Airport Improvement Program

Student Research Project

Christopher Matthys

PSC 420

November 26, 2016

1

1. Program Identification

The Airport Improvement Program (AIP) was established by the Airport and Airway

Improvement Act of 1982 and most recently amended by the Federal Aviation Administration

Modernization and Reform Act of 2012 (FAA 2016.a). The funds for the AIP are allocated

through the Airport and Airway Trust Fund (AATF), which was created by the Airport and

Airway Development and Revenue Act of 1970. In fiscal year 2016, $2.746 billion was

requested by the Federal Aviation Administration (FAA) to fund the AIP, a decrease from the

$3.192 billion enacted for the AIP in FY 2015 (FAA 2016.b). The funds in the AATF are

themselves generated through fees and excise taxes on air travel and fuel1 (FAA 2016.c). The

funds, although not taken from the general fund of the federal budget, must still be allocated

through the budget authorization process by the United States Congress.

2. The Grant Program Design

The objective for the AIP stated on the FAA website is to provide “grants to public

agencies — and, in some cases, to private owners and entities — for the planning and

development of public-use airports that are included in the National Plan of Integrated Airport

Systems (NPIAS)” (FAA 2016.a). This objective encompasses a wide range of smaller

objectives covered by the NPIAS. “The NPIAS report identifies the airports included in the

national airport system, the role they serve, and the amounts and types of airport development

eligible for Federal funding under the Airport Improvement Program (AIP) over the next 5

years” (DoT 2016.a). The most recent report covers 2012-2017 and was released on October 21,

2016. The current NPIAS lists eight standards necessary for the U.S. national airport system to

meet the demands for air transportation:

1 https://www.faa.gov/about/budget/aatf/media/Excise_Tax_Structure_Calendar_2016.pdf See Appendix A

2

1.) Airports should be safe and efficient, located where people will use them, and developed and maintained to appropriate standards;

2.) Airports should be affordable to both users and the Government, relying primarily on producing self-sustaining revenue and placing minimal burden on the general revenues of the local, State, and Federal Governments;

3.) Airports should be flexible and expandable and able to meet increased demand and accommodate new aircraft types;

4.) Airports should be permanent with assurance that they will remain open for aeronautical use over the long term;

5.) Airports should be compatible with surrounding communities, maintaining a balance between the needs of aviation, the environment, and the requirements of residents;

6.) Airports should be developed in concert with improvements to the air traffic control system and technological advancement;

7.) The airport system should support a variety of critical national objectives, such as defense, emergency readiness, law enforcement, and postal delivery; and

8.) The airport system should be extensive, providing as many people as possible with convenient access to air transportation, typically by having most of the population within 20 miles of a NPIAS airport (DoT 2016.a).

These standards function as the overall objectives of the NPIAS, which determines the eligibility

for AIP grants based upon which airports best help fulfill these criteria. The determination of

airport eligibility is done by the FAA in consultation with state aviation agencies and local

planning agencies (DoT 2016.a). The specific guidelines and criteria used to make the

determination are listed in FAA Order 5090.3C - Field Formulation of the National Plan of

Integrated Airport Systems. This regulation is formulated by the Office of Airport Planning &

Programming, Planning & Environmental Division within the FAA. Section 1-8 of Order

5090.3C defines the relationship between the AIP and the NPIAS.

1-8. RELATIONSHIP OF THE NPIAS TO THE AIRPORT IMPROVEMENT PROGRAM (AIP)

a. Section 47105(b)(2) of Title 49 U.S.C. requires that airport grant applications propose airport development or airport planning only in connection with public-use airports included in the current National Plan of Integrated Airport Systems. The proposed airport development must comply with approved standards for site location, airport layout, site preparation, paving, lighting, and safety of approaches.

3

b. The listing of any location, airport, or item of development in the plan does not in any way legally obligate or commit the Federal Government to provide funds for specific development nor does it imply environmental approval.

c. The basic support and justification for airport grants authorized by Congress are that such grants are required to help develop the airport system described in the NPIAS.

The target clientele for the AIP grant program are the 3,340 airports contained within the NPIAS

out of the 19,536 airports2 in the U.S. (DoT 2016.a). Chapter 2 of FAA Order 5090.3C covers the

criteria necessary for an airport’s inclusion in the NPIAS, which determines eligibility for the

receipt of AIP grants (See Appendix B). The main factors for inclusion into the NPIAS are

summarized in the FAA AIP sponsor guide and are as follows:

Whether an airport is considered a public-use airport The number of enplanements the airport has or is forecast to have The number of based aircraft located at the airport Whether an airport receives U.S. Mail service Whether there is a component of the U.S. Military, Reserves or National

Guard permanently based on or adjacent to the airport Special justification that would consider the isolation of the community

being served, whether the airport serves the need of an Indian tribe, supports recreation areas, or is needed to develop or protect important national resources (DoT 2012)

The airports included in the NPIAS vary tremendously from large commercial airports to small

privately owned airports open to public use. AIP grants fund construction and projects at the

selected airports which focus primarily on aircraft operations while excluding projects that

generate commercial revenue (Kirk 2009). In order to determine the priority of funding to the

various airports contained within the NPIAS, the national Airports Capital Improvement Plan

(ACIP) is used. “The ACIP also serves as the basis for the distribution of grant funds under the

Airport Improvement Program (AIP)” (DoT 2000.b). The ACIP is determined by the FAA in

conjunction with the states, planning agencies and airport sponsors.

2 Airports here refers to airports, heliports, seaplane bases, ballonports, gliderports, and Ultralight facilities.

4

“State aviation organizations, block grant states, and airport sponsors generally

submit their CIPs (based upon airport master/system plans, joint planning

conferences, airport master record data, safety inspection reports, pavement

condition surveys, etc.) to the FAA regional or district office for review” (DoT

2000.b).

