[Federal Register Volume 79, Number 84 (Thursday, May 1, 2014)]
[Proposed Rules]
[Pages 24632-24634]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-09830]


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DEPARTMENT OF TRANSPORTATION

14 CFR Part 398

[Docket No.: DOT-OST-2014-0061]


Essential Air Service Proposed Enforcement Policy

AGENCY: Office of Aviation Analysis (X50), Department of Transportation 
(DOT).

ACTION: Notice of Proposed Enforcement Policy.

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SUMMARY: This proposed notice of enforcement policy announces how the 
Department of Transportation (DOT) intends, going forward, to enforce 
compliance with the requirements of the Department of Transportation 
and Related Agencies Appropriations Act, 2000, which prohibits the 
Department from subsidizing Essential Air Service (EAS) to communities 
located within the 48 contiguous States receiving per passenger subsidy 
amounts exceeding $200, unless the communities are located more than 
210 miles from the nearest large or medium hub airport. As proposed, 
all communities receiving subsidies under the EAS Program would have 
until September 30, 2015, based on data from October 1, 2014, through 
September 30, 2015, to ensure compliance with the $200 subsidy cap or 
face termination of subsidy eligibility. After September 30, 2015, the 
Department would continue enforcement of the $200 subsidy cap on an 
annual basis based on data compiled at the end of every fiscal year. 
Consistent with established procedures, DOT will issue each potentially 
impacted community a show cause order regarding termination of 
eligibility and provide each such community with a fair and reasonable 
opportunity to demonstrate compliance with the $200 subsidy cap prior 
to a final decision by DOT. In addition, any community that is deemed 
ineligible under the $200 subsidy cap provision may petition the 
Secretary for a waiver. After receiving a community's petition for a 
waiver, the Secretary may waive the subsidy cap for a limited period of 
time, on a case-by-case basis, and subject to availability of funds. To 
provide the Department with sufficient time to evaluate the FY 2015 
data for potentially affected communities, DOT does not intend to begin 
the Show Cause Order process until January 2016.

DATES: Send comments on or before June 30, 2014. Late-filed comments 
will be considered to the extent practicable.

ADDRESSES: Send comments identified by docket number DOT-OST-2014-

[[Page 24633]]

0061 using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your 
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at (202) 493-2251.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments 
from the public to better inform its decision-making process. DOT posts 
these comments, without edit, to www.regulations.gov, as described in 
the system of records notice (DOT/ALL-14 FDMS), which can be reviewed 
at www.dot.gov/privacy. DOT will read and respond to all substantive 
comments. If you are filing comments on behalf of an organization or 
group of individuals, we encourage you to include the name of your 
group or organization. However, anonymous comments will be considered 
if they are timely filed. Including your name/group along with your 
comment is completely optional.
    Docket: Comments received may be read at http://www.regulations.gov 
at any time. Follow the online instructions for accessing the docket or 
go to the Docket Operations in Room W12-140 of the West Building Ground 
Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 
5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this action, contact Kevin Schlemmer, Chief, Essential Air Service and 
Domestic Analysis Division, Office of Aviation Analysis, Department of 
Transportation, 1200 New Jersey Avenue SE, Room W86-309, Washington, DC 
20590; telephone: (202) 366-3176; Kevin.Schlemmer@dot.gov. For legal 
questions concerning this action, contact Claire McKenna, Attorney, 
Office of the General Counsel, Department of Transportation, 1200 New 
Jersey Avenue SE., Room 96-309; telephone: (202) 366-0365; email: 
Claire.McKenna@dot.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Airline Deregulation Act, passed in 1978, gave airlines almost 
total freedom to determine which markets to serve domestically and what 
fares to charge for that service. The United States Congress (Congress) 
established the EAS program to guarantee that small communities that 
were served by certificated air carriers before deregulation maintain 
at least a minimal level of scheduled air service. Since its inception, 
the EAS program has provided a vital link for eligible small 
communities to the National Airspace System (NAS). Indeed, this program 
ensures that small communities across America can tap into the economic 
and quality of life benefits that scheduled air services offer.
    Over the years, Congress has made a number of statutory changes to 
the program (most recently in 2011 and 2012), but the fundamental 
purpose of the program remains unchanged. Given the socio-economic 
importance of this program, DOT remains committed to preserving the EAS 
program for eligible communities and ensuring the sustainability of the 
program for the future.
    This proposed enforcement policy concerns the statutory mandate 
that prohibits DOT from providing EAS funds to any community in the 48 
contiguous states that requires a per-passenger-subsidy in excess of 
$200 unless the community is located more than 210 miles from the 
nearest large or medium airport. Congress first imposed a $200 subsidy 
per passenger cap for communities in the 48 contiguous States in FY 
1990 appropriations language. Such language was repeated in several 
later appropriations acts, throughout the 1990s, and was made permanent 
by the Department of Transportation and Related Agencies Appropriations 
Act, 2000, Public Law 106-69, 113 Stat. 986 (Oct. 9, 1999). 
Specifically, the Act provided that:

