(noncommercial) and reliever airports, which are general aviation airports
designated by FAA to relieve congestion at a commercial service airport; (3)
small hub airports, or primary airports that have from .05 percent to .25
percent of annual passenger enplanements; and (4) the state block grant
program, which provides funds to selected states for distribution among
nonprimary airports. 8 Under the PFC program, commercial service airports
may charge boarding passengers up to a $4. 50 fee and retain the money for
airport infrastructure projects.

Table 1: Summary of Available and Awarded AIP Funds for Fiscal Years 1996-
2000, as of September 30 of Each Fiscal Year

Dollars in millions

Amount Statutory

Total amount Amount

obligated Total amount obligation

available for obligated

for grant of AIP grant Fiscal years

limitation Recoveries obligation

for new grants increases

funds awarded

1996 $1, 450 $56 $1,506 $1, 380 $126 $1, 506 1997 1,460 48 1,508 1, 476 32
1, 508 1998 1,617 37 1,654 1, 504 150 1, 654 1999 1,950 46 1,996 1, 959 37
1, 996 2000 1,845 63 1,908 1, 872 36 1, 908

Source: Compiled by GAO from FAA data.

Table 1 also illustrates how FAA determined the amount of AIP funding
available for obligation and how it distributed the funds. Each year, FAA
added the statutory obligation limitation, which was the amount authorized
by Congress for AIP, and the recoveries it retrieved from prior years?
projects to determine the total amount available for obligation. Once this
amount was determined, FAA distributed the money in two ways. FAA

awarded new grants for eligible projects at qualified airports, which
received the majority of each year?s AIP funding. Secondly, FAA awarded some
AIP funds for grant increases to existing projects or new projects. For
example, in fiscal year 2000, Congress authorized $1.85 billion for AIP. In
addition, in that same year, FAA recovered $63 million from prior year

grants, bringing the total amount available for obligation to $1. 91
billion. Of this amount, FAA obligated $1.87 billion for new grants and the
remaining $36 million for grant increases, bringing the total AIP grant
funds awarded to $1.91 billion. While FAA has no specific statutory
authority governing the use of recoveries, its rationale for using recovered
funds to increase the obligation limitation is set forth in a July 1984
legal memorandum. It states

that since at least 1970, FAA has informed Congress in its annual reports
and in a testimony that it is FAA?s practice to add prior year recoveries to
the current year obligation limitation to determine the total funds
available for obligation. It is FAA?s position that since Congress has long
been aware of its practice regarding recoveries and has taken no action to
require a

change in FAA?s administrative action, Congress has accepted FAA?s
interpretation. In addition, according to an OMB official, FAA is conforming
with OMB?s governmentwide policy regarding recoveries by

showing its AIP recoveries on OMB?s Standard Form 133 (Report on Budget
Execution), which allows recoveries of prior year obligations to be included
in the total amount available for obligation in the current year.

AIP Grant Funds Were FAA distributed AIP grant funds in accordance with the
formulas and setasides

Awarded According to established by Congress. FAA complied with the
statutory requirements for distributing apportionment funds, it made
available $728

Statutory million in fiscal year 1996, $904 million in fiscal year 1997,
$989 million in Requirements fiscal year 1998, $1 billion in fiscal year
1999, and over $1 billion in fiscal year 2000.

FAA also complied with statutory formulas governing set- aside funds by
awarding the required minimum amount of discretionary grant funds to
categories with set- aside requirements for each of the fiscal years

reviewed. For fiscal years 1996 and 1998, when Congress imposed maximum
funding limits on certain categories, FAA met these maximum limitations and
then used its remaining discretionary funds to award additional AIP funding
to these categories. Specifically, the 1996 Appropriations Act imposed a $26
million limit on the obligation of funds for the military airport program
and a $48 million limit on funds for the reliever airport program. In fiscal
year 1996, the total amount of discretionary funds awarded by FAA to the
military airport program

exceeded the limitation by $3 million, and the total amount of discretionary
funds awarded by FAA to reliever airports exceeded the limitation by $40
million. Both the military airport program and reliever airports were
eligible to receive additional AIP funding because FAA has the authority to
award remaining discretionary funds as it deems appropriate. Similarly, the
1998 Appropriations Act imposed a $200 million maximum limit on

discretionary grant funds for noise planning and mitigation and a $26
million discretionary limit for the military airport program. In fiscal year
1998, FAA awarded a total of $212 million for noise projects and $28 million
for the military airport program. FAA officials explained that the
additional $12 million awarded for noise projects was attributable to
apportioned

funds and that the additional $2 million awarded to the military airport
program were from the remaining discretionary funds that the airports were
eligible to receive. FAA not only complied with the statutory set- asides by
awarding the

required minimum amount of nondiscretionary grant funds from the small
airport fund to small airports, but it also provided additional funding
using

its remaining discretionary funds for each of the five fiscal years, as
shown in figure 2.

