[Federal Register Volume 69, Number 208 (Thursday, October 28, 2004)]
[Proposed Rules]
[Pages 62833-62844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23859]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 201, 203, 205, 215, 298, 380, 385, and 389

[Docket No. OST-2004-19426]
RIN 2105-AD43


Elimination of Commuter Air Carrier Registrations

AGENCY: Office of the Secretary (OST), Department of Transportation 
(DOT).

ACTION:  Notice of proposed rulemaking.

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SUMMARY: The Department proposes to amend the regulations governing air 
taxi

[[Page 62834]]

operators and commuter air carriers to eliminate the requirement that 
commuter air carriers file initial and amended registration forms. The 
information provided on such forms is duplicative of information that 
commuter air carriers are separately required to file under other 
regulations. Accordingly, the proposed amendment will simplify the 
process of applying for and maintaining commuter air carrier authority. 
The Department also proposes to make conforming amendments to other 
rules affected by the proposed amendment, as well as to make other 
minor administrative, editorial, clarifying, and organizational changes 
to rules applicable to air taxi operators and commuter air carriers.

DATES: Comments must received on or before December 13, 2004.

ADDRESSES: You may send comments identified by Docket No. OST-2004-
19426 using any of the following methods:
    <bullet> DOT Docket Web site: go to http://dms.dot.gov and follow 
the instructions for sending you comments electronically.
    <bullet> Government-wide Rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your 
comments electronically.
    <bullet> Mail: Dockets Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590. Fax: 1-202-493-2251.
    <bullet> Hand Delivery: Room PL-401 on the plaza level of the 
Nassif building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Delores A. King, Air Carrier Fitness 
Division, Department of Transportation, 400 Seventh Street, SW., 
Washington, DC 20590, (202) 366-9721.

SUPPLEMENTARY INFORMATION:

Comments Invited

    The Department invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. We also 
invite comments relating to any economic, environmental, energy, or 
federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments will reference a specific 
portion of the proposal, explain the reason for any recommended change, 
and include supporting data.
    We will file in the docket all comments we receive, as well as a 
report summarizing each substantive public contact with Department 
personnel concerning this proposed rulemaking. The docket is available 
for public inspection before and after the comment closing date. If you 
wish to review the docket in person, go to the address in the ADDRESSES 
section of the preamble between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays. You may also review the docket using 
the Internet at the Web address in the ADDRESSES section.
    Privacy Act: Using the search function of our docket Web site, 
anyone can find and read the comments received into any of our dockets, 
including the name of the individual sending the comment (or signing 
the comment on behalf of an association, business, labor union, etc.) 
You may review the Department's complete Privacy Act Statement in the 
Federal Register published on April 11, 2000 (65 FR 19477-78) or you 
may visit http://dms.dot.gov.
    Before acting on this proposal, we will consider all comments we 
receive on or before the closing date for comments. We will consider 
comments filed late if it is possible to do so without incurring 
expense or delay. We may change this proposal in light of the comments 
we receive.
    If you want the Department to acknowledge receipt of your comments 
on this proposal, include with your comments a pre-addressed, stamped 
postcard on which the docket number appears. We will stamp the date on 
the postcard and mail it to you.

Background

    Air carriers operating or proposing to operate small aircraft 
(i.e., those designed to hold 60 seats or less or 18,000 pounds payload 
or less) are exempt from the provisions of 49 U.S.C. 41101, which 
requires U.S. air carriers to hold certificates of public convenience 
and necessity in order to engage in interstate and/or foreign air 
transportation operations. This exemption is conditioned upon the air 
carrier meeting the registration, insurance and other requirements set 
for in part 298 of the Department's Economic Regulations (14 CFR part 
298). Air carriers operating under a part 298 exemption are generally 
referred to as ``air taxi operators.''
    A ``commuter air carrier,'' as defined in part 298, is an air taxi 
operator that carriers passengers on at least five round trips per week 
on at least one route between two or more points according to a 
published flight schedule that specifies the times, days of the week, 
and places between which those flights are performed.
    To register as an air tax operator (whether or not commuter air 
carrier operations are involved), an air carrier must submit a 
registration form (OST Form 4507) that asks for basic information about 
the company, including name, address, telephone and fax numbers, types 
of operations being performed, Federal Aviation Administration (FAA) 
office overseeing the carrier's operations, list of aircraft being used 
in the operation, and whether the company is a U.S. citizen. Evidence 
of current insurance coverage that meets the requirements of part 205 
of the Department's regulations must accompany the registration. If the 
information on the registration form subsequently changes, the carrier 
is required to submit an amendment to the Department within 30 days 
reflecting the change.
    In addition, section 298.21(d) requires a commuter carrier to be 
found ``fit, willing and able'' to conduct its scheduled passenger 
operations in addition to meeting the registration and insurance 
requirements of the rule. In making that fitness determination, the 
Department requires companies proposing to operate as a commuter air 
carrier to file an application and submit data to the Department in 
accordance with 14 CFR parts 201 and 204. Once the Department 
determines the company is fit to provide its proposed scheduled 
passenger operations, the Department issues a Commuter Air Carrier 
Authorization with accompanying terms, conditions, and limitations to 
the air carrier.

Statement of Proposed Action

    The fitness requirements and the process for obtaining authority 
for commuter air carriers are nearly identical to those applicable to 
companies seeking certificates of public convenience and necessity 
under 49 U.S.C. 41101. In fact, many companies that propose to operate 
small aircraft (under 60 seats of 18,000 pounds payload) and that would 
otherwise qualify for commuter authority choose instead to seek a 
certificate. At present, approximately 35 carriers hold commuter 
authority from the Department; of the approximately 145 carriers that 
currently hold certificates of public convenience and necessity, 
approximately 60 operate small aircraft only. In addition, both 
commuter air carriers and certificated air carriers must notify the 
Department under 14 CFR 204.5 of any substantial changes in their 
operations, ownership, or management. Unlike commuters, however, 
certificated air carriers are not required to file registration forms 
or amendments.
    Since the fitness and licensing requirements for commuter air 
carriers

[[Page 62835]]

are so closely aligned to those for certificated air carriers operating 
similar aircraft, we propose to revise the regulations to eliminate the 
requirement that commuter air carriers file initial and amended 
registration forms as currently required by part 298, thus relieving 
commuters from the often duplicative burden of filing registration 
forms and amendment as well as initial and updated fitness information.
    All of the information contained on OST Form 4507 is filed by 
commuter applicants requesting a fitness determination under 14 CFR 
204.5. Once found fit, commuters are required to notify the Department 
of substantial changes in their operations, ownership, or management. 
In addition to these substantial change notifications, the Department 
periodically requests updated fitness information from commuter air 
carriers. We believe that these requirements and procedures provide the 
Department an adequate opportunity to obtain relevant information 
regarding commuter air carriers. Under these circumstances, we believe 
that the separate registrations and amendments required of commuters 
under part 298 are no longer necessary and can be eliminated. These 
changes will not, however, affect the requirement that other air taxi 
operators must still file registrations and amendments with the 
Department, nor will they relieve commuters of any other requirements 
or provisions of part 298 applicable to their operations. This includes 
submitting evidence of liability insurance coverage which, under the 
proposal, would be filed with the Program Management Branch (AFS-260) 
of the Federal Aviation Administration, just as air taxi registrations 
and insurance and certificated air carrier insurance currently are.

Section-by-Section Analysis of Proposal

    We propose to reorganize part 298 to reflect the changes discussed 
above, to codify current Department policies or procedures, and to 
improve the clarity of the party. This section-by-section analysis 
explains the proposed amendments to each subpart of the rule.

Subpart A--General

    In this subpart, we propose to reclassify commuter air carriers 
from being a subset of air taxi operators to their own class of carrier 
that operate small aircraft in scheduled passenger service, and to 
amend sections 298.1, 298.2, and 298.3 accordingly. We also propose to 
amend section 298.4 to include the address for obtaining a statement of 
authority, and to eliminate section 298.5.

