Prior to AIR-21, which was signed into law on April 5, 2000, general aviation airports received AIP funding through funds apportioned to states by using geographic area and population-based formulas, as well as through discretionary funds. These airports also received funds through FAA’s small airport fund. AIR-21 amended the general aviation state apportionment grant program, in part, by creating a special rule, which provides general aviation entitlement grants for any fiscal year in which the total amount of AIP funding is $3.2 billion or more. Under this rule, the amount available for state apportionments increases from 18.5 percent of total AIP funding to 20 percent when AIP’s total funding is $3.2 billion or more. From the state apportionment, FAA computes and allocates the amount available for general aviation entitlements and the remaining funds are provided for “unassigned” state apportionment. The general aviation entitlement grant amount for any one airport represents one-fifth of the estimate of that airport’s 5-year costs for its needs, as listed in the most recently published NPIAS, up to an annual maximum of $150,000. After the aggregate amount of general aviation entitlements has been determined, the remainder is provided for the same type of airports within a state on an unassigned basis, the allocation of which is determined by a state’s area and population relative to all other states. To be eligible for a general aviation entitlement grant, an airport must be listed and have identified needs in the most recently published NPIAS; therefore, an airport’s listed needs largely determine the size of an airport’s annual grant. However, funding is not limited to the projects listed in the most recent NPIAS. The 1998-2002 NPIAS provided the basis for fiscal year 2001 and fiscal year 2002 grants. The 2001-2005 NPIAS, published in August 2002, provides the basis for fiscal year 2003 grants. A general aviation entitlement grant provides funding for 90 percent of an eligible project’s total costs; the airport must finance the remaining 10 percent, although many states pay a share of this local matching requirement. FAA’s regional and district offices work with state aviation officials and sponsors to find appropriate uses for these funds. Grant funds can be used on most airfield capital projects, such as runway, taxiway, and apron construction but generally not for terminals, hangers, and nonaviation development, such as parking lots. Some airfield maintenance and project planning costs are also allowed. Accepting a grant not only requires airport officials to pledge to continue operations and maintenance for 20 years but also precludes the airport from granting exclusive rights to those providing aeronautical services and allowing any activity that could interfere with its use as a general aviation airport. The number of general aviation airports that were apportioned general aviation entitlement funds is expected to increase from 2,100 in fiscal year 2001 to 2,493 in fiscal year 2003, as shown in figure 1. The expected 19 percent increase reflects the fact that more airports identified capital needs in the most recent NPIAS, which serves as the basis for fiscal year 2003 grants. FAA officials explained that before the NPIAS served as a basis for calculating entitlement grants, some FAA officials, sponsors, and state aviation officials did not always give high priority to keeping the general aviation portion of the NPIAS up to date. Thus, they added, the NPIAS used to calculate the fiscal years 2001 and 2002 general aviation entitlement might have understated airport development needs for these airports. In fiscal years 2001 and 2002, entitlement grants for general aviation airports were available because AIP funding levels were at least $3.2 billion. As the number of eligible airports or the value of development identified in the NPIAS for these airports increases, the funding for these grants also increases. However, this increase could result in a corresponding decrease in the amount of AIP funding available in that year for “unassigned” state apportionment grants. Since the latter amount is determined after subtracting the total general aviation entitlements from the total state apportionment, FAA estimates that general aviation entitlement grant funding will rise by about $70 million from $271 million in fiscal year 2002 to about $341 million for fiscal year 2003, as shown in figure 2. Over half of general aviation airports were apportioned the maximum amount of funding. For fiscal year 2001, of the 2,100 airports that were apportioned these entitlements, 71 percent were eligible for the maximum amount of $150,000. With the publication of the new NPIAS in August 2002, 83 percent of the 2,493 eligible airports were apportioned the maximum for fiscal year 2003. Working in collaboration with FAA’s regional or airport district offices, general aviation airports identify projects that will be funded with entitlement grants. These projects are listed in FAA’s Airports Capital Improvement Plan (ACIP), which includes only those projects that FAA has identified as candidates for AIP funding. After FAA has certified that the application materials are in order and all relevant AIP statutory, regulatory, and policy requirements have been satisfied, FAA then sends a grant offer to the airport sponsor or the state aviation agency representing the airport sponsor. The flowchart in figure 3 illustrates this process. When an airport elects not to accept its general aviation entitlement grant funds, the