Order 2026-3-18

Served: March 20, 2026

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the U.S. Department of Transportation on the 20th day of March, 2026

In the Matter of Grant Applications

SMALL COMMUNITY AIR SERVICE

DEVELOPMENT PROGRAM

under 49 U.S.C. § 41743

Docket DOT-OST-2025-2316

ORDER SOLICITING

SMALL COMMUNITY GRANT APPLICATIONS

By this Order, the U.S. Department of Transportation (the Department or DOT) invites applications from communities and/or consortia of communities interested in obtaining a Federal competitive grant under the Small Community Air Service Development Program (“Small

Community Program” or “SCASDP”) to address air service and airfare issues in their communities.

SUMMARY OVERVIEW OF KEY INFORMATION: SCASDP COMPETITIVE GRANT

OPPORTUNITY

Issuing Agency: Office of the Secretary, U.S. Department of Transportation.

Program Overview: The SCASDP program is designed to provide financial assistance to small communities, on a competitive basis, to help them enhance their air service. Grant monies are disbursed to grantees on a reimbursable basis.

Goals and Objectives: The program seeks to improve air service to underserved communities, including connectivity to the national air transportation system, consistent with statutory requirements and the Department’s strategic goals.

Eligible Applicants: Public entities only (individually or as a part of a consortium).

Eligible Project Types: By statute, the Department may award SCASDP grants to communities to subsidize air service to/from an underserved airport, to an underserved airport, or an airport where air service has been terminated or substantially reduced, to obtain air service to/from that airport, and to an underserved airport to otherwise improve air service. Examples of eligible projects that have received grants include economic air service studies, marketing of air service or an airport, air carrier recruitment, revenue guarantees to air carriers providing air service, start-up cost offsets, fee waivers, and reimbursement of air carrier ground handling fees.

Cost Share: Cost shares are not required for applications in this proceeding. However, disbursement of grant funds to grantees is done on a reimbursable basis, based on the percentage of local cash contribution to the proposed projects.

Funding: The Department will make up to $12 million available for Fiscal Year (FY) 2024

(utilizing FY 2024 and a portion of FY 2025 funding) to carry out this program.

APPLICATION DEADLINE

To participate, interested communities, or consortia of communities, must submit applications of no more than 20 one-sided pages each (excluding the completed Application for Federal

Domestic Assistance (SF-424), Summary Information schedule, application cover, and table of contents (each of which may not exceed one page in length), and any letters from the community or an air carrier showing support for the application).1 These applications, including all required information, must be submitted to www.grants.gov no later than 4 PM EDT on May 4, 2026.2

Applicants are strongly encouraged to submit applications in advance of the deadline. Please be aware that applicants must complete the grants.gov registration process before submitting an application, and that this process usually takes two to four weeks to complete.3 The Department will not accept late-filed applications except under limited circumstances related to technical difficulties. Additional information on applying through grants.gov is in Appendix A, including a notice regarding late-filed applications.

1 To help ensure meaningful public notice of and involvement in every program cycle, the Department notifies, by formal service of each notice of funding opportunity (NOFO), NOFO, the following civic parties that have connections to potential stakeholders/applicants: the United States Conference of Mayors, the National League of

Cities, the National Governors Association, the National Association of State Aviation Officials, County Executives of America, the American Association of Airport Executives, and the Airports Council International-North America

(see Ordering paragraph 2).

2 Applicant communities are encouraged to include all support letters with their applications to ensure that the

Department has a complete record upon which to act. To the extent practicable, each community should include all support letters in one .pdf file submitted with its application. Any support letter that a community submits after the deadline for applications has passed will be considered by the Department only to the extent practicable. Moreover, any support letter or comment received in connection with this proceeding will be posted in this Docket, along with any Department response to that submission.

