Impact of Regulatory Compliance Costs on Small Airports (2013)

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23 To determine compliance cost impacts, this research used two sources: (1) published estimates of cost impacts and (2) data provided by small airports through the Phase 2 survey, telephone interviews, and case studies. To simplify the analysis and discussion of the survey results, the FAA/DOT require- ments were grouped into the following broad categories: • Airfield design, standards, and operations • Part 139 requirements for newly certificated airports • Part 139 requirements for existing airport-operating certifi- cate holders • Requirements for vehicles in Aircraft Operations Areas (AOAs) • PFC requirements • Disadvantaged Business Enterprise (DBE) requirements • Miscellaneous FAA administrative requirements To the extent data was available, initial and recurring costs were analyzed separately. Technical Appendix 2 contains a more detailed analysis of the cost data for FAA/DOT requirements. 3.1 Published Cost Estimates Under Executive Order (EO) 12866, Regulatory Planning and Review, federal agencies are required to evaluate potential costs and benefits of proposed regulatory actions, including whether the action results in unacceptable or unreasonable costs to society. If a significant regulatory action is identified, federal agencies conduct an economic analysis to estimate implementation costs. Reports are publicly available in regu- latory docket folders. EO 12866 defines a significant regulatory action as one that is likely to have an annual effect on the economy of $100 mil- lion or more. Unless another criterion for significance applies, a comprehensive economic analysis is not required for any reg- ulation with less than $100 million economic impact. In addi- tion, EO 12866 applies only to regulatory documents adopted using the rulemaking procedures specified in the Administra- tive Procedure Act (APA), i.e., notice and comment and publi- cation in the Federal Register. The Regulatory Flexibility Act (RFA) requires federal agen- cies to certify whether regulatory actions have a significant economic impact on small entities. The Small Business Admin- istration advises that agencies should consider both adverse and beneficial impacts and identify opportunities to minimize adverse impacts. Because the airports included in this study are publicly owned, the relevant definition of a small entity is local government with a population of less than 50,000. As is the case with EO 12866, the RFA applies only to APA rule- making actions. As a result of these limitations, only a small portion of the compliance actions adopted during the study period included economic analysis or cost estimates. Even when APA rulemak- ing procedures were followed, a full economic analysis was not conducted in many cases. Often a rulemaking document will include a statement that the costs of a rule, or the impact on small entities, will be negligible or minimal. Table A-1 presents available published cost information for the FAA and DOT requirements. Where specific cost data is published, the source, other discussion of cost by the agencies, and brief comments are included. With few exceptions, the FAA did not publish cost informa- tion when adopting new compliance actions. Only six of the 140 compliance actions were APA rulemakings, and only two out of those six documents included specific cost projections. One of the regulatory documents with a specific cost pro- jection was an amendment to the PFC Regulation (14 CFR Part 158). This amendment implemented administrative streamlining for non-hub airports. The rulemaking document projected an average cost reduction of $9,500 (Table A-1, Item 4). The only FAA regulation that quantified an increase in costs to small airports was the amendment to the Airport Certification Regulation (14 CFR Part 139) to implement the new airport certification requirement for airports receiving C H A P T E R 3 Cost Impacts from FAA/DOT Requirements

24 scheduled service from small aircraft (Table A-1, Item 25). The FAA projected increased costs for existing and new cer- tificate holders. The added costs projected for new certificate holders (Class III airports) ($98,000 in initial costs; $119,000 in recurring costs) were substantially higher than the added costs projected for existing certificate holders. Several of the compliance actions in Table A-1 were intended to modify requirements to reduce airport compliance costs or to defer implementation of new requirements. Table A-1 notes the beneficial impact of these actions on airports. 3.2 Airport Population Affected by Requirements Regulatory compliance creates an impact only if it applies to an airport. The impact on the small airport industry as a whole depends upon the number of affected airports and the cost of compliance. For example, according to the survey, new standards for runway protection zones (RPZs) affect only 13 percent of airports, but compliance cost averages $1.4 mil- lion for each affected airport (based on interquartile mean cost). In contrast, new FAA standards for airport emergency plans affect 95 percent of airports, but the average cost per airport is only $4,364. The Phase 1 survey focused on identifying airports affected by particular requirements. Appendix B, Table B-1, presents data on the number of airports affected by each requirement covered in the Phase 1 survey. The analysis summarized in the rest of this chapter and presented in Technical Appendix 2 focused on the most costly requirements in each subject area. 3.2.1 Airfield Design, Standards, and Operations Airfield design, standards, and operations include a range of issues from the composition of airfield pavement to airfield lighting and marking. Approximately 43 individual regulatory and compliance actions fall into this category. The primary document establishing airfield design stan- dards is AC 150/5300-13, Airport Design. This document pro- vides general guidance on airport design. During the study period, this AC was revised seven times. Some of the changes amounted to clarifications or adjusting written standards to match current practices, but others were potentially costly. For example, Change 11 to the AC prohibits automobile parking in the central portion of the RPZ and adopts conditions on automobile parking in other areas of the RPZ. Other ACs address specific design, construction, or equip- ment issues. For example, AC 150/5340-1, Standards for Air- port Markings, addresses airfield markings. There were four revisions to this AC during the study period. The revisions addressed a variety of issues. For example, AC 150/5340-1K included 29 revisions characterized as “principal changes.” A separate AC addresses runway and taxiway signs; this AC (150/5345-44, Specification for Runway and Taxiway Signs) was revised three times during the study period. One of the revisions, AC 150/5345-44J, listed 42 “principal changes.” The analysis of requirements for airfield design, standards, and operations focused on the following: • RPZ requirements • Wildlife hazard fencing requirements • Runway safety area (RSA) requirements • Security fencing requirements • Airfield signage requirements Figure 1 shows the percentage of airports responding to the Phase 1 survey that reported being affected by the changes in requirements. As shown, the highest percentage of responding airports (79 percent) were required to modify airfield signs. The fewest airports (13 percent) were required to move facilities out of RPZs. 3.2.2 Part 139 Certification Requirements The primary change to Part 139 certification requirements was the 2004 amendment, although other potentially significant requirements were adopted in the form of ACs or CertAlerts throughout the study period. The analysis of the impact of Part 139 modifications focuses on four subjects: • Aircraft rescue and firefighting (ARFF) requirements • Perimeter fencing requirements • Snow and ice control plan requirements • Airport certification manual requirements The new requirements for existing certificate holders and newly certificated airports were different. Therefore, the sur- vey attempted to identify whether airports held certificates in 2004 or obtained them for the first time in response to the 2004 amendment. The survey responses were inconsis- tent with the FAA census of airports included in the regula- tory evaluation for the rule. Most of the newly certificated airports identified by the FAA (Class III airports under the 2004 amendment) are non-primary commercial service air- ports (airports with less than 10,000 annual enplanements), which are outside the scope of this research study. Many of the airports that reported being newly certificated in the survey were identified by the FAA as certificate holders. The survey results were adjusted to reflect the certification status reported by the FAA in 2004 with one exception. In 2004, there were two categories of airport certificates—full certifi- cates (Class I and Class IV airports under the 2004 amend-