Figure 2: Amount of Required Funding from the Small Airport Fund to Small
Airports and Awarded by FAA, Fiscal Years 1996- 2000 600 Dollars in millions
500 400 300 200 100

0 1996 1997 1998 1999 2000

Required minimum Amount awarded

Source: GAO analysis of FAA?s AIP data.

Appendix I provides additional detailed information on (1) how the AIP funds
awarded compared with the statutory formula amounts; and (2) the
distribution of apportionment, discretionary, and nondiscretionary AIP grant
funds by funding category for fiscal years 1996 through 2000.

AIP Funding to Small As shown in figure 3, the amount of AIP funding awarded
to small airports Airports Increased increased from $769 million in fiscal
year 1996 to $1.2 billion in fiscal year 1999, an increase of 56 percent.
Total grant funds awarded to small airports More Than Funding to include
nondiscretionary grant funds distributed through the small airport

Large Airports fund as well as grants that went to small airports through
other categories under the apportionment and discretionary grant funds.
Large airports experienced a smaller increase in AIP funding during the same
period. AIP funding provided to large airports increased from $596 million
in fiscal year

1996 to $739 million in fiscal year 1999, an increase of 24 percent. Both
types of airports experienced a decrease in AIP funding in fiscal year 2000
because the total amount of AIP funds available for distribution was lower
than in fiscal year 1999.

Figure 3: AIP Grants Awarded by FAA to Large and Small Airports, Fiscal
Years 1996 through 2000, as of September 30, of Each Fiscal Year

1400 Dollars in millions 1200 1000

800 600 400 200

0 1996 1997 1998 1999 2000

Large airports Small airports

Source: Compiled by GAO from FAA data.

See appendix II for additional information on AIP funding to large and small
airports and appendix III for the specific categories of airports in the
United States.

Scope and To address our three research questions, we obtained from FAA, for
fiscal Methodology years 1996 through 2000, data showing the amount of total
funds available

for obligation, calculation of the statutory formulas, and the actual amount
of AIP grants awarded by grant type, as well as airport and project type. We
subsequently compared (1) the amount available for obligation with the

amount of new AIP grant funds obligated or awarded and (2) the statutory

formula amounts with the actual grant funds obligated or awarded. We also
interviewed FAA officials to obtain information on how the AIP grant program
is administered and reviewed the various statutes governing the

AIP grant program. Finally, while we verified the information obtained from
FAA for accuracy, we did not independently review the validity of FAA?s AIP
database or its Departmental Accounting and Financial

Information System. Agency Comments We provided the Department of
Transportation with a copy of the draft report for its review and comment.
FAA officials agreed with the information contained in this report and
provided a few clarifying

comments, which we have incorporated in the report. We performed our work
from August 2001 through March 2002 in accordance with generally accepted
government auditing standards.

We are sending copies of this report to the chairman and ranking democratic
minority member, House Subcommittee on Aviation, Committee on Transportation
and Infrastructure. This report is also available on GAO?s home page at
http:// www. gao. gov. Please contact me or Tammy Conquest at (202) 512-
2834 if you have any questions. In addition, Alan Belkin, David Hooper, John
Thomson, Jr., and Alwynne Wilbur made

key contributions to this report. Gerald L. Dillingham, Ph. D. Director,
Physical Infrastructure Issues

Appendi xes Comparison of Statutory Formulas with AIP

Appendi x I

Grant Funds For tables 3 through 7, the grant amount column indicates the
amount FAA made available or awarded to each of these categories. However,
the grant amount column cannot be added to form a grand total primarily
because some grant funds may be counted in more than one formula category.
For

example, a grant awarded to a capacity project at a small hub airport would
be included in the capacity category under the discretionary fund and in the
small hub airport category under the small airport fund. In addition, the
grant amount column for the apportionment funds shows funds made available
to airports but not necessarily awarded that year, while the grant amount
column for the discretionary and nondiscretionary funds shows the amount of
grant funds actually awarded in that category that year.