The ACIP’s function to determine the priority of projects at the thousands of airports contained

in the NPIAS replaces an older system in which funding distribution was determined by regional

offices (DoT 2000.b).

The grant program design can be viewed through the Huntsville International Airport’s

inclusion in the AIP grant program. Locally, the Huntsville International Airport is run,

sponsored, by the Huntsville-Madison County Airport Authority(HMCAA) (Port of Huntsville

2016). The state aviation organization for Alabama is the Aeronautics Bureau of the Alabama

Department of Transportation (ABADoT 2016). In order to obtain grant funds for improvements

at the Huntsville International Airport the Aeronautics Bureau, along with the HMCAA, work

together to submit a Capital Improvement Plan(CIP) to the Southern Region Airports Division of

the FAA for review for inclusion in the ACIP. The determination is then made that the submitted

CIP is to be included in the ACIP, which places the airport within the NPIAS, making it eligible

for the AIP grants funds requested in the original CIP (DoT 2000.b). This is a rough

explanation of the process under which airports are determined to be eligible for AIP grant

funding.

AIP grants allow the grantee to avoid most of the debt or the bond financing of the cost

that would be required to make capital improvements to the airports. This alleviates much of the

funding concerns for air transportation infrastructure at the state and local level. State aviation

agencies maintain air transportation plans for infrastructure which depend upon funds from the

federal level of which the AIP is a significant part. AIP grants work to maintain the current

5

standard for air transport infrastructure at a national level while developing it for future needs

through the standards described in the NPIAS. At the same time AIP grants help achieve the

goals of the various state air transportation plans.

3. Political Environment

Many national and local interest groups are concerned about and involved with the AIP.

These groups range from conservative political groups that denounce most of the AIP grants as

funding unnecessary improvements at airports which add little to nothing to the national

transportation infrastructure, to individual pilots concerned about the runways at their small local

airports. There appears to be a divide between groups at the national level advocating that the

AIP be discontinued, along with the entire FAA, and groups that depend upon the AIP to provide

funds necessary to pay for the infrastructure needed to keep many smaller airports functioning.

Some detractors of the AIP complain that it is inefficient at distributing federal funds to

where they are needed the most because the majority of the money distributed through the AIP

benefits smaller airports which serve fewer travelers. “Since the grants are funded primarily by

taxes paid by these passengers, this represents a gross misallocation of resources due to political

machinations in Congress” (Sargent 2016). Some arguing for the defunding of the AIP hold that

the air transit system in America needs fundamental reform and should be privatized. One

argument used is that the current system is inefficient, as funding through the AIP is not

determined by market demands and is instead determined by the FAA bureaucracy and political

considerations (Poole and Edwards 2016). There is a push by groups such as the Cato Institute to

privatize much of the functions of the FAA, including the funding aspects such as the AIP grant

program, in the wake of the election of Donald Trump as President of the United States in

6

November 2017. Poole and Edwards argue that much of the funding provided by the AIP could

be replaced by increasing Passenger Facility Charges, which would require removing the cap on

them set by Congress in 1990. Additional funding could be found by transforming airports into

public-private partnerships in order to accrue funding from the private sector which would

replace the rest of the monies currently provided by the public through grant programs such as

the AIP (Poole and Edwards 2016).

Some local interest groups have worked to secure funding to get their airports up to

standards in order to qualify for AIP grants by meeting the requirements to be included in the

NPIAS. The Jackson-Hill Aviation Group advocated an airport improvement proposal for The

Ocean Isle Beach Airport in North Carolina hoping to eventually secure federal funding

(Jefferson 2005). At the local level, there is also support for the AIP from various elected

officials such as mayors. A public interest group, the United States Conference of

Mayors(USCM), advocates for the continued reauthorization of the AIP. “Whereas, the Airport

Improvement Program (AIP) plays an important role in financing airport safety and security

projects as well as projects to relieve passenger delays and congestion and must be reauthorized

at a higher level to ensure that adequate funding is available” (USCM 2009). The National

Association of Counties (NACo), another public interest group, supports the AIP, but believes

that the federal government should recognize counties’ abilities “to plan and coordinate aviation

with other modes of transportation and to control land use for future airport development” as

well as increasing the flexibility in investment of AIP funding (NACo 2016). Many interest

groups such as the NACo and the USCM appear to view the AIP as a necessary funding

arrangement for infrastructure at many of the United States’ small airports, which contrasts with

7

groups including the Cato Institute and the Heritage Foundation, who hold that such airports are

unnecessary or that the funding could be found from private sources and increases in fees.

The nature of the scheme used to determine eligibility of AIP funds using the NPIAS and

ACIP means that the responsiveness to local constituencies is measured in years. If a problem is

discovered which could be solved using funds provided an AIP grant, or if new development is

desired that would be eligible to be funded in part through an AIP grant, a local constituency

must start by updating their airport’s master plan. An airport’s master plan is its long-term plans

for development which forms the basis for the CIP submitted to the FAA regional offices (DoT

2012). Creation of a new airport master plan has its own 144-page guide from the FAA (DoT

2015.a). Once the master plan is updated it must be submitted to the FAA regional office, which

will approve the various individual components of the plan instead of the plan as a whole (DoT

2012). The approval of new or updated parts to an airport’s master plan is subject to

environmental review and site investigations by the FAA regional office as well as the concerned

state and local agencies. Once approved, the airport’s individual CIP can be updated in the ACIP

for inclusion in the NPIAS. Grant distribution is based not on an individual program manager

but upon a formula determining need within the ACIP called the National Priority System

equation (DoT 2000.a). “It is critical that airport owners and their consultant coordinate early

and often with the appropriate FAA planner to identify significant planning issues and to

determine the type and magnitude of effort required to address such issues” (DoT 2012). The

necessity of the early and often coordination appears to be the depth of the grant approval

process, which relies upon continuous updates because the process is so complex.