Section 298.1 Applicability

    We propose to add a reference in section 298.1 to indicate that 
part 298 applies to both air taxi operators and commuter air carriers.

Section 298.2 Definitions

    We propose to amend the definitions of ``air taxi operator'' and 
``commuter air carrier'' to reference revised sections 298.3(a) and (b) 
(see Section 298.3 Classification, below). For purposes of clarity and 
convenience, we proposed to add definitions of ``statute'' to refer to 
subtitle VII of title 49 of the United States Code, ``eligible place'' 
with respect to operations by commuters as contained in 49 U.S.C. 
41731(a)(1), and ``citizen of the United States'' as contained in 49 
U.S.C. 40102(a)(15). We are also proposing to add the word 
``originally'' before the word ``designed'' in the definition of 
``large aircraft'' to codify our long-held interpretation of that 
definition as we recently reiterated in Order 2002-9-4. Finally, we 
propose to amend the definition of ``small aircraft'' so that it no 
longer merely indicates that it is the ``opposite'' of ``large 
aircraft,'' but instead sets out the specific seating and payload 
limitations applicable to small aircraft. As discussed below in section 
298.5, we are also deleting the definition of ``all-cargo air carrier 
or section 41103 carrier'' as no longer necessary for purposes of this 
part.

Section 298.3 Classification

    The Department proposes to amend section 298.3 to reclassify 
commuter air carriers as their own class of carrier that operate small 
aircraft in scheduled passenger service and do not hold certificates, 
but that do hold Commuter Air Carrier Authorizations (see revised 
section 298.3(b)). We propose to delete the references in section 
298.3(a) to the requirement that commuters must file registration 
forms, and adopt a new ``Subpart E--Commuter Air Carrier 
Authorizations,'' that describes the requirements for obtaining 
commuter authority. As a result of these changes, we propose to 
renumber old section 298.3(b) as section 298.3(c).

Section 298.4 Requests for Statement of Authority

    We propose to add the mailing address of the Director, Office of 
Aviation Analyses for ease in requesting a statement of authority.

Section 298.5 Dual Operations--Air Taxi or Commuter Air Carrier and 
All-Cargo Service

    We propose to eliminate section 298.5 which authorizes air taxi and 
commuter operations by air carriers holding All-Cargo Air Service 
Certificates issued under 49 U.S.C. 41103 (formerly section 418 of the 
Federal Aviation Act). There currently are no certificated air carriers 
that hold only all-cargo certificates issued under 49 U.S.C. 41103--all 
such carriers also hold certificates issued under 49 U.S.C. 41102. 
Moreover, no applications pursuant to 49 U.S.C. 41103 have been 
received in a number of years--most carriers preferring to receive 
certificates under 49 U.S.C. 41102 for scheduled all-cargo authority, 
which also confer charter all-cargo rights. Small aircraft operations 
by carriers holding certificates issued under 49 U.S.C. 41102 are 
specifically authorized by 14 CFR 206.5 under the same terms and 
conditions as air taxi and commuter operations; thus section 298.5 is 
redundant and can be eliminated, along with the references to that 
section in sections 298.3(a)(1) and (2) and current section 298.3(b) 
(renumbered section 298.3(c)).

Subpart B--Exemptions

    In this subpart, we proposed to re-designate current section 298.13 
as section 298.12. All other sections in this subpart remain unchanged.

Subpart C--Registration for Exemption by Air Taxi Operators

    This subpart is currently titled ``Registration and Reregistration 
for Exemption.'' We propose to re-title this subpart as ``Registration 
for Exemption by Air Taxi Operators'' to eliminate an obsolete 
reference to ``re-registrations''. Also, as discussed below, we propose 
to amend all sections in this subpart (sections 298.21 through 298.24) 
to eliminate references to commuter air carriers and make other 
clarifying or organizational changes.

Section 298.21 Filing for Registration by Air Taxi Operators

    Currently, this section states that all air taxi operators, 
regardless of whether or not they are operating as commuter air 
carriers, must file a registration with the Department. We propose to 
amend this section to remove the requirement for commuter air carriers 
to file registrations.
    We also propose to make administrative changes to this section. 
Specifically, we propose to replace the reference to the Director, 
Office of Aviation Analysis in 298.21(a) with a reference to the 
Manager, Program

[[Page 62836]]

Management Branch (AFS-260) of the FAA--the office that processes air 
taxi registrations--and amend sections 298.21(c) and (d) to clarify the 
addresses where air taxi registrations should be filed. Further, we 
propose to clarify the requirements for air taxi operators engaged in 
foreign air transportation or participating in an interline agreement. 
Specifically, we are proposing to delete section 298.21(c)(4) to 
eliminate the requirement that air taxi operators engaged in foreign 
air transportation or participating in an interline agreement must file 
OST Form 4523--counterpart to Agreement 18900--and, instead, include a 
new section 298.21(c)(1)(ix) that references language currently 
contained on the registration form (OST Form 4507) certifying that the 
air taxi operator complies with Agreement 18900 and certifying that the 
information submitted on the registration form is complete and 
accurate. Finally, we propose to move the current requirement of 
section 298.21(d), which prohibits an air taxi from operating scheduled 
passenger service unless it has first been found fit by the Department 
as a commuter air carrier, to new section 298.32.

Section 298.22 Processing by the Department

    In this section, we propose to replace the obsolete reference to 
registration form ``298-A'' with the correct form number ``OST Form 
4507.''

Section 298.23 Notification of the Department of Change in Operations

    We propose to amend section 298.23(a) to clarify that amended air 
taxi registrations are to be submitted whenever any of the information 
contained on the most recently filed registration form changes. In 
doing so, we will replace the specific listing of items with a more 
general statement that applies to any of the information on the 
registration. We have also added a provision stating that filing fees 
are not required when submitting an amendment to a registration form. 
Section 298.23(b) will be amended to reflect the current addresses 
where amended air taxi registrations are to be submitted.

Section 298.24 Cancellation of the Registration

    We propose to amend this section, which sets out circumstances 
under which the Department may cancel registrations issued under part 
298, to eliminate all references to commuter air carriers, since the 
suspension or revocation of a commuter's authority will now be 
addressed in new section 298.53. In addition, we propose to specify 
additional circumstances beyond those currently contained in this 
section under which an air taxi registration may be cancelled. 
Specifically, these include (1) an air taxi operator's failure to 
remain a U.S. citizen under 49 U.S.C. 40102(a)(15) (amended section 
298.24(e)), and (2) other circumstances under which the Department 
determines that it is in the public interest to cancel a company's 
registration (new section 298.24(f)). These changes merely clarify that 
an air taxi operator must remain a U.S. citizen to hold authority under 
part 298 as is required under the statute, and that the Department has 
the ability to cancel the exemption authority awarded to an air taxi if 
the Department determines that it is in the public interest to do so.

Subpart D--Limitations and Conditions on Exemptions and Operations

    In this subpart, we propose to add sections 298.32 and 298.33 and 
amend sections 298.32, 298.35 and 298.36.

Section 298.31 Scope of Service and Equipment Authorized

    As discussed in Section 298.2 above, we propose to add the word 
``originally'' before the word ``designed'' to codify our long-held 
interpretation that aircraft operated under this part must have been 
originally designed to hold no more than 60 seats or 18,000 pounds 
payload.

Section 298.32 Limitations on Operations to Eligible Places

    As mentioned previously, we propose to move, without change, the 
provisions of current section 298.21(d), which prohibits a commuter air 
carrier from operating without first having its fitness determined, to 
new section 298.32.

Section 298.33 Security Requirements

    We propose to add this new section to clarify that, like 
certificated air carriers, air taxi operators and commuter air carriers 
must comply with security requirements established by the U.S. 
Government for such carriers. This imposes no new obligations on air 
taxis or commuters.

Section 298.35 Limitations on Carriage of Mail

    We propose to amend this section to clarify that ``Postal Service'' 
as used in that section refers to the ``U.S. Postal Service.''

