E7-3581. Notice of Order Soliciting Community Proposals

AGENCY:

Department of Transportation, Office of the Secretary.

ACTION:

Notice of Order Soliciting Community Proposals (Order 2007-2-22).

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 to Dockets, 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 April 27, 2007.

ADDRESSES:

Interested parties can submit applications either electronically using the procedures at http://dms.dot.gov or by hard copy. For the latter, an original and two copies of the application should be submitted to Dockets Operations and Media Management, M-30, Room PL-401, Department of Transportation, 400 7th Street, SW., Washington, DC 20590. Whichever method used, the application and any copies should bear the title “Proposal under the Small Community Air Service Development Program, Docket OST-2007-27370, as well as the name of the applicant community or consortium of communities, the legal sponsor, and the applicant's DUNS number. The SF424 is submitted electronically through http://www.grants.gov.

FOR FURTHER INFORMATION CONTACT:

Aloha Ley, Office of Aviation Analysis, 400 7th Street SW., Washington, DC 20590, [phone].

Dated: February 26, 2007.

Michael W. Reynolds,

Deputy Assistant Secretary for Aviation and International Affairs.

Issued by the Department of Transportation on the 26th day of February, 2007.

In the Matter of Grant Applications; Small Community Air Service Development Program Under 49 U.S.C. 41743 et seq.; Order Soliciting Community Grant Proposals

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) to develop cost-effective air services in their communities. Proposals should be submitted in the above-referenced docket no later than April 27, 2007. Applicants must submit form SF424, a standard federal government application form, in Grants.gov. An application will not be deemed complete until and unless all required documents are filed. (All applicants must register as Grants.gov users and are advised that the registration process can take two weeks to complete. See Appendix C for additional information on filing form SF424 using Grants.gov.)

Funding Opportunity

The Small Community Program was established under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), Public Law 106-181, as a three-year “pilot” program and was 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. The program was subsequently reauthorized for an additional five years, through fiscal year 2008, under the Vision 100-Century of Aviation Reauthorization Act, Public Law 108-176 (Vision 100), which also eliminated the “pilot” status of the program.^[1] On February 15, 2007, the President signed in to law the Revised Continuing Appropriations Resolution, 2007 (Pub. L. 110-005), which provides the Department with $10 million to administer the Small Community Program.^[2]

The program's authorizing statute limits the Department to a maximum of 40 grant awards, with a maximum of four grants per state, in each year the program is funded. However, the law does not prescribe any limits on the amounts of individual awards, and the amounts awarded will vary depending upon the features and merits of the proposals selected. Over the past five years, the Department's individual grants have ranged from $20,000 to nearly $1.6 million. Awarded grant funds do not have to be expended in the year of award, nor do they need to be used within a one-year period. Authorized grant projects may include activities that extend over a multi-year period under a single grant award; however, grant funds are to be used in a timely manner. Generally speaking, grant awards have not exceeded a three-to-four-year period.

Eligibility Information

Who is Eligible to Apply for a Grant?

Basic Criteria

Eligible applicants are those communities that (1) are served by an airport that was not larger than a small hub airport for calendar year 1997 and (2) had insufficient air service or unreasonably high airfares.^[3] Communities that do not currently have commercial air service are also eligible, but they must have met or be able to meet in a reasonable period all necessary requirements of the Federal Aviation Administration for the type of service involved in their grant proposals. Communities served by medium and large hubs are not eligible to apply.

EAS Communities May Apply

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. Indeed, a number of EAS-subsidized communities applied in past years and some have received grant awards. However, grant awards to EAS-subsidized communities are limited to (1) marketing or promotion projects that support existing or newly subsidized air services or (2) new air services, such as on-demand air taxi service. Furthermore, grants funds will not be authorized for EAS-subsidized communities to support either additional flights by EAS carriers or changes to those carriers' existing schedules.

Additional Consideration for Communities/Members of Consortia That Have Previously Received a Grant

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 (1) they are precluded from seeking funds for projects for which they have already received an award under the Small Community Program, and (2) they cannot accept a new grant while they are a party to an existing grant under the program, either as an individual community or as a member of a consortium.

