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.