Section 298.36 Limitations on Use of Business Name

    We propose to amend this section to clarify that a commuter may 
only hold out to the public in the name in which its Commuter Air 
Carrier Authorization is issued or in which another trade name is 
registered in accordance with part 215 (see revised section 298.36(a)). 
For clarity, we propose to revise paragraph (d) of this section to 
indicate that the Department is not precluded from intervening or 
taking enforcement action should there be evidence of a significant 
potential for, or actual, public confusion as a result of the use of a 
particular name.

Section 298.38 Financial Security Arrangements for Operating Public 
Charters

    This section was previously titled ``Security arrangements for 
operating Public Charters.'' We propose to amend the title of this 
section to clarify that this section refers to financial security 
requirements to avoid any confusion with general security requirements. 
In addition, we propose to replace an obsolete reference to 14 CFR 
207.17 with the correct reference to 14 CFR 212.8.

Subpart E--Commuter Air Carrier Authorizations

    We propose to add a new subpart E, ``Commuter Air Carrier 
Authorizations.'' This subpart prescribes rules pertaining to commuter 
air carrier authority.

Section 298.50 Applications

    This proposed new section contains directions for filing an 
application for a Commuter Air Carrier Authorization. In this section, 
we are not proposing any new requirements; rather, we are setting out 
provisions from other parts of the Department's regulations to clarify 
in part 298 the actions required by applicants requesting a Commuter 
Air Carrier Authorization (e.g., an original and two copies of the 
application must be filed with the Department's Dockets section, 
accompanied by the information required by 14 CFR 204 and the $670 
filing fee). These requirements are found currently in sections 201.1 
and 389.25.

Section 298.51 Processing by the Department

    This proposed new section states that applications for commuter 
authority will be processed in accordance with the procedural 
provisions of sections 302.207-302.211 which are applicable to 
certificated air carriers but have been followed by the Department in 
processing applications for commuter air carrier authority. Thus, the 
section imposes no new requirements on commuter applicants.

[[Page 62837]]

Section 298.52 Air Taxi Operations by Commuter Air Carriers

    Proposed section 298.52(a) provides that, during such time as a 
commuter holds an effective Commuter Air Carrier Authorization, it may 
also conduct air taxi-type operations (e.g., scheduled and on-demand 
cargo, on-demand passenger service, and scheduled passenger services 
consisting of less than four weekly round trips in a market pursuant to 
a published schedule) under part 298 without having to file a separate 
air taxi registration. Proposed section 298.53(b) provides that, if the 
carrier ceases its scheduled passenger commuter operations, resulting 
in the suspension of its commuter authority, it can continue to conduct 
other air taxi operations authorized by this part, provided that it 
registers as an air taxi operator under section 298.21 within 10 days 
of such cessation and complies with all other requirements applicable 
to air taxi operators under part 298 (including, for example, 
maintaining insurance coverage as required by part 205 and retaining 
appropriate FAA authority).

Section 298.53 Suspension or Revocation of Authority

    Proposed section 298.53 sets out circumstances under which the 
Department may suspend or revoke a Commuter Air Carrier Authorization. 
They also include the two additional requirements previously discussed 
in connection with changes to section 298.24 (see the discussion above 
on section 298.24).

Subparts F Through H

    No amendments are being made to subpart F, ``Reporting 
Requirements,'' subpart G, ``Public Disclosure of Data,'' and subpart 
H, ``Violations.''

Amendments to Other Rules

    To reflect the elimination of commuter registrations, we propose to 
make conforming amendments to other rules. We are also taking this 
opportunity to propose other minor administrative amendments to the 
Department's regulations. Affected rules include the following:
    We propose to amend section 201.1(b) to remove the reference to 
commuter registrations by deleting the word ``registration'' in the 
first sentence.
    We propose to amend section 203.3 to remove outdated references to 
the Department's ``Office of Aviation Analysis, Special Authorities 
Division'' as the source for obtaining OST Forms 4507 and 4523, 
replacing it with a reference to instructions in part 298 and 14 CFR 
294 on where to obtain these forms.
    We propose to amend sections 205.4(a), (b), and (c) and 205.7(a) to 
remove the outdated references to the ``Office of Aviation Analysis'' 
as the recipient of, and source for, certificate of insurance forms 
(OST Forms 6410 and 6411) and other notices of insurance changes. A 
revised section 205.4(c) is added to reflect the correct addresses at 
the Department where insurance certificates and endorsements are to be 
filed.
    We propose to amend section 215.3 to delete in the second sentence 
obsolete references to 14 CFR 221.21(j) and 221.35(d).
    We propose to amend section 215.4(a) to delete the references to 
commuter registrations and amendments in the second sentence. The word 
``commuter'' is added in the fourth sentence after the words 
``underlying certificate''; the word ``or'' is eliminated before 
``foreign air carrier''; and the word ``permit'' is eliminated and 
replaced with a comma (``,'') after ``foreign air carrier''.
    We propose to amend section 215.6 to delete the reference to 
commuter registrations.
    In section 380.2, we propose to amend the definition of ``direct 
air carrier'' to add the word ``commuter'' after the word 
``certificate'' and before the words ``or foreign air carrier'', to 
delete the reference to ``commuter air carrier'' after ``air taxi 
operator,'' and to add ``authorization'' after the word ``certificate'' 
and before the word ``permit'' to reflect that commuters receive a 
Commuter Air Carrier Authorization.
    We propose to amend section 385.12(e) to remove the reference to 
commuter air carriers.
    We propose to amend section 389.25(a), code 7, to read ``Commuter 
Air Carrier Authorization * * * $670.''

Paperwork Reduction Act

    OMB Information Collection Number: 2120-0633.
    Title of Information Collection: Exemptions for Air Taxi and 
Commuter Air Carrier Operations.
    Affected Public: Commuter air carriers and applicants for commuter 
air carrier authority.
    Brief Abstract: Applicants for authority to operate as an air taxi 
operator or commuter air carrier under 14 CFR part 298 are required to 
submit a registration form (OST Form 4507) that asks for basic 
information about the company (such as, name, address, telephone/fax 
numbers, types of operations being performed, Federal Aviation 
Administration (FAA) operating certificate, aircraft operated, and 
whether the company is a U.S. citizen). Once registered with the 
Department, the air taxi or commuter air carrier is required to submit 
an amendment to the Department when information on the registration 
changes. The proposed amendment here will eliminate this registration 
requirement for commuter air carriers--since the information required 
on the registration is duplicative of information provided to the 
Department elsewhere--thus resulting in a reduction in the above-noted 
paperwork collection.
    Burden Hours: The amendment proposed here will result in a 
diminution of the regulatory burden on affected parties. There are 
approximately 35 currently-authorized commuter air carriers subject to 
this reporting requirement, and new applicants for commuter authority 
over the past three years have averaged approximately four per year. 
The paperwork burden of this reporting requirement on commuter air 
carriers varies depending on the extent to which the information on the 
registration changes. A carrier does not need to submit further forms 
if the information contained in a registration does not change. As a 
result, the number of registration forms filed will vary. Based on our 
recent experience in this area, we have estimated approximately two 
amended registrations per currently-authorized commuter air carrier 
plus one registration for each new commuter applicant. Thus, we 
estimate the reduction in the paperwork burden for these carriers to 
be, on an annual basis, approximately 74 responses (4 new and 70 
amended OST Forms 4507s) and 37 burden hours (74 responses x .5 hours 
per response).
    Cost to the Respondents: We have previously estimated the average 
cost of completing and submitting a new or amended OST Form 4507 to be 
approximately $20.00. Thus, we estimate the cost savings to respondents 
of the proposed elimination of commuter registrations to be 
approximately $1,480 (74 responses x $20 per response).

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is the Department's policy to comply 
with International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The Department 
has determined that there are no ICAO Standards and Recommended 
Practices that

[[Page 62838]]

correspond to these proposed regulations.

