Document ID: DOT-OST-2011-0119-0001
Agency: dot
Document Type: Notice
Title: Orders Soliciting Community Proposals
Posted Date: 2011-07-01T04:00Z

[Federal Register Volume 76, Number 127 (Friday, July 1, 2011)]
[Notices]
[Pages 38944-38959]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16727]

[[Page 38943]]

Vol. 76

Friday,

No. 127

July 1, 2011

Part VIII

Department of Transportation

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Notice of Order Soliciting Community Proposals; Notice

  Federal Register / Vol. 76, No. 127 / Friday, July 1, 2011 / 
Notices  

[[Page 38944]]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

[Docket No. DOT-OST 2011-0119]

Notice of Order Soliciting Community Proposals

AGENCY: Department of Transportation, Office of the Secretary.

ACTION: Notice of Order Soliciting Community Proposals (Order 2011-7-
1).

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SUMMARY: The Department of Transportation is soliciting proposals from 
communities or consortia of communities interested in receiving a grant 
under the Small Community Air Service Development Program. The full 
text of the Department's order is attached to this document. There are 
two mandatory requirements for filing of applications, both of which 
must be completed for a community's application to be deemed timely and 
considered by the Department. The first requirement is the submission 
of the community's proposal, as described below; the second requirement 
is the filing of SF424 through http://www.grants.gov.

DATES: Grant Proposals as well as the SF424 should be submitted no 
later than August 2, 2011.

ADDRESSES: Interested parties can submit applications and the SF424 
electronically through http://www.grants.gov.

FOR FURTHER INFORMATION CONTACT: Aloha Ley, Office of Aviation 
Analysis, 1200 New Jersey Ave, SE., W86-310, Washington, DC 20590, 
(202) 366-2347.

SUPPLEMENTARY INFORMATION: 

Overview

    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 Program (Small 
Community Program and/or SCASDP) to address air service and airfare 
problems in their communities. Proposals, including all required 
information, must be submitted to http://www.grants.gov no later than 5 
p.m., Eastern Daylight Time (EDT), on Tuesday, August 2, 2011. 
Communities are reminded to register with Grants.gov early in the 
application period since the mandatory Grants.gov registration process 
can take up to three weeks to complete. Tutorials and other guidance 
for completing the required registration and application procedures are 
available at the ``Applicant Resources'' page of Grants.gov.\1\ If a 
community is a registered user of Grants.gov, it is the community's 
responsibility to verify that the Grants.gov account is valid and that 
the AOR (Authorized Organization Representative) is current and 
approved.
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    \1\ See http://www07.grants.gov/applicants/app_help_reso.jsp.
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Required Steps

     Determine eligibility (see Page 4);
     Register with http://www.grants.gov;
     Submit an Application for Federal Domestic Assistance 
(SF424);
     Submit a cover sheet including all required information 
(see Appendix B);
     Submit a completed ``Summary Information'' schedule (see 
Appendix C);
     Submit a detailed proposal which meets all required 
criteria (see Appendix D);
     Attach any letters of support to the proposal, which 
should be addressed to Aloha Ley, Associate Director, Small Community 
Program; and,
     Provide separate submission of confidential material, if 
requested. (see Appendix E)
    An application will not be deemed complete and will be ineligible 
for a grant award until and unless all required materials, including 
SF424, have been submitted through http://www.grants.gov by the 5 p.m. 
EDT August 2, 2011, deadline.
    This order is organized into the following sections:

I. Background
II. Eligibility Information
III. Types of Projects
IV. Application Review Information
V. Award Administration Information
VI. Appendix A--49 U.S.C. Sec.  41743
VII. Appendix B--Cover Sheet Contents
VIII. Appendix C--Summary Information
IX. Appendix D--Application Checklist
X. Appendix E--Confidential Commercial Information

I. Background

    The Small Community Program was established under the Wendell H. 
Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), 
Pubic Law 106-181, and reauthorized under the Vision 100-Century of 
Aviation Reauthorization Act, Public Law 108-176 (Vision 100). The 
program is designed to provide financial assistance to small 
communities to help them enhance their air service. The Department 
provides this assistance in the form of financial grants that are 
disbursed on a reimbursable basis.\2\
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    \2\ For detailed background on the Small Community Program, see 
our Web site at: http://ostpxweb.dot.gov/aviation/X-50%20Role_files/smallcommunity.htm.
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    Authorized grant projects may include activities that extend over a 
multi-year period under a single grant award; however, because there is 
a priority established by statute for communities and consortia that 
show that they can use the assistance ``in a timely fashion,'' 
applicants are advised to consider that criterion in developing their 
proposals.

Current funding and limitations

    The Small Community Program is authorized to receive appropriations 
under 49 U.S.C. 41743(e)(2), as amended. Appropriations are provided 
for the program pursuant to Section 1104 of the FY 2011 Full-Year 
Continuing Appropriations Act (Pub. L. 112-10 (extending the FY 2010 
Consolidated Appropriations Act (Pub. L. 111-117)). The Department has 
up to $15 million available for FY 2011 grant awards to carry out the 
Small Community Program.
    The program is limited to a maximum of 40 grant awards, with a 
maximum of four grants per State, in each year the program is funded. 
There are no limits on the amounts of individual awards, and the 
amounts awarded will vary depending upon the features and merits of the 
proposals selected. In past years, the Department's individual grant 
sizes have ranged from $20,000 to nearly $1.6 million.