funds revert to AIP’s discretionary fund to be awarded by FAA to another airport, as provided by statute. However, the funds remain available to this airport for up to 3 years. Therefore, in the third year that an airport has entitlement grant funds available, it could have as much as $450,000 available for a grant. In addition, an airport can use part of its general aviation entitlement grant in the first year and carry over the remainder for use later. For example, an airport might have a general aviation entitlement grant of $140,000, but the only AIP-eligible project it can implement during the fiscal year might require just $80,000 in AIP funds. FAA could issue the grant for $80,000 that fiscal year and include the remaining $60,000 of the airport’s available funds in another grant for that airport at any time within the 3 years after the grant was first made available. For general aviation airports in the nine block grant states, the acceptance process for these entitlement grants works differently. Each block grant state is apportioned a lump sum equal to the total of these grants for airports in that state plus total unassigned state apportionment funds. FAA has distributed all general aviation entitlement grant funds to these states in the same year the funds were apportioned. The block grant states are then responsible for distributing the funds to individual general aviation airports according to FAA’s requirements. According to FAA officials, states are required to offer eligible general aviation airports their entitlements in the fiscal year it is made available. If an airport does not accept the entitlement in the first year of its availability, the distribution of a general aviation entitlement grant must nonetheless be made to that airport by the end of 3 years. If an airport has not accepted the funding at the end of the 3-year period, the grant would be reduced by the amount of the funding not accepted. FAA officials explained that each block grant could be adjusted on an annual basis, but this approach is used to provide block grant states flexibility similar to the authority FAA has in managing AIP and general aviation entitlement grants. FAA officials added that the state assumes the risk if funds are used for another airport during the 3-year period. If funds have been expended at another airport and an unassigned state apportionment is not available to provide the general aviation entitlement funding to the original eligible airport, it would be necessary for the state to repay the federal funds with its own state- generated funds. As of October 1, 2002, about 75 percent of the total fiscal year 2001 general aviation entitlement grant funds had been accepted by the airports to which they were apportioned, and about 46 percent of the total fiscal year 2002 general aviation entitlement grant funds had been accepted. The percentage of the total funding accepted by airports for both fiscal years varied widely from state to state. Also, the percentage varied by size, with the larger general aviation airports having accepted 77 percent of their fiscal year 2001 entitlement funds compared to 65 percent for the smallest airports. As of October 1, 2002, $201 million (about 75 percent) of the $269 million in general aviation entitlement grant funding apportioned for 2001 had been accepted, as shown in figure 4. Of the $201 million accepted, $145 million (54 percent) was accepted in fiscal year 2001 and $56 million (21 percent) was accepted in fiscal year 2002. Almost $69 million of the fiscal year 2001 apportionments was carried over for possible future acceptance in fiscal year 2003. These grants were made to 1,599 (76 percent) of the 2,100 eligible airports. As shown in figure 5, airports had accepted $124 million of the $271 million in fiscal year 2002 general aviation entitlement grants (about 46 percent). Grants were made to 1,026 of the 2,108 eligible airports (49 percent). The remaining amount ($147 million) can be accepted in fiscal years 2003 or 2004. General aviation airports in some states accepted a larger percentage of funds in both fiscal years 2001 and 2002 than in other states. For fiscal year 2001 general aviation entitlement grant funds, the percentage of funds accepted ranged from about 48 percent to 100 percent. The acceptance rate for fiscal year 2002 general aviation entitlement grant funds varied from 11 percent to 99 percent. (See app. IV for a complete list of the percentage of funds that were accepted by state for fiscal years 2001 and 2002.) Larger general aviation airports (as measured by the number of based aircraft) have accepted more of their general aviation entitlement grant funding than the smallest airports, as shown in figure 6. Airports with more than 100 based aircraft had accepted 77 percent of their fiscal year 2001 general aviation entitlement grant funds. Similarly, general aviation airports with between 50 and 99 based aircraft had accepted about 81 percent of their general aviation entitlement funds. In contrast, 65 percent of the general aviation entitlement grant funds for fiscal year 2001 for airports with less than 20 based aircraft had been accepted. This pattern is similar for fiscal year 2002 funding. Airports with more than 100 based aircraft had accepted about 58 percent of their fiscal year 2002 grant funds, compared with 39 percent of the grant funds for airports with less than 20 based aircraft. According to the results of FAA’s survey, general aviation airports most often used the funds from fiscal year 2001 entitlement grants to