3 If an applicant experiences difficulties at any point during the registration or application process, it should contact the grants.gov support center by email (support@grants.gov) or by telephone (1-800-518-4726, available 24/7 except Federal holidays). See www.grants.gov/web/grants/support.html.

http://www.grants.gov/ mailto:support@grants.gov http://www.grants.gov/web/grants/support.html

ORGANIZATION OF THIS ORDER SOLICITING APPLICATIONS

In accordance with the requirements of 2 CFR Part 200, this Order is organized into the following sections:

A. Program Description

B. Federal Award Information

C. Eligibility Information

1. Eligible Applicants

2. Cost Sharing or Matching

D. Submission Requirements and Deadlines

E. Application Content and Format

1. Content and Format General Information

2. Content and Form of Application Submission

3. System for Award Management (SAM)

4. Funding Restrictions

5. Grant Funds, Sources and Uses of Project Funds

6. Sharing of Applicant Information

7. Additional Guidance

F. Application Review Information

1. Merit Criteria and Selection Considerations

a. Merit Criteria

b. Selection Considerations

2. Review and Selection Process

3. Integrity and Performance Review

G. Federal Award Administration and Post Award Requirements

1. Federal Award Notices

2. Administrative and National Policy Requirements

3. Reporting

H. Other Information

1. Disclosure of Lobbying Activities

2. Submission of Confidential Commercial Information

Appendix A – Additional Information on Applying Through www.grants.gov

Appendix B – Summary Information

Appendix C – Application Checklist

Appendix D – Disclosure of Lobbying Activities

Appendix E – Confidential Commercial Information

A. PROGRAM DESCRIPTION

The Small Community Program was established by the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (Pub. L. No. 106-181), reauthorized by the Vision 100-

Century of Aviation Reauthorization Act (Pub. L. No. 108-176), and subsequently reauthorized by the FAA Modernization and Reform Act of 2012 (Pub. L. No. 112-95) as amended, the

Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Pub. L. No. 115-63), the

FAA Reauthorization Act of 2018 (Pub. L. No. 115-254) (FAA 2018), and the FAA http://www.grants.gov/

Reauthorization Act of 2024, Pub. L. No. 118-63, May 16, 2024 (FAA 2024). The program is codified at 49 U.S.C. § 41743. 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 grants that are disbursed on a reimbursable basis.

The Small Community Program is authorized to receive appropriations under 49 U.S.C. §

41743(e)(2). Appropriations are provided for this program for FY 2024 award selection pursuant to the Consolidated Appropriations Act, 2024 (Pub. L. No. 118-42) and Full-Year Continuing

Appropriations and Extensions Act, 2025 (Pub. L. No. 119-4).

The Assistance Listing (formerly the Catalog of Federal Domestic Assistance (CFDA)) number for this solicitation is 20.930, titled Payments for Small Community Air Service Development.

Federal Awarding Agency Contact:

For further information concerning the technical requirements set out in this Order, please contact Brooke Chapman at Brooke.Chapman@dot.gov or (202) 366-0577. A TDD is available for individuals who are deaf or hard of hearing at (202) 366-3993. The Department may post answers to questions and other important clarifications in the above-captioned docket on www.regulations.gov and on the program website at https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP.

B. FEDERAL AWARD INFORMATION

No more than four 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. 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. Applications for renewal or supplementation of existing projects are not eligible to compete.

Pursuant to the authorities described above, the Department will make up to $12 million available for FY 2024 grant awards to carry out this program. There is no minimum or maximum individual award amount, and the amounts awarded will vary depending upon the features and merits of the selected applications. In past years, the Department’s individual grant sizes have ranged from $20,000 to nearly $1.6 million. Funding amounts made available for reimbursement may be impacted by future limitations placed on the spending authority and appropriations enacted for the Department. The Department may, at its discretion, issue partial funding awards up to the level authorized and provided that the above conditions are met. Additional information on the budget process may be found in OMB A-11:

https://www.whitehouse.gov/omb/information-for-agencies/circulars/.

Finally, as more fully discussed in Section F.1.a, the Department intends to award FY 2024 grants for durations of three years to complete studies, four years for marketing and promotion mailto:Brooke.Chapman@dot.gov http://www.regulations.gov/ https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP https://www.whitehouse.gov/omb/information-for-agencies/circulars/

(including advertising and public relations) of the airport, community, carrier, or destination, and five years for projects that target a revenue guarantee, subsidy, or other financial incentives.

C. ELIGIBILITY INFORMATION

1. Eligible Applicants

The Department determines application eligibility as part of the Eligibility Review stage.