25 ment) and limited certificates (Class II airports under the 2004 amendment). Limited certificate holders were exempt from many of the requirements applicable to full certificate holders. The 2004 amendment eliminated this distinction and established equivalent requirements on all certificate holders. The costs to a limited certificate holder for compliance with the 2004 amendment are more likely to be comparable to those incurred by a newly certificated airport than to an airport that was a full certificate holder. Therefore, for purposes of this research, the analysis categorizes limited certificate holders as newly certificated airports. Figure 2 summarizes the percentage of the newly certifi- cated airports (as defined in the previous paragraph) respond- ing to the Phase 1 survey that reported an impact from the requirements. As shown in Figure 2, 100 percent of newly certificated airports reported developing or modifying their airport cer- tification manual. The requirement for ARFF facilities and 13% 57% 61% 61% 79% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Moved Facilities Outside RPZ Modified Fencing for Deer Control Executed RSA Project Modified Fencing for Security Requirements Airfield Changes A ir po rt s A ff ec te d Added, Modified or Replaced Airfield Signs Figure 1. Airports affected by changes to FAA requirements for airfield design, standards, and operations. 38% 50% 57% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ARFF Building & Equipment Perimeter Fencing Snow & Ice Control Plan Airport Certification Manual Part 139 Amendments N ew ly C er ti fi ca te d A ir po rt s A ff ec te d Figure 2. Newly certificated airports affected by Part 139 amendments.

26 equipment affected the fewest airports, but at 38 percent, the proportion was still substantial. Existing certificate holders were also potentially subject to requirements to modify ARFF facilities or equipment and perimeter fencing. The 2004 amendment and subsequent compliance actions also required modifications to airport cer- tification manuals and snow and ice control plans. Figure 3 summarizes the survey findings on affected existing certificate holders. More airports were affected by the requirement to modify their airport certification manual (86 percent) than by any other. This result may understate the actual proportion of affected airports because, under the terms of the rule, all cer- tificate holders were required to submit a revised airport cer- tification manual for FAA approval. The new requirements for perimeter fencing affected the fewest existing certificate holders (35 percent). 3.2.3 Requirements for Vehicles in the Aircraft Operations Area The FAA has an ongoing program to reduce the frequency of vehicle and pedestrian incursions onto active runways or taxiways (called “vehicle/pedestrian deviations”). In support of this policy, the FAA issued a new AC addressing vehicle access, vehicle marking and inspection, driver training, emergency operations, and enforcement and control [AC 150/5210-20, Ground Vehicle Operations on Airports (June 21, 2002)]. In 2008, the FAA issued Change 1 to the AC. The Phase 1 survey requested airports to indicate if they were affected by five elements of the AC and Change 1: • Driver training • Vehicle inspection and marking • Vehicle access • Emergency operations • Enforcement and control A high percentage of the responding airports reported modifying their policies in each of the areas, as reflected in Figure 4. The highest percentage modified their driver training programs (92 percent), and the lowest percentage (60 percent) modified their vehicle inspection and marking procedures. 3.2.4 PFC Requirements During the study period, the FAA issued 11 compliance documents related to PFCs—four amendments to Part 158, FAA Order 5500.1 (the PFC order), and six PFC updates. Three of the four Part 158 amendments implemented changes in 49 USC §40117, which governs the PFC program. The FAA issued the fourth amendment, which increased the rate of carrier compensation for PFC collection on its own initiative. Order 5500.1 reflected Part 158, as in effect at the time of issuance, and policies and procedures already developed by the FAA on a case-by-case basis. It did not contain new policies or requirements. Two of the PFC updates were administra- tive in nature, and two provided guidance on amendments to Part 158. One of the updates reversed a prior determination that certain airline self-service kiosks are ineligible for PFCs. A more complete discussion of the PFC compliance actions is included in Technical Appendix 2. 35% 36% 61% 86% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Perimeter FencingARFF Facilities, Equipment, Staffing, Procedures Snow & Ice Control Plan Airport Certification Manual Part 139 Amendments A ir po rt s w it h Ex is ti ng C er ti fi ca te s A ff ec te d Figure 3. Existing certificate holders affected by Part 139 amendments.

27 The survey effort for PFCs focused on four changes to PFC requirements adopted during the study period, as follows: • Amendment to Part 158 to increase carrier compensation to 11 cents per PFC collected • Implementation of the non-hub airport PFC streamlining pilot program • New cost documentation requirements for projects exceed- ing $10 million in PFCs (PFC Update 50-06) • New documentation requirements for FAA staff analysis of PFC projects (PFC Update 59-09) Figure 5 summarizes the survey results for three of the PFC requirements. Eighty-eight percent reported using PFCs. According to FAA records, however, 84 percent of small hub and non-hub airports collect PFCs. Of non-hub airports reporting they use PFCs, 47 percent submitted a PFC appli- cation after the FAA implemented the non-hub pilot pro- gram. Of the airports that submitted a PFC application after issuance of PFC Update 50-06, 27 percent incurred increased costs to supply the additional cost information specified in the update. Thirty-four percent of airports submitting a PFC application after issuance of PFC Update 59-09 reported that the FAA requested additional information. The survey 60% 73% 77% 88% 92% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Vehicle Inspection & Marking Enforcement and Control Emergency Operations Vehicle Access Driver Training Modified Policies on Vehicle Operations A ir po rt s A ff ec te d Figure 4. Airports affected by modifications to policies on vehicle operations in aircraft operations areas. 27% 34% 47% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Airports Incurring Costs to Meet New PFC Cost Documentation Standards Airports Supplying Data to FAA to Meet New Attachment B Standards Ai rp or ts S ub m itti ng A pp lic ati on s U nd er N ew S ta nd ar ds Non-hub Airports Submitting PFC Applications Under Streamlined Rules Figure 5. Airports affected by changes to PFC requirements.