Responsiveness to local constituencies in the AIP grant program is therefore dependent upon

each individual airport’s ability to coordinate the planning with the FAA, as well as the relevant

8

state and local agencies, so that the NPIAS can be updated to reflect the needs of the local

constituencies with regards to their airport.

4. Fiscal Dimensions

In the Fiscal 2009 Federal Budget 3.9 billion dollars were appropriated for the AIP, with

3.385 billion available for grants (DoT 2011 and Kirk 2009). Historically, the funding for the

AIP increased from its inception in 1982 to 2009.

Figure 1. (Kirk 2009).

More recently, the enacted funding for the AIP through the appropriations process has been

decreasing. This can be observed in the funding levels of the past three years, with

$3,193,900,000 enacted in FY 2014, to $3,192,650,000 enacted in FY 2015, to the request made

9

by the FAA for FY 2016 being $2,746,900,000 (FAA 2016.b). Funds within the AIP are

primarily distributed through formula with the remaining funds made available to be applied for

by airports for planed capital development (Kirk 2009). The formula used for determining

distribution, the National Priority System equation, determines the National Priority Rating,

which determines the level a particular airport’s development plan is in accord with the FAA’s

objectives for the NPIAS on a scale of 0 to 100, with 100 being the most in line with the FAA

priorities (DoT 2000b).

National Priority Rating = (k5*P)*[(k1*A)+(k2*P)+(k3*C)+(k4*T)]

Where: k1 = 1.00, k2 = 1.40, k3 = 1.00, k4 = 1.20, k5 = 0.25.

National Priority Rating = .25P*(A+1.4P+C+1.2T)

(A) is the airport code used to identify the role and size of the airport. To provide

sufficient variability to the airport size factor, the airport code is assigned a value

that ranges between 2 and 5.

(P) is the purpose identifier which signifies the underlying objective of an airport

development project (e.g., reconstruction). There are 8 purpose identifiers.

(C) is the component identifier which signifies the physical component (e.g.,

runway), for which the development is intended. There are 17 component

identifiers.

(T) is the type identifier which signifies the actual work being done (e.g.,

extension). There are 38 type identifiers (DoT 2000b).

The types of grants distributed through the AIP are primarily categorical formula grants

distributed in accordance with the National Priority Rating in the NPIAS. In FY 2009, out of the

3.385 billion dollars available for AIP grants, 2.792 billion was distributed through formula

grants, with 592.8 million dollars of the remaining funds being distributed mainly through

discretionary grants (Dot 2009). These discretionary grants are determined by FAA project

10

priorities, congressional directives, and three specific categories of grants that are required a

certain percentage of discretionary funds by law. The percentages used and the three categories

are as follows: 35% for Airport Noise Set-Aside, which deals with noise issues related to

airports; 4% for the Military Airport Program (MAP) which is for the conversion of military

airports to civilian or dual use; and 2/3rds of 1% for Grants for Reliever Airports which help in

metro area suffering from delays (Kirk 2009). There is also a state block grant system within the

AIP which combines the formula funds and the discretionary funds going to non-primary airports

for up to ten states. The block grants transfer the oversight and administrative responsibilities

normally carried out by the regional FAA offices to state control. The participating states

determine the distribution of funds to AIP projects at non-primary airports (Kirk 2009).

In FY 2009 Alabama received $67,282,590.00 in AIP grant funding. Huntsville

International Airport received four grants totaling $11,929,420 to acquire equipment, improve

and expand the terminal building, improve the access road, rehabilitate the apron, and acquire

land for development. The Madison County Executive Airport received one grant for $272,419

to extend a runway (FAA 2016.d and FAA 2016.e). The grant funds are made available to the

airport sponsor, who then expends them under the oversight of the regional FAA office for the

purpose intended by the specific grant. There is an exception for airports under the block grant

state program in which the distribution of AIP money and oversight are taken over by the state

aviation agency (Kirk 2009). In the case of the Huntsville International Airport, the sponsor is

the HMCAA, who spends the funds according to the specifics of each grant under the AIP (Port

of Huntsville 2016).

The percentage of funding that is required to match the federal grant differs depending

upon the type of airport. This ranges from the federal grant funds paying for 95% of the project

11

costs for small airports and state block grant recipients, paying 75% the project cost for large/

medium sized hubs, and paying 70% of project costs for private airports and those grants funded

through discretionary grants. Generally, the remaining program funds are to be made up by the

airports, which can be done through various means, such as state funding, private funding or the

issuing of bonds. Excepting the state block grant program, most AIP grants funding avoids

allocation through state distribution entirely (Kirk 2009). In Alabama, the funding mix for

Airport grants has traditionally been 90% federal funds with 5% provided by the state and the

remaining 5% provided by localities (AB AL DoT 2005). The Alabama state funds come from

the Airport Development Fund (ADF) and the Surplus Military Fields Fund (SMFF). The ADF

funds are generated through an excise tax on aviation fuel. The SMFF funds are generated “from

surplus military airfields that either are currently or formerly owned by the state” (AB AL DoT

2005). The local funding for Alabama airports come from four sources: general fund revenues,

bond issues, airport-generated revenues, and public-private partnerships (AB AL DoT 2005).

General fund revenues, those funds derived from the local municipal taxes, as well as airport

generated revenues, make up the majority of the local funding for AIP projects, with bonds and

public-private partnerships being rarer (AB AL DoT 2005).

