Aviation and the Environment: Federally Authorized Funding for
Noise-Related Projects (Correspondence, 09/27/2000, GAO/RCED-00-285R).

The Federal Aviation Administration (FAA) determines cost factors in
administering two programs that will fund airports' capital development
and the noise-related projects. This correspondence: (1) determines the
total historical funding of noise-related projects through both the
Airport Improvement Program (AIP) and the Passenger Facility Charge
program, by FAA, (2) compares the amount of AIP funds set aside for
noise-related projects in the AIP appropriation for fiscal year (FY)
2000, and (3) compares the authorized amounts for the AIP for fiscal
years 2001 through 2003 with the projected costs of noise-related
projects planned in the current National Plan of Integrated Airport
Systems.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-00-285R
     TITLE:  Aviation and the Environment: Federally Authorized Funding
	     for Noise-Related Projects
      DATE:  09/27/2000
   SUBJECT:  Noise pollution control
	     Environmental monitoring
	     Future budget projections
	     Grants-in-aid
	     Airports
	     Federal aid for transportation
IDENTIFIER:  FAA Airport Improvement Program
	     FAA Passenger Facility Charge Program
	     Airport and Airway Trust Fund
	     FAA National Plan of Integrated Airport Systems

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GAO/RCED-00-285R

Funds for Airport Noise- Related Projects United States
General Accounting Office

Washington, DC 20548 Resources, Community, and

Economic Development Division

B- 286087 September 27, 2000 The Honorable John J. Duncan, Jr. Chairman,
Subcommittee on Aviation Committee on Transportation and Infrastructure
House of Representatives

Subject: Aviation and the Environment: Federally Authorized Funding for
NoiseRelated Projects

Dear Mr. Chairman: The Federal Aviation Administration (FAA) administers two
programs that fund airports' capital development projects, including noise-
related projects: the Airport Improvement Program (AIP), which provides
federal grants for airport capital development, and the Passenger Facility
Charge (PFC) program, which allows airports, with the approval of FAA, to
charge passengers a fee that also pays for development projects. You asked
us to (1) determine the total historical funding of noise- related projects
through both the AIP and the PFC programs, by FAA region, and (2) compare
the amount of AIP funds set aside for noise- related projects in the AIP
appropriation for fiscal year 2000 and the authorized amounts for the AIP
for fiscal years 2001 through 2003 with the projected costs of noise-
related projects planned in the current National Plan of Integrated Airport
Systems (NPIAS). 1

The AIP grant program is funded by appropriations from the Airport and
Airway Trust Fund. Two types of AIP grants are available to fund capital
development at airports in the national airport system: (1) apportionment
grants, which are distributed by a statutory formula to commercial service
airports according to the number of passengers served and the land weight of
cargo moved, and to the states according to a percentage of the total amount
of the appropriated funds, with a special supplement for the state of
Alaska; and (2) discretionary grants (those

1 The more than 3, 300 airports in the NPIAS, also referred to as the
national airport system, fall into two categories: (1) commercial service
airports- those that enplane 2, 500 or more passengers a year and have
scheduled airline service- and (2) general aviation airports- those that
have at least 10 aircraft based at their locations and fewer than 2, 500
scheduled enplanements a year. Commercial service airports consist of
primary and other commercial service airports. Primary airports are
categorized as large hubs, medium hubs, small hubs, and nonhubs, based on
enplanement levels. The NPIAS database provides a compilation of planned
development projects that are competing for federal grants, including noise-
related projects, at airports in the national system.

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 2 amounts
generally remaining after apportionment funds are allocated) for which any

airport in the national airport system may apply. Some discretionary funds
are “set aside” for specific types of projects, such as noise-
related projects, or for specific types of airports. To be eligible for AIP
grants, an airport must be included in the NPIAS, which incorporates a
substantial database of individual airports' capital development projects,
including noise- related projects.

To be eligible for funding with AIP noise set- aside funds, projects must
generally be part of an airport's FAA- approved noise compatibility program.
Participation in the noise compatibility program is voluntary and is carried
out in accordance with the provisions of 14 C. F. R. part 150. However,
projects at schools and hospitals in the vicinity of an airport may be
funded with AIP noise set- aside funds even though an airport does not have
an FAA- approved noise compatibility program.

Airports receiving AIP grants must pay a matching share of the cost of a
project. For noise- related projects, large airports must pay 20 percent of
the cost of a project in matching funds while all other airports must pay 10
percent. The term “large” airport refers to large and medium hub
airports.