construct landing areas (e.g., runways, taxiways, and aprons). As shown in figure 7, of the 1,373 total projects reported in FAA’s survey, 483 (35 percent) were designated as landing area construction projects. The next three categories of projects most frequently undertaken were as follows: Pavement maintenance (227): This category includes the general upkeep and maintenance of paved areas on airport land, such as filling and sealing cracks, grading pavement edges, and coating pavement with protective sealants. FAA’s Great Lakes Region and New Jersey did not respond to the survey. systems, visual navigation aids, and electronic navigation and weather equipment, which help observe, detect, report, and communicate weather conditions at an airport. Planning projects (162): This category includes the costs associated with preparing the documents that are a necessary part of developing plans to address current and future airport needs. This includes the plans required for airport development (e.g., the master plan and airport capital improvement plan) and environmental assessments as well as the additional elements or costs that are needed to complete such plans. These four largest categories comprise over 75 percent of all projects funded with general aviation entitlement grants in fiscal year 2001. Almost all of the 50 state and 2 territorial aviation officials and the 56 selected general aviation airport managers that we interviewed indicated that these entitlement grants are useful and help meet the needs of general aviation airports. They also told us that airports have easily met the administrative requirements for receiving these grants. Over two-thirds of the selected airport managers said that the grants provided critical funding to undertake projects at their airports. Although positive about the grants, some state officials and airport managers suggested a variety of changes. While the most frequently suggested change was to increase grant funding to better meet the cost of larger projects, some state aviation officials expressed concern that this change would correspondingly decrease the funds available for state aviation apportionments and thus hamper their ability to address statewide aviation priorities. Other frequently mentioned suggestions included extending the time frames for fund use and broadening the categories of eligible projects. Five of the 52 state aviation officials and one airport manager commented that the NPIAS is not an up- to-date list of airport needs and recommended that it not be used to distribute these entitlement grant funds. Over two-thirds of the state aviation officials told us that FAA’s requirements for receiving these entitlement grants are easy to fulfill. These requirements include completing required airport capital improvement and layout plans, submitting grant application forms, getting projects included in the NPIAS, and providing the 10 percent matching funds. Most general aviation airport managers we interviewed agreed with this view. FAA officials reported that they purposely simplified the grant processing paperwork requirements for the general aviation entitlement grants, knowing that many eligible airports would be first time recipients of FAA funding. In addition, FAA officials told us that the regional and district offices conducted extraordinary outreach efforts to ensure that qualifying airports were aware of these new grants. Almost 85 percent of the state aviation officials found entitlement grants useful by allowing general aviation airports to purchase needed equipment and undertake large projects, such as runway repairs. For example, one state aviation official told us that these grants were very important for maintaining safety and preserving runways at general aviation airports in his state. Over two-thirds of the selected general aviation airport managers said that they would not have been able to undertake or complete needed projects without these grant funds, and three-fourths of them said that the categories of projects eligible for funding include most of their capital needs. This means that they can use the funds for needed improvements, even for comparatively smaller projects such as lighting and fencing. Other state officials and airport managers added that the general aviation entitlement grants are important to the viability of general aviation airports. One state official said that the grants are helping to prevent the closure of general aviation airports, some of which provide medical access for small communities. Increasing the maximum amount of general aviation entitlement grants was the most frequent suggestion from state aviation officials to improve their usefulness. Some general aviation airport managers we surveyed supported this view. Almost two-thirds of the state aviation officials stated that the current annual maximum of $150,000 is not adequate to complete some major projects, while about one-third of the airport managers expressed this opinion. Other suggestions to improve the grants’ usefulness included making all 3 years of funding available to airports in the first year and increasing the time frame for funding availability to beyond the current 3- year limit. Almost half of the state officials suggested increasing the annual amount of these grants to better enable general aviation airports to meet the cost of larger capital projects. Most state officials said that because the $150,000 annual amount is not adequate to complete some major projects, some airports rollover the funding to accumulate up to $450,000 of