New projects are eligible. Previous grant recipients may submit grant proposals and seek funds for new projects in a different category. For example, although a community which had received a grant for a market study could not apply for a new grant for another market study, it could apply for funding for a revenue guarantee for new air service. Communities should note, however, that interest in this program could exceed both the funds available and the number of communities that can participate 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.

No concurrent grants are permitted. A community or member of a consortia 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, for a grant applicant to enter into a subsequent grant, its most recent grant must have expired or its participation in the grant otherwise terminated. 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.

City-pair Subsidies for a Carrier to Compete Against an Incumbent Raise Concerns

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. The Department is concerned generally about subsidizing one carrier but not others in a competitive market and that, while bringing new competition may benefit the community in the short term, a market may prove insufficient to support two carriers and service may deteriorate to the point that the community's service is less beneficial than before.

A Consortium Is More Than a Collection of Communities

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” while in effect the application is a collection of individual community requests that involve different projects. We do not view this as a consortium. Rather, an application representing a consortium would be one that facilitates efforts of communities working together toward a joint grant project. For example, several communities surrounding an airport may apply together to improve air services at that airport, or surrounding airports may work together to provide regional air service.

Multiple Applications by a Community Will Not Be Considered

The Department requests that communities file only one application for a grant. In the past, some communities have filed both individual applications and requests 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 request for funding a revenue guarantee and one for marketing—we will consider such proposals. However, communities should be aware that they can still only receive one grant, either the stand-alone grant or as a member of a consortium, since a community may not have concurrent grants.

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 do not propose a community financial contribution will be at a competitive disadvantage.

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. This 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. Cash contributions exclude intangible or non-cash items, such as the “value” of donated advertising.

Cash from airport revenues. This includes contributions from funds generated by airport operations. Federal law (49 U.S.C. sections 47107(b), (l)-(p)) and policy concerning the use of airport revenue (64 FR 7696, February 16, 1999) preclude the use of airport revenues for revenue guarantees to airlines. Community proposals that include local contributions based on airport revenues do not receive priority consideration for selection.

In-Kind Contributions from the airport. This can include such items as waivers of landing fees, terminal rents, fuel fees, and/or 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 regarded as an in-kind contribution. Similarly, reduced fares by airlines will be considered an in-kind contribution.

Cash vs. In-Kind Contributions

Only cash contributions will be eligible for reimbursement. “In-kind” contributions involve services or benefits that do not include a cash transaction between the parties. Because grant funding under the Small Community Program is provided on a reimbursable basis, the Department cannot reimburse the grant sponsor for “in-kind” or non-cash contributions. Therefore, in-kind contributions are not considered as part of the community's cash financial contribution to the project. Of course, communities are free to include in-kind contributions in their proposals. In fact, communities are encouraged to offer in-kind inducements as an extra incentive to facilitate air service/fare improvements. While these contributions will not be considered as part of the community's cash contribution toward the project on which reimbursements are made, they will be considered as illustrative of the community's overall commitment to the proposed grant project. If there is any question about whether a proposed contribution would be considered as “in-kind” or cash, the applicant should contact the Department before submitting its proposal.

Financial Commitments Must Be Fulfilled

Applicant communities should also 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. Community participation with respect to all aspects of the proposal, including the financial aspects, is critical to the success of the authorized project initiative. As with the grant awards in past years, receipt of the full federal contribution awarded will thus be linked to the community's fulfillment of its financial contribution. 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.

Application and Submission Information

Filing Deadline and Procedures

Grant applications are due by April 27, 2007. They may be submitted in hard-copy form or by electronic filing. Regardless of the filing method used, however, applicants must also register for and complete SF424, Application For Federal Domestic Assistance. In addition, the cover page of each application should contain the information specified under “Cover page contents,” below. Questions regarding the program or the filing of proposals should be directed to the Office of Aviation Analysis, at [phone] or [e-mail].

