FAA Grants for Airport Noise Abatement --
The Airport Improvement Program and
Passenger Facility Charge Program

The following is from Chapter 2, Aviation and the Environment: FAA's Role in Major Airport Noise Programs. U.S. General Accounting Office, GAO/RCED-00-98 (April 2000). See the full report for figures, which are not reproduced here. [The link is to a file in Adobe "pdf" format.]

Most types of projects to reduce airport-related noise or mitigate its effects on nearby communities are eligible for federally authorized funding through the Airport Improvement Program (AIP) and the Passenger Facility Charge (PFC) program. Under the AIP, however, statutes require that, with a few exceptions, projects be part of an airport’s noise compatibility program. Once an airport applies for AIP funding, FAA sets priorities for projects using two types of project selection criteria before awarding the grants. The PFC program is a more flexible funding source than the AIP, in part because projects do not have to be part of an approved noise compatibility program and because airports set their own priorities, subject to FAA approval. Since the programs began, the majority of funds have been used to acquire land and soundproof buildings.

Most Types of Projects Are Eligible for AIP, but They Generally Must Be
Part of an FAA-Approved Airport Noise Compatibility Program

The types of noise-related projects eligible for AIP funding include such efforts as developing information to prepare planning and noise compatibility program documents, acquiring land, acquiring air rights or other easements, purchasing noise-monitoring equipment, constructing noise barriers, and soundproofing buildings. The construction or expansion of runways and taxiways, which can reduce noise levels affecting some communities by enabling flights to avoid densely populated areas, is also eligible for AIP funding.

There are some statutory restrictions on eligibility. AIP grants may not be approved for land purchases unless the airport provides written assurance that the following conditions will be met:

[FN 1] The reimbursement is to be paid to the Secretary of Transportation for deposit in the Airport and Airway Trust Fund or, as the Secretary prescribes, reinvested in approved noise compatibility projects. When land is purchased with AIP grants for other airport purposes and is resold, an interest in it must also be retained to ensure noise compatible land use.
In addition, federal appropriations law prohibits the use of AIP funds for studies, maps, or environmental impact analyses needed to implement flight procedure changes made to reduce noise. These costs are paid for by other appropriated funds for air traffic control.

In addition to these statutory restrictions, FAA policy prohibits using AIP funds for remedial noise mitigation -- such as soundproofing buildings -- for buildings that were known to be incompatible with prevailing noise exposure levels before they were built.

To qualify for AIP funds that are set aside for noise-related projects, an airport must have an FAA-approved noise compatibility program that includes the projects the airport wants funded, except that projects to insulate public buildings used primarily for educational or medical purposes can be funded even though an airport does not have such a program. Nevertheless, FAA approval of an airport’s program does not guarantee that the projects in it will receive AIP noise set-aside funding because an airport must apply for AIP funding separately once its program is approved.

In addition, AIP funds may pay for projects that mitigate the noise impact of other airport development projects -- such as the construction of a new runway -- even if the noise-related projects are not included in an approved noise compatibility program. The airport, however, would have to use its AIP apportionment funds for those projects or the projects would have to compete with other airport development projects for AIP discretionary funds.

Selection Criteria Influence Which Eligible Projects Receive AIP Funding

In deciding which eligible projects to fund, FAA sets priorities using (1) its guidance on land use compatibility and (2) a national priority system that comparatively ranks all projects eligible for AIP funding. When awarding AIP funds for projects included in an airport’s noise compatibility program, FAA gives priority to projects located in areas where noise exposure levels are 65 decibels or higher (when measured under a method that assigns greater weight to flights occurring between 10 p.m. and 7 a.m.). [FN 2] Projects are eligible for funding in areas with lower noise exposure levels. However, according to FAA officials, nearly all of the AIP funds set aside for noise-related projects in the past have been awarded for projects where incompatible land uses occur in areas exposed to noise levels of 65 decibels or higher under FAA’s chosen method for measuring community exposure to airport-related noise.

[FN 2] FAA Order 5100.38A, section 710.
FAA also sets priorities for AIP-eligible projects through a national priority system that comparatively ranks all projects, including noise-related projects, in order to identify those projects that most warrant funding. First, FAA applies a formula that assigns projects a numerical score from 0 to 100 -- the higher the score, the higher the priority. The formula ranks projects by assigning points for each of four factors: FAA officials then consider other factors -- such as benefit-cost analysis, risk assessment, environmental issues, regional priorities, state and metropolitan system plans, airport growth, and market forces -- in determining the final ranking of a project. FAA officials have discretion over the relative importance of the formula and other factors in deciding the final ranking of projects.