II. Eligibility Information

Registration With Grants.Gov

    Communities not previously registered are encouraged to register 
with http://www.grants.gov early during the application period because 
the registration and SF424 application process required by http://www.grants.gov can take up to three weeks to complete. A community may 
file its proposal anytime after the initial registration process has 
been completed on http://www.grants.gov as long as the entire 
application is filed by August 2, 2011.
    Communities are encouraged to contact the Grants.gov help desk for 
any technical assistance in filing their applications. The Grants.gov 
``Applicant Resources'' page (http://www07.grants.gov/applicants/app_help_reso.jsp) provides instructions and guidance on completing the 
registration and application processes. Further, grant proposals must 
be submitted as an attachment to the SF424.

Eligibility Requirements

    When selecting applicants to participate in the Small Community

[[Page 38945]]

Program, the Department is statutorily required to apply the following 
eligibility criteria: \3\
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    \3\ 49 U.S.C. 41743(c).
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    1. As of calendar year 1997, the airport serving the community was 
not larger than a small hub airport, and it has insufficient air 
carrier service or unreasonably high air fares,
    2. The airport serving the community presents characteristics, such 
as geographic diversity or unique circumstances that demonstrate the 
need for, and feasibility of, grant assistance from the Small Community 
Program;
    3. An applicant may not receive an additional grant to support the 
same project from a previous grant;
    4. An applicant may not receive an additional grant, prior to the 
completion of its previous grant;
    5. No more than 4 communities or consortia of communities, or a 
combination thereof, from the same State may be selected to participate 
in the program in any fiscal year; and
    6. No more than 40 communities or consortia of communities, or a 
combination thereof, may be selected to participate in the program in 
each year for which the funds are appropriated.
    In assessing whether a previous grantee's current proposal 
represents a new project, we compare the goals and objectives of the 
earlier grant, including the key components of the means by which those 
goals and objectives were to be achieved, to the current proposal. For 
example, if a community received an earlier grant to support a revenue 
guarantee for service to a particular destination or direction, a new 
application for another revenue guarantee for the same service would be 
disqualified under Section 41743(c), even if the revenue guarantee were 
structured differently or the type of carrier were different. However, 
we do not read Section 41743(c) to disqualify a new application for 
service to a new destination or direction using a revenue guarantee, or 
for general marketing of the airport and the various services it 
offers. We recognize that not all revenue guarantees, marketing 
agreements, equipment purchases, etc. are of the same nature, and that 
if a subsequent proposal incorporates different goals or significantly 
different components, it may be sufficiently different to constitute a 
new project under Section 41743(c).
    The Department is authorized to award grants to communities that 
seek to provide assistance to:
     An air carrier to subsidize service to and from an 
underserved airport for a period not to exceed 3 years;
     An underserved airport to obtain service to and from the 
underserved airport; and/or
     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.\4\
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    \4\ 49 U.S.C. 41743(d).
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Priority Considerations

    Priority factors considered. The law directs the Department to give 
priority consideration to those communities or consortia where: \5\
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    \5\ 49 U.S.C. 41743(c)(5).
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     Air fares are higher than the national average air fares 
for all communities;
     The community or consortium will provide a portion of the 
cost of the activity from local sources other than airport revenue 
sources;
     The community or consortium has established or will 
establish a public-private partnership to facilitate air carrier 
service to the public;
     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; and
     The assistance will be used in a timely manner.
    Additional factors considered. Applications will be evaluated 
against the priority considerations listed above. Our experience has 
been that more applications are received than can be funded under the 
Small Community Program. Consequently, consistent with the criteria 
stated above, the selection process will take into consideration such 
additional factors as:
     The geographic location of each applicant, including the 
community's proximity to larger centers of air service and low-fare 
service alternatives;
     The proposed Federal grant amount requested compared with 
the local share offered;
     Whether the applicant community has previously received a 
grant award under this program and, if so, whether its application 
includes an explanation of how the community's proposed project differs 
from its previously funded project;
     The community's demonstrated commitment to and 
participation in the proposed grant project;
     The extent to which the applicant's proposed solution(s) 
to solving the problem(s) is new or innovative;
     The population and business activity as well as the 
relative size of each applicant community;
     The community's existing level of air service and whether 
that service has been increasing or decreasing;
     Whether the community's proposal, if successfully 
implemented, could serve as a working model for other communities;
     The grant amount requested compared with total funds 
available for all communities;
     Whether the community has a viable plan to use the funds 
in a timely manner;
     The uniqueness of an applicant's claimed problems and 
whether the proposed project clearly addresses the applicant's claimed 
problems; and
     Whether the community's proximity to an existing or prior 
grant recipient could adversely affect either its proposal or the 
project undertaken by the other recipient.
    Full community participation is a key goal of this program as 
demonstrated by the statute's focus on local contributions and active 
participation in the project. Therefore, applications that demonstrate 
broad community support will be more attractive. For example, 
communities providing proportionately higher levels of cash 
contributions from other than airport revenues will have more 
attractive proposals. Communities that provide multiple levels of 
contributions (state, local, airport, cash and in-kind contributions) 
also will have more attractive proposals. Similarly, communities that 
demonstrate participation in the development and execution of the 
proposed air service project will enhance the attractiveness of their 
proposals. In this regard, the Department welcomes letters of intent 
from airlines on behalf of community proposals that are specifically 
intended to enlist new or expanded air carrier presence. Such letters 
will be accorded greater weight when authorized by airline planning 
departments.
    Proposals that offer innovative solutions to the transportation 
issues facing the community will be more attractive. Small communities 
have faced many problems retaining and improving their air services and 
in coping with air fares that are higher than typical for larger 
communities. Therefore, proposals that offer new, creative approaches 
to addressing these problems, to the extent that they are

