GAO-02-167R

United States General Accounting Office

Washington, DC 20548

B-289153

October 25, 2001

The Honorable Ernest F. Hollings

Chairman

The Honorable John McCain

Ranking Minority Member

Committee on Commerce, Science, and Transportation

United States Senate

The Honorable Don Young

Chairman

The Honorable James L. Oberstar

Ranking Minority Member

Committee on Transportation and Infrastructure

House of Representatives

Subject: Office of Management and Budget: Regulations for Air Carrier Guarantee

Loan Program Under Section 101(a)(1) of the Air Transportation Safety and

System Stabilization Act

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a

major rule promulgated by the Office of Management and Budget (OMB), entitled

“Regulations for Air Carrier Guarantee Loan Program Under Section 101(a)(1) of the

Air Transportation Safety and System Stabilization Act” (14 CFR Chapter VI and Part

1300). We received the rule on October 9, 2001. It was published in the Federal

Register as a final rule on October 12, 2001. 66 Fed. Reg. 52270.

The final rule sets forth the procedures for applications and minimum requirements

for the issuance of federal credit instruments under section 101(a)(1) of the Air

Transportation Safety and System Stabilization Act (ATSSSA). The purpose of these

federal credit instruments is to assist air carriers who suffered losses due to the

terrorist attacks on September 11, 2001, and to whom credit is not otherwise

reasonably available, in order to facilitate a safe, efficient, and viable commercial

aviation system in the United States.

Enclosed is our assessment of OMB’s compliance with the procedural steps required

by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. Our review

indicates that OMB complied with the applicable requirements.
Page 2 GAO-02-167R

If you have any questions about this report, please contact James W. Vickers,

Assistant General Counsel, at (202) 512-8210. The official responsible for GAO

evaluation work relating to the subject matter of the rule is John Anderson,

Managing Director, Physical Infrastructure. Mr. Anderson can be reached at (202)

512-2834.

signed

Kathleen E. Wannisky

Managing Associate General Counsel

Enclosure

cc: Mr. Jay P. Lefkowitz

General Counsel

Office of Management and Budget
GAO-02-167R

ENCLOSURE

ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE

ISSUED BY THE

OFFICE OF MANAGEMENT AND BUDGET

ENTITLED

"REGULATIONS FOR AIR CARRIER GUARANTEE LOAN PROGRAM

UNDER SECTION 101(A)(1) OF THE AIR TRANSPORTATION SAFETY

AND SYSTEM STABILIZATION ACT"

(14 CFR CHAPTER VI AND PART 1300)

(i) Cost-benefit analysis

OMB states that the application procedure and minimum requirements will apply to

up to $10 billion in loan guarantees, which guarantees will translate into a “credit

subsidy” of some amount not yet determined. The benefits of the final rule will be to

mitigate the costs incurred by the airline industry including transaction costs

associated with business closings due to short-run financial or economic

dislocations caused by the September 11 attacks.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,

607, and 609

The Director of OMB has certified that the final rule will not have a significant

economic impact on a substantial number of small entities.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform

Act of 1995, 2 U.S.C. §§ 1532-1535

The final rule does not contain an intergovernmental or private sector mandate, as

defined in title II, of more than $100 million in any one year.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

As the ATSSSA required that OMB issue regulations not later than 14 days after

enactment, OMB issued the final rule without notice and comment and effective

upon publication under the exemptions provided under 5 U.S.C. 553(b)(B) and

553(d). In addition, OMB cites section 553(a) of the Administrative Procedure Act

(APA) which provides that the rulemaking requirements of the APA do not apply to

agency actions that concern “loans, grants, benefits, or contracts.”
Page 2 GAO-02-167R

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

The information collection requirements of the final rule have been approved by

OMB on an emergency basis and assigned OMB Control No. 0348-0059. OMB

estimates there may be up to 150 respondents under this program and the total

annual burden would be 6,000 hours or $300,000, assuming a $50 per hour cost.

Statutory authorization for the rule

The final rule is promulgated under the authority contained in section 102(c)(2)(B)

of the Air Transportation Safety and System Stabilization Act, Public Law 107-42.

Executive Order No. 12866

The final rule was reviewed by OMB and found to be an “economically significant”

regulatory action under the order.

Executive Order No. 13132 (Federalism)

The final rule does not have sufficient federalism implications to warrant the

preparation of a federalism assessment.