According to an FAA official, projects competing for AIP funds set aside for noise-related projects are ranked on the basis of project type and airport size because the values of the other two factors in the formula are the same for all noise-related projects. As a result, projects in areas with higher noise exposure levels and for larger airports will score higher under the formula than projects in areas with lower noise exposure levels and for smaller airports. When noise-related projects compete for other AIP discretionary funds, however, all four factors in the formula contribute to determining the project’s comparative ranking. [FN 3]

[FN 3] According to an FAA official, such noise projects are usually implemented as mitigation of the environmental impacts of other types of airport development projects and their comparative ranking is based on the type of development project rather than on the noise project itself.
Even if an airport’s project ranks relatively high, however, it may not be funded in a given year. According to an FAA official, for the past few years FAA has applied an administrative cap that limits the amount of AIP funding awarded to any single airport in one year for noise-related projects. The limit is $5 million for projects included in an airport’s noise compatibility program and $3 million for insulating public buildings used primarily for educational or medical purposes (whether or not the airport participates in the noise compatibility program). According to the FAA official, FAA imposes the limits when the demand for AIP funds set aside specifically for noise-related projects exceeds the amount of AIP funds available. The limits are intended to ensure that all airports that need funding for noise-related projects have access to AIP funds. The FAA official explained that the agency has exceeded the limit for an airport when sufficient funds were available to meet all demand and the airport was able to document its ability to spend more in that year. The official also said that each year FAA reevaluates whether the limits are needed; if the total cost of the noise projects submitted for funding substantially exceed the money available, the limits will generally remain in effect.

The PFC Program Can Fund Some Project Costs Ineligible for AIP Grants

The statutes define eligible types of noise-related projects under the PFC program as anything eligible for AIP funding. Unlike most projects funded with AIP grants set aside for noise-related projects, however, PFC projects do not have to be part of an FAA-approved noise compatibility program. Nevertheless, according to FAA officials, FAA requires airports to demonstrate that the projects will provide noise reduction or mitigation and would qualify for inclusion in a noise compatibility program. In addition, unlike AIP funds, PFC funds may be used to pay the financing costs for an approved project and the nonfederal share of projects funded with AIP grants. Airports can set their own priorities, subject to FAA approval, regarding which noise-related projects to fund through the PFC program.

Land Acquisition and Soundproofing Projects Receive
the Majority of AIP and PFC Noise-Related Funding

More than 75 percent of all AIP funds and over 50 percent of all PFC funds spent on noise reduction or mitigation have been used to acquire land and to soundproof buildings. [FN 4] This is generally true for both large and small airports. In this report, "large" airports are those airports categorized in FAA’s National Plan for Integrated Airport Systems -- those airports eligible for AIP grants -- as large and medium hub airports. "Small" airports are those categorized as small hub, nonhub, other commercial service, and general aviation airports.

[FN 4] According to an FAA official, most land acquisition projects involve acquiring homes and relocating the people displaced.

AIP Projects

Of the nearly $24 billion in AIP grants awarded for fiscal years 1982 [FN 5] through 1999, over $2.7 billion, or 11.5 percent, were for noise-related projects. Of this amount, $1.4 billion (over 50 percent) was used to acquire land for noise mitigation purposes, and $673 million (nearly 25 percent) was used to soundproof buildings. Figure 2 shows the distribution of total AIP funds for noise-related projects by project type for fiscal years 1982 through 1999. Appendix III provides AIP funding data for noise-related projects for each fiscal year, from 1982 through 1999, by project type.

[FN 5] This is the first fiscal year of funding for the AIP.
Figure 2: AIP Noise-Related Projects, Fiscal Years 1982 Through 1999 (Total: $2.7 billion)

About $2.1 billion of the $2.7 billion in AIP noise-related grants went to large airports and about $582 million went to small airports for noise-related projects. As Figure 3 shows, both large and small airports targeted their AIP grants for land acquisition and soundproofing buildings.

Figure 3: AIP Noise-Related Projects, Fiscal Years 1982 Through 1999 for Large Airports (Total: $2.1 billion) and for Small Airports (Total: $582 million)

PFC Projects

For fiscal years 1992 [FN 6] through 1999, FAA approved the collection of nearly $24 billion in passenger facility charges, with over $1.6 billion, or 6.9 percent, approved for noise-related projects. [FN 7] About $755 million (46 percent) of this funding has been approved for projects that will require multiple phases to complete. These projects consist of one or more different types of projects that are approved together -- usually combinations of soundproofing and land acquisition, according to an FAA official. About $481 million (just over 29 percent) has been approved for projects to soundproof buildings, while $378 million (23 percent) has been approved for projects to acquire land. Figure 4 shows the distribution of noise-related projects approved for fiscal years 1992 through 1999, by project type. Appendix IV provides data on the amount of PFC funds approved in each fiscal year, from 1992 through 1999, by project type.

[FN 6] The Passenger Facility Charge program was authorized by the Congress in 1990, but approved collections did not begin until fiscal year 1992.

[FN 7] Approved collection periods have been as short as 6 months and as long as 40 years or more.

Figure 4: PFC Noise-Related Projects, Fiscal Years 1992 Through 1999 (Total: $1.6 billion)

Of the $1.6 billion in PFC funds approved for noise-related projects, nearly all was approved for large airports, while about $46 million was approved for small airports. FAA has approved about the same portion of multiple-phase projects for large and small airports at 46 percent ($735 million) and 45 percent ($21 million) respectively. However, large and small airports differ in their use of PFC funds for other types of projects. For example, large airports had a much larger portion of their funds approved for soundproofing buildings. Figure 5 illustrates the funding pattern by project type for large and small airports.

Figure 5: PFC Noise-Related Projects, Fiscal Years 1992 Through 1999 for Large Airports (Total: $1.59 billion) and for Small Airports (Total: $45.6 million)