Table 2: Comparison of Formula Amounts with AIP Grant Amount as of September
30, 1996, for Fiscal Year 1996

In thousands of dollars

Funding category Formula amount Grant amount Apportionments $728,049 $728,
049

Primary airports 428,227 428, 227 Cargo 38,945 38, 945 Alaska supplement
10,673 10, 673 States 159,148 159, 148 Carryover apportionments 91,057 91,
057

Discretionary $620,124 N/ A

Noise 181,250 $187, 166 Military airport program 26,000 29, 404 Capacity,
safety, security, and noise 249,187 275, 453 Reliever a 48,000 88, 387
Commercial a 21,750 25, 669 System planning a 10,875 13, 445 Remaining
discretionary 83,062 83, 062

Nondiscretionary (small airport fund) $101,826 $368, 668

Nonhub/ other commercial service 58,186 $156, 224 General aviation/ reliever
airports 29,093 111, 046 Small hub airports 14,547 101, 399

Grand total $1,450,000 N/ A

Legend: N/ A = not applicable a These categories only had formula amounts in
fiscal year 1996.

Source: Compiled by GAO from FAA data.

Table 3: Comparison of Formula Amounts with AIP Grant Amount as of September
30, 1997, for Fiscal Year 1997

In thousands of dollars

Formula Grant Funding category amount amount

Apportionments $904, 575 $904, 575

Primary airports 525, 436 525, 436 Cargo 36,500 36,500 Alaska supplement 10,
673 10, 673 States 270, 100 270, 100 Carryover apportionments 61, 867 61,
867

Discretionary $447, 634 N/ A

Noise 143, 540 $173, 683 Military airport program 18, 521 18, 521 Capacity,
safety, security, and noise 214, 179 217, 230 Remaining Discretionary 71,
393 71, 393

Nondiscretionary (small airport fund) $107, 791 $312, 615

Nonhub/ other commercial service 61, 595 $145, 252 General aviation/
reliever airports 30, 797 56, 463 Small hub airports 15, 399 110, 901

Grand total $1, 460, 000 N/ A

Legend: N/ A = not applicable Source: Compiled by GAO from FAA data.

Table 4: Comparison of Formula Amounts with AIP Grant Amount as of September
30, 1998, for Fiscal Year 1998

In thousands of dollars

Formula Funding category amount Grant amount

Apportionments $989, 114 $989, 114

Primary airports 516, 217 516, 217 Cargo 42,500 42,500 Alaska supplement 10,
673 10, 673 States 314, 500 314, 500 Carryover apportionments 105, 224 105,
224

Discretionary $581, 093 N/ A

Noise 200, 000 211, 913 Military airport program 26, 000 27, 879 Capacity,
safety, security, and noise 243, 879 267, 717 General aviation, reliever,
commercial a 29, 921 182, 324 Remaining Discretionary 81, 293 81, 293

Nondiscretionary (small airport fund) $129, 793 $337, 342

Nonhub/ other commercial service 74, 167 $155, 019 General aviation/
reliever airports 37, 084 89, 088 Small hub airports 18, 542 93, 235

Grand total $1,700, 000 N/ A

Legend: N/ A = not applicable a This category only had a formula amount for
fiscal year 1998.

Source: Compiled by GAO from FAA data.

Table 5: Comparison of Formula Amounts with AIP Grant Amount as of September
30, 1999, for Fiscal Year 1999

In thousands of dollars

Formula Funding category amount Grant amount

Apportionments $1, 034, 883 $1, 034, 883

Primary airports 519,892 519, 892 Cargo 48, 750 48,750 Alaska supplement 10,
673 10, 673 States 360,750 360, 750 Carryover apportionments 94,818 94, 818

Discretionary $773,765 N/ A

Noise 239, 867 $241, 199 Military airport program 30,951 34, 596 Capacity,
safety, security, and noise 377, 211 399, 266 Remaining discretionary 125,
737 125, 737

Nondiscretionary (small airport fund) $141,352 $551, 765

Nonhub/ other commercial service 80,773 $245, 097 General aviation/ reliever
airports 40, 386 132, 328 Small hub airports 20, 193 174, 340

Grand total $1,950,000 N/ A

Legend: N/ A = not applicable Source: Compiled by GAO from FAA data.