The PFC program is a voluntary program that allows airports to charge
passengers a fee that remains with the airport and is used to pay for
capital development projects, including noise- related projects. Airports
must obtain FAA's approval, however, to collect the fee and to apply the
funds to specific projects. FAA administers both programs through its nine
regional offices. 2

Although we present some data by FAA region, geographic location is not a
factor in determining which noise- related projects are funded through AIP
grants or PFC collections. AIP apportionment funds are awarded to a
commercial service airport based on the airport's total number of
enplanements and the land weight of cargo moved. For AIP discretionary
grants, FAA uses a priority ranking system, which considers factors such as
a project's purpose and the airport's size, to comparatively assess eligible
projects. Also, under the PFC program, airports determine which projects
they want to fund with the fees and apply to FAA for approval to use the
fees on those projects.

In summary, we found the following:

ï¿½ Historical AIP funding of noise- related projects, by FAA region: From
fiscal year 1982, the first year of funding under AIP, through fiscal year
1999, AIP provided about $2.75 billion to airports for noise- related
projects. As figure 1 shows, the airports in FAA's Southern Region
collectively were awarded the

2 FAA's nine regional offices serve the following states: Alaskan Region:
Alaska; Central Region:

Iowa, Kansas, Missouri, and Nebraska; Eastern Region: Delaware, Maryland,
New Jersey, New York, Pennsylvania, Virginia, and West Virginia; Great Lakes
Region: Illinois, Indiana, Michigan, Minnesota, North Dakota, Ohio, South
Dakota, and Wisconsin; New England Region: Connecticut, Maine,
Massachusetts, New Hampshire, Rhode Island, and Vermont; Northwest Mountain
Region:

Colorado, Idaho, Montana, Oregon, Utah, Washington, and Wyoming; Southern
Region: Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina,
South Carolina, and Tennessee; Southwest Region: Arkansas, Louisiana, New
Mexico, Oklahoma, and Texas; and Western- Pacific Region:

Arizona, California, Hawaii, and Nevada.

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 3 highest
total amount-$ 709 million, or nearly 26 percent- of the AIP grants for

noise- related projects. 3 The airports in FAA's Western- Pacific Region
collectively were awarded the second highest amount-$ 538 million, or nearly
20 percent- while the airports in FAA's Alaskan Region, which unlike other
regions includes only one state, were awarded the lowest amount-$ 5 million,
or 0.2 percent. 4

ï¿½ Historical PFC funding of noise- related projects, by FAA region: For
fiscal years 1992, when FAA began approving PFC collections, through 1999,
FAA approved about $1.64 billion in PFC collections for noise- related
projects. As figure 1 shows, airports in FAA's Great Lakes Region and
Western- Pacific Region dominated the use of PFC funds for noise- related
projects by receiving approval for nearly 77 percent of the PFC collections
that FAA approved for such projects. 5 The remaining approved collections
were spread across airports in FAA's other regions.

Figure 1: Map of FAA's Regions With Total AIP Funding of Noise- Related
Projects and Total Approved PFC Collections for Noise- Related Projects

3 Enc. I provides detailed data on the funding distribution by FAA region. 4
Under the statutory formula for the application of AIP funds, the state of
Alaska is assured a certain portion of AIP funds each year for development
projects. 5 Enc. I provides detailed data on the funding distribution by FAA
region.

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 4

ï¿½ Comparison of current and future AIP noise set- aside funds with planned
noise- related projects in the NPIAS: In the Wendell H. Ford Aviation
Investment and Reform Act for the 21 st Century, the Congress set aside 34
percent of the AIP discretionary funds specifically for noise- related
projects. Under that formula, AIP provided about $207 million in fiscal year
2000 appropriations, and- based on authorizations- could provide about $327
million in fiscal year 2001, $344 million in fiscal year 2002, and $361
million in fiscal year 2003 for noiserelated projects.

We compared appropriations for fiscal year 2000 and authorizations for
fiscal years 2001 through 2003 with the projected costs of noise- related
projects in the current 5- year NPIAS (fiscal years 2000 through 2004). The
projected costs were based on FAA's estimates of the year the project would
receive AIP funding and the expected start date of the projects. Because the
NPIAS contains total project costs, we deducted the amount that airports
would be required to pay as their matching- share obligations before we
compared available AIP noise- set aside funds with project costs.