Applicants and applications deemed ineligible at this stage will be disqualified. The Department will apply the criteria under Section C.1 as part of the Eligibility Review stage.

Only public entities may apply for and serve as the legal sponsor of a grant under the Small

Community Program. Private organizations cannot be the lead applicant. A community may file only one application for a grant, either individually or as part of a consortium.

Consortium Applications: Both individual communities and consortia of communities are eligible for SCASDP funds. An application from a consortium of communities must be one that seeks to facilitate the efforts of the communities working together toward one joint grant project, with one joint objective, including the establishment of one entity to ensure that the joint objective is accomplished.

Communities Without Existing Air Service: Communities that do not currently have commercial air service are eligible for SCASDP funds.

Eligible Projects: The Department is authorized to award grants under 49 U.S.C. § 41743(d) to communities that seek to provide assistance to:

• A U.S. air carrier4 to subsidize service to and from an underserved airport for a period not to exceed 3 years;

• An underserved airport, or an airport where air service has been terminated or substantially reduced, 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 Only U.S. air carriers are eligible to receive assistance from communities under SCASDP. See 49 U.S.C. §

40102(a)(2). A particular U.S. carrier may hold authority to conduct operations as a certificated air carrier, a commuter air carrier, or an air taxi operator. Communities are encouraged to verify, at an early stage of any air carrier discussions, that the air carrier holds appropriate Department authority to conduct the proposed services.

Communities may verify this authority by contacting the Department’s Air Carrier Fitness Division at (202) 366-

5903.

Eligibility Limitations:

Hub Size: In order to satisfy the hub-size requirement set forth in 49 U.S.C. §

41743(c)(1)(A), the airport serving the community or consortium may not be larger than a small-hub airport, as determined using the FAA’s most recently published classification effective on the Department’s set application deadline (due date).5

Same Project Limitation: Under 49 U.S.C. § 41743(c)(4)(B), as amended by FAA

2024, a community or consortium may not receive a new grant to support the same project more than once in a five-year period from the date of execution of the previous/original grant.6 In assessing whether a previous recipient’s current application represents a new project, the Department will compare the goals and objectives of the previous grant, including the key components of the means by which those goals and objectives were to be achieved, to the current application. 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 by that community for another revenue guarantee for service to the same destination or in the same direction would be subject to the five-year restriction, even if the revenue guarantee were structured differently or the type of carrier were different. However, a new application by such a previous recipient for service to a new destination or direction using a revenue guarantee, or for general marketing and promotion (including advertising and public relations) of the airport and the various services it offers, would be eligible.7 The Department recognizes that not all revenue guarantees, marketing agreements, studies, or other activities are of the same nature, and that if a subsequent application incorporates different goals or significantly different components, it may be sufficiently different to constitute a new project under

49 U.S.C. § 41743(c). Under 49 U.S.C. § 41743(e)(1), as amended by FAA 2018, the final scope of a project can be limited to only the elements that used funding or to only elements achieved, minimizing future project limitations on any idle components of the original scope.

Beginning with FAA 2018, Congress authorized limited waivers of the Same Project

Limitation. Under Section 41743(c)(4)(C), as amended by FAA 2024, the Secretary may waive the Five-Year Same Project Limitation, and thus make additional grants to a community or consortium of communities to participate in support of the same project within a five-year period, if the Secretary determines that communities “spent little or no

5 “Small-hub airport” is defined in 49 U.S.C. § 47102(23) as “a commercial service airport that has at least 0.05 percent but less than 0.25 percent of the passenger boardings.” See also https://www.faa.gov/airports/planning_capacity/categories. For FAA passenger enplanement information to use to determine an airport’s eligibility as a small-hub airport, see https://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/.

6 For the purpose of this provision, the five-year period starts on the date that the initial grant agreement was executed. Further, this limitation applies for all final project elements contained in a previous grant agreement’s scope.