In 2016 the Huntsville International Airport has received 3 grants under the AIP so far.

The first grant, #3-01-0042-077-2016, was announced on August 26, 2016 and awarded on

September 1,2016. The total AIP funding amount is $9,159,642, with $3,736,586 coming from

the entitlement, or formula funds, and the remaining $5,423,056 coming from discretionary

funds. This grant funds the acquisition of snow removal equipment, rehabilitation of the

terminal building, and security enhancements. The second grant, #3-01-0042-078-2016, was

announced on September 21, 2016 and awarded on September 22, 2016. Unlike the first grant

12

the second grant’s total, $9,647,996, was funded completely out of discretionary funds (DoT

2016.b). This grant funds the second part of a five-part project: the creation of an additional

taxiway that will connect the cargo aircraft parking with the north end of an existing runway

(Alexander-Adams 2016). The third grant in 2016, #3-01-0042-079-2016, was announced on

September 1, 2016 and awarded the next day, on September 2, 2016. This grant, like the second

grant, was funded entirely out of discretionary funds with a total amount of $1,572,123. This

grant was awarded to conduct a new airport master plan study (DoT 2016.b). In addition to the

three grants awarded to the Huntsville International Airport, the smaller Huntsville Executive

Airport was awarded $241,280 in grant #3-01-0087-026-2016. This grant for the smaller airport

was funded completely out of formula funding to rehabilitate the runway and taxiway and to

perform a study to update the airport master plan (DoT 2016.b).

5. Program Management and Implementation

The AIP is administered by Office of Airports (ARP) within the FAA, with much of the

administrative and oversight duties being carried out in regional offices. There are nine main

regional offices: Alaskan, Central, Eastern, Great Lakes, New England, Northwest Mountain,

Southern, Southwest, and Western Pacific (DoT 2016.c). The larger regions are further divided

into smaller districts which cover anywhere from one state/territory to four. Alabama is under

the Southern regional office, which is headquartered in Atlanta, but it reports to the Jackson

Airports District Office, which covers both Alabama and Mississippi. Those states under block

grant funding have the AIP grants distributed, overseen, and administered by their respective

state aviation agencies. As of 2009, the ten states participating in the AIP block grant program

13

are Illinois, Michigan, Missouri, New Hampshire, North Carolina, Pennsylvania, Tennessee,

Texas, and Wisconsin (Kirk 2009).

In the Huntsville/Madison County area the recipients of AIP grant funding are the

Huntsville International Airport and the Huntsville Executive Airport. The grant money is

distributed to the airport’s sponsors, which are the Huntsville-Madison County Airport Authority

for the Huntsville International Airport, and the Madison County Executive Airport Authority for

the Huntsville Executive Airport. The AIP grants are distributed according to the rankings in the

NPIAS using a combination of formula and discretionary grants. The grants distributed to the

two airports in the Huntsville/Madison county area are spent on a variety of different items

ranging from the purchase of new support vehicles to maintenance. The general projects covered

by AIP grants are airport planning, airport development, noise compatibility planning, and noise

compatibility projects (DoT 2000.b). Each year new grants are issued based upon the needs of

the airports and the availability of funds. The main project at the Huntsville International Airport

receiving AIP funding is the construction of a new taxiway. This particular project has been

divided into five parts, with the over $9 million-dollar grant, #3-01-0042-078-2016, of FY 2016

covering the second part of the project.

The nature of the funding structure of the AIP means that there is continuous review of

grant usage and each airport’s implementation of their respective airport master plans. The

structure of the grant program requires that each airport desiring to remain eligible for AIP grants

must maintain the proper documentation. The direct administration of the AIP program done by

the Office of Airports (ARP) at the FAA maintains a risk model policy which categorizes the

AIP eligible airport sponsors into three risk levels: Nominal, Moderate, and Elevated (DoT

2015.b). An airport sponsor’s risk level is determined by ten risk factors across three categories

14

and computed into a score on a scale of 100, with 0 being the lowest risk and 100 the highest.3

Each of the three risk levels has its own action plan required for sponsors at particular levels.

“Sponsors with a Nominal Risk rating will receive the basic level of grant oversight and

monitoring. No additional documentation or requirements will be placed on the sponsor in

relation to the Risk Model” (DoT 2015.b). Small irregularities at the Nominal level may,

however, necessitate additional actions to bring the sponsor into compliance with FAA guidance

and procedures. “Sponsors with a Moderate risk rating will receive additional targeted grant

oversight related to the specific factor(s) that triggered the increase in risk rating” (DoT 2015.b).

Issues that can trigger a Moderate risk level can include “a history of grant payment and

processing irregularities, such as improper drawdowns, late payments, large unliquidated

outstanding balances and untimely financial project closeouts” (DoT 2015.b). An Elevated Risk

level brings about the involvement of FAA regional management, the development of a Risk

Reduction Plan of Corrective Action containing the outlines of deficiencies within the airports

program, a list of planned corrective actions, and dates agreed upon by the airport sponsor and

the FAA for the corrections to be implemented by (DoT 2015.b). Risk levels are determined

before an airport can receive an AIP grant, and the risk assessment is reviewed on regular

basis with variations on review length based upon the previous risk level.

3 See Appendix C for list of the ten risk factors

15

Works Cited

Aeronautics Bureau of the Alabama Department of Transportation. 2005. “Alabama Statewide

Airport System Plan” January. http://www.dot.state.al.us/aerweb/frm/Chapter%208.pdf

(Accessed November 26, 2016)

Aeronautics Bureau of the Alabama Department of Transportation. 2016.

http://www.dot.state.al.us/aerweb/index.htm (Accessed November 23, 2016).