Hereafter, notwithstanding 49 U.S.C. 41742, no essential air service 
subsidies shall be provided to communities in the 48 contiguous 
States that are located fewer than 70 highway miles from the nearest 
large or medium hub airport, or that require a rate of subsidy per 
passenger in excess of $200 unless such point is greater than 210 
miles from the nearest large or medium hub airport.

    The Department always has expected communities less than 210 miles 
from the nearest large or medium hub airport to work together with air 
carriers providing EAS to keep the subsidy per passenger below the $200 
cap or risk termination of eligibility from the EAS Program. DOT also 
has routinely provided notice of this statutory mandate to communities 
that were or appeared to be at risk of exceeding the cap, and a number 
of EAS communities have lost their eligibility as a result of the cap.
    Although the $200 subsidy cap is a longstanding statutory 
provision, in 2012, Congress added a provision that allows the 
Secretary to grant waivers in limited circumstances. To effectuate that 
new provision and to ensure the fair and consistent treatment of all 
EAS communities subject to the $200 subsidy cap prospectively, DOT is 
issuing this proposed enforcement policy. Specifically, the Department 
is considering a policy that will defer future enforcement of the $200 
subsidy cap until January 2016. The proposed policy, if finalized, 
would set September 30, 2015, as the date by which any EAS community 
with a per passenger subsidy exceeding or approaching the $200 subsidy 
cap must ensure compliance with the cap. Under the proposed policy, DOT 
would determine each community's subsidy per passenger cap based on 
data compiled from October 1, 2014, through September 30, 2015. 
Consistent with past practice and our obligations under 49 U.S.C. 
41733(f)(2), DOT would continue to encourage potentially affected 
communities to work with air carriers providing subsidized EAS to 
maximize use of the service awarded under their respective carrier-
selection orders to avoid exceeding the $200 subsidy cap.
    If after September 30, 2015, a particular community's subsidy per 
passenger remains above $200 and its location is less than 210 miles 
from the nearest large or medium hub airport, the Department would 
initiate proceedings, consistent with 49 U.S.C. 41733(f) and Public Law 
112-97 (Feb. 14, 2012), Section 426(e), directing interested persons to 
show cause why the Department should not terminate the eligibility of 
the community in question under the EAS Program. This process will 
provide each potentially affected community with a fair and reasonable 
opportunity to demonstrate compliance with the $200 subsidy cap prior 
to a final decision by DOT. To provide the Department with sufficient 
time to receive and evaluate the FY 2015 data for potentially affected 
communities, DOT does not intend to begin the show cause process until 
January 2016.
    After September 30, 2015, the Department would continue enforcement 
of the $200 subsidy cap on an annual basis based on data compiled at 
the end of every fiscal year and submitted to DOT after the close of 
the

[[Page 24634]]

most recent fiscal year. Regardless of whether this proposed 
enforcement policy is adopted in any form, the EAS program contains 
certain statutory protections that an adversely impacted EAS community 
may invoke. First, in the event that DOT determines that a community is 
ineligible because it exceeds the $200 subsidy cap provision in a given 
fiscal year, the community may petition the Secretary of DOT for a 
waiver pursuant to Pubic Law 112-97, Sec. 426(e) (c) (Feb. 14, 2012). 
Under this provision, ``[s]ubject to the availability of funds, the 
Secretary may waive, on a case-by-case basis, the subsidy-per-passenger 
cap.'' The law further provides: ``A waiver . . . shall remain in 
effect for a limited period of time, as determined by the Secretary.'' 
Second, a community that is deemed ineligible based on the $200 subsidy 
cap and removed from the program may petition the Secretary for 
reinstatement into the program in a subsequent year if the community 
can demonstrate that it will be able to comply with the $200 subsidy 
cap on an annual basis going forward.
    The Department seeks comments from all interested parties regarding 
this proposed enforcement policy.

    Issued in Washington, DC, on April 23, 2014.
Brandon M. Belford,
Deputy Assistant Secretary for Aviation and International Affairs.
[FR Doc. 2014-09830 Filed 4-30-14; 8:45 am]
BILLING CODE 4910-9X-P