7 As noted in Section E. (“Market Analysis”), target markets proposed by communities may be destination specific

(e.g., service to LAX), a geographic region (e.g., northwest mountain region) or directional (e.g., hub in the southeastern United States or a point north, south, east, or west of the applicant community).

https://www.faa.gov/airports/planning_capacity/categories https://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/ money on [their] previous project or encountered industry or environmental challenges8, due to circumstances that were reasonable beyond [their]control….” The Department will consider such waivers as part of complete and timely applications submitted in response to this Order. Communities seeking a waiver are asked to include in their application a discussion of the facts and circumstances that the Secretary should consider in applying the statutory test to their request, e.g., a full history of the previous grant and a documented and well-supported description of any applicable challenges encountered in the communities.

Concurrent Grant Limitation: A community or consortium may have only one

SCASDP grant at any time. If a community or consortium applies for a subsequent

SCASDP grant when its current grant has not yet expired, that community/consortium must notify the Department of its intent to terminate the current SCASDP grant, and if the community/consortium is selected for a new grant, such termination must take place prior to entering into the new grant agreement. Each beneficiary of a grant agreement under SCASDP is subject to this limitation; in other words, each airport or other government entity, including a State department of transportation, that receives a benefit from an active SCASDP grant, whether individually or part of a consortium, may not receive another SCASDP grant until the active grant is terminated. In addition, for consortium member applicants, permission must be granted from both the grant sponsor and the Department to withdraw from the current SCASDP grant before that consortium member will be deemed eligible to receive a subsequent SCASDP grant.

No Direct Benefits to Air Carriers: SCASDP provides financial assistance to eligible communities and is not intended to benefit any specific air carrier (other than through a revenue guarantee agreement or carrier-implemented marketing program). To that end, projects seeking funds to support the purchase of aircraft, the establishment of a new air carrier, or other similar direct benefits to an air carrier or a company seeking to become an air carrier are not eligible under SCASDP.9

Airport Capital Improvement Projects: Airport capital improvement projects, including, but not limited to, runway expansions and enhancements, the construction of additional aircraft gates, and other airport terminal expansions and reconfigurations are ineligible for funding under SCASDP. Airports seeking funding for airport capital improvement projects may want to consult with their local FAA Regional Office to discuss potential eligibility for grants under the Airport Improvement Program.

Essential Air Service Communities: Small communities that currently receive subsidized air service under the Essential Air Service (EAS) or Alternate Essential Air

Service (AEAS) program will not be considered eligible for SCASDP funds. Specifically, the Department will not deem eligible for consideration a project that includes service to

8 The Department clarifies that the term “environmental challenges” stated in 49 U.S.C. § 41743, refers to a community or airport situation and/or conditions (e.g., hurricane damage or widespread coastal flooding).

9 Such direct benefits would include, for example, funds to pay for the relocation of air carrier ground equipment, such as airport tugs, or other ancillary air carrier equipment, and relocation of personnel, including crews. Note that start-up costs to offset some expenses would be eligible for consideration.

a subsidized EAS point (or a point receiving AEAS funding), whether it is a point of origin, an intermediate point (for example, on a one-stop service), or a destination point on the proposed service.

Finally, the EAS statute (49 U.S.C. § 41733(c)(1)(D)) requires that the Department consider whether an air carrier has included a marketing plan in its proposal to provide subsidized EAS as part of the carrier selection criteria. In light of this and the scarcity of

SCASDP funds, the Department will not consider awarding additional Federal support under SCASDP for the marketing of subsidized EAS air service.

2. Cost Sharing or Matching

Cost sharing or matching is not required for applications. However, applications that provide multiple levels of contributions (State and/or local cash and/or in-kind contributions) will be viewed more favorably. See Section E.8 (“Local Contributions”).

D. SUBMISSION REQUIREMENTS AND DEADLINES

An application will not be complete and will be deemed ineligible for a grant award until and unless all required materials outlined in section E and Appendix A of this document, including the SF-424, have been submitted electronically submitted through www.grants.gov and time-stamped by 4:00PM on May 4, 2026 (the “Application Deadline”). See Appendix A, “Timely

Receipt Requirements and Proof of Timely Submission” and “Experiencing Unforeseen www.grants.gov Technical Issues” for more details.