[[Page 38946]]

reasonable, will have their attractiveness enhanced. Proposals that 
provide a well-defined plan, a reasonable timetable for use of the 
grant funds, and a plan for continuation and/or monitoring of the 
project after the grant expires also will have greater attractiveness.

Additional Criteria and Grant Limitations

    Communities without existing air service. Communities that do not 
currently have commercial air service are also eligible, but air 
service providers must have met or be able to meet in a reasonable 
period all Departmental requirements for air service certification, 
including safety and economic authorities.
    Essential Air Service communities. Small communities that meet the 
basic criteria and currently receive subsidized air service under the 
Essential Air Service (EAS) program are eligible to apply for funds 
under the Small Community Program. However, grant awards to EAS-
subsidized communities are limited to marketing or promotion projects 
that support existing or newly subsidized EAS. Grant funds will not be 
authorized for EAS-subsidized communities to support any new competing 
air service. Furthermore, no funds will be authorized to support 
additional flights by EAS carriers or changes to those carriers' 
existing schedules. These restrictions are necessary to avoid conflicts 
with the EAS program.
    Consortium applications. The statute permits individual communities 
and consortia of communities to apply for grant awards under this 
program. In some instances in the past, several communities in a State 
have filed a single application as a ``consortium,'' but in effect the 
application was a collection of individual community requests involving 
different projects. This is not a consortium. An application from a 
consortium of communities must be one that seeks to facilitate the 
efforts of the communities working together toward a joint grant 
project. In other words, the application must set forth one grant 
project, with one joint objective, and establish one entity to ensure 
that the joint objective is accomplished according to the terms of a 
grant agreement. For example, several communities surrounding an 
airport may apply together to improve air services at that airport, 
with a joint objective of securing new or additional service to that 
airport. Or, surrounding airports may apply together in support of a 
regional plan to lower fares or reverse a decline in traffic.
    Prior grant recipients. Communities or members of a consortia that 
were awarded grants in previous years and want to apply for a grant 
this year should be aware that they are precluded from seeking new 
funds for projects for which they have already received an award under 
the Small Community Program.
    In its application, a community that is a previous grant recipient 
should compare and contrast its proposed project with its previously 
funded one(s) to demonstrate why its latest proposal represents a new 
project. Communities should also note that in prior years of the 
program, interest in participation exceeded the funds available in any 
one year. For this reason, the fact that a community has already 
received one or more grants will be a consideration when comparing its 
new proposal with those of other applicant communities.
    Concurrent applications. A community or member of a consortium may 
participate in the program a subsequent time only after its 
participation in a prior grant has terminated. 49 U.S.C. 41743(c)(4). 
Simply stated, a community can have only one Small Community Program 
grant at any time. If a grant applicant is applying for a subsequent 
grant and its current grant has not yet expired, it must notify the 
Department of its intent to terminate the current grant prior to 
entering into the new grant. In addition, for grant applicants that are 
members of a consortia grant, permission must be granted from both the 
grant sponsor and the Department to withdraw from the current grant 
prior to being eligible to receive a subsequent grant.
    Multiple Applications. The Department requests that communities 
file only one application for a grant. In the past, some communities 
have filed both individual applications and applications as part of a 
consortium. In many cases these applications have involved the same 
project at the same or different funding levels. We will not consider 
the stand-alone application if a community is also submitting a largely 
identical request as part of a consortium. To the extent that a 
community files separately and as part of a consortium for 
complementary projects--for example, one for a revenue guarantee and 
one for marketing--we will consider such proposals. However, 
communities should be aware that they can receive only one grant, 
either the stand-alone grant or as a member of a consortium, because no 
community can have concurrent grants.
    Market analysis and a complementary marketing commitment. A 
thorough understanding of the target market is essential for the 
ultimate success of new or expanded air service. Likewise, the chances 
that such a service will become self-sustaining are enhanced when its 
implementation is supported by a well-designed marketing campaign. For 
these reasons, communities requesting funds for a revenue guarantee/
subsidy/financial incentive are encouraged to include in their 
proposals an in-depth analysis evidencing close familiarity with their 
target markets. Such communities also are encouraged to designate in 
their proposals a portion of the project funds (Federal, local or in-
kind) for the development and implementation of a marketing plan in 
support of the service sought.
    Subsidies for a carrier to compete against an incumbent. The 
Department is reluctant to subsidize one carrier but not others in a 
competitive market. For this reason, communities that propose to use 
the grant funds for service in a city-pair market that is already 
served by a carrier must explain in detail why the existing service is 
insufficient or unsatisfactory, or provide other compelling information 
to support such proposals. This information is necessary for the 
Department to consider the competitive implications of giving financial 
or other tangible incentives for one carrier that the other carrier is 
not receiving.
    Cost Sharing and Local Contributions Are Important Factors. The 
statute does not require communities to contribute toward a grant 
project, but those communities that contribute from local sources other 
than airport revenues are accorded priority consideration. One core 
objective of the Small Community Program is to promote community 
involvement in addressing air service/air fare issues through public/
private partnerships. As a financial 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 
demonstrates a greater commitment towards achieving the stated goals. 
The Department has historically received many more applications than 
can be accommodated and nearly all of those applications have proposed 
a community financial contribution to the project. Thus, proposals that 
propose a community financial contribution will be given priority 
consideration.
    Applicant communities should be aware that, if awarded a grant, the 
Department will not reimburse the community for pre-award expenses such 
as the cost of preparing the grant application or for any expenses 
incurred prior to the community executing a