Hard-copy Submission

Applications may be submitted by hand, mail, or express delivery. Proposals postmarked after the due date will not be accepted. There are two mandatory requirements for hard-copy filing of applications, both of which must be completed for a community's application to be deemed timely and considered by the Department.

• First, the applicant must submit a proposal that includes all of the information required by this Application and Submission section, including the Summary Sheet that appears in Appendix B. Applicants should submit an original and two copies of their proposals, including the Summary Information Sheet, if submitting their proposals using the hard-copy option.
• Second, the application (including original and two copies) must be sent/delivered to Dockets Operations and Media Management, M-30, Room PL-401, Department of Transportation, 400 7th Street, SW., Washington, DC 20590.

Electronic Submission

Communities may submit their proposals electronically by following the instructions at our Web site, http://dms.dot.gov. If a community elects to file electronically, it should not submit a hard copy of the application to the Dockets Operations and Media Management Office. Questions about electronic filing procedures should be addressed to Renee Wright, Dockets Operations and Media Management, at [phone].^[4]

SF424 Required

To comply with Grants.gov initiative, a mandate of the President's Management Agenda, all applicants must submit form SF424, Application for Federal Domestic Assistance, found on http://www.grants.gov. Applicants must complete a one-time registration process in order to submit the SF424 application. This registration process can take approximately three to five days to complete. For this reason, communities intending to file applications should complete the registration process as soon as practicable to ensure they can meet the application deadline. Appendix C provides additional information with respect to the registration process in Grants.gov as well as instructions on submitting SF424 once the registration process has been completed. An application will not be deemed complete unless the proposal has been submitted to the Department's Docket Operations and Media Management office (hard copy or electronic submission) and the SF424 application has been submitted through Grants.gov by the April 27 deadline.

Cover Page Contents

The cover page for all applications, regardless of the method of submission, should bear the title “Proposal Under the Small Community Air Service Development Program,” and should include the docket number as shown on the first page of this order, the name of the community or consortium of communities applying, the legal sponsor, and the community's Dun and Bradstreet (D&B) Data Universal Numbering System (DUNS) number.

Additional Materials

Additional materials such as DVDs and videos cannot be included in the Docket Management System. If communities want to include such information in their proposals, they should provide that information, along with a copy of their application, to the Department's Office of Aviation Analysis, X-50, Room 6401, 400 7th Street, SW., Washington, DC 20590.

Confidential Treatment of Information

Applicants will be able to provide certain information relevant to their proposals on a confidential basis. Under the Department's regulations, such information is limited to commercial or financial information that, if disclosed, would either significantly harm 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 OST-2007-27370” 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 in the original or in any of the copies of the applicant's proposal that are submitted to the Department. Those submissions, however, should indicate clearly where the confidential material would have been inserted. If applicants invoke Rule 12, the confidential portion of the filing will be treated as confidential pending a final determination. All confidential material must also be received by April 27, 2007.

Types of Projects and Application Content

The statute is very general about the types of projects that can be authorized so that communities are provided greater flexibility in addressing their particular air service and airfare issues. Since circumstances may differ among communities, applicants have some latitude in identifying their own objectives and developing strategies for accomplishing them.

Another 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 discontinued. 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.^[5]

Communities are encouraged to be innovative and to consider a wide range of initiatives and air transportation services in developing their proposals. At the same time, general, vague, or unsupported proposals will not be entertained. The more highly defined and focused the proposal, the more likely it will enhance its attractiveness, particularly given the statute's priority consideration for applicants who can use the funds in a timely manner. (49 U.S.C. 41743 (c)(5)(E)).

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 frequency, direct and connecting destinations offered, available 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 needs or deficiencies, including any major origin/destination markets not now served or not served adequately. In addition, communities are free to submit any information about their fare levels that they deem relevant to consideration of their grant request.
• 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 that goal(s). Proposals should:

✓ Clearly identify the target audience of each component of the proposed transportation initiative, including all advertising and promotional efforts.