E. APPLICATION CONTENT AND FORMAT

1. General Information

As discussed in this section and in Appendix A, all applications for grants under this NOFO must be submitted electronically via www.grants.gov. This NOFO lays out all application steps and includes all application forms and materials or Internet addresses where such forms may be found.10

2. Content and Form of Application Submission

To Apply for a Grant in this Proceeding:

• Determine the eligibility of your community;

• New grants.gov users must register with www.grants.gov (see Registration with www.grants.gov, below). Existing grants.gov users must verify existing www.grants.gov account has not expired, and the Authorized Organization Representative (AOR) is current;

10 In particular, a fillable .pdf of the Summary Information schedule, which must be filed with an application in this proceeding, is available at https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP.

http://www.grants.gov/ http://www.grants.gov/ http://www.grants.gov/

• A community with an active SCASDP grant must notify the Department (Office of

Aviation Analysis, X-50) of its intent to terminate its existing grant in order to be eligible for selection;

• Submit an Application for Federal Domestic Assistance (SF-424) via www.grants.gov.

• Submit a completed “Summary Information” schedule. This is your application cover sheet (see Appendix B);

• Submit a detailed application of up to 20 one-sided pages (excluding the completed Form

SF-424, Form SF-LLL (see Appendix D), Summary Information schedule, application cover and table of contents (each of which may not exceed one page in length), and any letters from the community or an air carrier showing support for the application), by the prescribed due date, that meets all required criteria (see Appendix C) and provides all other pertinent information, including:

o A description of the community’s air service needs or deficiencies;

o The driving distance, in miles, to the nearest large-, medium-, and small-hub airports, and airport with jet service;

o A strategic plan for meeting those needs under the Small Community Program, including a concise synopsis of the scope of the proposed grant project;

o For service to or from a specific city or market, such as New York, Chicago, Los

Angeles, or Washington, D.C., for example, a list of the airports that the applicant considers part of the market;

o A detailed description of the funding necessary for implementation of the community's project;

o An explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds (if applicable);

o Designation of a legal sponsor responsible for administering the program; and

• A request for waiver of the Five-Year Same Project Limitation (if applicable) – see

Appendix B. Attach any letters from the community or an air carrier showing support for the application, which should be addressed to Brooke Chapman, Associate Director, Small Community Air Service Development Program;11 and

• Provide separate submission of confidential material, if applicable (see Appendix E).

An application consisting of more than 20 pages (see sixth bullet above) will be accepted by the

Department, but the content in the additional pages past page 20 will not be evaluated or considered by the Department. The Department would prefer that applicants use one-inch margins and a font size not less than 12-point type and include page numbers.

Registration with www.grants.gov: Communities must be registered with www.grants.gov in order to submit an application for funds available under this program. For consortium applications, only the legal sponsor must be registered with www.grants.gov in order to submit its application for funds available under this program. See Appendix A for additional information on applying through www.grants.gov.

Contents of Application: There is no set format that must be used for applications. Each application should, to the maximum extent possible, address the selection criteria set forth in

11 See footnote 2.2 http://www.grants.gov/ http://www.grants.gov/

Section F.1, including a clear description of the air service needs/deficiencies and present plans/strategies that directly address those needs/deficiencies. At a minimum, however, each application must include the following information:

• A description of the community’s air service needs or deficiencies, including information about: (1) major origin/destination markets that are not now served or are not served adequately; (2) fare levels that the community deems relevant to consideration of its application, including market analyses or studies demonstrating an understanding of local air service needs; (3) any air service developments within the past ten years that have adversely affected the community, including, but not limited to, termination of scheduled passenger service;12 and (4) any air service development efforts over the past three years and the results of those efforts (such as marketing and promotion, including advertising and public relations) and any letters from air carriers demonstrating support for these efforts and proposing to offer new services.

• A strategic plan for meeting those needs under the Small Community Program, including the community’s purpose for the project, and a detailed plan describing the specific means that are proposed for attaining the goals set out in that project purpose.13 If the application is selected, the Department will work with the recipient to incorporate the relevant elements of the application’s strategic plan into the grant agreement’s project scope.14 Applicants should note that, once a grant agreement is signed, amendments to project scope are limited to those that are consistent with the original purpose of the grant or the community’s current air service needs. Applicants also are advised to obtain firm assurances from air carriers proposing to offer new air services if a grant is awarded.

