Daily Rules, Proposed Rules, and Notices of the Federal Government
By this order, the Department invites proposals from communities and/or consortia of communities interested in obtaining a Federal grant under the Small Community Air Service Development Pilot Program (Pilot Program) to address air service and air fare problems at their communities. Proposals should be submitted no later than June 30, 2003.
On April 5, 2000, the President signed the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), Public Law 106-181. Among other things, the statute established a new pilot program designed to help smaller communities enhance their air service. The statute directs the Secretary of Transportation to assist communities in developing projects that will improve their access to the National air transportation system through public-private partnerships, and to help communities overcome factors that might be inhibiting improvements in their current air service.
Specifically, the law authorizes the Secretary to provide financial assistance (direct financial assistance to an air carrier is limited to three years) to as many as 40 communities nationwide in each year for which program funds are appropriated, though no more than four of those may be from the same state.
The statute authorized the Pilot Program for a period of three years beginning in fiscal year 2001. No funds were appropriated for the first year the program was authorized, but in the Department's FY 2002 appropriation bill, Public Law 107-87, Congress appropriated $20 million for the program, to remain available until expended. After soliciting proposals from interested communities, in June 2002, the Department made grant awards to 40 of the 180 communities that had submitted grant proposals. Order 2002-6-14. Those awards were subject to the communities completing a formal grant agreement with the Department for implementation of their grant projects. Two grant recipients did not execute agreements with the Department, and by Order 2002-12-16, the Department reallocated those grant funds to two other communities.
On February 20, 2003, as part of the Department's FY 2003 appropriations bill, Public Law 108-7, Congress appropriated another $20 million for the program for FY 2003, also to remain available until expended. Given the overall limitation in the AIR-21 legislation regarding the total number of communities that could participate in the program, it was apparent that the Department could not use the appropriation for grants to additional communities without additional legislative authorization. On April 16, as a provision of the Emergency Wartime Supplemental Appropriations Act, 2003, Public Law 108-11, Congress amended the AIR-21 legislation to clarify that the numerical community limitations in the law were to be applied on a per year basis. Therefore, the Department is now in a position to solicit proposals from interested communities.
This is the second year that the Department is making grant awards under this program. There was an extraordinary response to the Pilot Program last year, with 180 applications filed. It is still too soon to evaluate the results of the projects authorized under the fiscal year 2002 grant awards. Nonetheless, we believe that the application process worked very well. Therefore, we generally intend to follow the same approach as we did last year and to provide communities as much flexibility as possible in developing their grant proposals. In this regard, there are a number of aspects about this program that we noted in last year's request for proposals that are important and we believe would be beneficial if they are repeated here.
The law is very general about how program funding can be used. Moreover, we recognize that each community's circumstances may be different, and that each community needs some latitude in identifying its own objectives and developing strategies for accomplishing them. What should remain clear, however, is that program funding is intended to improve air service to those communities that are not receiving sufficient air service or are experiencing unreasonably high air fares, and not to shift existing costs from the local or state level to the Federal level.
There are many ways that a community might enhance its current air service or attract new service, such as: By promoting awareness among residents of locally available service; by attracting a new carrier through revenue guarantees or operating cost offsets; by offering an incumbent carrier financial incentives to lower its fares, increase its frequencies, add new routes, or deploy more suitable aircraft, including upgrading its equipment from turboprops to regional jets; by combining traffic support from surrounding communities with regionalized service through one airport; or by providing local ground transportation service to improve the community's access to air service. The core objective of the Pilot Program is to secure enhancements that will be responsive to a community's air transportation/air fare needs and whose benefits can be expected to continue after the initial expenditures.
Consequently, we encourage communities to consider a wide range of initiatives in developing their proposals. At the same time, we will not entertain general, vague, or unsupported proposals. The more highly defined the proposal, the more likely it will receive favorable consideration. At a minimum, we expect proposals to address specifically the following:
To the extent that a proposed project is dependent upon or relevant to completion of other Federally funded
There is no pre-established contribution level that is required of the applicant communities. Moreover, the law does not require communities to contribute toward a grant project. We emphasize, however, that a core objective of the Pilot Program is to promote community involvement in addressing air service/air fare issues through public/private partnerships. This includes not only participation in identifying and implementing the projects geared toward development of the community's air service, but, also, a financial commitment to achieve those developmental objectives. As a stakeholder in the process, the community gains greater control over the type, quality, and success of the air service initiatives that will best meet its needs, and a greater commitment towards achieving the stated goals. Furthermore, while we recognize that some communities may have greater financial resources available than others, we still expect there to be a direct relationship between the amount of Federal support that a community seeks and the amount that it is prepared to contribute toward the proposed initiative. The greater the Federal grant amount requested, the greater the amount that we would expect as the community's contribution.