✓ Set forth a realistic timetable for implementation of the grant project. In this regard, the statute includes timely use of the grant funds as a priority consideration. Consequently, communities must have a well-developed project plan and detailed timetable for implementing that plan. In establishing the timetable, however, communities should be realistic about their ability to meet their project deadlines.^[6]

✓ Proposals involving new or improved service explain how the service will become self-sufficient since, under the statute, a community cannot seek grant funding in subsequent years in support of the same project. It is important that communities seriously consider the scale of their proposed projects in developing their proposals and the timetable for achieving them. To the extent that a proposed project is dependent upon or relevant to 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.

✓ Of particular importance when drafting a proposal, applicants should fully and clearly outline the goals and objectives sought to be achieved, e.g., “to broaden the awareness by residents in the Tri-County area of the operations 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 more easily accommodated.

• 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 a 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 give a full description of 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 its specific responsibilities in the implementation of the project. If the application does not include specific information on the partnership participation in the project, the Department cannot evaluate how well a community has met this consideration, and the applicant will not be deemed as having 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 other cash contributions toward 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.^[7]

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 grant agreement with the Department. In addition, 10 percent of the grant funds will be withheld until the Department receives the final report of the grant project. See “Award Administration Information,” below.

• 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 identify critical milestones during the life of the grant, including the need to modify or discontinue funding if identified milestones cannot be met. 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. Applicant communities are on notice that any modifications must first be approved by the Department. Moreover, modifications to the project will be considered only to the extent that the changes do not deviate from the original goal and scope of the authorized grant project. As noted above, the Department will not permit fundamental changes to a community's proposal in order to preserve a grant award.
• 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 at 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 a new or improved service at a community will be well on its way to becoming self-sustaining, but will not have reached that goal when the grant has expired. Similarly, it is possible that extensive marketing and promotional efforts may be in process, but not completed, at the end of the grant period and will require continued support. Therefore, in developing its proposal, the community should carefully consider and describe its plans for continued financial support for the project after the grant funding is no longer available. This aspect of the application reflects on 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.
• A description of the community's air service development efforts over the past five years and the results of those efforts. Many communities have been active on an on-going basis for many years in air service development efforts, while others are just beginning. To the extent that a community has previously engaged in other air service initiatives, including through public/private partnerships, it should describe those efforts and their results in its grant proposal. This should include marketing and promotional efforts of airport services as well as efforts to recruit additional or improved air service and airfare initiatives.
• Designation of a legal sponsor responsible for administering the program. The legal sponsor 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 accept program reimbursements. In this regard, communities can designate only a single government entity as the legal sponsor, even if a consortium, for example, 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.^[8]

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:

✓ Detailed information regarding the property and facilities available for development such as an existing airpark or land for such an airpark;

✓ The other modes of transportation that would be available to support additional economic development, such as rail, road, and/or water access;

✓ Information concerning historic, existing, and any future business activity in the area that would support further development;

✓ Demographic information concerning the community and its environs relevant to the developmental efforts, including population, employment, and per capita income data; and

✓ 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.

Application Review Information

The Department will carefully review each proposal and the staff may contact applicants if clarification is needed. The grant awards will be made as quickly as possible so that communities awarded grants can complete the grant agreement process and proceed to implement their plans. Pending unforeseen circumstances, this process should be completed before September 2007. Given the competitive nature of the grant process, the Department will not meet with grant applicants with respect to their grant proposals. Our selection of communities for grant awards will be based on the communities' written submissions.

Priority Factors Considered

The law directs the Department to give priority consideration to those communities or consortia where:

• 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 relative size of each applicant community;
• The geographic location of each applicant, including the community's proximity to larger centers of air service and low-fare service alternatives;
• 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;
• Current demographic indicators for the community, such as population, income and business activity;
• The community's demonstrated commitment to and participation in the proposed grant project;
• The grant amount requested compared with total funds available for all communities;
• The proposed federal grant amount requested compared with the local share offered;
• Whether the community has a realistic plan to use the funds in a timely manner;
• The uniqueness of an applicant's claimed problems and whether the proposed project addresses those problems;
• The extent to which the applicant's proposed solution(s) to solving the problem(s) is new or innovative;
• Whether the community's proximity to an existing grant recipient could impact its proposal; and
• Whether the applicant community has previously received a grant award under this program.