28 did not ask whether airports were affected by the change in the carrier compensation rate, because all airports collecting PFCs are subject to the new rate. 3.2.5 DBE Requirements The DOT maintains separate rules for DBE participation in airport concessions (49 CFR Part 23, the airport concession DBE rule) and in federally funded projects (49 CFR Part 26, the DBE Project Participation Rule). Part 23 applies only to airports. Part 26 applies to airports and other DOT-funded entities. The DOT amended Part 23 once and Part 26 twice during the study period. As shown in Figure 6, the airport concession DBE rule affected 44 percent of responding airports, and the DBE Project Participation Rule affected 52 percent. 3.2.6 Miscellaneous Administrative Requirements During the study period, the FAA modified a number of administrative requirements relating to the AIP, or opera- tion of AIP-obligated airports. Actions included changes to requirements for procurement of architectural, engineering, and consulting services for grant-funded projects, inter- nal guidance to FAA staff on administering the AIP (FAA Order 5100.38C) and identifying projects for potential dis- cretionary funding (FAA Order 5100.39A), and standards for applying AIP grant assurances (FAA Order 5190.6B). Twenty- eight of the requirements listed in Table A-1, Appendix A, are considered to fall into the category of administrative require- ments. Requirements in this category include amendments to DOT regulations governing debarment of businesses from participating in grant-funded projects. The survey focused on five specific compliance actions with the potential for substantial impacts or with costs that could be readily calculated, as follows: • Selection of architects, engineers, and other consultants • Development and use of geospatial information system (GIS) data in airport planning • Modification to financial reporting forms for grant-funded projects • Modification of requirements for airport snow and ice control plans • Modification of requirements for airport emergency plans The last two listed compliance actions are also closely linked to the airport certification requirements. Figure 7 summarizes the percentage of airports affected by these requirements. The new requirements for airport emer- gency plans affected the largest percentage of airports (95 per- cent). Only 15 percent of airports reported a change in costs due to the new financial reporting requirement. For all these airports, costs of financial reporting increased. 3.3 Unit Cost Estimates from Phase 2 Survey Results The Phase 2 survey, as supplemented by telephone inter- views and the case studies, provided data on the cost to indi- vidual airports of the requirements discussed in Section 3.2. Technical Appendix 2 provides detailed initial and recurring costs of the requirements included in the foregoing Figures 1 through 7 and presents calculations of average costs per air- port, per thousand enplanements, and per thousand com- mercial operations. To eliminate the effects of outliers, the interquartile mean—the arithmetic mean of data between 44% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Airport Concession Project Participation Changes in DBE Rules A ir po rt s A ff ec te d Figure 6. Airports affected by DBE rule changes.

29 the 25th and 75th percentile—was used as a measure of aver- age (central tendency), unless otherwise indicated. Where requirements are related (e.g., Part 139 certification require- ments), the average costs of individual requirements were added to arrive at an estimate of total airport cost for the requirement category. The summary data in Tables 1 through 3 is derived from the Phase 2 survey results and shows the interquartile range of cost estimates—excluding the lowest and highest 25 percent— for the two items with the highest cost per airport in each requirement category. For one exception, Part 139 require- ments, estimates of total cost per airport are listed to compare with the FAA-published per-airport cost estimates for the full compliance cost of the 2004 amendments to Part 139. As dis- cussed in the next section, most cases do not appear to have a relationship between costs and activity levels (i.e., enplane- ments or operations). Therefore, the summary tables do not present unit cost estimates based on activity levels. 3.3.1 FAA Requirements Tables 1 and 2 summarize the most significant initial and recurring costs, on a per-airport basis, for each category of FAA requirements. As shown in Table 1, the new RSA requirements result in the highest average cost per airport at around $3.7 million. The change to RPZ requirements results in the second highest cost at approximately $1.5 million. As shown in Table B-2 (Appendix B) and Table TA-12 (Tech- nical Appendix 2), the FAA compliance actions with the lowest initial costs were modifications to requirements for airport water rescue plans ($500 per airport) and modifications to requirements for snow and ice control plans ($639 per airport). As shown in Table 2, the individual requirement with the highest recurring cost is ARFF compliance for newly cer- tificated airports ($575,000). The second most expensive is enforcement and control of vehicles in aircraft operations areas (approximately $129,000). The compliance action with the lowest recurring cost was adoption of new requirements for snow and ice control plans ($150), as shown in Table TA-13 (Technical Appendix 2). The second least expensive require- ment was the modification of snow and ice NOTAMs ($500) as shown in Table B-3 (Appendix B). Also, airports did not report recurring costs for many requirements. For example, no newly certificated airports reported recurring costs related to their airport certification manual or snow and ice control plans. Recurring costs are frequently operational or administrative. At small airports, these activities are often completed by airport staff in the nor- mal course of their duties, and it is hard to estimate compli- ance costs. Nevertheless, the time required to comply with the requirements is ultimately taken away from accomplishing other operational or administrative tasks. This staff time is an opportunity cost to small airports. The FAA provided cost projections for two compliance actions issued during the study period—the Part 139 amend- ments and the non-hub airport PFC streamlining pilot pro- gram. The latter was an estimate of cost savings. In general, the FAA projections understated the cost of the Part 139 amendment, as compared with the survey results. The FAA projected the initial costs of the Part 139 amendments to be $98,000. The average cost of compliance with new ARFF requirements alone reported in the survey was almost 15 times higher than the FAA figure, and total initial compliance costs were almost 23 times higher. The recurring costs reported by newly certificated airports were 15% 52% 60%A ir po rt s A ff ec te d 61% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increased Costs Due to New Grant Reporting Form Requirements for GIS Data New Consultant Selection Guidance New Snow and Ice Control Plan Guidance New Airport Emergency Plan Guidance Figure 7. Airports affected by various FAA administrative requirements.