Executive Order 12866 and DOT Regulatory Policies and Provisions

    Executive Order 12866, Regulatory Planning and Review, directs the 
Department to assess both the costs and the benefits of a regulatory 
change. We are not allowed to propose or adopt a regulation unless we 
make a reasoned determination that the benefits of the intended 
regulation justify the costs. Our assessment of this rulemaking 
indicates that its economic impact is minimal because the rule will not 
impose any new costs on the affected commuter air carriers; in fact, it 
relieves them of a filing requirement with the attendant costs and 
burdens. The remaining changes are administrative and editorial in 
nature and primarily reflect organizational and procedural changes 
within the Department. This rulemaking is non-significant under DOT 
policies and procedures and was not reviewed by the Office of 
Management and Budget under Executive Order 12866.

Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act of 1980 (RFA) directs the Department 
to fit regulatory requirements to the scale of the business, 
organizations, and governmental jurisdictions subject to the 
regulation. We are required to determine whether a proposed or final 
action will have a ``significant economic impact on a substantial 
number of small entities'' as they are defined in the Act. If we find 
that the action will have a significant impact, we must do a 
``regulatory flexibility analysis.''
    This proposed rule relieves commuter air carriers from filing 
registration forms and amendments, and it reorganizes some of the 
regulations applicable to commuter air carriers. Therefore, we certify 
that this action will not have a significant economic impact on a 
substantial number of small entities.

Trade Impact Assessments

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States. Legitimate domestic objectives, such as safety, are not 
considered unnecessary obstacles. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards. The Department has assessed the 
potential effect of this rulemaking and has determined that it will 
have only a domestic impact and therefore no effect on any trade-
sensitive activity.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act) is intended, 
among other things, to curb the practice of imposing unfunded Federal 
mandates on State, local, and tribal governments. Title II of the Act 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed or final agency rule 
that may result in an expenditure of $100 million or more (adjusted 
annually for inflation) in any one year by State, local, and tribal 
governments, in the aggregate, or by the private sector; such a mandate 
is deemed to be a ``significant regulatory action.''
    This proposal does not contain such a mandate. The requirements of 
Title II of the Act, therefore, do not apply.

Executive Order 13132, Federalism

    The Department has analyzed this proposed rule under the principles 
and criteria of Executive Order 13132, Federalism. We have determined 
that this action would not have a substantial direct effect on the 
States, on the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.

List of Subjects

14 CFR Part 201

    Air carriers, Reporting and recordkeeping requirements.

14 CFR Part 203

    Air carriers, Air transportation, Foreign relations, Insurances, 
Reporting and recordkeeping requirements.

14 CFR Part 205

    Air carriers, Freight, Insurance, Reporting and recordkeeping 
requirements.

14 CFR Part 215

    Air carriers, Reporting and recordkeeping requirements, Trade 
Names.

14 CFR Part 298

    Air taxis, Reporting and recordkeeping requirements.

14 CFR Part 380

    Charter flights, Reporting and recordkeeping requirements, Surety 
bonds.

14 CFR Part 385

    Organization and functions (Government agencies).

14 CFR Part 389

    Administrative practice and procedure, Reporting and recordkeeping 
requirements.

The Proposed Amendment

    For the reasons set forth in the preamble, the Department proposes 
to amend title 14, chapter II of the Code of Federal Regulations as 
follows:

PART 201--AIR CARRIER AUTHORITY UNDER SUBTITLE VII OF TITLE 49 OF 
THE UNITED STATES CODE

    1. The authority citation for Part 201 continues to read as 
follows:

    Authority: 5 U.S.C. 1008; 49 U.S.C. Chapters 401, 411, 413, 415, 
417.


Sec.  201.1  [Amended]

    2. In Sec.  201.1(b), remove the word ``registration'' in the first 
sentence.

PART 203--WAIVER OF WARSAW CONVENTION LIABILITY LIMITS AND DEFENSES

    3. The authority citation for Part 203 continues to read as 
follows:

    Authority: 49 U.S.C. chapters 401, 411, 413, 415, 417.


Sec.  203.3  [Amended]

    4. In Sec.  203.3, in the second sentence remove the words ``with 
the Department's Office of Aviation Analysis'' and add, in their place, 
``in accordance with the provisions of those parts'', and remove the 
last sentence.

PART 205--AIRCRAFT ACCIDENT LIABILITY INSURANCE

    5. The authority citation for Part 205 continues to read as 
follows:

    Authority: 49 U.S.C. chapters 401, 411, 413, 417.

    6. Amend Sec.  205.4 as follows:
    A. Revise paragraph (a) to read as set forth below;
    B. Amend paragraph (b) by removing the words ``Department's Office 
of Aviation Analysis'' in the first sentence and adding, in their 
place, ``Department at the addresses specified in paragraph (c) of this 
section''; and
    C. Revise paragraph (c) to read as set forth below.
    The revisions read as follows:


Sec.  205.4  Filing of evidence of insurance.

    (a) A U.S. or foreign air carrier shall file a certificate of 
insurance or a complete plan for self-insurance with the Department. 
Each carrier shall ensure that the evidence of aircraft accident 
liability coverage filed with the Department is correct at all times. 
The Department will normally notify the

[[Page 62839]]

carrier within 20 days of receipt if the certificate or plan does not 
meet the requirements of this part. Certificates of Insurance shall be 
filed on OST Form 6410 for U.S. air carriers, including commuter air 
carriers and air taxi operators, and OST Form 6411 for foreign air 
carriers, including Canadian air taxi operators. The Department may 
return the certificate or self-insurance plan to the carrier if it 
finds for good cause that such certificate or plan does not show 
adequate evidence of insurance coverage under this part. Forms may be 
obtained from and should be filed with the Department at the addresses 
specified in paragraph (c) of this section. Forms may also be obtained 
on the Internet at http://ostpxweb.dot.gov/aviation.
* * * * *
    (c) Certicates of insurance and endorsements required in paragraphs 
(a) and (b) of this section shall be submitted to the Department of 
Transportation, Federal Aviation Administration, Program Management 
Branch, AFS-260, 800 Independence Avenue, SW., Washington, DC 20591. 
For those air carriers that have a mailing address in the State of 
Alaska, the forms shall be submitted to the Department of 
Transportation, Federal Aviation Administration, Alaskan Region 
Headquarters, AAL-230, 222 West 7th Avenue, Box 14, Anchorage, Alaska 
99513. For Canadian air taxis, the forms shall be submitted to the 
Department of Transportation, Special Authorities Division, X-46, 400 
7th Street SW., Washington, DC 20590.


Sec.  205.7  [Amended]

* * * * *
    9. In Sec.  205.7(a), remove the words ``Department's Office of 
Aviation Analysis (or, for Alaskan air taxi operators, to the 
Department's Alaska Field Office)'' and add, in their place the words 
``Department at the addresses specified in Sec.  205.4(c)''.

PART 215--USE AND CHANGE OF NAMES OF AIR CARRIERS, FOREIGN AIR 
CARRIERS AND COMMUTER AIR CARRIERS

    10. The authority citation for part 215 continues to read as 
follows:

    Authority: 40 U.S.C. chapters 401, 411, 413, 417.


Sec.  215.3  [Amended]

    11. In Sec.  215.3, in the second sentence, remove the words 
``Except as provided in Sec. Sec.  221,21(J) and 221.35(d) of this 
chapter,''.


Sec.  215.4  [Amended]

    12. In Sec.  215.4(a), in the second sentence, remove the words ``, 
as well as any commuter air carrier registration or amendment filed 
under part 298,'' and add the word ``commuter'' after ``certificate,'' 
in the fourth sentence.


Sec.  215.6  [Amended]

    13. In Sec.  215.6, remove the words ``or in approving the commuter 
registration,'' in the first sentence.

PART 298--EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER 
OPERATIONS

    14. The authority citation for part 298 continues to read as 
follows:

    Authority: 49 U.S.C. 329 and Chapters 401, 411, 417.