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—cash and in-kind contributions—also will have more attractive proposals. Similarly, communities that demonstrate historic and/or active participation in the proposed air service project will have the attractiveness of their proposals enhanced. 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 credence 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 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 possess greater attractiveness.

Award Administration Information

The Department will announce its grant selections by Order, which will be served on each grant recipient, all other applicants, and all parties served with this order. The selection order will also be posted on the Department's Docket Management System and Web page.

Grant Agreement

Communities awarded grants are required to execute a grant agreement with the Department before they begin to spend 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. Applicants should not assume they have received a grant, nor should they obligate or spend 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, numerous assurances are required to be made and honored 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 the assurances when they execute their grant agreements.^[9] 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#Funds.^[10]

Grantee Reports

The grant agreements between the Department and the selected communities will require quarterly reports on the progress of implementation of the grant project, as well as the submission on a quarterly or other time-specific basis of additional material relevant to the grant project, such as copies of advertising and promotional material and copies of contracts with consultants and service providers. In addition, communities will be required to submit a final report to the Department with respect to their grant projects, and 10 percent of the grant funds available will not be reimbursed to the community until the final report has been received. Communities will be permitted to seek reimbursement of project implementation costs on a regular basis. The frequency of such requests will be established in the grant agreement, which will be tailored to the specific features of the community's grant project. In most cases, reimbursements will be made on a monthly basis. In this regard, the Department will provide the grant recipient communities with details and procedures for securing reimbursements electronically.

Grant Amendments

A grantee may wish to amend its agreement with the Department in the event of a material 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 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, since the latter was never contemplated by the original agreement. Likewise, an agreement intended to subsidize new service expressly to an “eastern hub city” cannot be amended to permit a subsidy for service to a hub on the West Coast. Accommodating such a change would effectively require the Department to consent to a new grant agreement, an action for which we have no legal authority.

Grantees are also advised that the Department will not extend the expiration date of an agreement simply to allow more time for a community to solicit air carriers for new air service. 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 has received expressions of interest from one or more air carriers. In some instances, these expressions of interest failed to pan out and the community was left without any immediate prospects, at which time it would ask for a grant extension to allow more time to pursue other carriers. Because we are 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 avoid misunderstandings, 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 in Docket OST-2007-27370 no later than April 27, 2007; ^[11] 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), the Association of County Executives, the American Association of Airport Executives (AAAE), and the Airports Council International-North America (ACI), and posted on http://www.grants.gov

  By:

Michael W. Reynolds,

Deputy Assistant Secretary for Aviation and International Affairs.

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

Appendix A

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

§ 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 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.

Appendix B

Small Community Air Service Development Program

Summary Information

All applicants must submit this information along with their proposal. In addition, applicants must also fill out form SF424 on http://www.grants.gov. (See Appendix C for the SF424 filing process)

A. Applicant Information: (Check All That Apply)

☐ Not a Consortium

☐ Interstate Consortium

☐ Intrastate Consortium

☐ Community now receives EAS subsidy

☐ Community (or Consortium member) previously received a Small Community Grant

If previous recipient, expiration date of grant:

B. Public/Private Partnerships: (List Organization Names)

Public

1.

2.

3.

4.

5.

Private

1.

2.

3.

4.

5.

C. Project Proposal: (Check All That Apply)

☐ Marketing

☐ Personnel

☐ Travel Bank

☐ Upgrade Aircraft

☐ Increase Frequency

☐ Service Restoration

☐ New Route

☐ Low Fare Service

☐ Subsidy

☐ Surface Transportation

☐ Revenue Guarantee

☐ Start Up Cost Offset

☐ Study

☐ Regional Service

☐ Launch New Carrier

☐ First Service

☐ Secure Additional Carrier

☐ Other (specify)

D. Existing Landing Aids at Local Airport:

☐ Full ILS

☐ Outer/Middle Marker

☐ Published Instrument Approach

☐ Localizer

☐ Other (specify)

E. Project Cost:

Federal amount requested:

Total local cash financial contribution:

Airport funds:

Non-Airport funds:

State cash financial contribution:

Existing funds:

New funds:

Airport In-kind contribution: (amount & description)

Other In-Kind contribution: (amount & description)

Total cost of project:

F. Enplanements:

2000

2001

2002

2003

2004

2005

G. Is this application subject to review by State under Executive Order 12372 process?

☐ a. This application was made available to the State under the Executive Order 12372 Process for review on (date) .