30 almost five times higher than the FAA cost projection of $119,000. The FAA made separate initial cost projections for each newly designated category of full certificate holders, as follows: • Class I airports—$1,360 • Class IV airports—$1,791 The initial Part 139 compliance costs reported by existing certificate holders are approximately 690 times the higher FAA projection above. Recurring costs were projected by the FAA as follows: • Class I airports—$8,479 • Class IV airports—$911 Reported recurring costs are approximately 69 times higher than the projection. For newly certificated airports and existing certificate holders, the FAA projected that recurring costs would be higher than initial costs of compliance. The survey results are reversed, with initial costs reported as higher for both groups. The projection of cost savings in the non-hub airport PFC streamlining pilot program similarly overstated the anticipated cost reduction reported in the survey. The rule- making document projected an average cost reduction of $9,500. The average cost savings reported in the survey is $2,300. 3.3.2 DOT Requirements The Phase 2 survey focused on the cost of compliance with modifications to the DBE requirements adopted during the study period. The results are summarized in Table 3. The 25th percentile, 75th percentile, and interquartile mean costs are shown, with separate listings for initial and recurring costs. The initial costs of the airport concession DBE requirements were less than half of the lowest cost FAA requirement listed in Table 1. Initial costs for project participation requirements are approximately one-third lower. Recurring DBE compliance costs are also generally lower. Estimated Cost of Compliance Requirement(s) 25th Percentile 75th Percentile Interquartile Mean1 Airfield Design, Standards & Operations Requirements Executed RSA project $1,200,000 $10,500,000 $3,676,184 Moved facilities outside of RPZ $298,383 $3,040,086 $1,492,556 Part 139 Requirements for Newly Certificated Airports2 ARFF facilities, equipment & clothing3 $1,462,733 $1,462,733 $1,462,733 Modification of perimeter fencing4 $784,390 $784,390 $784,390 Subtotal Part 139 Costs $2,248,640 Part 139 Requirements for Existing Certificate Holders1 ARFF facilities, equipment, staffing or procedures $500,000 $1,625,100 $998,360 Modification of perimeter fencing $180,000 $1,100,000 $257,706 Subtotal Part 139 Costs $1,261,074 Requirements for Vehicles in Operations Area Enforcement and control $95,500 $2,125,000 $450,000 Emergency operations $2,125 $257,500 $26,933 PFC Requirements Compliance with new cost documentation requirements $7,000 $26,000 $17,167 Reduction in PFC revenue due to carrier compensation increase $1,900 $16,250 $7,067 Miscellaneous FAA Administrative Requirements Requirements for use of GIS $62,496 $507,212 $176,000 Requirements for consultant selection $4,875 $450,000 $157,500 1 Unless otherwise noted. 2 Airports holding limited certificates in 2004 are classified as newly certificated. 3 Interquartile mean value cannot be determined with less than three responses. Arithmetic mean value used. 4 Single airport response. Value of response used. Table 1. Summary of highest cost FAA requirements per airport (initial costs).

31 3.4 Relationship between Costs and Activity Levels The costs of the requirements summarized above were ana- lyzed to determine if there was a relationship between the level of costs and two measures of activity—passenger enplane- ments and commercial operations. In all but two cases, quantitative analyses showed that there did not appear to be a relationship between compliance costs and activity level. In the following two cases where quantitative analyses indicated possible correlation with activity level, inadequate sample and qualitative considerations prevailed in ruling out correlation: • A relationship between the recurring costs of complying with new FAA requirements for perimeter fencing to pre- vent wildlife hazards and both enplanements and com- mercial operations was ruled out because of an inadequate sample of only three observations and logical consideration. The cost of perimeter fencing would depend on material cost and airfield perimeter, not necessarily on traffic level. • Qualitative factors ruled out a relationship between the recurring costs of compliance with the DBE concession requirements and both enplanements and operations, on a very small number of observations. The recurring costs of the DBE requirements relate to reporting and updating Estimated Cost of Compliance Requirement(s) 25th Percentile 75th Percentile Interquartile Mean1 Airfield Design, Standards & Operations Requirements Modification of airfield signs $4,600 $10,000 $10,000 Modification of perimeter fencing for wildlife hazards $5,000 $14,000 $6,600 Part 139 Requirements for Newly Certificated Airports2 ARFF requirements3 $362,500 $787,500 $575,000 Modifications of perimeter fencing4 $10,000 $10,000 $10,000 Subtotal Part 139 Costs $585,000 Part 139 Requirements for Existing Certificate Holders2 ARFF requirements $2,500 $75,000 $24,083 Modifications of perimeter fencing5 $1,000 $5,000 $5,000 Subtotal Part 139 Costs $29,646 Requirements for Vehicles in Operations Area Enforcement and control $35,868 $283,000 $128,992 Emergency operations $3,000 $225,000 $51,230 Miscellaneous FAA Administrative Requirements Requirements for use of GIS $7,538 $71,500 $35,000 Requirements for airport emergency plans $500 $1,200 $867 1 Unless otherwise noted. 2 Airports holding limited certificates in 2004 are classified as newly certificated airports. 3 Interquartile mean value cannot be determined with less than three responses. Arithmetic mean value used. 4 Single airport response. Value of response used. 5 Interquartile mean value results from low number of responses and single values duplicated in multiple responses for minimum and between minimum and maximum. Table 2. Summary of highest cost FAA items per airport (recurring costs). Estimated Cost of Compliance Requirement(s) 25th Percentile 75th Percentile Interquartile Mean Airport Concession DBE Requirements Initial cost $2,100 $18,000 $7,620 Recurring cost $1,750 $4,750 $2,900 DBE Project Participation Requirements Initial cost $6,250 $15,907 $11,000 Recurring cost $6,500 $14,576 $11,000 Table 3. Summary of DBE compliance costs per airport.