As shown in table 1, we found that the projected costs of planned projects
exceeded the available AIP noise set- aside funds for fiscal year 2000 by
nearly $143 million, but it is unknown how these amounts compare for fiscal
years 2001 through 2003. What portion, if any, of the $143 million in
unfunded projects for fiscal year 2000 might be rescheduled for funding, or
when, could not be determined. As a result, we could not compute the
difference between available funding and planned project costs for fiscal
years 2001 through 2003. FAA's planning guidelines state that when planned
projects remain unfunded in any given year because of limited AIP funds,
those projects must be reviewed again and either placed in the NPIAS as
warranting future funding or deleted from the NPIAS database. Because FAA
does not track historically what happens to unfunded projects, FAA was not
able to provide data on how unfunded planned projects had been handled in
the past. However, according to FAA officials, projects scheduled for
funding in one year that remain unfunded at the end of that fiscal year will
be scheduled for funding in the following year. Whether an overall surplus
or shortage actually occurs will depend on the amount appropriated for AIP,
the costs and timing of rescheduled projects, and the extent to which any
new projects are added to the NPIAS. 6

6 A distribution of the total costs of planned noise- related projects in
the current NPIAS (fiscal years 2000 through 2004), by FAA region, appears
in enc. II.

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 5

Table 1: Comparison of the AIP Noise Set- Aside With the Cost of Planned
Noise- Related Projects in the NPIAS, Fiscal Years 2000 Through 2003

Dollars in thousands

Fiscal year 2000 2001 2002 2003

AIP noise set- aside funds $206,719 a $326,798 b $344,111 b $361,176 b Cost
of noise projects in the NPIAS c -minus matching shares d 349,417 297,036 e
293,329 e 150,443 e Difference (142,698) f f f

a Amount appropriated. b These are FAA's estimates for the noise set- aside
amounts based only on AIP authorization levels. The actual amount of the
noise set- aside in any given year will be affected by how much, if any, AIP
apportionment funds for that year are unused and thus carried over to the
next year. Such apportionment carryover amounts are added to discretionary
funds in the year unused, but subtracted from discretionary funds for the
following year. According to FAA, the apportionment carryover amount has
ranged in the past generally between $60 million to $150 million.

c Planned costs are based on FAA's estimates of the year the project will
receive AIP funding and the expected start date of the project. Although
data are from the 5- year NPIAS for fiscal years 2000 through 2004, we
compared only 4 years of data because AIP appropriation and/ or
authorization data are available only through fiscal year 2003.

d Airports receiving AIP grants must pay a matching share of the cost of a
project. For noise- related projects, large and medium hub airports pay 20
percent of the cost of a project in matching funds, and all other airports
pay 10 percent.

e These costs are subject to change. The NPIAS is updated each year, and
according to FAA officials, amounts unfunded will be scheduled for funding
in the following fiscal year. f The difference cannot be computed because it
depends on how much of the $142,698, 000 in unfunded NPIAS noise projects
may be carried over for future funding, and when.

Source: GAO compilation of FAA data.

The NPIAS is updated each year, and new projects, as well as airports, may
be added. The current 5- year NPIAS project database was prepared at a time
when FAA limited the amount of AIP noise set- aside funds that an individual
airport could receive in a single year because the demand for those funds
generally exceeded the amount available. Airports with FAA- approved noise
compatibility programs were generally not allowed to receive more than $5
million each in a single year for noise- related projects. Airports were
also generally not allowed to receive more than $3 million each in a single
year for projects at schools and hospitals in the vicinity of the airport.

In addition, FAA officials stated that the demand for noise set- aside funds
is likely to increase for two reasons. First, FAA approves about 15 to 20
new or revised noise compatibility programs a year, thus generating new
projects eligible for noise set- aside funding. Second, airports have shown
increasing interest in funding noise mitigation projects for residents who
live in geographic areas beyond those that FAA has defined as incompatible
with airport noise. Such areas have not generally benefited from noise
mitigation programs because of the limited noise set- aside funds. 7

7 Currently, FAA's funding for noise relief is focused on geographic areas
exposed to 65 decibels of noise or higher as measured by the Day- Night
Sound Level method, which measures exposure from cumulative events over
time.

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 6

Scope and Methodology

To determine the distribution of AIP and PFC funding for noise- related
projects by FAA region, we obtained AIP and PFC historical data from FAA. We
did not independently review the validity of the AIP program database, but
it is the only database for that information, and we have used data from it
extensively during several reviews of various aspects of the grant program.
In 1999, we independently validated the PFC project database and found it to
be very reliable (a 0.3- percent error rate). We sorted and totaled the AIP
and PFC data by FAA region.