☐ b. Program is subject to E.O. 12372, but has not been selected by the State for review.

☐ c. Program is not covered by E.O. 12372.

H. Is the Applicant delinquent on any Federal debt? (if “yes”, provide explanation)

☐ No

☐ Yes (explain)

Appendix C

Filing Form SF424—Application for Federal Domestic Assistance

Grants.gov, originally called the E-Grants Initiative, a mandate of the President's Management Agenda, states,

“Agencies will allow applicants for Federal Grants to apply for and ultimately manage grant funds online through a common Web site, simplifying grants management and eliminating redundancies.”

Public Law 106-107, the legislation that mandates streamlining and improved accountability for Federal grants, and related references in the President's Management Agenda, requires that Federal grant management activities be standardized. As a result, the Office of Management and Budget recently issued a policy directive requiring that all Federal agencies post grant opportunities online as of November 7, 2006.

Therefore, this year, to comply with the Grants.gov initiative, the Department will begin accepting grant applications via http://www.grants.gov. In order for an application to be considered in the Small Community Air Service Development Program, the community must submit its application of form SF424—Application for Federal Domestic Assistance—via http://www.grants.gov. Below are instructions on:

• How to FIND the SCASDP application online at http://www.grants.gov;
• How to register to submit applications; and
• How to APPLY or complete and submit the application form SF424.

Finding the SCASDP Grant Opportunity on Grants.Gov

Start your search for the Small Community Air Service Development Program grant opportunity by entering http://www.grants.gov and clicking the Find Grant Opportunities tab at the top of the page. In the search box titled “Search for Catalog of Federal Domestic Assistance (CFDA) number” enter 20.930. You will see a summary of the SCASDP requirements.

Register to Submit Applications

Prior to applying, you must register to create a Grants.gov account and receive approval from your organization to submit applications. Detailed instructions on how to complete the registration is available on http://www.grants.gov.

1. Register your Organization.

• Obtain a Data Universal Number System (DUNS) number.
• Register the organization with a Central Contractor Registry (CCR).

2. Register yourself as an Authorized Organization Representative (AOR).

• Obtain a username and password.
• Register with Grants.gov.

3. Get Authorized as an AOR by your Organization.

• Obtain E-Business Point of Contact authorization.

Applying for the Grant

Once you have located the Small Community Air Service Development Program grant opportunity, you will need to enter the Funding Opportunity and/or the Catalog of Federal Domestic Application (CFDA) number 20.930 to access the application package and instructions online. However, you must complete the registration process before applying (see B above). In order to view the application package and instructions, you will also need to download and install the PureEdge Viewer.

1. Download PureEdge Viewer [Required].

2. Download an Application Package.

3. Complete an Application Package.

4. Submit an Application Package.

Enter the SCASDP CFDA number (20.930) to download the application form SF424 and begin the process to apply for the grant through http://www.grants.gov. It is a 4-step process:

Apply Step 1: Download the Grant Application Form SF424 and Application Instructions

You will need to enter the Funding Opportunity and/or CFDA number to access the application package and instructions. Download and install the PureEdge Viewer (available on http://www.grants.gov). This small, free program will allow you to access, complete, and submit applications electronically and securely.

Apply Step 2: Complete the Selected Grant Application Package

You can complete the application offline—giving you the flexibility to complete grant applications when and where you want. It also enables you to easily route it through your organization for review, or completion of various components, just like any other e-mail attachment.

Apply Step 3: Submit a Completed Grant Application Package

You will submit the application online. When you are ready to submit the completed application form SF424, you must have already completed the Get Started Steps. You will then need to log into http://www.grants.gov using the username and password you entered when you registered with a Credential Provider to submit the application.