    15. Amend Part 298 by revising Subparts A through E to read as 
follows:

PART 298--EXEMPTIONS FOR AIR TAXI AND COMMUTER AIR CARRIER 
OPERATIONS

Subpart A--General
Sec.
298.1 Applicability of part.
298.2 Definitions.
298.3 Classification.
298.4 Requests for statement of authority.
Subpart B--Exemptions
298.11 Exemption authority.
298.12 Duration of exemption.
Subpart C--Registration for Exemption by Air Taxi Operators
298.21 Filing for registration by air taxi operators.
298.22 Processing by the Department.
298.23 Notifications to the Department of change in operations.
298.24 Cancellation of the registration.
Subpart D--Limitations and Conditions on Exemptions and Operations
298.30 Public disclosure of policy on consumer protection.
298.31 Scope of service and equipment authorized.
298.32 Limitation on operations to eligible places.
298.33 Security requirements.
298.34 [Reserved]
298.35 Limitations on carriage of mail.
298.36 Limitations on use of business name.
298.37 Prohibition of services not covered by insurance.
298.38 Financial security arrangements for operating Public 
Charters.
Subpart E--Commuter Air Carrier Authorizations
298.50 Application.
298.51 Processing by the Department.
298.52 Air taxi operations by commuter air carriers.
298.53 Suspension or revocation of authority.

Subpart A--General


Sec.  298.1  Applicability of part.

    This part establishes classifications of air carriers known as 
``air taxi operators'' and ``commuter air carriers,'' provides certain 
exemptions to them from some of the economic regulatory provisions of 
subtitle VII of title 49 of the United States Code (Transportation), 
specifies procedures by which such air carriers may obtain authority to 
conduct operations, and establishes rules applicable to their 
operations in interstate and/or foreign air transportation in all 
States, Territories and possessions of the United States. This part 
also establishes reporting requirements for commuter air carriers and 
small certificated air carriers.


Sec.  298.2  Definitions.

    As used in this part:
    Air taxi operator means an air carrier as established by Sec.  
298.3(a).
    Air transportation means interstate air transportation, foreign air 
transportation, or the transportation of mail aircraft as defined by 
the Statute \1\
---------------------------------------------------------------------------

    \1\ Interstate air transportation is defined in section 
40102(a)(25) as the transportation of passengers or property by 
aircraft as a common carrier for compensation, or the transportation 
of mail by aircraft (1) between a place in (i) a State, territory, 
or possession of the United States and a place in the District of 
Columbia or another State, territory, or possession of the United 
States; (ii) Hawaii and another place in Hawaii through the airspace 
over a place outside Hawaii; (iii) the District of Columbia and 
another place in the District of Columbia; or (iv) a territory or 
possession of the United States and another place in the same 
territory or possession; and (2) when any part of the transportation 
is by aircraft. Note: Operations wholly within the geographic limits 
of a single State are not considered interstate air transportation 
if in those operations the carrier transports no more than a de 
minimus volume of passengers or property moving as part of a 
continuous journey to or from a point outside the State.
    Foreign air transportation is defined in section 40102(a)(23) of 
the Statute as the transportation of passengers or property by 
aircraft as a common carrier for compensation, or the transportation 
of mail by aircraft, between a place in the United States and a 
place outside of the United States and when any part of the 
transportation is by aircraft.
    Air transportation also is defined to include the transportation 
of mail by aircraft. Section 5402 of the Postal Reorganization Act, 
39 U.S.C. 5402, authorizes the carriage of mail by air taxi 
operators and commuter air carriers in some circumstances under 
contract with the U.S. Postal Service.
---------------------------------------------------------------------------

    Aircraft-hours means the airborne hours of aircraft computed from 
the moment an aircraft leaves the ground until it touches the ground at 
the end of a flight stage.
    Aircraft miles means the miles (computed in airport-to-airport 
distances) for each flight stage actually completed, whether or not 
performed in accordance with the scheduled pattern.

[[Page 62840]]

    Certificated air carrier means an air carrier holding a certificate 
issued under section 41102 of the Statute.
    Citizen of the United States means:
    (1) An individual who is a citizen of the United States;
    (2) A partnership each of whose partners is an individual who is a 
citizen of the States; or
    (3) A corporation or association organized under the laws of the 
United States or a state, the District of Columbia, or a territory or 
possession of the United States, of which the president and at least 
two-thirds of the board of directors and other managing officers are 
citizens of the United States, which is under the actual control of 
citizens of the United States, and in which at least 75 percent of the 
voting interest is owned or controlled by persons that are citizens of 
the United States.
    Commuter air carrier means an air carrier as established by Sec.  
298.3(b) that carriers passengers on at least five round trips per week 
on at least one route between two or more points according to its 
published flight schedules that specify the times, days of the week, 
and places between which those flights are performed.
    Departure means takeoff from an airport.
    Eligible place means a place in the United States that--
    (1)(i) Was an eligible point under section 419 of the Federal 
Aviation Act of 1958 as in effect before October 1, 1988;
    (ii) Received scheduled air transportation at any time after 
January 1, 1990; and
    (iii) Is not listed in Department of Transportation Orders 89-9-37 
and 89-12-52 as a place ineligible for compensation under Subchapter II 
of chapter 417 of the Statute; or
    (2) Was determined, on or after October 1, 1988, and before the 
date of the enactment of the Wendell H. Ford Aviation Investment and 
Reform Act for the 21st Century, by the Department to be eligible to 
receive subsidized small community air service under section 41736(a) 
of the Statute.
    Flight stage means the operation of an aircraft from takeoff to 
landing.
    Large aircraft means any aircraft originally designed to have a 
maximum passenger capacity of more than 60 seats or a maximum payload 
capacity of more than 18,000 pounds.
    Maximum certificated takeoff weight means the maximum takeoff 
weight authorized by the terms of the aircraft airworthiness 
certificate.\2\
---------------------------------------------------------------------------

    \2\ This weight may be found in the airplane operating record or 
in the airplane flight manual, which is incorporated by regulation 
into the airworthiness certificate.
---------------------------------------------------------------------------

    Maximum passenger capacity means the maximum number of passenger 
seats for which an aircraft is configured.
    Maximum payload capacity means the maximum certificated take-off 
weight of an aircraft, less the empty weight,\3\ less all justifiable 
aircraft equipment, and less the operating load (consisting of minimum 
fuel load, oil, flight crew, steward's supplies, etc.). For purposes of 
this part, the allowance for the weight of the crew, oil, and fuel is 
as follows:
---------------------------------------------------------------------------

    \3\ Empty weight is defined in section 03 of part 241 as 
follows: the weight of the airframe, engines, propellers, and fixed 
equipment. Empty weight excludes the weight of the crew and payload, 
but includes the weight of all fixed ballast, unusable fuel supply, 
undrainable oil, total quantity of engine coolant, and total 
quantity of hydraulic fluid.
---------------------------------------------------------------------------

    (1) Crew--200 pounds per crew member required under FAA 
regulations,
    (2) Oil--350 pounds,
    (3) Fuel--The minimum weight of fuel required under FAA regulations 
for a flight between domestic points 200 miles apart,\4\
---------------------------------------------------------------------------

    \4\ Assumes VFR weather conditions and flights not involving 
extended overwater operations.
---------------------------------------------------------------------------

    Provided, however, That in the case of aircraft for which a maximum 
zero fuel weight is prescribed by the FAA,\5\ maximum payload capacity 
means the maximum zero fuel weight, less the empty weight, less all 
justifiable aircraft equipment, and less the operating load (consisting 
of minimum flight crew, steward's supplies, etc., but not including 
disposable fuel or oil).
---------------------------------------------------------------------------

    \5\ The maximum zero fuel weight is the maximum permissible 
weight of an airplane with no disposable fuel or oil. The zero fuel 
weight figure may be found in the FAA's type certificate data 
sheets, and/or in FAA-approved flight manuals.
---------------------------------------------------------------------------