Strategic plans should:

o for applications involving new or improved service, explain how the service will become self-sufficient;

o fully and clearly outline the goals and objectives of the project; and o fully and clearly summarize the actual, specific steps (in bullet form, with a proposed timeline) that the community intends to take to bring about these goals and objectives.

• If relevant, a detailed description of the funding necessary for implementation of the proposed project (including Federal and non-Federal contributions).

• An explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds within a five-year period; applicants for which

12 For example, if a community has lost scheduled passenger air service, or other air service, or been otherwise adversely affected as a result of an airline merger, the applicant should describe the situation in detail and quantify, to the extent possible, its effects on the community.

13 See Appendix B, p. 3-4.

14 If new service is proposed to or from a specific city or market served by multiple airports (such as New York, Chicago, Los Angeles, or Washington, D.C., for example), the applicant is encouraged to identify the airport(s) in that city or market the community would be targeting under its application in order to facilitate the evaluation of the proposal and the drafting of the grant agreement’s project scope. Statutory flexibility allows that the final scope of the project can be limited to only the elements achieved. See 49 U.S.C. § 41743(e)(1) and Section C.1’s description of the Same Project Limitation herein.

the Same Project Limitation may apply should also explain why a waiver under Section

41743(c)(4)(C) should be granted by the Secretary. See Section C.1 (“Same Project

Limitation”).

• Designation of a legal sponsor responsible for administering the proposed project. The legal sponsor of the proposed project must be a government entity, such as a State, county, or municipality. The legal sponsor must be legally, financially, and otherwise able to execute the grant agreement and administer the grant, including having the authority to sign the grant agreement and to assume and carry out the certifications, representations, warranties, assurances, covenants and other obligations required under the grant agreement with the Department and to ensure compliance by the grant recipient with the grant agreement and grant assurances. 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 project cost reimbursements. A community may designate only one 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 may not be designated as the legal sponsor of a grant under the Small Community

Program. The community must ensure that the legal sponsor and grant recipient of any funding has the legal authority under State and local laws to carry out all aspects of the grant, and the Department may require an opinion of the legal sponsor’s attorney as to its legal authority to act as a sponsor and to carry out its responsibilities under the grant agreement. The applicant should also provide the name of the signatory party for the legal sponsor.

3. System for Award Management (SAM)

Each applicant is required to (i) be registered in SAM before submitting its application; (ii) provide a valid Unique Entity Identifier (UEI) number in its application; and (iii) continue to maintain an active SAM registration with current information at all times during which it has an active Federal award or an application or plan under consideration by the Department. The

Department will not make any award to an applicant until the applicant has complied with all applicable SAM requirements and, if an applicant has not fully complied with the requirements by the time the Department is ready to make an award, the Department may determine that the applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another applicant. For more information on SAM requirements for this award, and the UEI, see Appendix A.

Late Application Notice: Applicants that are unable to successfully submit their application package through grants.gov prior to the Application Deadline due to technical difficulties outside their control must submit an email to SCASDPgrants@dot.gov with the information described in

Appendix A.

mailto:SCASDPgrants@dot.gov

4. Funding Restrictions

Expenditures made prior to the execution of a grant agreement, including costs associated with preparation of the grant application, will generally not be considered for reimbursement, except in limited cases at the discretion of the Department where otherwise allowable costs are deemed necessary for efficient and timely performance of the scope of work, and explicitly allowed by the Department to begin prior to grant execution at the grantee’s risk, in accordance with 2 CFR

§ 200.458.

5. Grant Funds, Sources and Uses of Project Funds

Project budgets should show how different funding sources will share in each activity and present those data in dollars and percentages. The budget should identify other Federal funds the applicant is applying for or has been awarded, if any, that the applicant intends to use. Funding sources should be grouped into three categories: non-Federal, SCASDP (funds being requested in this proceeding), and other Federal with specific amounts from each funding source.15

6. Sharing of Applicant Information

The Department may share application information within the Department or with other Federal agencies if the Department determines that sharing is relevant to the respective program’s objectives.16