Alexander-Adams, Marcia. 2016. “Press Release – FAA Awards $90 Million in Infrastructure

Grants to Airports” November 4. Washington D.C.: DoT.

https://www.faa.gov/news/press_releases/news_story.cfm?newsId=21074 (Accessed

November 26, 2016)

US Conference of Mayors. 2009. “Modernizing America's Aviation System for the 21st Century

through the Reauthorization of the Federal Aviation Administration (FAA).”

https://www.usmayors.org/resolutions/77th_conference/tc02.asp (Accessed November

26, 2016)

FAA. 2016.a. “Overview: What is AIP?” https://www.faa.gov/airports/aip/overview/ (Accessed

November 22, 2016).

FAA. 2016.b. “Budget Estimates Fiscal Year 2016 Federal Aviation Administration.”

https://www.transportation.gov/sites/dot.gov/files/docs/FY2016-BudgetEstimate-

FAA.pdf (Accessed November 22, 2016).

FAA. 2016.c. “Airport & Airway Trust Fund (AATF)” https://www.faa.gov/about/budget/aatf/

(Accessed November 22, 2016).

16

FAA. 2016.d. “[ AIP 2009 ] Funding and Grant Breakdown by Service Level”

https://www.faa.gov/airports/aip/grant_histories/media/fy2009-aip-grants-states.pdf

(Accessed November 22, 2016).

FAA. 2016.e “FY 2009-AIP-Grants”

https://www.faa.gov/airports/aip/grant_histories/media/fy2009-aip-grants.pdf (Accessed

November 22, 2016).

Jefferson, Paul R. 2005. “Pilots guide airport expansion effort”

http://www.starnewsonline.com/news/20050807/pilots-guide-airport-expansion-effort

(Accessed November 22, 2016).

Kirk, Robert S. 2009. Airport Improvement Program (AIP): Reauthorization Issues for

Congress. U.S. Congressional Research Service. (R40608; May 29, 2009)

https://www.fas.org/sgp/crs/misc/R40608.pdf (Accessed November 22, 2016).

National Association of Counties 2016. “Transportation” NACo American County Platform and

Resolutions 2016-2017 http://www.naco.org/sites/default/files/Transportation_0.pdf

(Accessed November 23, 2016)

Poole, Robert W. and Chris Edwards. 2016. “Privatizing U.S. Airports” Cato Institute Tax and

Budget Bulletin No.76. November 21, 2016. https://www.cato.org/publications/tax-

budget-bulletin/privatizing-us-airports#full (Accessed November 23, 2016).

Port of Huntsville. 2016. http://www.flyhuntsville.com/portal/#.WDZNVfkrKCj (Accessed

November 23, 2016).

Sargent, Michael. 2016. “Senate’s FAA Authorization Perpetuates Big-Government Intrusion

into Aviation Industry” Heritage Foundation. Issue Brief #4546. April 11, 2016.

17

http://www.heritage.org/research/reports/2016/04/senates-faa-authorization-perpetuates-

big-government-intrusion-into-aviation-industry (Accessed November 22, 2016).

U.S. Department of Transportation. Federal Aviation Administration. 2016.a. Report to

Congress National Plan of Integrated Airport Systems (NPIAS) 2017–2021. Washington

D.C.: DoT. https://www.faa.gov/airports/planning_capacity/npias/reports/media/NPIAS-

Report-2017-2021-Narrative.pdf (Accessed November 22, 2016).

U.S. Department of Transportation. Federal Aviation Administration. 2016.b. FAA Airport

Improvement Program Grant Detail Report. Washington D.C.: DoT.

https://www.faa.gov/airports/aip/grantapportion_data/media/FY16-AIP-Grants.xlsx

(Accessed November 26, 2016)

U.S. Department of Transportation. Federal Aviation Administration. 2016.c. Airports Regional

& District/Development Offices.

https://www.faa.gov/about/office_org/headquarters_offices/arp/regional_offices/

(Accessed November 26, 2016)

U.S. Department of Transportation. Federal Aviation Administration. 2015.a. Airport Master

Plans Advisory Circular No.: 150/5070-6B. Washington D.C.: DoT.

https://www.faa.gov/documentLibrary/media/Advisory_Circular/150-5070-6B-Change-

2-Consolidated.pdf (Accessed November 25, 2016).

U.S. Department of Transportation. Federal Aviation Administration. 2015.b. Airport

Improvement Program (AIP) Grant Oversight Risk Model Policy. November 30.

Washington D.C.: DoT. https://www.faa.gov/airports/aip/media/AIP-Oversight-Risk-

Model.pdf (Accessed November 26, 2016)

18

U.S. Department of Transportation. Federal Aviation Administration. 2012. AIP Sponsor Guide.

Washington D.C.: DoT.

https://www.faa.gov/airports/central/aip/sponsor_guide/media/0500.pdf (Accessed

November 25, 2016).

U.S. Department of Transportation. Federal Aviation Administration. 2011. Airport

Improvement Program Fiscal Year 2009 Report to Congress 26th Annual Report of

Accomplishments. Washington D.C.: DoT.

https://www.faa.gov/airports/aip/grant_histories/media/26th-aip-annual-report-of-

accomplishments.pdf (Accessed November 25, 2016).

U.S. Department of Transportation. Federal Aviation Administration. 2000.a. Field Formulation

of the National Plan of Integrated Airport Systems (NPIAS). Washington D.C.: DoT.

https://www.faa.gov/airports/resources/publications/orders/media/planning_5090_3C.pdf

(Accessed November 22, 2016).