32 DBE concession plans and goals. While concession reve- nues and hence minimum DBE concession revenues may vary with the level of activity, the fundamental require- ments to monitor and report performance and update the plan apply regardless of an airport’s DBE concession revenue. 3.5 Industry Cost Estimates Industry cost impacts for FAA and DOT requirements were estimated by following a three-step process: 1. The total number of potentially affected airports (airport population) was determined. In many cases, the airport pop- ulation consisted of all small airports. In other cases, such as the certification requirements and PFC requirements, only a subset of small airports was potentially affected, and the appropriate airport population was determined using FAA records. 2. The number of airports actually affected by the require- ment was determined. Unless the terms of a requirement or other information indicated otherwise, this number was calculated by multiplying the airport population sub- ject to the requirement (Step 1) by the percentage of air- ports reporting an impact from the requirement in the Phase 1 survey. If the terms of the requirement or other information clearly indicated that the survey results were inaccurate, the percentage was adjusted to conform to the percentage indicated by the terms of the requirement or other percentage. For example, embedded in the total costs of Part 139 requirements is the cost of preparing a new airport certification manual. This requirement applied to 100 percent of certificated airports by the terms of the regulation. 3. Because there does not appear to be a relationship between compliance costs and activity measures, the average cost per airport was multiplied by the number of affected air- ports to arrive at an industry cost estimate. The summary tables in the rest of this section provide the industry cost impacts for the two requirements with the highest industry cost in each category of FAA and DOT requirement discussed previously. Because the industry costs account for the number of airports affected by individual requirements, the requirements listed do not exactly match the requirements listed in the tables in Section 3.3. For example, the documen- tation requirements for PFC projects exceeding $10 million were the most costly PFC requirement for individual airports. However, after accounting for the number of airports affected, the change in the carrier compensation requirement was the most costly PFC requirement to the small airport industry as a whole. In addition, because it is possible to account for the num- ber of airports affected by each requirement, total costs for the cost categories and all requirements are presented. 3.5.1 FAA Requirements Table 4 summarizes the initial industry costs and highlights the most costly requirements in each broad category of the FAA compliance requirements. Table 5 summarizes the recur- ring industry costs and highlights the most costly requirements in each broad category. As shown in Table 4, total initial costs of FAA requirements adopted during the study period were just under $1.4 billion. The most costly category was airfield design, standards, and operational requirements (almost $1.1 billion), and the most costly single requirement was the new standard for RSAs ($695 million). Also, Part 139 compliance costs were $1 mil- lion more per airport for newly certificated airports than they were for existing certificate holders. However, because of the small number of newly certificated airports in the affected population (15), their aggregate compliance costs were only 11 percent of the aggregate costs for existing certificate holders. As shown in Table 5, total recurring costs were almost $65 million. The most costly category of requirements was vehicle access ($48 million). The most costly single require- ment was enforcement and control procedures for vehicle access ($29 million). The recurring Part 139 compliance costs for newly certificated airports ($585,000) were so much higher than the recurring costs for existing certificate holders (just under $30,000) that the industry costs for newly certificated airports were higher, even though the affected population was limited to 15 airports. Comparing Tables 4 and 5, initial FAA compliance costs were substantially higher than recurring costs. However, if initial costs represent construction of facilities or equipment purchases, FAA financial assistance may be available. Recur- ring costs, in contrast, are typically considered operational or administrative costs and generally do not qualify for federal assistance. Moreover compliance is often accomplished by airport staff in the normal course of duties. The costs there- fore cannot be readily determined by many airports, but are very real. 3.5.2 DOT Requirements Table 6 summarizes the industry compliance costs of the modifications to DOT’s DBE requirements. Initial costs of compliance with the airport concession DBE requirements are 2.6 times higher than recurring costs. Initial and recur- ring costs of DBE participation requirements reported in the survey were equal at $1.7 million. The initial and recurring

33 industry costs are substantially less than costs of compliance with the FAA requirements listed in Tables 4 and 5. 3.6 Funding Sources The financial impact of compliance requirements can be reduced to the extent that airports may rely on outside fund- ing sources. The research identified outside funding sources potentially available to airports for the six categories of require- ments. These funding sources will reduce the financial impact on airports only if they are actually used. The Phase 2 survey included questions about funding sources for some of the requirements addressed in the survey. This section discusses the outside funding sources (primarily grants) potentially available to airports to help meet compliance requirements and the actual use of outside funding reported in the surveys. Two financial assistance programs administered by the FAA are an important source of funding for some of the require- ments in each of the six categories. The AIP is a significant source of funding for airport capital development, planning, and environmental mitigation. AIP funds cannot be used for operations and maintenance (O&M) costs of the airport, with a possible exception for DBE com- pliance costs. For small airports, the federal share of project costs was 95 percent during most of the study period, with the airport responsible for a 5 percent local matching share. Before 2003, the federal share was 90 percent and the local matching share was 10 percent. Under the FAA Modernization Requirement(s) Estimated Cost per Airport (Interquartile Mean)1 Estimated Industry Initial Cost Airports Subject to Requirement Airports Affected by Requirement2 Industry Initial Cost Airfield Design, Standards & Operational Requirements Runway safety area (RSA) requirements $3,676,184 310 61% $695,166,000 Security fencing requirements $777,269 310 61% $146,982,000 Total cost of all airfield requirements $6,818,672 310 $1,062,636,000 Part 139 Requirements, Newly Certificated Airports3 ARFF requirements $1,462,733 15 38% $8,338,000 Perimeter fence requirements $784,390 15 50% $5,883,000 Subtotal cost for Part 139 $2,248,640 15 $14,243,000 Part 139 Requirements, Existing Certificate Holders3 ARFF requirements4 $998,360 295 36% $106,026,000 Perimeter fence requirements5 $257,706 295 35% $26,608,000 Subtotal cost for Part 139 $1,261,074 295 $133,896,000 Requirements for Vehicle Access to Aircraft Operations Area Enforcement and control $450,000 310 73% $101,835,000 Emergency operations $26,933 310 77% $6,429,000 Total cost of all vehicle access requirements $517,634 310 $118,404,000 PFC Requirements Reduction in PFC revenue due to carrier compensation increase $7,067 260 100% $1,837,000 Compliance with new cost documentation requirements $17,167 260 18% $807,000 Total "cost" increase $30,567 260 $2,958,000 Non-hub pilot program cost savings (2,300.00) 188 19% ($82,000) Net cost $2,876,000 Miscellaneous FAA Administrative Requirements Requirements for consultant selection $157,500 310 60% $29,295,000 Requirements for use of GIS $176,000 310 52% $28,371,000 Total cost for all miscellaneous requirements $338,629 $59,109,000 Grand Total FAA Requirements $1,391,164,000 1 Unless otherwise noted. 2 Unless otherwise indicated, percentage of airports is based on Phase 1 survey results. 3 Airports holding limited certificates in 2004 are classified as newly certificated airports. 4 Interquartile mean value cannot be determined with less than three responses. Arithmetic mean value used. 5 Single airport response. Value of response used. Table 4. Summary of industry cost impacts of FAA requirements (initial costs).