funding over 3 years to complete such projects. However, some state aviation officials and airport managers also expressed concern that even this 3-year total might not be sufficient to complete such expensive capital projects as repairing or improving runways and taxiways. Some state aviation officials, as well as some selected airport managers, reported undertaking comparatively smaller projects, such as fencing for security, lighting, and pavement maintenance. While emphasizing the importance of the grants to general aviation airports, many selected airport managers expressed more concern about the adequacy of funding than any other issue we discussed with them. Their most frequent suggestion to improve the grants was to increase funding amounts to better meet the cost of larger capital projects. Nine state aviation officials also suggested allowing more flexibility in the existing 3-year time frame to use the funds, which would enable airports to afford a broader range of projects. Two airport managers we interviewed also suggested increased flexibility. For example, three state aviation officials suggested making all 3 years of grant funding available to airports in the first year. One of these officials said that making the full 3-year grant amount available to airports during the first year of funding would help airports undertake critical projects earlier because they would not need to wait to accumulate sufficient funding. According to FAA officials, this suggestion would represent a significant departure from current practices for administering entitlement funds. Officials told us that while multiyear grants can be made to primary airports for multiyear projects,AIR-21 did not provide this authority for general aviation entitlement grants. Officials noted that this added flexibility could benefit some airports. Alternatively, other state aviation officials, as well as some of the selected airport managers, suggested extending the current 3-year time frame for using these funds to as much as 4 or 5 years. They expect this extension would allow them to accumulate sufficient funds to undertake a broader range of capital projects and allow some airports sufficient time to complete these projects. While state aviation officials and selected airport managers said that increased funding and time frames could help them complete larger projects, apportionment grants are also available to general aviation airports to help them complete many of these projects. Some state aviation officials reported that general aviation airports use entitlement grant funds in combination with apportionment funds to complete such larger projects as improving, extending, or constructing runways, taxiways, and aprons. Seven of the state aviation officials expressed concern that, as funding for general aviation entitlement grants increases, funding for unassigned apportionment grants could correspondingly decrease because the amount available for unassigned apportionment is determined by deducting the general aviation entitlement grant funding from a fixed percentage of AIP. Two state aviation officials told us that the reduction in aviation apportionment funding could hamper the states’ abilities to address their aviation priorities. Some state aviation officials said that because they can better determine which projects within their states are high priorities, they are better able to distribute the funds to airports on a statewide basis. For example, a state aviation official said that because these entitlement grants have reduced funding for significant projects, the small projects general aviation airports have undertaken have had a minimal impact on that state’s aviation system. FAA officials added that while the grants have been used for worthwhile projects, less unassigned apportionment grant funding could limit a state’s ability to address its aviation priorities and provide access to the national aviation system from rural and nonmetropolitan areas. Because the entitlement funds come directly to general aviation airports, general aviation airport managers we interviewed were not concerned with the shift in funding source. One airport manager commented that projects requested by large airports are generally assigned a higher priority by states than projects requested by small airports. This manager added that, as a result, small airports usually do not receive apportionment funds from state aviation agencies. The manager told us that general aviation entitlement grants have allowed the airport to complete projects that would not have been selected by the state for apportionment funding. However, FAA officials stated that they determine the allocation of unassigned apportionment funds, except in block grant states. FAA officials added that project type and purpose receive more consideration than airport size in allocating these funds. While most officials said that the categories of projects eligible for entitlement grants generally covered the capital needs of general aviation airports, some of them suggested broadening the categories of eligible projects to include revenue-producing facilities. Under current program rules, revenue-producing facilities, such as hangars, terminals, and fueling stations, are not eligible for these grants. However, a few state officials told us that these facilities should be considered eligible for the grants because they would help produce the revenue necessary to allow small airports to supplement grant funding, complete needed projects, and, in some cases, become more self-sufficient