    Mile means a statute mile, i.e., 5,280 feet.
    Nonrevenue passenger means a person traveling free or under token 
charges, except those expressly named in the definition of revenue 
passenger; a person traveling at a fare or discount available only to 
employees or authorized persons of air carriers or their agents or only 
for travel on the business of the carriers; and an infant who does not 
occupy a seat. (This definition is for 14 CFR part 298 traffic-
reporting purposes and may differ from the definitions used in other 
parts by the Federal Aviation Administration and the transportation 
Security Administration for the collection of passenger Facility 
Charges and Security Fees.) The definition includes, but is not limited 
to, the following examples of passengers when traveling free or 
pursuant to token charges:
    (1) Directors, officers, employees, and others authorized by the 
air carrier operating the aircraft;
    (2) Directors, officers, employees, and others authorized by the 
air carrier or another carrier traveling pursuant to a pass interchange 
agreement:
    (3) Travel agents being transported for the purpose of 
familiarizing themselves with the carrier's services;
    (4) Witnesses and attorneys attending any legal investigation in 
which such carrier is involved;
    (5) Persons injured in aircraft accidents, and physicians, nurses, 
and others attending such persons;
    (6) Any persons transported with the object of providing relief in 
cases of general epidemic, natural disaster, or other catastrophe;
    (7) any law enforcement official, including any person who has the 
duty of guarding government officials who are traveling on official 
business or traveling to or from such duty;
    (8) Guests of an air carrier on an inaugural flight or delivery 
flights or newly-acquired or renovated aircraft;
    (9) Security guards who have been assigned the duty to guard such 
aircraft against unlawful seizure, sabotage, or other unlawful 
interference;
    (10) Safety inspectors of the National Transportation Safety Board 
or the FAA in their official duties or traveling to or from such duty;
    (11) Postal employees on duty in charge of the mails or traveling 
to or from such duty;
    (12) Technical representatives of companies that have been engaged 
in the manufacture, development or testing of a particular type of 
aircraft equipment, when the transportation is provided for the purpose 
of in-flight observation and subject to applicable FAA regulations;
    (13) persons engaged in promoting air transportation;
    (14) Air marshals and other Transportation Security officials 
acting in their official capacities and while traveling to and from 
their official duties; and
    (15) Other authorized persons, when such transportation is 
undertaken for promotional purpose.
    Passengers carried means passengers on board each flight stage.
    Point when used in connection with any territory or possession of 
the United States, or the States of Alaska and Hawaii, means any 
airport or place where aircraft may be landed or taken off, including 
the area within a 25-mile radius of such airport or place; when used in 
connection with the continental United States, except Alaska, it shall 
have the same meaning except be

[[Page 62841]]

limited to the area within a 3-mile radius of such airport or place: 
Provided, That for the purposes of this part, West 30th Street Heliport 
and Pan Am Building Heliport, both located in New York City, shall be 
regarded as separate points.
    Reporting carrier for Schedule T-100 purposes means the air carrier 
in operational control of the light, i.e., the carrier that uses its 
flight crews under its own FAA operating authority.
    Revenue passenger means a passenger for whose transportation an air 
carrier receives commercial remuneration. (This definition is for 14 
CFR part 298 traffic-reporting purposes and may differ from the 
definitions used in other parts by the Federal Aviation Administration 
and the Transportation Security Administration for the collection of 
Passenger Facility Charges and Security Fees.) This includes, but is 
not limited to, the following examples:
    (1) Passengers traveling under publicly available tickets including 
promotional offers (for example two-for-one) or loyalty programs (for 
example, redemption of frequent flyer points);
    (2) Passengers traveling on vouchers or tickets issued as 
compensation for denied boarding or in response to consumer complaints 
or claims;
    (3) Passengers traveling at corporate discounts;
    (4) Passengers traveling on preferential fares (Government, seamen, 
military, youth, student, etc.);
    (5) Passengers traveling on barter tickets; and
    (6) Infants traveling on confirmed-space tickets.
    Revenue passenger-mile means one revenue passenger transported one 
mile. Revenue passenger-miles are computed by multiplying the aircraft 
miles flown on each flight stage by the number of revenue passengers 
carried on that flight stage.
    Revenue seat-miles available means the aircraft-miles flown on each 
flight stage multiplied by the number of seats available for sale on 
that flight stage.
    Revenue ton-mile means one ton of revenue traffic transported one 
mile. Revenue ton-miles are computed by multiplying the aircraft-miles 
flown on each flight stage by the number of pounds of revenue traffic 
carried on that flight stage and converted to ton-miles by dividing 
total revenue pound-miles by 2,000 pounds.
    Revenue ton-miles available means the aircraft-miles flown on each 
flight stage multiplied by the number of pounds of aircraft capacity 
available for use on that stage and converted to ton-miles by dividing 
total pound-miles available by 2,000 pounds.
    Scheduled service means transport service operated over routes 
pursuant to published flight schedules or pursuant to mail contracts 
with the U.S. Postal Service.
    Small aircraft means any aircraft originally designed to have a 
maximum passenger capacity of 60 seats or less or a maximum payload 
capacity of 18,000 pounds or less.
    Small certificated air carrier means an air carrier holding a 
certificate issued under section 41102 of the Statute that provides 
scheduled passenger air service within and between only the 50 States 
of the United States, the District of Columbia, the Commonwealth of 
Puerto Rico, and the U.S. Virgin Islands with small aircraft as defined 
in this section.
    Statute means Subtitle VII of title 49 of the United States Code 
(Transportation).
    Ton means a short ton, i.e., 2,000 pounds.
    Wet-Lease Agreement means an agreement under which one carrier 
leases an aircraft with flight crew to another air carrier.


Sec.  298.3  Classification.

    (a) There is hereby established a classification of air carriers, 
designated as ``air taxi operators,'' which directly engage in the air 
transportation of persons or property or mail or in any combination of 
such transportation and which:
    (1) Do not directly or indirectly utilize large aircraft in air 
transportation;
    (2) Do not hold a certificate of public convenience and necessity 
and do not engage in scheduled passenger operations as specified in 
paragraph (b) of this section;
    (3) Have and maintain in effect liability insurance coverage in 
compliance with the requirements set forth in part 205 of this chapter 
and have and maintain a current certificate of insurance evidencing 
such coverage on file with the Department;
    (4) If operating in foreign air transportation or participating in 
an interline agreement, subscribe to Agreement 18900 (OST Form 4523 or 
OST Form 4507) and comply with all other requirements of part 203 of 
this chapter; and
    (5) Have registered with the Department in accordance with subpart 
C of this part.
    (b) There is hereby established a classification of air carriers, 
designated as ``commuter air carriers,'' which directly engage in the 
air transportation of persons, property or mail, and which:
    (1) Do not directly or indirectly utilize large aircraft in air 
transportation;
    (2) Do not hold a certificate of public convenience and necessity;
    (3) Carry passengers on at least five round trips per week on at 
least one route between two or more points according to its published 
flight schedules that specify the times, days of the week, and places 
between which those flights are performed;
    (4) Have and maintain in effect liability insurance coverage in 
compliance with the requirements set forth in part 205 of this chapter 
and have and maintain a current certificate of insurance evidencing 
such coverage on file with the Department;
    (5) Have and maintain in effect and on file with the Department a 
signed counterpart of Agreement 18900 (OST Form 4523) and comply with 
all other requirements of part 203 of this chapter; and
    (6) Hold a Commuter Air Carrier Authorization issued in accordance 
with subpart E of this part.
    (c) A person who does not observe the conditions set forth in 
paragraph (a) or (b) of this section shall not be an air taxi operator 
or commuter air carrier within the meaning of this part with respect to 
any operations conducted while such conditions are not being observed, 
and during such periods is not entitled to any of the exemptions set 
forth in this part.


Sec.  298.4  Requests for statement of authority.

    In any instance where an air taxi operator or commuter air carrier 
is required by a foreign government to produce evidence of its 
authority to engage in foreign air transportation under the laws of the 
United States, the Director, Office of Aviation Analysis (X-50), Office 
of the Secretary, 400 7th Street, SW., Washington, DC 20590, will, upon 
request, furnish the carrier with a written statement, outlining its 
general operating privileges under this part for presentation to the 
proper authorities of the foreign government.

Subpart B--Exemptions


Sec.  298.11  Exemption authority.