34 Requirement(s) Estimated Cost per Airport (Interquartile Mean)1 Estimated Industry Recurring Cost Airports Subject to Requirement Airports Affected by Requirement2 Industry Recurring Cost Airfield Design, Standards & Operational Requirements Modification of airfield signs $10,000 310 79% $2,449,000 Modification of perimeter fencing for wildlife hazards $6,600 310 57% $1,166,000 Total cost for all airfield requirements $18,100 310 $3,880,000 Part 139 Requirements, Newly Certificated Airports3 ARFF requirements4 $575,000 15 38% $3,278,000 Perimeter fence requirements5 $10,000 15 50% $75,000 Subtotal cost for Part 139 $585,000 15 $3,353,000 Part 139 Requirements, Existing Certificate Holders2 ARFF requirements $24,083 295 36% $2,558,000 Perimeter fence requirements6 $5,000 295 35% $516,000 Subtotal cost for Part 139 $29,646 295 $3,175,000 Requirements for Vehicle Access to Aircraft Operations Area Enforcement and control $128,992 310 73% $29,191,000 Emergency operations $51,230 310 77% $12,229,000 Total cost for all vehicle access requirements $210,606 310 $48,340,000 Miscellaneous FAA Administrative Requirements Requirements for use of GIS $35,000 310 52% $5,642,000 Requirements for airport emergency plans $867 310 95% $255,000 Total cost for all miscellaneous requirements $36,017 310 $5,925,000 Grand Total FAA Requirements $64,673,000 1 Unless otherwise noted. 2 Unless otherwise indicated, percentage of airports is based on Phase 1 survey results. 3 Airports holding limited certificates in 2004 are classified as newly certificated airports. 4 Interquartile mean value cannot be determined with less than three responses. Arithmetic mean value used. 5 Single airport response. Value of response used. 6 Interquartile mean value results from low number of responses and single values duplicated in multiple responses for minimum and between minimum and maximum. Table 5. Summary of industry cost impacts of FAA requirements (recurring costs). Requirement(s) Estimated Cost per Airport (Interquartile Mean) Estimated Industry DBE Cost Airports Subject to Requirement Airports Affected by Requirement1 Industry DBE Cost Airport Concession DBE Requirements Initial cost $7,620 310 44% $1,039,000 Recurring cost $2,900 310 44% $396,000 DBE Project Participation Requirements Initial cost $11,000 310 52% $1,773,000 Recurring cost $11,000 310 52% $1,773,000 Total DBE Compliance Costs Total Initial Costs $18,620 310 $2,812,000 Total Recurring Costs $13,900 310 $2,169,000 1 Unless otherwise indicated, percentage of airports is based on Phase 1 survey results. Table 6. Summary of industry cost impacts of DOT DBE requirements.

35 and Reform Act, Pub. L. 112-95 (February 14, 2012), the local matching share for most small airports returned to the 10 per- cent level, effective in FY 2012. The local matching share may come from any non-federal source. PFCs are considered another form of federal assistance because of the FAA’s role in approving their collection and use. However, PFCs are generated locally and collected at the dis- cretion of the individual airport operator. Currently the maxi- mum PFC is $4.50 per enplaned passenger. In general, PFCs may be used for any costs that are eligible for AIP grants, with broader eligibility in the area of terminal projects and noise mitigation. Currently 188 out of 237 non-hub airports col- lect a PFC, as do 72 out of 73 small hub airports. PFC fund- ing can be applied to pay the full amount of any incremental costs that are eligible for AIP funding or to pay for the local matching share of a project receiving grant funds. PFC proj- ect administrative costs, including costs of preparing applica- tions, are also eligible. Like AIP funds, PFCs cannot be used for airport O&M expenses. Some states maintain their own airport assistance pro- grams. State funds may be provided to assist airports in pay- ing the local share of AIP-funded projects or may be provided to fund projects that do not receive AIP grants. When state funds are used for the local match, 50 percent of the local matching requirement is typically provided from state air- port assistance programs. Table 2 in ACRP Synthesis of Airport Practice 24: Strategies and Financing Opportunities for Airport Environmental Programs (ACRP Synthesis 24; 2011) includes a listing of all state airport assistance programs. Eligibility for state airport assistance programs generally follows federal standards (although some states may fund projects that are ineligible for AIP). 3.6.1 Potential Funding Sources The capital costs of many of the FAA compliance require- ments listed in Table A-1 may be eligible in part for AIP or fully eligible for PFC funding. Potential eligibility is discussed in the “Notes on Published Costs” column of the table. AIP Funding During most of the study period, the federal share for AIP- funded projects at small airports was 95 percent. Beginning in FY 2012, the federal share for most small airports is 90 percent. For the FAA requirements listed in Table A-1, incremen- tal costs associated with the design or construction standards listed in ACs, orders, and CertAlerts are eligible for AIP fund- ing, to the extent they apply to AIP-eligible construction. Capital costs associated with the Part 139 requirements are eligible, as well. Development of plans or manuals may be eligible, if the exercise qualifies as airport planning under the AIP statute. However, ongoing staffing costs and any operat- ing costs of facilities or equipment required by Part 139 are not eligible. Thus, although recurring costs of FAA compliance are generally lower than initial costs, airports cannot look to federal funding to help pay the costs. Any incremental costs associated with preparing or sub- mitting AIP applications as a result of changes to FAA require- ments are eligible for reimbursement as a project formulation cost. Incremental project administration costs resulting from FAA requirements may be reimbursable. One exception to the general rule that operational and administrative costs cannot be funded with AIP is the DOT DBE requirements. Although these expenses are operational or administrative, the FAA may consider these costs to be proj- ect administration costs that are eligible for reimbursement. As discussed in Section 3.6.2, however, only a small number of airports have received federal assistance for DBE compliance. PFC Funding PFCs can be used to fund any incremental costs associated with the FAA requirements included in Table A-1 that are eli- gible for AIP funding. PFCs can be used to pay the full cost (if the associated project was funded entirely with PFCs), the local matching share of the incremental costs (if the associ- ated project received AIP funds), or any other amounts pro- vided that the project is approved. Finally, any incremental costs associated with changes to PFC application or adminis- trative requirements can be funded with PFCs. State Funding Programs Depending on the location, state or local economic devel- opment funds may be available to projects that are subject to the design and construction standards listed in Table A-1. Where available, these funds could also be used to defray the incremental costs associated with any of the standards. The research team has not attempted to catalogue state or local economic development funding opportunities. In states with airport assistance programs, state airport funds could be used for incremental costs resulting from the FAA requirements listed in Table A-1 that are applicable to eligible capital development projects. In most cases, state par- ticipation would be limited to one-half of the local matching requirement. Limitations on the Benefits of Federal Assistance The use of AIP or PFC funds may reduce the amount of cash airports must generate from other sources—e.g., rates and charges, bond proceeds, discretionary funds—to comply with federal requirements, but there is an opportunity cost.