[[Page 38947]]

grant agreement with the Department. In addition, ten percent of the 
grant funds will be withheld until the Department receives the final 
report on the grant project. See ``Award Administration Information,'' 
below.
    Types of contributions. Contributions should represent a new 
financial commitment or new financial resources devoted to attracting 
new or improved service, or addressing specific high-fare or other 
service issues, such as improving patronage of existing service at the 
airport. Contributions from already-existing programs or projects 
(e.g., designating a portion of an airport's existing annual marketing 
budget to the project) are considered less favorably than contributions 
for new and innovative programs or projects. For those communities that 
propose to contribute to the grant project, that contribution can be in 
the following forms:
    Cash from non-airport revenues. A cash contribution can include 
funds from the State, the County or the local government, and/or from 
local businesses, or other private organizations in the community. 
Contributions that are comprised of intangible non-cash items, such as 
the ``value'' of donated advertising, are considered ``in-kind'' 
contributions (see further discussion below).
    Cash from airport revenues. This includes contributions from funds 
generated by airport operations. Airport revenues may not be used for 
revenue guarantees to airlines.\6\ Community proposals that include 
local contributions based on airport revenues do not receive priority 
consideration for selection.
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    \6\ 49 U.S.C. 47107, 47133.
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    In-kind contributions from the airport. This can include such items 
as waivers of landing fees, terminal rents, fuel fees, and/or vehicle 
parking fees.
    In-kind contributions from the community. This can include such 
items as donated advertising from media outlets, catering services for 
inaugural events, or in-kind trading, such as advertising in exchange 
for free air travel. Travel banks and travel commitments/pledges are 
considered to be in-kind contributions,\7\ as are reduced fares offered 
by airlines.
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    \7\ A travel ``bank'' involves the actual deposit of funds from 
participating parties (e.g., businesses, individuals) into a 
designated bank account for the purpose of purchasing air travel on 
the selected airline, with defined procedures for the subsequent use 
or withdrawal of those funds under an agreement with the airline. 
Often, however, what communities refer to as a travel ``bank'' in 
reality involves travel ``pledges'' from businesses in the community 
without any collection of funds or formal procedures for use of the 
funds. As with other types of in-kind contributions, the Department 
views travel banks and pledges included in grant proposals as an 
indicator of local community support.
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    Cash vs. in-kind contributions. Communities that include local 
contributions made in cash are given priority consideration for 
selection.
    Financial commitments must be fulfilled. Applicant communities 
should note that, as part of the grant agreement between the Department 
and the community, the community has legally committed itself to 
fulfilling its proposed financial contribution to the project and that 
its failure to meet this commitment could lead the Department to 
terminate the grant. Community participation in all aspects of the 
proposal, including the financial aspects, is critical to the success 
of the authorized project initiative. Furthermore, communities cannot 
propose a certain level of cash contribution from non-airport sources, 
and subsequent to being awarded a grant, seek to substitute or replace 
that contribution with either ``in-kind'' contributions or 
contributions from airport revenues, or both. Given the statute's 
priority for contributions from non-airport sources and the competitive 
nature of the selection process, a community's grant award could be 
reduced or terminated altogether if it is unable to replace the 
committed funds from non-airport revenue sources.
    Payment Reimbursement Receipts: The Small Community Program is a 
reimbursable program; therefore, communities are required to make 
expenditures in full for project implementation under the program prior 
to seeking reimbursement from the Department. Reimbursement rates are 
calculated as a percentage of the total Federal funds requested divided 
by the Federal funds plus the local cash contribution (which is not 
refundable). Payments/expenditures in forms other than cash (e.g. in-
kind) are not reimbursable. For example, if a community requests 
$500,000 in Federal funding and provides $100,000 in local contribution 
the reimbursement rate would be 83.33 percent: ((500,000)/(500,000 + 
100,000)) = 83.33.