and remain open. Many of the airport managers we interviewed supported this view. FAA officials indicated that expansion of eligibility warrants consideration but would require statutory changes. Five state aviation officials suggested that FAA use a more current list of airport projects to determine the amounts of future general aviation entitlement grants. One airport manager also made this suggestion. One state official was concerned that the list of projects in FAA’s NPIAS was between 18 and 24 months old when FAA used it to calculate the entitlement grants for fiscal years 2001 and 2002. That official said that because FAA used an outdated list of airports’ needs, the grant amounts some airports received were based on already completed projects. Another official added that some of these airports then used the grant funds for low- priority projects because higher priority projects had been completed. FAA officials disagreed with this criticism of the use of the NPIAS. They told us that the NPIAS is used only to calculate the amount of an airport’s general aviation entitlement grant. Decisions on the projects to be funded are based on the airport’s ACIP, which is kept up to date through regular consultation between FAA and the airport’s sponsor or state aviation officials. Nevertheless, FAA officials acknowledged that use of the NPIAS added complexity and confusion to calculation of general aviation entitlement grants, and indicated that a simplified method warranted consideration. Since most eligible airports receive the maximum grant amount, an alternative approach might be to establish a uniform general aviation entitlement amount for each general aviation airport listed in the NPIAS. FAA officials pointed out that, under current formulas, care would be needed in selecting the uniform grant level under this approach. Setting the level too low would limit the usefulness of the general aviation entitlement grant to individual airports, but setting the level too high would reduce the amount of unassigned apportionment funding based on state and national priorities. We provided the Department of Transportation with a copy of the draft report for its review and comment. FAA officials agreed with information contained in this report and provided some clarifying and technical comments, which we have incorporated where appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of Transportation, and the Administrator, FAA. This report is also available at no charge on GAO’s Web site at http://www.gao.gov. Please contact me or Carol Anderson-Guthrie at (202) 512-2834 if you have any questions. Individuals making key contributions to this report are listed in appendix V. We were asked to review the general aviation entitlement grant funding that was available to eligible nonprimary airports—referred to as general aviation airports for simplicity in this report—including reliever, nonprimary commercial service, and other general aviation airports. Of the universe of 2,943 general aviation airports, we reviewed data for those that were eligible to receive these grants based on the requirements established by the Federal Aviation Administration (FAA). We reviewed data on the general aviation entitlement grant funding that was accepted by general aviation airports, both directly from FAA and through block grant states. To obtain information from block grant states, we asked block grant state aviation officials to provide information on general aviation entitlement grant obligations made by their state to individual airports. We also analyzed a survey conducted by FAA to determine the types of projects that had been undertaken with the general aviation entitlement grant funding. In addition, to determine the stakeholders’ opinions concerning general aviation entitlement grants, we designed and administered a survey of all 52 state and territory aviation officials and 56 airport management officials. Initially, we conducted interviews with FAA and other relevant aviation industry officials to better understand the program and the scope of the issues. We gathered information on industry opinions about the general aviation entitlement program including its usefulness, its limitations, and possible changes to the program. The interviews provided an introductory view of the general aviation entitlement grant program. To establish a background context and understanding of the program’s purpose, we also conducted research on the legislation, statutes, policies, procedures, and guidelines that govern the implementation and operation of the general aviation entitlement grant program. To determine the amount of general aviation entitlement grant funds that were accepted by airports, we received data from FAA’s Airport Improvement Program (AIP) Grants Management Database, which contains all general aviation entitlement grants issued directly by FAA to airports and state sponsorship programs. This database also includes grants issued through October 1, 2002, using fiscal year 2001 and fiscal year 2002 general aviation entitlements. The database includes grants issued directly to airports and grants issued under state sponsorship outside of the block grant program. The database includes data on the aggregate amount of general aviation entitlement grant funding included in state block grants. However FAA’s national database does not track distribution of block grant funds by the states, including general aviation entitlement grants to individual airports in the nine block grant states. After comparing these data with the 