36 AIP and PFC funds applied to comply with federal require- ments cannot be used for the physical completion of projects that benefit airport users and generate a financial return to the airport. In addition, AIP and PFC funding has not kept pace with the growth in federal requirements. From October 1, 2008 (beginning of FY 2008), through the end of the study period, the FAA and DOT adopted 35 new requirements (23 percent of the total adopted). However, AIP funding remained flat at approximately $3.5 billion from 2008 through 2011 and actually declined by $165 million in 2012. The $4.50 PFC cap was implemented in June of 2000, close to the beginning of the study period. 3.6.2 Use of Financial Assistance The Phase 2 survey for FAA and DOT requirements included questions about the sources of funding to pay for compliance. The survey addressed use of AIP and PFC funds, other air- port funds, and other funding sources. Figures 8 through 20 and the discussion in this subsection summarize the survey results and focus on the use of AIP and PFC funds. Generally speaking, other airport revenue was used to cover costs that were not financed by AIP or PFC funds. A limited number of airports reported using other funding sources. For AIP funds, the figures show the number of airports that used no AIP funds; the number that used some AIP funds, but less than the full federal share; and the number that used the full federal share. For PFC funds, the figures show the num- ber of airports that used no PFC funds; the number that used PFC funds for the full amount of the local matching share; the number that used PFC funds for less than the matching share; and the number that used PFC funds for more than the local matching share. The results in many cases include airports that reported using both AIP and PFC funds. The data is presented separately for initial and recurring costs, because the patterns of use are significantly different. Initial Compliance Costs Figures 8 through 19 provide summary data on the use of AIP and PFC funds for the FAA requirements. The data is presented for the individual categories (and sometimes indi- vidual requirements) because of variations in the pattern of usage of AIP funds that are masked by aggregation of data. PFC usage was more consistent but unexpected. In most cases, a majority of airports did not use PFC funds, even to finance all or part of the local matching requirement for an AIP grant. Airfield Design, Standards, and Operations. The funding sources for airfield design, standards, and operation require- ments are summarized in Figures 8 through 13. A substantial number of airports were able to obtain AIP funding for the full federal share of project costs for these compliance require- ments. This outcome is to be expected, because the compli- ance requirements involve capital development and address safety and security issues. More noteworthy is the limited use of PFCs, even to fund the local matching share of projects. At some airports, this may reflect the use of state grant funds, but many airports reported the use of no PFCs at all. Data on the use of AIP funding for fencing requirements (wildlife and security) is presented in Figure 8, and data on the use of PFCs for wildlife fencing is presented in Figure 9. The survey did not include a specific question on the use of PFCs for security fencing. As shown, 37 out of 40 responding airports reported receiving the full federal share to comply Total count may include multiple responses for individual airports 1 2 37 None Less Than Federal Share Use of AIP Funds Ai rp or ts Full Federal Share 0 5 10 15 20 35 40 25 30 Figure 8. AIP funding levels for initial costs of perimeter fencing requirements.

37 Use of PFC Funds Ai rp or ts 0 5 10 15 20 25 30 12 2 2 1 None Less Than Local Share Local Share Only More Than Local Share Figure 9. PFC funding levels for initial costs of wildlife fencing requirements. Total count may include multiple responses for individual airports Use of AIP Funds Ai rp or ts 0 5 10 15 20 35 40 25 30 1 5 19 None Less Than Federal Share Full Federal Share Figure 10. AIP funding levels for initial costs of runway protection (RPZ and RSA) requirements. with perimeter fencing requirements. Only one airport did not receive any federal funds. In contrast, 12 out of 17 air- ports reported using no PFC funds to comply with wildlife fencing requirements. Only two relied on PFCs to finance the full local matching share of their projects, and one airport’s PFC share exceeded the local matching requirement. Data on the use of AIP funding for runway protection requirements (RPZ and RSA) is presented in Figure 10, and data on use of PFCs for RPZ requirements is presented in Figure 11. The survey did not include a specific question on the use of PFCs for RSAs. Nineteen out of 25 airports received AIP funds for the full federal share of their runway protection projects, and only one airport received no federal funding. As shown, a majority of airports (three out of five) did not use PFCs to finance their RPZ projects. Figures 12 and 13 show the use of AIP and PFC funds, respectively, to finance the costs of compliance with new air- field signage requirements. Twelve out of 16 airports reported receiving AIP grants for the full federal share of their signage projects, but three airports did not receive any AIP grants. Consistent with the other requirements, a majority of airports (nine out of 16) did not use any PFCs to meet airfield sig- nage requirements. However a substantial number (six) did finance their local matching share with PFCs. Part 139 Certification Requirements. No newly certifi- cated airport reported the use of either AIP or PFC funds to finance their compliance requirements. Airport funds or fund- ing from other sources finance the compliance costs. This result is unexpected, because projects to meet safety requirements

38 Use of PFC Funds Ai rp or ts 0 5 10 15 20 25 30 3 0 2 0 None Less Than Local Share Local Share Only More Than Local Share Figure 11. PFC funding levels for initial costs of RPZ requirements. Use of AIP Funds Ai rp or ts 0 5 10 15 20 35 40 25 30 3 1 12 None Less Than Federal Share Full Federal Share Figure 12. AIP funding levels for initial costs of airfield signage requirements. Use of PFC Funds Ai rp or ts 0 5 10 15 20 25 30 None Less Than Local Share Local Share Only More Than Local Share 9 1 6 0 Figure 13. PFC funding levels for initial costs of airfield signage requirements.