III. Types of Projects

    The statute is very general about the types of projects that can be 
authorized so that communities are provided flexibility in addressing 
their particular air service and airfare issues. Because circumstances 
may differ among communities, applicants have some latitude in 
identifying their own objectives and developing strategies for 
accomplishing them.
    The major objective of the Small Community Program is to help 
communities secure enhancements that will be responsive to their air 
transportation/air fare needs on a long-term basis after the financial 
support of the grant has ended. There are many ways that a community 
might enhance its current air service or attract new service, such as:
     Promoting awareness among residents of locally available 
service;
     Attracting a new carrier through revenue guarantees or 
operating cost offsets;
     Attracting new forms of service, such as on-demand air 
taxi service;
     Offering an incumbent carrier financial or other 
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;
     Combining traffic support from surrounding communities 
with regionalized service through one airport; or
     Providing local ground transportation service to improve 
access to air service to the community and the surrounding area.\8\
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    \8\ These examples are illustrative only and are not meant as a 
list of projects favored by the Department. Interested communities 
can view actual proposals submitted in prior years. Go to http://www.regulations.gov and, under ``Search,'' enter one of the 
following depending on the desired filing year: DOT-OST-2002-11590, 
DOT-OST-2003-15065, DOT-OST-2004-17343, DOT-OST-2005-20127, DOT-OST-
2006-23671; DOT-OST-2007-27370, DOT-OST-2008-0100, DOT-OST-2009-
0149, and DOT-OST-2010-0124.
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    The SCASDP program has already supported numerous standard revenue 
guarantee and marketing projects; there is an increased prospect for 
favorable consideration if the proposal offers distinctive or creative 
aspects or features that have potential for establishing new and better 
practices. At the same time, proposals must not be general, vague, or 
unsupported. The more highly defined and focused the proposal, the more 
competitive it will be, particularly in light of the priority 
consideration afforded by the statute to those applicants that can use 
the funds in a timely manner. 49 U.S.C. 41743(c)(5)(E).

Additional Information

    There is no set format that must be used in submitting grant 
proposals. At a minimum, however, a proposal must provide the following 
information:
     A description of the community's existing air service, 
including the carrier(s) providing service, service

[[Page 38948]]

frequency, nonstop destinations offered, fares, and equipment types.
     A synopsis of the community's historical service, 
including destinations, traffic levels, service providers, and any 
extenuating factors that might have affected traffic in the past or 
that can be expected to influence service needs in the near to 
intermediate term.
     A description of the community's air service development 
efforts over the past five years and the results of those efforts. The 
community should describe past air service development efforts and 
their results in its grant proposal. The description should include 
marketing and promotional efforts of airport services as well as 
efforts to recruit additional or improved air service and airfare 
initiatives.
     A description of the community's air service needs or 
deficiencies. A community should submit any information about (1) major 
origin/destination markets that are not now served or are not served 
adequately, and (2) fare levels that the community deems relevant to 
consideration of its grant request, including market analyses or 
studies demonstrating an understanding of local air service needs.
     A strategic plan for meeting those needs under the Small 
Community Program, including the community's specific project goal(s) 
and detailed plan for attaining such goal(s). Plans should:
    [cir] Clearly identify the target audience of each component of the 
proposed transportation initiative, including all advertising and 
promotional efforts.
    [cir] Set forth a realistic timetable for implementation of the 
grant project including a timeline chart. Because the statute includes 
timely use of the grant funds as a priority consideration, a community 
must have a well-developed project plan and a detailed timetable for 
implementing that plan. In establishing the timetable, however, the 
community should be realistic about its ability to meet its project 
deadlines.\9\
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    \9\ The projected timetable will be an integral part of the 
grant agreements between the selected communities and the 
Department. Therefore, there is no advantage to a community in 
proposing an aggressive timetable that cannot be met, and there may 
be disadvantages if the community finds that it cannot meet its 
timetable or if its timeline is deemed unrealistic. Communities 
should carefully consider all factors affecting implementation of 
their projects and develop realistic timeframes for achieving those 
objectives.
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    [cir] For proposals involving new or improved service, explain how 
the service will become self-sufficient. Under the statute, a community 
cannot seek grant funding in subsequent years in support of the same 
project. Moreover, in developing a proposal, it is important that a 
community seriously consider the scale of its proposed project and the 
timetable for achieving the stated goals. To the extent that a proposed 
project is dependent upon or relevant to the completion of other 
Federally funded capital improvement projects, the community should 
provide a description of, and the construction time-line for, those 
projects, keeping in mind the statutory requirement to use Small 
Community Program funding in a timely manner.
    [cir] Fully and clearly outline the goals and objectives of the 
project; e.g., ``to broaden the awareness by residents in the Tri-
County area of the various services provided by passenger carriers at 
the Tri-County airport,'' or ``to obtain new and affordable service to 
a hub airport in a direction where there is no such service.'' When an 
application is selected, these goals and objectives will be 
incorporated into the grant agreement and define its basic project 
scope. Once an agreement is signed, if circumstances change and an 
amendment is sought to allow for different activities or a different 
approach, the Department will look to whether the change being sought 
is consistent with those fundamental project goals and objectives. 
Proposed changes that would alter those fundamental goals and 
objectives cannot be authorized, because doing so would undermine the 
competitive nature of the selection process. Applicants are also 
encouraged to include in their proposals alternative or back-up 
strategies for achieving their desired goals and objectives. By 
incorporating such information into the grant agreement, desired 
changes may be permitted.
    [cir] Include metrics by which progress towards goals will be 
measured, the source(s) of those data, and how the data will be 
analyzed.
    [cir] If the applicant received a Small Community Program grant in 
the past, explain how its proposed project differs from its earlier one 
by comparing and contrasting project goals, objectives and methods of 
achieving them.
     A description of any public-private partnership that will 
participate in the project. Full community involvement is a key aspect 
of the Small Community Program. The statute gives priority to those 
communities that already have established, or will establish, a public-
private partnership to facilitate air service to the public. The 
proposal should fully describe the public-private partnership that will 
participate in the community's proposal and how the partnership will 
actively participate in the implementation of the proposed project. In 
addition, applicants should identify each member of the partnership, 
the role that each will play, and the specific responsibilities of each 
member in project implementation. If the application does not include 
specific information on the partnership participation in the project, 
the Department will not be able to evaluate how well a community has 
met this consideration, and the applicant will not be deemed to have 
met this priority consideration in the Department's evaluation of the 
community's proposal.
     A detailed description of the funding necessary for 
implementation of the community's project, including the Federal and 
non-Federal contributions. Proposals should clearly identify the level 
of Federal funding sought. They should also clearly identify the 
community's cash contributions to the proposed project, ``in-kind'' 
contributions from the airport, and ``in-kind'' contributions from the 
community. Cash contributions from airport revenues should be 
identified separately from cash contributions from other community 
sources. Similarly, cash contributions from the State and/or local 
government should be separately identified and described.
     An explanation of how the community will ensure that its 
own funding contribution is spent in the manner proposed.
     Descriptions of how the community will monitor the 
progress of the grant project and identification of a list of critical 
milestones to be met during the life of the grant, including the need 
to modify or discontinue funding if the community cannot achieve such 
milestones. This is an important component of the community's proposal 
and serves to demonstrate the thoroughness of the community's planning 
of the proposed grant project.
     A description of how the community plans to continue with 
the project if it is not self-sustaining after the grant award expires. 
A particular goal of the Small Community Program is to provide long-
term, self-sustaining improvements to air service for small 
communities. A community cannot seek further grant funding in support 
of the same project. 49 U.S.C. 41743(c)(4). It is possible that new or 
improved service at a community will be well on its way to becoming a 
self-sustaining service, but it may not have reached that goal before 
the grant expires. Similarly, it is possible that extensive marketing 
and promotional efforts may be in progress, but not have been completed 
at the end of the grant period and will require