1998-2002 National Plan of Integrated Airport Systems (NPIAS), we found some discrepancies. In coordination with FAA officials, we resolved these discrepancies and they are reflected in our report. We classified all grants accepted through state sponsorship program grants as having been accepted directly by individual airports. We then deleted all state sponsorship program grants from the data. The total block grants accepted were removed to avoid overstating the amount that individual airports accepted. To obtain grant acceptance data for airports receiving grants through block grant states, we asked state aviation officials in those states to provide acceptance data as of October 1, 2002, on all the airports that were eligible for general aviation entitlement grants. This information was self-reported, and we did not verify the information provided by the states. After we discussed our methodology with FAA officials and reached agreement that the data from FAA and the individual block grant states were comparable, we aggregated the datasets. Funds not accepted were classified as “carry over/not yet accepted.” We then merged these data with the 1998-2002 NPIAS file and categorized the results by airport size, as measured by the number of based aircraft and state, in order to identify possible trends in the data. Using FAA’s guidance, we stratified airports into four size categories: less than 20 based aircraft, 20-49 based aircraft, 50-99 based aircraft, and 100 or more based aircraft. In order to ascertain the projects that have been undertaken by general aviation airports, we used FAA’s survey of Airport Improvement Program FY2001 Non-Primary Entitlements. FAA surveyed its nine regions and the nine block grant states to gather data for several items, including the projects for which airports used the general aviation entitlement grant funds. FAA created 11 categories for the projects. We reviewed the results of its survey and met with FAA officials to discuss our interpretation. We did not verify the information provided by FAA. However, we raised questions about the overall design of FAA’s data collection effort and the specific steps carried out to help ensure the quality of the collected data. We determined that the data quality was sufficient for the purpose of our review. To assess the usefulness of the general aviation entitlement grants and to identify the potential areas of change, we surveyed state aviation and airport management officials. We designed a computer-assisted telephone interview (CATI) instrument to collect their responses. We conducted a census of state aviation officials (50 states and 2 territories) who oversee the operations of airports and head their respective state aviation programs. All 52 of these aviation officials provided their opinions on the experiences of airports in their respective states and territories. To compare state and airport-level responses about the program, we also obtained the perspectives of 56 general aviation airport management officials to acquire their responses to the same questions and direct illustrations of their experience with the program. The small sample size was not designed to be projectable to the population of general aviation airports. However, measures were taken to help ensure that the airports chosen systematically cover and broadly represent the substantive criteria. Our selection approach was completed in three steps. First, we identified airports that accepted entitlement grant funds in either fiscal years 2001 or 2002. Second, we stratified these airports according to: size—the number of based aircraft—measured as small (less than 20 based aircraft), medium 1 (20-49), medium 2 (50-99), and large (100 or more); FAA regional location; and block grant status (whether the airport is located in a block grant state). We sought guidance from FAA in determining the airport size categories. The stratification process produced 56 exclusive groups (airports in block grant states are not located in each FAA region). Then, in the third step, we randomly selected one airport from each of the groups, which were joined to form the final sample of 56 airports. All of the airport management officials provided responses about their experiences with the program. The CATI consisted of closed- and open-ended questions that asked about an airport’s experiences with and its ability to meet the requirements of the general aviation entitlement grant. Descriptive statistical analyses of close- ended survey data were performed to determine response patterns. Analyses of open-ended responses were conducted to detect broad themes and topics within those themes, summarizing state aviation and airport management responses on program improvements and projects undertaken using entitlement grants. We conducted our review from June 2002 through February 2003 in Easton, Maryland; Odenton, Maryland; Greenville, Texas; Mesquite, Texas; and Washington, D.C., in accordance with generally accepted government auditing standards. The collection of state aviation and airport management interview data was completed in September and November 2002, respectively. The Airport Improvement Program (AIP), which was created in 1982, is funded by the Airport and Airway Trust Fund. AIP distributes funds to airports through grants in a manner that reflects several national priorities and objectives including financing small state and community airports. The distribution system for AIP grants is complex. It is based on a combination of formula grants (also referred to as apportionments) and