39 Total count may include multiple responses for individual airports Use of AIP Funds Ai rp or ts 0 5 10 15 20 35 40 25 30 10 6 10 None Less Than Federal Share Full Federal Share Figure 14. AIP funding levels for initial costs of Part 139 requirements, existing Part 139 airports. Use of PFC Funds Ai rp or ts 0 5 10 15 20 25 30 None Less Than Local Share Local Share Only More Than Local Share Total count may include multiple responses for individual airports 18 2 5 1 Figure 15. PFC funding levels for initial costs of Part 139 requirements, existing Part 139 airports. receive the highest priority for AIP funding, and Congress directed the FAA to set aside funds to help newly certificated airports pay the costs of the new Part 139 requirements. Figures 14 and 15 show the use of AIP funds and PFCs, respec- tively, to finance the Part 139 compliance for existing airports. The figures show the funding for all requirements combined, and they include multiple responses from individual airports, i.e., the same airport may have incurred costs for compliance with ARFF requirements and perimeter fencing requirements. There was more diversity in the use of AIP funds for Part 139 requirements than the previous requirements. An equal number of airports (10 each) received no AIP funds and received the full federal share for their Part 139 compliance projects. This pattern may reflect the status of some Part 139 requirements as administrative or operational. Consistent with the previous requirements, 18 out of 26 airports used no PFC funds to finance their Part 139 com- pliance projects. Requirements for Vehicle Operations on the Airport. Figures 16 and 17 show the use of AIP funds and PFCs, respec- tively, for financing compliance with requirements for vehicle operations on the airfield. The figures show the funding for all requirements combined, and they include multiple responses from individual airports, i.e., the same airport may have incurred costs for compliance with enforcement and control requirements and emergency vehicle operations requirements. A majority of airports (17 out of 31) received no AIP fund- ing for compliance with these requirements. Only five air- ports reported receiving the full federal share. This pattern of

40 Total count may include multiple responses for individual airports Use of AIP Funds Ai rp or ts 0 5 10 15 20 35 40 25 30 None Less Than Federal Share Full Federal Share 17 9 5 Figure 16. AIP funding levels for initial cost of requirements for vehicle operations. 25 2 1 3 0 5 10 15 20 25 30 Use of PFC Funds Ai rp or ts None Less Than Local Share Local Share Only More Than Local Share Total count may include multiple responses for individual airports Figure 17. PFC funding levels for initial cost of requirements for vehicle operations. funding may reflect the status of some of the requirements as administrative or operational. A substantial majority of airports (25 out of 31) did not use any PFC funds to comply with these requirements. The pattern is consistent with PFC usage for previous requirements. PFC Program Requirements. Three of the changes to PFC program requirements affect the preparation of appli- cations. The costs of PFC applications are eligible for PFC funding and are typically financed with PFCs. The fourth requirement was the change in the required carrier com- pensation rate. This requirement did not require out-of- pocket expenditures by airports, but reduced monthly net PFC revenue received. Therefore, the survey did not include questions about funding sources for PFC requirements. Miscellaneous FAA Administrative Requirements. The miscellaneous administrative requirements addressed in the survey fall into distinct subcategories. Two requirements— consultant selection and use of GIS—are directly related to AIP-eligible projects; the funding sources for these require- ments are presented together. The other two requirements— modifications to snow and ice control plans and modifications to airport emergency plans—are administrative or operational in nature and are generally not eligible for AIP funds. Figures 18 and 19 show the use of AIP and PFC funds, respec- tively, to finance the costs of consultant selection requirements

41 Total count may include multiple responses for individual airports Use of AIP Funds Ai rp or ts 0 5 10 15 20 35 40 25 30 None Less Than Federal Share Full Federal Share 2 3 16 Figure 18. AIP funding levels for initial costs of consultant selection and GIS requirements. 0 5 10 15 20 25 30 Use of PFC Funds Ai rp or ts None Less Than Local Share Local Share Only More Than Local Share Total count may include multiple responses for individual airports 16 1 3 1 Figure 19. PFC funding levels for initial costs of consultant selection and GIS requirements. and the requirements for the use of GIS techniques and data. They include multiple responses from individual airports, i.e., the same airport may have incurred costs for compliance with both requirements. A substantial majority of airports (16 out of 21) received the full federal share of AIP grants for their compliance projects, and only two airports received no AIP funding. A majority of airports (16 out of 21) reported using no PFCs to fund the costs of the consultant selection and GIS requirements. The pattern of funding for modifications to snow and ice control plans and modifications to airport emergency plans reflects the differences in AIP (and hence PFC) eligibility. Thirteen out of 14 airports reported using only airport funds (other than PFCs) to finance the initial costs of compliance with the requirements for snow and ice control plans. One airport received an AIP grant for the full federal share and used PFCs to finance its local matching share. Twenty-six airports reported incurring costs to meet new requirements for airport emergency plans, and all 26 used airport funds to finance the full initial costs of compliance. These results are consistent with treatment of preparing and updating these plans as operational or administrative activities ineligible for AIP and PFC funding. DOT DBE Requirements. Eight airports incurred ini- tial costs for compliance with the new airport concession

42 0 5 10 15 20 Funding Sources Ai rp or ts Total count may include multiple responses for individual airports 19 2 5 3 100% Airport Partial AIP Partial Other Source 100% Other Source Figure 20. Funding sources for recurring costs of requirements for vehicle operations. DBE requirements. Seven relied entirely on airport funds to pay these costs. One airport received an AIP grant for 75 percent of compliance costs and used PFCs to pay for the balance. All four airports that incurred initial costs for compli- ance with the DBE project participation requirements relied entirely on airport funds to pay these costs. One airport reported that the FAA considers DBE com- pliance to be a project administrative cost that can be reim- bursed with AIP funds (and hence PFCs). The results above suggest that this interpretation of eligibility is not being widely followed in the small airport community. Recurring Costs FAA Requirements. With one exception—vehicle operations—AIP grants and PFCs are not used to finance the recurring costs of FAA requirements. Airports relied in most cases entirely on airport funds. A small number of airports (five in total) relied on third-party funding to cover recur- ring compliance costs. One airport (out of 14 total) reported receiving an AIP grant to pay a portion of its recurring Part 139 compliance costs. Figure 20 summarizes the sources of funding used by small airports to pay the recurring costs of the FAA requirements on vehicle operations. While the majority (19 out of 29) of airports used airport funds to pay the full cost of compliance, 10 airports were able to obtain funding from other sources, including two that received AIP funds. The prevalence of airport funds to finance recurring costs is consistent with the typical status of recur- ring costs as operational or administrative. DOT DBE Requirements. Seven out of eight airports used airport funds (other than PFCs) to finance the full recurring costs of airport concession DBE compliance. The eighth airport used a combination of AIP (75 percent) and PFC (25 percent) funds. Three out of four airports used airport funds (other than PFCs) to finance the full recurring costs of project DBE require- ments. The fourth airport used a combination of AIP (95 per- cent), PFC (2.5 percent) and other (2.5 percent) funds.