7. Additional Guidance

Scope Flexibilities: The scope of a SCASDP grant award is eligible, at the Department’s discretion, for amendment throughout the grant cycle and at closing. Statutory flexibilities allow the Department to consider requests from the community or consortium and any participating air carrier, to modify the scope of a signed agreement when there is evidence that the changes are consistent with the original purpose of the grant or the community’s current air service needs. In addition, the final scope of the project can be limited to only the elements that used funding or to only elements achieved. See 49 U.S.C. § 41743(e)(1). These flexibilities provide the option to direct grant funds where current needs exist and minimize future same project limitations on idle components of the original scope. Under 49 U.S.C. § 41743(c)(4)(B), same project limitations apply to each scope element for a period of five years from the date of execution of the original/previous grant agreement. Under Section 41743(c)(4)(C), as amended by FAA 2024, the

Secretary may waive the five-year limitation if it determines that the community “spent little or no money on [their] previous project or encountered industry or environmental challenges, due to circumstances that were reasonably beyond [their] control….” Request for amendments and

15 This information is collected from applicants in the Summary Information schedule. See Appendix B, section J to this Order.

16 Note that applicants may provide certain confidential business information relevant to their application proposals on a confidential basis (i.e., not subject to public disclosure, under the provisions of 14 CFR § 302.12). See Section

H.2 and Appendices C and E to this Order for information on confidential handling by the Department of such information, in accordance with the Department’s Freedom of Information regulations (49 CFR § 7.17).

waivers must be directed to the Department on official letterhead describing the reasons for the request in detail along with the corresponding evidence and/or supporting documentation.

Market Analysis: Applicants requesting funds for a revenue guarantee/subsidy/financial incentive are encouraged to conduct and reference in their applications an in-depth analysis of their target markets. Target markets can be destination specific (e.g., service to LAX), a geographic region (e.g., northwest mountain region) or directional (e.g., hub in the southeastern

United States or a point north, south, east, or west of the applicant community).

Complementary Marketing Commitment: Applicants requesting funds for a revenue guarantee/subsidy/financial incentive are encouraged to designate in their applications 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, a community that proposes to use the grant funds for service in a city-pair market that is already served by another air carrier must explain in detail why the existing service is insufficient or unsatisfactory or provide other compelling information to support such an application proposal.

Local Contributions: Applications must clearly identify the level of Federal funding sought for the proposed project. Applications must also identify the community’s cash contributions to the proposed project, in-kind contributions from the airport, and in-kind contributions from the community. Non-Federal funds will be applied proportionately to the entire scope of the project.

Communities cannot use non-Federal funds selectively to fund certain components of a project

(see Section GG.2on Payments for more information). Cash contributions from airport revenues must be identified separately from cash contributions from other community sources. Cash contributions from the State and/or local government should be separately identified and described as well.

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.

For 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 local government, and/or from local businesses, or other private organizations in the community.17 Because private cash contributions are to be from local community sources, the Department will not consider as a part of these non-airport revenues any funds that a community might receive from an air carrier interested in

17 This kind of cash contribution can also include certain monies provided by an airport, where those monies are not generated by airport operations, but by funds sourced from tax revenues that are provided to the airport by a taxing authority. An applicant may rely on this form of cash contribution only if it demonstrates that (1) the funds originate from a taxing authority and not from normal airport revenues, and (2) the funds have been segregated, via a separate accounting, from normal airport revenues.

providing service under that community’s application. Moreover, 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 subsidies (including revenue guarantees) to airlines, per 49 U.S.C. § 47107 and 47133. Applications that include local contributions based on airport revenues alone will be viewed less favorably than those with cash from non-airport sources.

In-kind contributions from the airport: This can include such items as waivers of landing fees, ground handling 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.

Cash vs. in-kind contributions: Communities that include local contributions made in cash will be viewed more favorably.

Commencement of Proposed Air Service Prior to Award Selection: The Department will take into consideration whether air service proposed by a community is announced or begins prior to our announcement of grant awards. Air services that commence prior to grant awards could call into question the extent to which Federal funding is necessary to support the targeted service. Moreover, the Department generally will not reimburse expenses, including revenue guarantees to air carriers, incurred by a selected community prior to the effective date of that selectee’s grant agreement, except in limited cases at the discretion of the Department where otherwise allowable costs are deemed necessary for efficient and timely performance of the scope of work, and explicitly allowed by the Department to begin prior to grant execution at the grantee’s risk, in accordance with 2 CFR § 200.458.