Applicant communities should also keep in mind that, as part of the partnership between the Department and the community, we expect the community to meet its proposed financial contribution to the project. We believe that community participation with respect to all aspects, including the financial aspects, of the proposal is critical to the success of the authorized Pilot Program initiative. As with the fiscal year 2002 grant awards, receipt of the full Federal contribution awarded will thus be linked to the community's fulfillment of its financial contribution.
We will not dictate the format that applicants should use in submitting their applications, other than the guidance above concerning issues that we would like addressed in the community's application. The law provides considerable latitude to communities in developing their proposals and we do not want to stifle any innovation with a very strict format. However, given the high volume of applications received last year, and the delay in our ability to begin the grant process for this fiscal year, in this order, we are requiring applicants to submit Summary Information (attached as Appendix B to this order) at the beginning of their applications to assist our review of each proposal.
The Pilot Program provides considerable flexibility in how funds can be used to implement a community's proposal. For example, grant funds can be used to cover the expenses of any new advertising or promotional activities that can reasonably be related to improving the scheduled air service to the community. Funds may also be used for any type of new media advertising or other promotional activities; for new studies designed to measure air service deficiencies, or to measure traffic loss or diversion to other communities; as well as for the employment or use of new, dedicated air service development staff on a long-term basis, advertising or public relations agencies, universities, and consulting firms. In addition, grant funds may also be used for financial incentives, including subsidy or revenue guarantees, to air carriers in conjunction with their provision of air service or the fare levels charged, or to ground service providers in providing access to air transportation services.
As noted above, applicants will be expected to meet the financial contributions that they proposed toward their service proposals. To the extent that applicants may include the use of travel banks or travel pledges as financial incentives to service providers (air or surface), they should have confirmation and verification of such pledges or commitments
While the statute does not preclude communities from including capital expenditures, such as terminal/runway improvements or airport equipment in their grant requests, we do not encourage communities to do so. If our experience this year mirrors that of last year, we will have many more proposals for Federal assistance than we can accommodate under the limitations of the statute. Moreover, the FAA's Airport Improvement Program (AIP) and Facilities and Equipment Program (FE) are specifically intended for such purposes and capital improvement requests are more appropriately
The law does not exclude small communities that currently receive subsidized air service under the Essential Air Service (EAS) program from seeking funds under the Pilot Program. A number of EAS subsidized communities applied last year and the Department made grant awards to some of those applicants. We intend to again permit subsidized EAS communities to seek grant funds under this year's appropriation, and we will entertain requests that are directed toward increasing ridership on the subsidized service. Any proposal from an EAS community seeking funds for service to a point other than its EAS hub will be considered very carefully, weighing, and with particular emphasis on, the potential negative effect of such a project on the cost to the government for the already Federally subsidized service.
Proposals are due June 30, 2003. Given the limited time available to make these grant awards, proposals filed after that date will
Applicants will be able to provide certain information relevant to their proposals on a confidential basis. Under the Department's regulations, such information is limited to commercial or financial information whose disclosure would either significantly harm the competitive position of a business or enterprise or make it more difficult for the Government to obtain similar information in the future. Applicants seeking confidential treatment of a portion of their applications should segregate the confidential material in a sealed envelope marked "Confidential Submission of X (the applicant) in Docket OST-2003-15065" and include with that material a request in the form of a motion seeking confidential treatment of the material under 14 CFR 302.12 (Rule 12) of the Department's regulations. The applicant should submit an original and four copies of this material. The confidential material should not be included in the original
We recognize that a number of communities that filed applications last year were not awarded grants. Some of these communities may still be interested in pursuing the proposals that they submitted last year with or without any modifications. Others may want to change their proposals, but make no changes to the historical or other information that was provided in their fiscal year 2002 proposals. Communities that are interested in doing so may adopt their 2002 applications by reference to the extent that the information in that application remains relevant. They should submit in this docket, by the due date, however, any necessary amendments and/or updates to their previous applications and include the additional information that is required in this order, including the Summary Information.