[[Page 38949]]

continued support.\10\ Therefore, in developing its proposal, the 
community should carefully consider and describe in detail its plans 
for providing any necessary continued financial support for the project 
after the grant funding is no longer available. This aspect of the 
application reflects the community's commitment to the grant project 
and is an important component to the Department's consideration of the 
community's proposal for selection for a grant award.
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    \10\ Project implementation costs are reimbursable from grant 
funds only for services or property delivered during the grant term.
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     Designation of a legal sponsor responsible for 
administering the program. The legal sponsor of the grant project must 
be a government entity. If the applicant is a public-private 
partnership, a public government member of the organization must be 
identified as the community's sponsor to receive program 
reimbursements. In this regard, communities can designate only a single 
government entity as the legal sponsor, even if it is applying as a 
consortium that consists of two or more local government entities. 
Private organizations cannot be designated as the legal sponsor of a 
grant under the Small Community Program.\11\
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    \11\ The community has the responsibility to ensure that the 
recipient of any funding has the legal authority under State and 
local laws to carry out all aspects of the grant.
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Air Service Development Zone Designation
    The statute authorizing the Small Community Program also provides 
that the Department will designate one of the grant recipients as an 
Air Service Development Zone. The purpose of the designation is to 
provide communities interested in attracting business to the area 
surrounding the airport and/or developing land-use options for the area 
to work with the Department on means to achieve those goals. The 
Department will assist the designated community in establishing 
contacts with and obtaining advice and assistance from appropriate 
government agencies, including the Department of Commerce as well as 
other offices within the Department of Transportation, and in 
identifying other pertinent resources that may aid the community in its 
efforts to attract businesses and to formulate land-use options. 
However, the community receiving the designation will be responsible 
for developing, implementing, and managing activities related to the 
air service development zone initiative. Only communities that are 
interested in these objectives and have a plan to accomplish them 
should compete for the available designation. There are no additional 
funds associated with this designation, and applying for the 
designation will provide no special benefit or preference to a 
community in receiving a grant award under the Small Community Program.
    Grant applicants interested in selection for the Air Service 
Development Zone designation must include in their applications a 
separate section, titled, Support for Air Service Development Zone 
Designation. That section should include:
    [cir] Detailed information regarding the property and facilities 
available for development such as an existing airpark or land for such 
an airpark;
    [cir] The other modes of transportation that would be available to 
support additional economic development, such as rail, road, and/or 
water access;
    [cir] Information concerning historic, existing, and any future 
business activity in the area that would support further development;
    [cir] Demographic information concerning the community and its 
environs relevant to the developmental efforts, including population, 
employment, and per capita income data; and
    [cir] Any other information that the community believes is relevant 
to its plans to enhance air service development.
    The community should provide as detailed a plan as possible, 
including what goals it expects to achieve from the air service 
development zone designation and the types of activities on which it 
would like to work with the Department in achieving those goals. The 
community should also indicate whether further local government 
approvals are required in order to implement the proposed activities.