Table 6: Comparison of Formula Amount with AIP Grant Amount as of September
30, 2000, for Fiscal Year 2000

In thousands of dollars

Formula Funding category amount Grant amount

Apportionments $1, 100, 435 $1,100, 435

Primary airports 556,349 556, 349 Cargo 55,519 55, 519 Alaska supplement
10,673 10, 673 States 342,368 342, 368 Carryover apportionments 135,526 135,
526

Discretionary $607,999 N/ A

Noise 206,719 $211, 844 Military airport program 24,320 31, 351 Capacity,
safety, security, and noise 282,719 389, 077 Remaining discretionary 94,240
94, 240

Nondiscretionary (small airport fund) $142,205 $435, 297

Nonhub/ other commercial service 81,260 $183, 507 General aviation/ reliever
airports 40,630 111, 139 Small hub airports 20,315 140, 651

Grand total $1,850,638 N/ A

Legend: N/ A = not applicable Source: Compiled by GAO from FAA data.

Appendi x II

Amount of AIP Grants By Airport Type Tables 7 through 11 show the total
amount of AIP grants awarded to airport types as classified in the National
Plan of Integrated Airport Systems. See appendix III for more detailed
description of airport categories.

Table 7: Amount of AIP Grants as of September 30, 1996, Awarded for Fiscal
Year 1996 by Airport Type

In thousands of dollars

Type of airport Total Large airports $596, 444

Large hub 357, 672 Medium hub 238, 772

Small airports 769, 350

Small hub 196, 415 Nonhub 233, 868 Other commercial service 27,277 Reliever
104, 712 General aviation 146, 309 State block grants 60, 769

System planning 14, 094 Grand total $1, 379, 888

Source: Compiled by GAO from FAA data.

Table 8: Amount of AIP Grants as of September 30, 1997, Awarded for Fiscal
Year 1997 by Airport Type

In thousands of dollars

Type of airport Total Large airports $600, 101

Large hub 351, 975 Medium hub 248, 126

Small airports 866, 388

Small hub 224, 137 Nonhub 258, 629 Other commercial service 71,126 Reliever
100, 579 General aviation 139, 527 State block grants 72, 390

System planning 9, 362 Grand total $1, 475, 850

Source: Compiled by GAO from FAA data.

Table 9: Amount of AIP Grants as of September 30, 1998, Awarded for Fiscal
Year 1998 by Airport Type

In thousands of dollars

Type of airport Total Large airports $587, 625

Large hub 342, 633 Medium hub 244, 992

Small airports 906, 486

Small hub 187, 421 Nonhub 261, 704 Other commercial service 39,061 Reliever
127, 843 General aviation 185, 506 State block grants 104, 951

System planning 9, 358 Grand total $1, 503, 469

Source: Compiled by GAO from FAA data.

Table 10: Amount of AIP Grants as of September 30, 1999, Awarded for Fiscal
Year 1999 by Airport Type

In thousands of dollars

Type of airport Total Large airports $738, 726

Large hub 407, 488 Medium hub 331, 238

Small airports 1, 206, 291

Small hub 281, 828 Nonhub 369, 260 Other commercial service 64,037 Reliever
148, 991 General aviation 211, 219 State block grants 130, 955

System planning 13, 728 Grand total $1, 958, 744

Source: Compiled by GAO from FAA data.

Table 11: Amount of AIP Grants as of September 30, 2000, Awarded for Fiscal
Year 2000 by Airport Type

In thousands of dollars

Type of airport Total Large airports 719, 977

Large hub $446, 239 Medium hub 273, 738

Small airports 1, 141, 493

Small hub 271, 861 Nonhub 353, 601 Other commercial service 58,996 Reliever
111, 692 General aviation 223, 574 State block grants 121, 769

System planning 11, 208 Grand total $1, 872, 677

Source: Compiled by GAO from FAA data.

Appendi x II I Categories of U. S. Airports

Glossary Apportionment funds Statutory provisions require that AIP funds be
apportioned by formula each

year to specific airports or types of airports. Such funds are available to
airports in the year they are first apportioned and they remain available
for the 2 fiscal years immediately following (or 3 fiscal years for nonhub
airports). Recipients of apportioned funds are primary airports, cargo
service airports, states and insular areas, and Alaska.

Alaska supplemental Funds are apportioned for certain Alaskan airports to
ensure that Alaska receives at least as much as these airports were
apportioned in fiscal year 1980 under previous grant- in- aid legislation.

Capacity, safety, security, Grants that are to be used for preserving or
enhancing the capacity, safety,

and noise projects security, and carrying out noise compatibility planning
and programs at primary and reliever airports.

Cargo service airports Airports that, in addition to any other air
transportation services that may be available, are served by aircraft
providing air transportation of only cargo with a total annual landing
weight (the weight of aircraft transporting only cargo) of more than 100
million pounds.