    Air taxi operators and commuter air carriers are hereby relieved 
from the following provisions of the Statute only if and so long as 
they comply with the provisions of this part and the conditions imposed 
herein, and to the extent necessary to permit them to conduct air taxi 
or commuter air carrier operations:
    (a) Section 41101;
    (b) Section 41504; except that the requirements of that section 
shall apply to:

[[Page 62842]]

    (1) Tariffs for through rates, fares, and charges filed jointly by 
air taxi operators or commuter air carriers with air carriers or with 
foreign air carriers subject to the tariff-filing requirements of 
Chapter 415; and
    (2) Tariffs required to be filed by air taxi operators or commuter 
air carriers which embody the provisions of the counterpart to 
Agreement 18900 as specified in part 203 of this chapter;
    (c) Section 41702, except for the requirements that air taxi 
operators and commuter air carriers shall:
    (1) Provide safe service, equipment, and facilities in connection 
with air transportation;
    (2) Provide adequate service insofar as that requires them to 
comply with parts 252 and 382 of this chapter;
    (3) Observe and enforce just and reasonable joint rates, fares, and 
charges, and just and reasonable classifications, rules, regulations 
and practices as provided in tariffs filed jointly by air taxi 
operators or commuter air carriers with certificated air carriers or 
with foreign air carriers; and
    (4) Establish just, reasonable, and equitable divisions of such 
joint rates, fares, and charges as between air carriers participating 
therein which shall not unduly prefer or prejudice any of such 
participating air carriers;
    (d) Section 41310, except that the requirements of that subsection 
shall apply to through service provided pursuant to tariffs filed 
jointly by air taxi operators or commuter air carriers with 
certificated air carriers or with foreign air carriers and to 
transportation of the handicapped to the extent that that is required 
by part 382 of this chapter.
    (e) Section 41902;
    (f) Section 41708.


Sec.  298.12  Duration of exemption.

    The exemption from any provision of the Statute provided by this 
part shall continue in effect only until such time as the Department 
shall find that enforcement of that provision would be in the public 
interest, at which time the exemption shall terminate or be conditioned 
with respect to the person, class of persons, or service (e.g., 
limited-entry foreign air transportation market) subject to the 
finding.

Subpart C--Registration for Exemption by Air Taxi Operators


Sec.  298.21  Filing for registration by air taxi operators.

    (a) Every air taxi operators who plans to commence operations under 
this part shall register with the Department not later than 30 days 
prior to the commencement of such operations, unless, upon a showing of 
good cause satisfactory to the Manager, Program Management Branch (AFS-
260), Federal Aviation Administration, registration within a lesser 
period of time is allowed.
    (b) The registration of an air taxi operator shall remain in effect 
until it is amended by the carrier or canceled by the Department.
    (c) Registration by all air taxi operators shall be accomplished by 
filing with the Department at the address specified in paragraph (d) of 
this section the following:
    (1) Air Taxi Registration (OST Form 4507), executed in 
duplicate.\6\ This form shall be certified by a responsible official 
and shall include the following information:
---------------------------------------------------------------------------

    \6\ OST Form 4507 can be obtained from the Manager, Program 
Management Branch, Federal Aviation Administration, AFS-260, or on 
the World Wide Web at http://www.faa.gov/avr/afs/afs200/afs260/Part298.cfm.
---------------------------------------------------------------------------

    (i) The name of the carrier and its mailing address;
    (ii) The carrier's principal place of business, if different from 
its mailing address, and its telephone number and fax number;
    (iii) The carrier's FAA certificate number, if any, and the address 
and telephone number of the carrier's local FAA office;
    (iv) The type of service the carrier will offer (scheduled 
passenger,\7\ scheduled cargo, mail under a U.S. Postal Service 
contract, on-demand passenger, on-demand cargo, or other service such 
as air ambulance operations, firefighting or seasonal operations);
---------------------------------------------------------------------------

    \7\ Companies proposing to provide scheduled passenger service 
at the level established by this Part for commuter air carriers are 
not permitted to conduct such operations under their air taxi 
registration; such companies must first be found fit, willing and 
able to operate and be issued a Commuter Air Carrier Authorization 
by the Department.
---------------------------------------------------------------------------

    (v) A list of the aircraft that the carrier proposes to operate, 
or, in the case of an amendment to the registration, the aircraft that 
it is currently operating in its air taxi operations, and the aircraft 
type, FAA registration number and passenger capacity of each aircraft;
    (vi) For initial registration, the proposed date of commencement of 
air taxi operations;
    (vii) For amendment, whether the carrier has carried passengers in 
foreign air transportation during the previous 12 months;
    (viii) Whether the carrier is a citizen of the United States; and
    (ix) A certification that the registration is complete and accurate 
and that, if the carrier is engaged in foreign air transportation, or 
participating in an interline agreement, it subscribes to the terms of 
Agreement 18900 (see OST Form 4523).
    (2) A certificate of insurance (OST Form 6410) which is currently 
effective (or in case of initial registration, is to become effective), 
as defined in part 205 of this chapter;
    (3) An 8 dollar ($8) registration filing fee in the form of a 
check, draft, or postal money order payable to the Department of 
Transportation.
    (d) Registrations required in paragraph (c) of this section shall 
be submitted to the Department of Transportation, Federal Aviation 
Administration, Program Management Branch (AFS-260), 800 Independence 
Avenue, SW., Washington, DC 20591. For those air taxi operators that 
have a mailing address in the State of Alaska, the registrants shall be 
filed with the Department of Transportation, Federal Aviation 
Administration, Alaskan Region Headquarters (AAL-230), 222 West 7th 
Avenue, Box 14, Anchorage, Alaska 99513.


Sec.  298.22  Processing by the Department.

    After examination of the OST Form 4507 submitted by the carrier, 
the Department will stamp the effective date of the registration on the 
form and return the duplicate copy to the carrier to confirm that it 
has registered with the Department as required by this part. The 
effective date of the registration shall not be earlier than the 
effective date of the insurance policy or policies named in the 
certificate of insurance filed by the carrier under Sec.  298.21(c)(2).


Sec.  298.23  Notifications to the Department of change in operations.

    (a) If any of the information contained on its registration 
changes, an air taxi operator shall submit an amendment reflecting the 
updated information. This amendment shall be filed no later than 30 
days after the change occurs. There is no filing fee for submitting an 
amendment.
    (b) An amendment shall be made by resubmitting OST Form 4507 to the 
Department of Transportation, Federal Aviation Administration, Program 
Management Branch (AFS-260), 800 Independence Avenue, SW., Washington, 
DC 20591. If the air taxi operator has a mailing address in the State 
of Alaska, the form shall be mailed to the Department of 
Transportation, Federal Aviation Administration, Alaskan Region 
Headquarters, (AAL-230), 222 West 7th Avenue, Box 14, Anchorage, Alaska 
99513.

[[Page 62843]]

Sec.  298.24  Cancellation of the registration.

    The registration of an air taxi operator may be canceled by the 
Department if any of the following occur:
    (a) The operator ceases its operations;
    (b) The operator's insurance coverage changes or lapses;
    (c) The operator fails to file an amended registration when 
required by Sec.  298.23;
    (d) The operator's Air Carrier Certificate and/or Operations 
Specifications is revoked by the Federal Aviation Administration;
    (e) The operator fails to qualify as a citizen of the United 
States;
    (f) The Department determines that it is otherwise in the public 
interest to do so.

Subpart D--Limitations and Conditions on Exemptions and Operations


Sec.  298.30  Public disclosure of policy on consumer protection.

    (a) Every air taxi and commuter air carrier shall cause to be 
displayed continuously in a conspicuous public place at each desk, 
station and position in the United States that is in charge of a person 
employed exclusively by it, or by it jointly with another person, or by 
any agent employed by it to sell tickets to passengers, a sign located 
so as to be clearly visible and readable to the traveling public, 
containing a statement setting forth the air taxi and commuter air 
carrier's policy on baggage liability and denied boarding compensation.
    (b) An air taxi or commuter air carrier shall provide a written 
notice on or with a passenger's ticket concerning baggage liability as 
provided in Sec.  254.5 of this chapter. These ticket notices are 
required only for passengers whose ticket includes a flight segment 
that uses large aircraft (more than 60 seats).
    (c) If the substantive terms of the counter sign and ticket notice 
required by this section differ, the terms contained in the required 
ticket notice govern.