U.S. Department of Transportation. Federal Aviation Administration. 2000.b. FAA Order

5100.39A, Airports Capital Improvement Plan. Washinton D.C.: DoT.

https://www.faa.gov/documentLibrary/media/Order/order-5100-39A-acip.pdf (Accessed

November 22, 2016).

19

Appendix A: Current Aviation Excise Tax Structure https://www.faa.gov/about/budget/aatf/media/Excise_Tax_Structure_Calendar_2016.pdf

20

Appendix B: Chapter 2 of FAA Order 5090.3C

Chapter 2. ENTRY CRITERIA AND PROCEDURES Section 1. ENTRY CRITERIA 2-1. GENERAL This section provides criteria by which airports are evaluated for entry into the

National Plan of Integrated Airport Systems. In the NPIAS, the word "airport" includes landing areas developed specifically for helicopters and seaplanes as well as conventional fixed wing aircraft landing areas.

2-2. LEGISLATIVE DEFINITIONS Airports are included in the NPIAS on the basis of their roles in providing air transportation. Eligibility for receiving Federal aid may involve additional criteria, such as the following definitions: a. Public Airport is any airport that is used or to be used for public purposes, under the control of a public agency, the landing area of which is publicly owned (Section 47102(16) of Title 49 of the United States Code) b. Public-Use Airport means: (1) a public airport; or (2) Privately owned airport used or intended to be used for public purposes that is a reliever airport or determined by the Secretary to have at least 2,500 passenger boardings each year and to receive scheduled passenger aircraft service. (Section 47102(17) of Title 49 of the United States Code)

2-3. TYPES OF AIRPORTS Airports are divided into two categories that reflect the type of service provided the community. The service levels also represent statutory funding categories associated with the airport grant program. a. Commercial Service Airports are publicly owned airports that enplane 2,500 or more passengers annually and receive scheduled passenger aircraft service. Commercial service airports are either: (1) Primary - airport that enplanes more than 10,000 passengers annually; or (2) Nonprimary - airport that enplanes between 2,500 and 10,000 passengers annually. b. General Aviation Airports while not specifically defined are considered to be airports not classified as commercial service. General aviation airports include: Order 5090.3C 12/4/2000 Page 12 (1) Reliever is an airport designated by the FAA as having the function of relieving congestion at a commercial service airport and providing more general aviation access to the overall community. Privately owned airports may be identified as reliever airports. (2) Privately owned public-use airports that enplane 2,500 or more passengers annually and receive scheduled passenger service are also classified as general aviation because they do not meet the criteria for commercial service (i.e., are not publicly owned). (3) Other General Aviation are airports that are largely intended to serve the needs of general aviation users (users who conduct non-military operations not involving the carriage of passengers or cargo for hire or compensation).

2-4. COMMERCIAL SERVICE The following criteria will be used to qualify commercial service airports for entry into the NPIAS: a. An existing public airport that receives scheduled passenger service of aircraft and annually enplanes 2,500 or more revenue passengers as determined by the FAA will be included in the NPIAS. b. An existing public airport which is forecast by the FAA to receive scheduled passenger service of aircraft and annually enplane 2,500 or more passengers within the plan period will be included in the NPIAS as a commercial service airport for the time periods in which it is expected to qualify. c. A proposed public airport which is forecast by the FAA to be a commercial service airport within the plan period will be included in the NPIAS as a commercial service airport for the time period(s) in which it is expected to qualify. The inclusion of a

21

proposed commercial service airport (i.e., an airport that currently does not exist but is forecasted to have scheduled commercial service on the opening date) must be reviewed and approved by APP-1 before inclusion in the NPIAS. The documentation provided by the airport proponent will be reviewed by FAA Airports District Office/Regional Office personnel to ensure that: (1) the scale of the airport is warranted by an appropriate and documented level of activity, (2) the level of support/consensus is adequate to achieve the proposed development. For instance, a proposed general aviation airport needs local and regional government support to ensure that adequate resources are available for airport development. However, a proposed major commercial service airport requires the support of multiple government jurisdictions as well as state government support and perhaps multiple state government support to ensure that adequate financial, land use, and access planning resources are available to achieve the planned airport development, and (3) the proposed airport is financially feasible. The financial aspects can be examined by comparing estimated capital and operating costs to the probable sources of funds, including grants, subsidies, and income from rents and fees.

2-5. GENERAL AVIATION The following criteria will be used to qualify general aviation airports for entry into the NPIAS: a. An airport that was included in the previous NPIAS should remain in the NPIAS if it is subject to a current compliance obligation resulting from a FAAP, ADAP, or AIP grant. An exception to this rule may be airports that meet both of the following requirements: (1) The airport is not included in an accepted state airport system plan (SASP) or metropolitan airport system plan (MASP), and (2) There is clearly no longer a continuing system role for the airport; in other words, the justification which prompted the original grant of Federal funds is no longer valid. (3) An airport that meets both 2-5a(1) and (2) may be deleted from the NPIAS if it is not subject to compliance obligations. An airport that meets both 2-5a(1) and (2) that is subject to compliance obligations cannot be deleted from the NPIAS until AAS-400 determines that the airport can be released from its compliance obligations. Prior to the deletion of the location from the NPIAS, the airport must be notified. b. An existing airport that is included in an accepted SASP or MASP may be included in the NPIAS if it: (1) has at least 10 based aircraft, and (2) serves a community located 30 minutes or more average ground travel time (for the purpose of systems analysis, a 20 mile radius is often used as the equivalent of 30 minutes ground travel time) from the nearest existing or proposed NPIAS airport. c. A proposed airport located 30 minutes or more average ground travel time from the nearest existing NPIAS airport may be included if there is clear evidence that at least 10 aircraft will be based at the airport within the first year of its operation. d. An existing or proposed airport not meeting the criteria in paragraphs 2-5a, b, or c may be included in the NPIAS if it meets all four of the following requirements: (1) It is included in an accepted SASP and/or MASP, assuming one exists, and (2) It serves a community more than 30 minutes from the nearest existing or proposed NPIAS airport, and (3) It is forecast to have 10 based aircraft during the short-range planning period (within 5 years), and (4) There is an eligible sponsor willing to undertake the ownership and development of the airport. e. An existing or proposed airport not meeting the criteria in paragraphs 2-5a, b, c, or d may be included in the NPIAS on the basis of a special justification showing a significant national interest. Such special justification includes: (1) A determination that the benefits of the airport will exceed its development costs. This would apply in some cases where an airport is included in an accepted SASP or MASP but the community it serves is within 30