IV. Award Administration Information

    The grant awards will be made as promptly as possible so that 
selected communities can complete the grant agreement process and 
proceed to implement their plans. Given the competitive nature of the 
grant process, the Department will not meet with grant applicants with 
respect to their grant proposals.
    The Department will announce its grant selections via a selection 
order, which will be served on each grant recipient, all other 
applicants, and all parties served with this solicitation order. The 
selection order will also be on the Department's Small Community 
Program Web page.
    Grant agreement. Communities awarded grants are required to execute 
a grant agreement with the Department before they begin to expend funds 
under the grant award. Grant funds will be provided on a reimbursable 
basis only, with reimbursements made only for expenses incurred and 
billed during the period that the grant agreement is in effect and at 
the appropriate percentage rate.\12\ Applicants should not assume they 
have received a grant, nor should they obligate or expend local funds 
prior to receiving and fully executing a grant agreement with the 
Department. Expenditures made prior to the execution of a grant 
agreement, including costs associated with preparation of the grant 
application, will not be reimbursed. Moreover, there are numerous 
assurances that grant recipients must sign and honor when Federal funds 
are awarded. All communities receiving a grant under the Small 
Community Program will be required to accept the responsibilities of 
these assurances and to execute such the assurances when they execute 
their grant agreements. Copies of the applicable assurances are 
available for review on the Department's Web page at http://ostpxweb.dot.gov/aviation/X-50%20Role_files/smallcommunity.htm (click 
on ``SCASDP Grant Assurances'').
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    \12\ The percentage is determined by: (SCASDP Grant Amount) / 
(SCASDP Grant Amount + Local Cash Contribution + State Cash 
Contribution, if applicable).
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    Grantee reports. The grant agreement between the Department and 
each selected community will require the submission of quarterly 
reports on the progress the community has made during the previous 
quarter in implementing its grant project. In addition, the grant 
agreement will require the submission, on a quarterly or other time-
specific basis, of other materials relevant to the grant project, such 
as copies of advertising and promotional material and copies of 
contracts with consultants and service providers. In addition, each 
community will be required to submit a final report on its project to 
the Department, and 10 percent of the grant funds will not be 
reimbursed to the community until such final report is received.
    Additional information on award administration for selected 
communities will be provided in the grant agreement.
    Grant amendments. A grantee may wish to amend its agreement with 
the Department in the event of a change in circumstances after the date 
the agreement is executed. Typically, amendments involve an extension 
to the time period for completing the grant or a change in the types of 
activities authorized for reimbursement under the goals and objectives 
(``project scope'') of

[[Page 38950]]

the grant agreement. Grantees are cautioned, however, that the 
Department cannot authorize amendments that are incompatible with the 
scope of the agreement. For example, a grant awarded solely for the 
purpose of developing an airport marketing plan cannot be amended to 
permit subsidization of an air carrier's startup costs, or a grant 
awarded solely for the purpose of attracting low-fare service cannot be 
amended to permit it to attract service from a legacy carrier, since 
the latter, in each example, was never contemplated by the original 
agreement.
    Applicants are advised to obtain firm assurances from air carriers 
proposing to offer new air service if a grant is awarded. Many grants 
have been awarded for the purpose of subsidizing new or additional air 
service for a small community, with the goal of that service becoming 
self-sustaining by the end of the subsidy period. In virtually all 
cases, the community seeking the grant funds received expressions of 
interest from one or more air carriers. In some instances, these 
expressions of interest failed to materialize and the community was 
left without any immediate prospects, at which time it asked for a 
grant extension to allow more time to pursue other carriers. Because 
the Department is charged by law to consider timely use of funds when 
selecting grant recipients, the Department will grant an extension only 
when the community can provide strong evidence of a firm commitment on 
the part of an air carrier to deliver the desired service.
    To ensure understanding, grantees contemplating amendments to their 
agreements are urged to discuss their situations with the Small 
Community Program staff before requesting a formal amendment.
    This order is issued under authority delegated in 49 CFR 1.56a(f).
    Accordingly,
    1. Community proposals for funding under the Small Community Air 
Service Development Program should be submitted via http://www.grants.gov as an attachment to the SF424 no later than August 2, 
2011; and
    2. This order will be published in the Federal Register and also 
will be served on the Conference of Mayors, the National League of 
Cities, the National Governors Association, the National Association of 
State Aviation Officials (NASAO), County Executives of America, the 
American Association of Airport Executives (AAAE), and the Airports 
Council International-North America (ACI), and posted on http://www.grants.gov.

    Issued in Washington, DC, on June 28, 2011.
Susan L. Kurland,
Assistant Secretary for Aviation and International Affairs.

    An electronic version of this document is available on the World 
Wide Web at http://www.regulations.gov.