Sec.  298.31  Scope of service and equipment authorized.

    Nothing in this part shall be considered as authorizing the 
operation of large aircraft in air transportation, and the exemption 
provided by this part to air taxi operators and commuter air carriers 
that register with the Department extends only to the direct operation 
in air transportation in accordance with the limitations and conditions 
of this part of aircraft originally designed to have a maximum 
passenger capacity of 60 seats or less or a maximum payload capacity of 
18,000 pounds or less.


Sec.  298.32  Limitation on operations to eligible places.

    No person shall provide scheduled passenger service as a commuter 
air carrier at an eligible place unless it has been found by the 
Department to be fit, willing, and able to conduct such service and 
issued a Commuter Air Carrier Authorization as provided in subpart E of 
this part.


Sec.  298.33  Security requirements.

    In conducting operations under this part, an air taxi operator or a 
commuter air carrier is required to adhere to all security requirements 
established by the Department of Transportation and the Department of 
Homeland Security applicable to such operations.


Sec.  298.34  [Reserved]


Sec.  298.35  Limitations on carriage of mail.

    An air taxi operator or commuter air carrier is not authorized to 
carry mail except pursuant to contract with the U.S. Postal Service 
entered into pursuant to section 5402 of the Postal Reorganization Act 
(39 U.S.C. 5402).


Sec.  298.36  Limitations on use of business name.

    (a) An air taxi operator or commuter air carrier in holding out to 
the public and in performing its services in air transportation shall 
do so only in the name or names in which its air carrier certificate is 
issued pursuant to section 44702 of the Statute by the Federal Aviation 
Administration, and in which it is registered with the Department under 
this part, or in which its Commuter Air Carrier Authorization is issued 
or other trade name is registered.
    (b) Slogans shall not be considered names for the purposes of this 
section, and their use is not restricted hereby.
    (c) Commuter air carriers are subject to the provisions of part 215 
of this chapter with regard to the use and change of air carrier names.
    (d) Neither the provisions of this section nor the grant of a 
permission hereunder shall preclude Department intervention or 
enforcement action should there be evidence of a significant potential 
for, or of actual, public confusion.


Sec.  298.37  Prohibition of services not covered by insurance.

    An air taxi operator or commuter air carrier shall not operate in 
air transportation or provide or offer to provide air transportation 
unless there is in effect liability insurance which covers such 
transportation and which is evidenced by a current certificate of 
insurance on file with the Department as required by part 205 of this 
chapter.


Sec.  298.38  Financial security arrangements for operating Public 
Charters.

    When an air taxi operator or commuter air carrier performs a Public 
Charter under part 380 of this chapter, either:
    (a) The air taxi operator or commuter air carrier shall meet the 
bonding or escrow requirements applicable to certificated air carriers 
as set forth in Sec.  212.8 of this chapter; or
    (b) The air taxi operator or commuter air carrier shall ensure that 
it does not receive any payments for the charter until after the 
charter has been completed. In this case, its contracts with the 
charter operator and the charter operator's depository bank, if any, 
shall state that the charter operator or bank, as applicable, shall 
retain control of and responsibility for all participant funds intended 
for payment for air transportation until the charter has been 
completed, notwithstanding any provision of part 380 of this chapter.

Subpart E--Commuter Air Carrier Authorizations


Sec.  298.50  Application.

    (a) Any person desiring to provide air transportation as a commuter 
air carrier must first obtain a Commuter Air Carrier Authorization. 
This shall be accomplished by filing with the Department--
    (1) An application in accordance with the requirements of parts 201 
and 302 of this chapter;
    (2) Data in accordance with part 204 of this chapter to support a 
determination by the Department that the person is ``fit, willing, and 
able'' to operate the proposed commuter service; and
    (3) A $670 filing fee in the form of a check, draft, or postal 
money order payable to the Department of Transportation.
    (b) An executed original and two true copies of an application for 
a Commuter Air Carrier Authorization shall be filed with Department of 
Transportation Dockets, 400 7th Street, SW., PL-401, Washington, DC 
20590.


Sec.  298.51  Processing by the Department.

    In processing applications filed in accordance with Sec.  298.50, 
the Department will generally follow the procedures set forth in 
Sec. Sec.  302.07 through 302.211 of this chapter.


Sec.  298.52  Air taxi operations by commuter air carriers.

    (a) A commuter air carrier that holds an effective Commuter Air 
Carrier Authorization and otherwise meets the requirements of this part 
is also authorized to conduct air taxi

[[Page 62844]]

operations (e.g., scheduled cargo, mail under a U.S. Postal Service 
contract, on-demand passenger, on-demand cargo, or other service such 
as air ambulance operations, firefighting or seasonal operations) 
without having to meet the registration requirements of subpart C of 
this part, except as provided in paragraph (b) of this section.
    (b) Should a commuter air carrier cease conducting all scheduled 
passenger operations and its Commuter Air Carrier Authorization is 
suspended pursuant to Sec. Sec.  298.53 and/or 204.7 of this chapter, 
it may continue to conduct air taxi operations provided that the 
carrier maintains in effect liability insurance coverage as required 
for such operations by part 205 of this chapter and, within 10 days of 
the cessation of scheduled passenger operations, registers as an air 
taxi operator in accordance with subpart C of this part; and provided 
further that the carrier continues to hold authority from the Federal 
Aviation Administration to conduct such air taxi operations.


Sec.  298.53  Suspension or revocation of authority.

    A Commuter Air Carrier Authorization may be suspended or revoked if 
any of the following occur:
    (a) The operator fails to maintain insurance coverage as required 
by part 205 of this chapter for commuter operations;
    (b) The scheduled passenger authority under the operator's Air 
Carrier Certificate is suspended or revoked by the Federal Aviation 
Administration;
    (c) The operator does not commence operations for which it has been 
found fit, or the operator ceases those operations as provided in Sec.  
204.7 of this chapter;
    (d) The Department finds that the carrier is not fit, willing, and 
able to conduct scheduled service or fails to qualify as a citizen of 
the United States; or
    (e) The Department determines that it is otherwise in the public 
interest to do so.

PART 380--PUBLIC CHARTERS

    16. The authority citation for part 380 continues to read as 
follows:

    Authority: 49 U.S.C. 40101, 40102, 40109, 40113, 41101, 41103, 
41301, 41504, 41702, 41708, 41712, 46101.


Sec.  380.2  [Amended]

    17. In Sec.  380.2 in the definition of Direct air carrier add the 
word ``, commuter'' after ``certificated''; remove the words ``or 
commuter air carrier'' after ``air taxi operator'' the first time that 
term is used; and add ``authorization,'' between ``certificate'' and 
``permit''.

PART 385--STAFF ASSIGNMENTS AND REVIEW OF ACTION UNDER ASSIGNMENTS

    18. The authority citation for part 385 continues to read as 
follows:

    Authority: 49 U.S.C. subtitle I, chapters 401, 411, 413, 415, 
417.


Sec.  385.12  [Amended]

    19. In Sec.  385.12(e), remove the words ``and commuter air 
carriers''.

PART 389--FEES AND CHARGES FOR SPECIAL SERVICES

    20. The authority citation for part 389 continues to read as 
follows:

    Authority: Sec. 204, 1002, Pub. L. 85-726, as amended, 72 Stat. 
743, 797; 49 U.S.C. 1324, 1502. Act of August 31, 1951, ch. 376, 65 
Stat. 268; 31 U.S.C. 483a.


Sec.  389.25  [Amended]

    21. In Sec.  389.25(a), in the table, under the entry Code 7, 
remove the words ``Scheduled Passenger Commuter Registration'' and add, 
in their place, ``Commuter Air Carrier Authorization''.

Karan K. Bhatia,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 04-23859 Filed 10-27-04; 8:45 am]
BILLING CODE 4910-62-M