Note:

To submit electronic grant applications, you must be fully authorized by your organization, i.e., been given status as an Authorized Organization Representative (AOR). You can easily check your status by logging into http://www.grants.gov by accessing the Applicant link at the top of the screen. If you have registered your user name and password with Grants.gov, you will be able to log in. After logging in, access the ‘Manage Profile’ link. Your status, located below your title, will state: “AOR—request sent” or “AOR—Approved”. If your status is ‘AOR—request sent’, you cannot yet submit grant applications. You may correct this by contacting your E-Business Point of Contact (POC). He or she will need to log in by accessing the Ebiz link at the top of the screen. They will need your organization's DUNs number and MPIN, to approve you as an AOR.

Apply Step 4: Track the Status of a Completed Grant Application Package

Once you have submitted an application, you can check the status of your application submission. You can identify your application by CFDA Number, Funding Opportunity Number, Competition ID, and/or Grants.gov Tracking Number.

Footnotes

1.  For detailed background on the Small Community Program, see our Web site at: http://ostpxweb.dot.gov/​aviation/​X-50%20Role_​files/​smallcommunity.htm#Funds.

2.  This funding is subject to a 1% across-the-board rescission. Furthermore, the program's funding for this year may be affected by a provision that provides the Secretary with authority to transfer funds from any program within or administered by the Office of the Secretary to the Essential Air Service (EAS) program if the EAS program does not have sufficient funds to meet its statutory obligations. In addition, a portion of the funds available for the Small Community Program may be used by the Department for grants-management purposes.

3.  The hub classifications are based on the Federal Aviation Administration's CY 1997 enplanement data.

4.  Interested communities can view proposals submitted in prior years in Docket OST-2002-11590, Docket OST-2003-15065, Docket OST-2004-17343, Docket OST-2005-20127, and Docket OST-2006-23671 for FY 2002, 2003, 2004, 2005 and 2006 grants, respectively, through the Department's docket management system at the following Web address: http://dms.dot.gov/​.

5.  These examples are illustrative only and are not meant as a list of projects favored by the Department.

6.  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. Communities should carefully consider all factors affecting implementation of their projects and develop realistic timeframes for achieving those objectives, keeping in mind that authorized projects generally have averaged three to four years.

7.  In this regard, instances have arisen in the past where communities have relied extensively on what they characterize as travel banks for a significant portion of their local contribution. A travel “bank” involves an actual deposit of funds from the participating entities into a bank for the purpose of purchasing committed air travel on the selected airline and defined procedures for use of those funds under an agreement with the airline. Most 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. In either case, communities that include travel banks in their proposals must also include a written confirmation from an airline supporting it.

8.  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.

9.  With respect to grants administration generally, the Department is considering possible actions to streamline and simplify certain aspects of its existing administrative processes. Grantees will be apprised if any such actions are to be implemented.

10.  The applicable regulations include, among others: (1) 49 CFR Parts 21 and 27 and 14 CFR Parts 271 and 382—Nondiscrimination in federally-assisted programs of the Department of Transportation—Effectuation of title VI of the Civil Rights Act of 1964; 49 CFR Part 27—Nondiscrimination on the basis of disability in programs and activities receiving or benefiting from Federal financial assistance; and 14 CFR Part 382—Nondiscrimination on the basis of disability in air travel; (2) 49 CFR Part 29—Government-wide debarment and suspension (non-procurement) and government-wide requirements for drug-free workplace (grants); and (3) 49 CFR Part 20—New restrictions on lobbying. The complete list of the applicable assurances is on the cited webpage. The assurances noted are for reference purposes only and should not be included in the community's application. The assurances are part of the grant agreement that will be sent to each grant recipient and should be completed at that time.

11.  Proposals must be postmarked no later than April 27, 2007. The original application should be submitted on 8.5″ x 11″ paper, in dark ink (not green) and without tabs to facilitate inclusion in the Department's docket management system. The remaining copies may be tabbed and include use of any color ink.