Carryover apportionments Funds apportioned for primary or cargo service
airports, states and Alaskan airports remain available for obligation during
the fiscal year for

which the amount was apportioned and the 2 fiscal years immediately after
that year (or the 3 fiscal years immediately following that year in the case
of nonhub airports). When such funds are not used in the fiscal year of the
apportionment, they are carried over to following year( s). Commercial
service airports Airports that handle regularly scheduled commercial airline
traffic and have at least 2,500 annual passenger enplanements (boarding by
passengers).

Discretionary funds Those funds generally remaining after apportionment
funds are allocated, but a number of statutory set- asides are established
to achieve specified funding minimums.

Enplanements Boarding by passengers. General aviation airports Airports that
have no scheduled commercial passenger service. Insular areas Guam, American
Samoa, the Commonwealth of the Northern Mariana

Island, and the U. S. Virgin Islands. For AIP purposes, these islands are
treated the same as a state.

Large hub airports Primary airports that have at least 1 percent of all
annual enplanements. Military airport program Under this program, a special
set- aside of the discretionary portion of AIP

is to be used for capacity and/ or conversion related projects at up to 15
current and former military airports. Such airports are eligible to
participate in the program for 5 fiscal years and may be extended for 5 more
years if approved by the Secretary of Transportation. The airports are
designated as a civil commercial service or reliever airport in the national
airport system. Approved projects must be able to reduce delays at an
existing commercial service airport that has more than 20,000 hours

of annual delays in commercial passenger aircraft takeoffs and landings.
Medium hub airports Primary airports that have between .25 percent and 1
percent of all annual enplanements. National airport system The set of
airports designated by FAA as providing an extensive network of air
transportation to all parts of the country. It is comprised of commercial

service airports and general aviation airports. Noise projects AIP projects
that reduce airport- related noise or mitigate its effects.

Eligible noise projects generally fall into the following categories: land
acquisition, noise insulation, runway and taxiway construction (including
associated land acquisition, lighting, and navigational aids), noise
monitoring equipment, noise barriers, and miscellaneous.

Nonhub airports Primary airports that have over 10,000 annual enplanements,
but less than .05 percent of all annual enplanements. Obligations An
obligation occurs when FAA makes a grant to an airport sponsor,

thereby obligating FAA to fund a project under AIP. Other commercial service
Airports that have between 2,500 and 10,000 annual passenger enplanements
from scheduled commercial service. Primary airports Airports that have
10,000 or more annual passenger enplanements from scheduled commercial
service. Reliever airports Airports designated by FAA to relieve congestion
at a commercial service

airport and to provide improved general aviation access to the overall
community. Only general aviation airports have been designated as reliever
airports.

Set- aside funds The portion of discretionary funds set- aside designed to
achieve specified funding minimums established by Congress.

Small airport fund The passenger facility charge (PFC) program requires
large and medium hub airports participating in the PFC program to return a
portion of their AIP apportionment funds. Airports charging a PFC of $3.00
or less must return up to one- half of their AIP apportionment funds and
airports charging over a $3.00 PFC must return up to 75 percent of their AIP

apportionment fund. Congress requires most of the returned AIP funds to be
put in the small airport fund, which FAA redistributes to small airports.

Small hub airports Primary airports that have from .05 percent to .25
percent of all annual enplanements.

State block grant program States assume responsibility for administration of
AIP grants at airports classified as other than primary (other commercial
service, reliever, and general aviation airports). Each state is responsible
for determining which locations within its jurisdiction will receive funds
and for ongoing project administration. This program is only available to
selected states.

States AIP funds to states are apportioned for use by the 50 U. S. states,
the District of Columbia, Puerto Rico, and the insular areas at other
commercial service, reliever, and general aviation airports.

System planning AIP grants for the purpose of studying aspects of a regional
or statewide airport system. These studies usually include primary and
nonprimary airports. Most system planning grants are issued to metropolitan
planning organizations or state aviation agencies.

(540016)

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a

GAO United States General Accounting Office

Page i GAO- 02- 283 Aviation Financing

Contents

Contents

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Page 1 GAO- 02- 283 Aviation Financing United States General Accounting
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Appendix I

Appendix I Comparison of Statutory Formulas with AIP Grant Funds

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Appendix I Comparison of Statutory Formulas with AIP Grant Funds

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Appendix I Comparison of Statutory Formulas with AIP Grant Funds

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Appendix I Comparison of Statutory Formulas with AIP Grant Funds

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Appendix II

Appendix II Amount of AIP Grants By Airport Type

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Appendix II Amount of AIP Grants By Airport Type

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Appendix III

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Glossary Page 21 GAO- 02- 283 Aviation Financing

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