We anticipate that some communities that were awarded grants last year may also want to seek additional funds to expand projects authorized last year or for entirely new projects. Those communities are free to submit grant proposals under this year's appropriation. However, the funds for this program are very limited and the interest in the program has far exceeded both the funds available and the number of communities that can participate under the statute. The fact that the community has already received one grant under the Pilot Program would be considered carefully in comparing a new proposal with those of other applicant communities.
The statute provides that the Department will designate one of the communities awarded a grant as an Air Service Development Zone and work closely with the designated community or consortium on means to attract business to the areas surrounding the airport and to develop land use options for the area. In this regard, the Department will also coordinate with the Department of Commerce to provide data to the community/consortium relevant to this objective. There are no additional funds associated with this designation, and no special benefit or preference will be given to communities seeking this designation in receiving a grant under the Pilot Program. Rather, the Department will serve as a liaison between the community and other government agencies with respect to the community's development plans.
Communities that are interested in this designation should clearly indicate that interest in their applications separately from their grant proposals and should provide information in support of their selection for this designation. They should also clearly indicate this interest in the appropriate place in the Summary Information.
The Department will carefully review each proposal and the staff may contact applicants and discuss their proposals with them if clarifications or more information is needed. Communities may amend their proposals at any time prior to the Department's selection of grant recipients and we will consider those amendments to the extent the review process permits. It is our intent to make the grant awards as quickly as possible so that communities awarded grants can complete the grant agreement process and proceed to implement their plans.
Given our experience of last year, it is likely that we will receive more applications than we will be able to fund under the limitations of the Pilot Program. We, therefore, expect to have to make many very difficult decisions. With this in mind, in making our
An important overreaching objective of the Pilot Program is to find solutions to transportation problems of small communities that could serve as models for other small communities to improve their access to air service and to the Nation's air transportation system. To this end, we hope to approve, as we did last year, a variety of different and innovative proposals at many communities experiencing different types of transportation issues, challenges, and opportunities.
Given the highly competitive nature of the grant process, the Department does not intend to meet with grant applicants with respect to their grant proposals, a process that is sometimes used in other grant programs. The Department's selection of communities for grant awards will be based on the community's written submissions to the Department.
Communities awarded grants will be expected to execute a grant agreement with the Department
This order is issued under authority delegated in 49 CFR 1.56a(f).
1. Community proposals for funding under the Small Community Air Service Development Pilot Program should be submitted no later than June 30, 2003;
2. This order will be published in the
An electronic version of this document is available on the World Wide Web at
Sec. 41743. Airports not receiving sufficient service
(1) an assessment of the need of the community or consortium for access, or improved access, to the national air transportation system; and
(2) an analysis of the application of the criteria in subsection (c) to that community or consortium.
(A) had insufficient air carrier service; or
(B) had unreasonably high air fares.
(A) air fares are higher than the average air fares for all communities;
(B) the community or consortium will provide a portion of the cost of the activity to be assisted under the program from local sources other than airport revenues;
(C) the community or consortium has established, or will establish, a public-private partnership to facilitate air carrier service to the public; and
(D) the assistance will provide material benefits to a broad segment of the traveling public, including business, educational institutions, and other enterprises, whose access to the national air transportation system is limited.
(1) to provide assistance to an air carrier to subsidize service to and from an underserved airport for a period not to exceed 3 years;
(2) to provide assistance to an underserved airport to obtain service to and from the underserved airport; and
(3) to provide assistance to an underserved airport to implement such other measures as the Secretary, in consultation with such airport, considers appropriate to improve air service both in terms of the cost of such service to consumers and the availability of such service, including improving air service through marketing and promotion of air service and enhanced utilization of airport facilities.
(1) to function as a facilitator between small communities and air carriers;
(2) to carry out this section;
(3) to ensure that the Bureau of Transportation Statistics collects data on passenger information to assess the service needs of small communities;
(4) to work with and coordinate efforts with other Federal, State, and local agencies to increase the viability of service to small communities and the creation of aviation development zones; and
(5) to provide policy recommendations to the Secretary and Congress that will ensure that small communities have access to quality, affordable air transportation services.
41743. Airports not receiving sufficient service.
All applicants must submit this information along with their proposal. Previous applicants may incorporate by reference all or any portion of their initial proposals in Docket OST-2002-11590, but must also submit this summary information to be considered for a grant award from the FY 2003 funding for the Pilot Program in this docket.