SEC. 8. OFFICE OF RURAL AVIATION. 
(a) ESTABLISHMENT.—There is established within 
the Office of the Secretary of Transportation the Office 
of Rural Aviation (referred to in this section as the ‘‘Of-
fice’’). 
(b) FUNCTIONS.—The functions of the Office are— 
(1) to develop a uniform 4-year contract for air 
carriers providing essential air service to commu-
nities under subchapter II of chapter 417 of title 49, 
United States Code; 
(2) to develop a mechanism for comparing ap-
plications submitted by air carriers under section 
41733(c) to provide essential air service to commu-
nities, including comparing— 
(A) estimates from air carriers on— 
(i) the cost of providing essential air 
service; and 
(ii) the revenues air carriers expect to 
receive when providing essential air service; 
and 
(B) estimated schedules for air transpor-
tation; and 
(3) to select an air carrier from among air car-
riers applying to provide essential air service, based 
on the criteria described in paragraph (2). 
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SEC. 9. EXTENSION OF AUTHORITY TO MAKE AGREEMENTS 
UNDER THE ESSENTIAL AIR SERVICE PRO-
GRAM. 
Section 41743(e)(2) of title 49, United States Code, 
is amended by striking ‘‘2008’’ and inserting ‘‘2011’’. 
SEC. 10. ADJUSTMENTS TO COMPENSATION FOR SIGNIFI-
CANTLY INCREASED COSTS. 
Section 41737 of title 49, United States Code, is 
amended— 
(1) in subsection (a)(1)— 
(A) in subparagraph (B), by striking ‘‘; 
and’’ and inserting a semicolon; 
(B) in subparagraph (C), by striking the 
period and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(D) provide for an adjustment in com-
pensation to account for significant increases in 
fuel costs, in accordance with subsection (e).’’; 
and 
(2) in subsection (e)— 
(A) in paragraph (1), by striking ‘‘may’’ 
and inserting ‘‘shall’’; and 
(B) in paragraph (2), by striking ‘‘may’’ 
and inserting ‘‘shall’’. 
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SEC. 11. CHARTER AIR CARRIER PASSENGER BOARDINGS. 
Notwithstanding any other provision of law, the Sec-
retary of Transportation shall treat passenger boardings 
on aircraft operated by charter air carriers at airports re-
ceiving essential air service under subchapter II of chapter 
417 of title 49, United States Code, as passenger 
boardings for purposes of section 47114(c)(1)(E) of such 
title. 
SEC. 12. AUTHORIZATION OF APPROPRIATIONS FOR ESSEN-
TIAL AIR SERVICE. 
(a) ADJUSTMENT TO AUTHORIZATION OF APPRO-
PRIATIONS.—Section 41742 of title 49, United States 
Code, is amended— 
(1) 
in 
subsection 
(a)(2), 
by 
striking 
‘‘$77,000,000’’ and inserting ‘‘$40,000,000’’; and 
(2) in subsection (b), by striking ‘‘Notwith-
standing section 47114’’ and all that follows. 
(b) FUNDS FROM AIRPORT
AND AIRWAY TRUST 
FUND.—Section 41737(d)(2) of title 49, United States 
Code, is amended to read as follows: 
‘‘(2) In addition to amounts authorized to be 
appropriated under section 41742(a), not more than 
$50,000,000 shall be available to the Secretary out 
of the Fund for each of the fiscal years 2008 
through 2011 to incur obligations under this section. 
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Amounts made available under this section remain 
available until expended.’’. 
Æ 
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