discretionary funds. Formula funds are apportioned by formula or percentage and may be used for any eligible airport or planning project. Through the AIP, the Federal Aviation Administration (FAA) apportions formula grants automatically to specific airports or types of airports including primary airports, cargo service airports, general aviation airports, and Alaska airports. In administering AIP, FAA must comply with various statutory provisions, formulas, and set-asides established by law, which specify how AIP grant funds are to be distributed among airports. Each year, FAA uses the statutory formulas to determine how much in apportionment funds are to be made available to each airport or state. After determining these amounts, FAA informs each airport or state of the amount of funding available for that year. However, these funds do not automatically go to an airport’s sponsor. To receive the funds it is entitled to, an airport or state has to submit a valid grant application 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 to use their apportionment funds. This carryover allows airports to accumulate a larger amount to pay for more costly projects. Once the apportionments have been determined, the remaining amount of AIP funds is deposited in that program’s discretionary fund, which consists of set- asides that are established by statute and other distributions. AIP funds are usually limited to planning, designing, and constructing projects that improve aircraft operations, such as runways, taxiways, aprons, and land purchases, as well as to purchase security, safety, and emergency equipment. AIP funds are also available to plan for and implement programs to mitigate aircraft noise in the vicinity of airports. However, these grants are generally not eligible for projects related to commercial revenue-generating portions of terminals, such as shop concessions, commercial maintenance hangars, fuel farms, parking garages, and off- airport road construction. Outside the national system are many landing strips and smaller airports, most with fewer than 10 aircraft. These airports have at least 10 aircraft based at their locations and fewer than 2,500 scheduled enplanements. General aviation airports (which includes reliever airports) and non- primary commercial service airports may be eligible to receive general aviation entitlement grant funding. enplanements annually. Large hubs (31): at least 1 percent or more of all enplanements. Medium hubs (35): at least 0.25 percent, but less than 1 percent of all enplanements. Small hubs (71): at least 0.05 percent, but less than 0.25 percent of all enplanements. Nonhubs (282): more than 10,000 enplanements, but less than 0.05 percent of all enplanements. In addition to those named above, Jon Altshul, Nancy Boardman, Jeanine Brady, Kevin Jackson, Bert Japikse, Michael Mgebroff, Jeff Miller, George Quinn, and Don Watson made key contributions to this report. 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Summary: In 2000, Congress created general aviation entitlement grants to provide funding up to $150,000 per fiscal year to individual general aviation airports. These grants fund capital improvements and repair projects. GAO was asked to (1) assess the amount of funding airports used, (2) identify the types of projects undertaken, and (3) convey suggestions made by interested parties to improve the grants in preparation for the reauthorization of the legislation in 2003. By the end of fiscal year 2002, most fiscal year 2001 general aviation entitlement grant funds had been accepted by the airports to which they were apportioned. However, less than half of the fiscal year 2002 entitlement grant funds had been accepted by those airports at the end of fiscal year 2002. The remaining portions of unused entitlement funds for the 2 fiscal years were carried over to use in the following years--up to 3 years. In both fiscal years, the percentage of entitlement grant funds accepted varied widely by state. Larger general aviation airports accepted a greater percentage of their entitlement grants than small airports for both fiscal years. In fiscal 2001, general aviation airports used these funds primarily to undertake landing area construction projects--runways, taxiways, and aprons. In addition, the airports used the funds to undertake pavement maintenance; airfield lighting, weather observation systems, and navigational aids; and planning projects. These four categories constituted over 75 percent of all projects undertaken with these funds. While most state aviation officials, selected airport managers, and FAA officials we spoke with indicated these entitlement grants were useful, they also suggested some changes. The most common concerned the amount of funding. Several state aviation officials and some selected airport managers indicated that the $150,000 annual maximum amount per airport was not adequate to complete projects. However, state officials expressed concerns that increasing the entitlement amount could hinder the states' ability to address their own aviation priorities because any increase would proportionately decrease the states' apportionments. The majority of the selected airport managers indicated that, without these grants, their airports would have been unable to undertake the projects. Other suggestions concerned increasing the amount of time to use the grants, broadening the categories of eligible projects, and using an alternative to FAA's National Plan of Integrated Airports Systems as the basis for funding eligible projects.