Small Community Air Service Development Program

United States Code Annotated
Title 49. Transportation
Subtitle VII. Aviation Programs
Part A. Air Commerce and Safety
Subpart II. Economic Regulation
Chapter 417. Operations of Carriers
Subchapter II. Small Community Air Service

[rtarr7] Sec.  41743. Airports not receiving sufficient service

    (a) Small community air service development program.--The 
Secretary of Transportation shall establish a program that meets the 
requirements of this section for improving air carrier service to 
airports not receiving sufficient air carrier service.
    (b) Application required.--In order to participate in the 
program established under subsection (a), a community or consortium 
of communities shall submit an application to the Secretary in such 
form, at such time, and containing such information as the Secretary 
may require, including--
    (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.
    (c) Criteria for participation.--In selecting communities, or 
consortia of communities, for participation in the program 
established under subsection (a), the Secretary shall apply the 
following criteria:
    (1) Size.--For calendar year 1997, the airport serving the 
community or consortium was not larger than a small hub airport, 
and--
    (A) Had insufficient air carrier service; or
    (B) Had unreasonably high air fares.
    (2) Characteristics.--The airport presents characteristics, such 
as geographic diversity or unique circumstances, that will 
demonstrate the need for, and feasibility of, the program 
established under subsection (a).
    (3) State limit.--Not more than 4 communities or consortia of 
communities, or a combination thereof, from the same State may be 
selected to participate in the program in any fiscal year.
    (4) Overall limit.--No more than 40 communities or consortia of 
communities, or a combination thereof, may be selected to 
participate in the program in each year for which funds are 
appropriated for the program.
    No community, consortia of communities, nor combination thereof 
may participate in the program in support of the same project more 
than once, but any community, consortia of communities, or 
combination thereof may apply, subsequent to such participation, to 
participate in the program in support of a different project.
    (5) Priorities.--The Secretary shall give priority to 
communities or consortia of communities where--
    (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;
    (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; and
    (E) The assistance will be used in a timely fashion.
    (d) Types of assistance.--The Secretary may use amounts made 
available under this section--
    (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.
    (e) Authority to make agreements.--
    (1) In general.--The Secretary may make agreements to provide 
assistance under this section.
    (2) Authorization of appropriations.--There is authorized to be 
appropriated to the Secretary $20,000,000 for fiscal year 2001, 
$27,500,000 for each of fiscal years 2002 and 2003, and $35,000,000 
for each of fiscal years 2004 through 2008 to carry out this 
section. Such sums shall remain available until expended.
    (f) Additional action.--Under the program established under 
subsection (a), the Secretary shall work with air carriers providing 
service to participating communities and major air carriers (as 
defined in section 41716(a)(2)) serving large hub airports to 
facilitate joint-fare arrangements consistent with normal industry 
practice.
    (g) Designation of responsible official.--The Secretary shall 
designate an employee of the Department of Transportation--
    (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

[[Page 38951]]

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.
    (h) Air Service Development Zone.--The Secretary shall designate 
an airport in the program as an Air Service Development Zone and 
work with the community or consortium on means to attract business 
to the area surrounding the airport, to develop land use options for 
the area, and provide data, working with the Department of Commerce 
and other agencies.

Cover Page

    The cover page for all applications should bear the title 
``Proposal Under the Small Community Air Service Development 
Program, Docket DOT-OST-2011-0119'' and should include:
    (1) The name of the community or consortium of communities 
applying for the grant;
    (2) The legal sponsor and its Dun and Bradstreet (D&B) Data 
Universal Numbering System (DUNS) number, including + 4; Employee 
Identification Number (EIN) or Tax ID; and,
    (3) The 2-digit Congressional district code applicable to the 
sponsoring organization and, if a consortium, to each participating 
community.
BILLING CODE 4910-9X-P

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BILLING CODE 4910-9X-C

Confidential Commercial Information

    Applicants will be able to provide certain confidential business 
information relevant to their proposals on a confidential basis. 
Under the Department's Freedom of Information Act regulations (49 
CFR 7.17), such information is limited to commercial or financial 
information that, if disclosed, would either likely cause 
substantial harm to the competitive position of a business or 
enterprise or make it more difficult for the Federal Government to 
obtain similar information in the future.
    Applicants seeking confidential treatment of a portion of their 
applications must segregate the confidential material in a sealed 
envelope marked ``Confidential Submission of X (the applicant) in 
Docket DOT-OST-2011-0119,'' 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 two copies 
of its motion and an original and two copies of the confidential 
material in the sealed envelope.
    The confidential material should not be included with the 
original of the applicant's proposal that is submitted via http://www.grants.gov. The applicant's original submission, however, should 
indicate clearly where the confidential material would have been 
inserted. If an applicant invokes Rule 12, the confidential portion 
of its filing will be treated as confidential pending a final 
determination. All confidential material must be received by August 
2, 2011, and delivered to the Office of Aviation Analysis, 8th 
Floor, Room W86-310, 1200 New Jersey Ave., SE., Washington, DC 
20590.
    A template for the confidential motion can be found at http://ostpxweb.dot.gov/aviation/X-50%20Role_files/smallcommunity.htm.

[FR Doc. 2011-16727 Filed 6-30-11; 8:45 am]
BILLING CODE 4910-9X-C