To compare the amounts appropriated and authorized for the AIP noise set-
aside with the costs of noise- related projects in the current NPIAS, we
obtained from FAA (1) the actual AIP noise set- aside amounts for fiscal
year 2000 and estimates of the AIP noise set- aside for fiscal years 2001
through 2003 based on the authorized amounts, and (2) data on the noise-
related projects in the 5- year NPIAS for fiscal years 2000 through 2004. We
calculated the matching- share costs of airports for AIPfunded noise-
related projects and deleted those costs from NPIAS project costs in order
to compare the AIP share of project costs with the AIP noise set- aside
funding data. We compared the planned project costs based on FAA's estimates
of the year the projects would receive AIP funding and the expected start
date of the projects.

Agency Comments

We provided the Department of Transportation with a copy of the draft report
for its review and comment. The Department had no objections to the
information presented in the draft report.

---- We performed our work from July 2000 through September 2000 in
accordance with generally accepted government auditing standards.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 5 days after
the date of this letter. Please contact me or Belva Martin at (202) 512-
2834 if you have any questions. In addition, Beverly Ann Bendekgey, Julian
L. King, and John A. Thomson, Jr. made key contributions to this report.

Sincerely yours, Gerald L. Dillingham, Ph. D. Associate Director,
Transportation

Issues

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 7

Enclosure I AIP and PFC Funding for Noise- Related Projects by FAA Region

Tables 2 and 3 identify total Airport Improvement Program (AIP) and total
Passenger Facility Charge (PFC) program funding for noise- related projects,
since the inception of each program, grouped by airports in each of the
Federal Aviation Administration's (FAA) regions.

Table 2: AIP Funding of Noise- Related Projects for Fiscal Years 1982
Through 1999, by FAA Region

FAA region Amount Percentage

Alaskan $5,027,285 0. 2 Central 185,081,464 6. 7 Eastern 213,690,454 7. 8
Great Lakes 461,913,047 16.8 New England 144,230,863 5. 2 Northwest Mountain
217,428,766 7. 9 Southern 709,137,391 25.8 Southwest 272,910,721 9. 9
Western- Pacific 538,140,679 19.6

Total $2,747,560,670 99.9

Note: The percentages do not total 100 because of rounding. Source: GAO
compilation of FAA data.

Table 3: Approved PFC Collections for Noise- Related Projects for Fiscal
Years 1992 Through 1999, by FAA Region

FAA region Amount Percentage

Alaskan $0 0. 0 Central 94,741,850 5. 8 Eastern 1, 452,449 0.1 Great Lakes
645,288,204 39.4 New England 28,390,000 1. 7 Northwest Mountain 119,364,538
7. 3 Southern 129,175,065 7. 9 Southwest 9, 832,867 0.6 Western- Pacific
608,668,239 37.2

Total $1,636,913,212 100.0

Source: GAO compilation of FAA data. FAA data are as of October 31, 1999.

GAO/ RCED- 00- 285R Funds for Airport Noise- Related Projects 8

Enclosure II Noise- Related Projects Included in the National Plan of
Integrated Airport

Systems for Fiscal Years 2000 Through 2004, by FAA Region

The total projected costs of noise- related projects that are part of the 5-
year National Plan for Integrated Airport Systems (fiscal years 2000 through
2004) by FAA region appear in table 4. As the table shows, the largest share
of costs for planned projects-$ 521 million, or nearly 35 percent of total
costs- originates from airports in FAA's Great Lakes Region, while the
second largest share-$ 354 million, or nearly 24 percent- originates from
airports in FAA's Southern Region. The smallest share- $3.8 million, or 0.3
percent- originates from airports in FAA's Alaskan Region. 8

Table 4: Noise- Related Projects in NPIAS for Fiscal Years 2000 Through
2004, by FAA Region

FAA region Amount Percentage

Alaskan $3,822,222 0. 3 Central 87,935,000 5. 9 Eastern 53,934,089 3. 6
Great Lakes 521,141,980 34.7 New England 61,449,227 4. 1 Northwest Mountain
66,794,446 4. 4 Southern 354,069,333 23.6 Southwest 106,316,111 7. 1
Western- Pacific 247,067,788 16.4

Total $1,502,530,197 100.1

Note: The percentages do not total 100 because of rounding. Source: GAO
compilation of FAA data.

(348250) 8 Unlike other FAA regions, the Alaskan Region consists of only one
state and is assured a certain portion of AIP funds each year for
development projects.

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