22

minutes of the nearest existing or proposed NPIAS airport or less than 10 based aircraft are forecast in the short-range period. A technique for estimating the benefit of an airport, in terms of time saved and cost avoided by travelers, is included in the report, "Estimating the Regional Economic Significance of Airports," DOT/FAA/PPA-92-6, September 1992. (2) Written documentation describing, for example, isolation (communities in remote areas or on islands), airports to serve the needs of native American communities, airports needed to support recreation areas, or airports needed to develop or protect important national resources. f. General Aviation Heliports. (1) A public use heliport that does not meet the criteria in paragraphs 2-4 or 2-5 may be included in the plan if it makes a significant contribution to public transportation. Preferably, heliports included in the NPIAS will also be included in the state or metropolitan airport system plan. Heliport landing areas may be included in the NPIAS if they have: (a) at least 4 based rotorcraft, or (b) 800 annual itinerant operations, or (c) 400 annual operations by air taxi rotorcraft. (2) Private use heliports or special service heliports that are primarily intended to provide community services such as police patrol, traffic surveillance, or air ambulance transportation should not be included. g. Reliever Airports. An existing or proposed public use airport may be included in the NPIAS as a reliever airport if it relieves airport congestion at a commercial service airport and provides general aviation access to the overall community. A case-by-case review should be conducted of each candidate reliever to determine whether there is a current or future significant requirement for additional general aviation capacity to relieve congestion at the commercial service airport or to enhance general aviation access to the overall community. An airport should be designated as a reliever airport only if the review documents a significant requirement. Candidate reliever airports shall meet the following criteria: (1) The candidate reliever airport can provide substantial capacity as evidenced by: (a) A current activity level of at least 100 based aircraft or 25,000 annual itinerant operations (a heliport may qualify as a reliever if it has one half of this activity level). (b) In the case of a new airport or an existing airport it must have a forecasted activity level of at least 100 based aircraft or 25,000 annual itinerant operations for the time period in which it is being designated as a reliever. (2) The relieved airport: (a) is a commercial service airport that serves a metropolitan area (MA) with a population of at least 250,000 persons or at least 250,000 annual enplaned passengers, and (b) operates at 60 percent of its capacity, or would be operated at such a level before being relieved by one or more reliever airports, or is subject to restrictions that limit activity that would otherwise reach 60 percent of capacity. (3) Grandfathered Airports. Privately owned airports currently designated as reliever airports that do not meet the new reliever criteria but have received AIP funds and are subject to grant obligations will retain the reliever airport designation and therefore remain eligible for AIP funds. These grandfathered airports will retain their reliever designation until the grant obligations have been met (10 years for privately owned airports). Those airports that do not meet the new reliever criteria but have not received AIP funds should be redesignated as general aviation airports or deleted from the NPIAS. h. Airports Receiving U.S. Mail Service. Every point which is a scheduled stop for an air carrier transporting mail pursuant to a current contract with the U.S. Postal Service (USPS) or otherwise designated by USPS, and served through a public airport should be included in the NPIAS. The airport must be adequate to satisfy the needs of the USPS. i. Airports with U.S. Military Activity. Any public use airport where a unit of the Air National Guard or a reserve component of the Armed Forces of the United States is permanently based on or

23

adjacent to the airport and operates permanently assigned aircraft in activities directly related to the unit's mission will be included in the NPIAS. j. Surplus Military Airfields. Military airfields that are identified by the Department of Defense for closure should be carefully reviewed to determine if the facility could be successfully converted to a civil airport in which case it should be included in the NPIAS as a proposed airport until the facility has been transferred to a public sponsor. k. Joint Use Airports. Airports with existing formal written joint use agreements between the military and the local sponsor should be included when the civil activity warrants it or it meets the NPIAS entry criteria. If a joint use agreement has not been formally executed, then the requirement for a proposed airport or expansion of an existing airport may be identified until the joint use agreement is formally executed.

Section 2. PLANNING AND OPERATIONAL PROCEDURES RELATED TO ENTRY CRITERIA

2-6. GENERAL This section includes planning and operational procedures related to the use of the entry criteria in the preceding section.

2-7. FORECASTING In order to qualify for inclusion in the NPIAS, an existing airport must satisfy the entry criteria at the time of inclusion. Except where expressly permitted by the entry criteria, forecasting that an airport will meet entry criteria at some future time will not qualify it for inclusion prior to that time. Once an airport is included, forecasts of system roles, based aircraft, operations, and other levels of service are required for the short and intermediate time frames. Data from the FAA’s forecast will be incorporated into the NPIAS annually. When a master plan's forecast varies significantly (generally more than 10% or affects the timing and/or cost of major development) from the FAA’s forecast, the methodology used in the master plan should be verified and if correct, the master plan forecast should be coordinated with APO-110 and differences resolved.

2-8. COMMERCIAL SERVICE AND PRIMARY AIRPORT LISTS The National Planning Division, APP-400, compiles and distributes at the beginning of each fiscal year a list of primary and non-primary commercial service airports. The airport’s classification as primary or commercial service will be downloaded automatically into the NPIAS database.

2-9. REDESIGNATION OF AIRPORTS An airport that is designated as a commercial service airport should retain this designation in the NPIAS throughout the fiscal year. If scheduled service is suspended then the airport should be redesignated to the appropriate category at the beginning of the next fiscal year.

2-10. RELIEVER AIRPORTS a. Complexity, General Location, and Total Number of Relievers. (1) Where one or more reliever airports are determined to be necessary to serve a community, one should be recommended as an all-weather instrumented facility primarily to serve itinerant general aviation activity. This reliever should be located in such a manner, with respect to the city center or business or industrial district served by the relieved airport, that it will provide essentially the same user conveniences as those provided by the relieved airport. (2) Any additional relievers, if required, may be less complex if they primarily will accommodate locally based small aircraft. They should be sited in relationship to the aircraft owners to be served or in an area well suited to instrument training, rather than in terms of access to the city center. (3) Depending upon optimum siting conditions, there are situations where a single reliever will satisfactorily serve both transient itinerant activity and based aircraft requirements. There are also

24

situations where more than one reliever is needed to provide the required degree of relief. Most of these latter instances occur in large, densely populated metropolitan areas where reliever airports must be planned on a system basis and where optimum airport locations are not available. There is no simple mathematical equation that will indicate the maximum number of relievers that will be needed. Each situation must be examined carefully and analytical judgment applied to determine the number of required relievers. b. Short Runway Alternatives. Prior to recommending the inclusion of a reliever airport in the NPIAS, the airport to be relieved must be examined for alternative means of expanding its capacity and relieving congestion. In every instance, recommendation of a short runway (not necessarily parallel) should be considered to serve general aviation in lieu of or in conjunction with a reliever airport.

2-11. PROPOSED AIRPORTS There are three types of proposed airports: replacement, supplemental, and additional. a. Replacement Airport – a proposed airport that will replace an existing airport that is unable to meet the aviation needs of the community. (1) It is not necessary that a replacement airport be identified in the Plan in order to provide Federal aid for a planning study related to it. If the existing airport is included in the NPIAS, Federal aid can be granted for a variety of studies, including the alternative of replacing the existing NPIAS airport with a proposed airport. (2) When a commercial service airport is being replaced, retain the existing commercial service airport and include the proposed commercial service airport as a replacement for it. When the replacement airport becomes operational, the existing airport may be retained, perhaps as a reliever airport, or it may be closed and converted to nonaeronautical use. If the replaced airport closes then it should be deleted from the NPIAS. (3) When a general aviation airport is being replaced, the existing airport should remain in the NPIAS until the replacement airport opens. Retaining both the existing and replacement general aviation airports is discouraged and should be limited to highly unusual situations. b. Supplemental Airport – a proposed airport that will supplement an existing airport, helping it to meet the aviation demand of the community. Both airports will remain open. (1) It is not necessary that a supplemental airport be identified in the Plan in order to provide Federal aid for a planning study related to it. If an existing airport is included in the NPIAS, Federal aid can be granted for a variety of studies, including the alternative of supplementing the existing NPIAS airport with a new airport. (2) It would be unusual for a general aviation airport to need to be supplemented by another general aviation airport. Order 5090.3C 12/4/2000 Page 18 c. Additional Airport - a proposed airport offering air transportation to a community that does not have an existing NPIAS airport. (1) An additional airport must be identified in the Plan before the FAA will provide Federal aid for a master planning study related to it. (2) The additional airport must meet the entry criteria for its future service level.

2-12. EXISTING, PRIVATELY OWNED AIRPORTS An existing privately owned airport may be included in the NPIAS when it is open to the public, meets tests of Federal interest, has the potential for FAA site approval, and it is financially feasible to develop the airport in accordance with FAA standards to meet forecasts of aviation demand. Inclusion in the NPIAS will usually include a recommendation for public acquisition of the airport.

25

Appendix C: from AIP-Oversight-Risk-Model (DoT 2015.b)

The risk categories, weighting percentages and associated risk factors are as follows:

Category #1 - Sponsor Policies and Information Technology Structure – 15%o Risk Factor #1 - Sponsor does not have documented policies or procedures to

enable oversight of procurement processes, grants oversight, disbursement processes, or business continuity.

o Risk Factor #2 - Sponsor's information technology infrastructure and financial systems are not sufficient to support the ongoing management and reporting needs of the project.

Category #2 - Sponsor Past Performance – 75% o Risk Factor #3 - Sponsor's projects are historically not completed within original

schedule. o Risk Factor #4 – Sponsor has a history of engaging in improper contracting or

procurement practices. o Risk Factor #5 – Sponsor has a history of grant payment and processing

irregularities, such as improper drawdowns, late payments, large unliquidated outstanding balances and untimely financial project closeouts.

o Risk Factor #6 – Sponsor has a history of requesting 15% amendments prior to project closeout.

o Risk Factor #7 – Sponsor inability to maintain documentation in a way that can be retrieved easily.

o Risk Factor #8 – Sponsor has a history of non-compliance with grant assurances and other federal grant requirements (e.g., Davis-Bacon and Buy America).

o Risk Factor #9 – Sponsor has a history of previous Single Audit findings, or findings of wrongdoing by oversight bodies (e.g., OIG, GAO), or historic problems with audit findings.

Category #3 - Sponsor Demographic – 10% o Risk Factor #10 - Sponsor expertise is lacking in key grant and project

management areas including but not limited to first-time Sponsor, limited staff, high turnover, etc.

26