Aviation Security: Communities proposing new or expanded air service under a SCASDP grant application are encouraged to contact the Transportation Security Administration (TSA) early in the process to ascertain what the security implications of such service would be with respect to the airport involved, and what measures that airport would need to take with the TSA to assure that the service would meet all applicable TSA requirements.

Airport Readiness and FAA Certification: Communities should describe how their projects can be accomplished within the grant durations set forth in Section B, including whether the airport and proposed air service provider have the requisite authorities and certifications necessary to carry out the proposed projects. In addition, because of this emphasis placed on timely use of funds, applicants proposing new service should describe the airport and whether it can support the proposed service, including whether the airport holds, or intends to apply for, an airport operating certificate issued under 14 CFR Part 139. Air service providers proposed for the new service must have met or be able to meet, in a reasonable period of time, all Department requirements for air service certification, including safety and economic authorities.

Department Priorities Relating to Safety: The Department is committed to administering this program consistently with its priorities related to safety. Any air carrier conducting operations under this program must be in compliance with all applicable DOT statutes and regulations, including all applicable safety regulations and requirements of the Federal Aviation

Administration as set forth in the Federal Aviation Regulations and other relevant documents.18

F. APPLICATION REVIEW INFORMATION19

1. Merit Criteria and Selection Considerations

Applications meeting the Eligibility Review stage criteria as set forth in Section C.1 (“Eligible

Applicants”) are advanced to the Technical Review stage. SCASDP grants will be awarded based on the selection criteria outlined below. In the Technical Review stage, the Department considers the extent to which each eligible application aligns with Merit Criteria and Selection

Considerations. This review relies on an applicant’s use of data-driven and evidence-based methods to demonstrate how well the proposed project aligns with the criteria and selection considerations. Applications that align well with one or more of the Merit Criteria will be viewed more favorably than those that do not align with any Merit Criteria.

The Technical Review determines an application’s alignment with the following factors in

49 U.S.C. § 41743(c)(1) and (2):

• The applicant community or consortium has insufficient air carrier service or unreasonably high air fares; and

• 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.20

a. Merit Criteria

The Department will evaluate the extent to which a proposed project meets the standards set forth in 49 U.S.C. § 41743(c)(5), as amended by FAA 2024, which direct the Department to give priority consideration to those communities or consortia whose applications align with the following criteria:

Air fares are higher than the national average air fares for all communities. The Department will compare the local community’s air fares to the national average air fares for all similar markets. Communities with market air fares significantly higher than the national average air

18 See also ‘Airport Readiness and FAA Certification,’ above.

19 As a part of our review of any application, the Department may reach out to an applicant, if necessary, to resolve a factual discrepancy or similar technical issue with that application.

20 In this context, the statutory term “diversity” is synonymous with geographic distribution.

fares in similar markets will receive priority consideration and be considered as meeting a Merit

Criterion. The Department calculates these fares using data from the Bureau of Transportation

Statistics (BTS) Airline Origin and Destination Survey data. The Department evaluates all fares in all relevant markets that serve a SCASDP community and compares the SCASDP community fares to all fares in similar markets across the country. Each SCASDP applicant’s air fares are computed as a percentage above or below the national averages. The report compares a community’s air fares to the average for all other similar markets in the country that have similar density (passenger volume) and similar distance characteristics (market groupings). All calculations are based on 12-month ended periods to control for seasonal variation of fares.

The community or consortium has demonstrated support from at least one air carrier to provide service. The Department will consider letters of intent from air carriers on behalf of applications that specifically indicate intent to enlist new or expanded air service at the community. Letters from airline planning departments that describe the planned services in detail will be viewed more favorably.

The community or consortium will provide a portion of the cost of the activity from local sources other than airport revenue sources. The Department will consider whether a community or consortium proposes local funding for the proposed project. Applications providing proportionately higher levels of cash contributions from sources other than airport revenues will be viewed more favorably. Applications that provide multiple levels of contributions (State and/or local cash and/or in-kind contributions) will also be viewed more favorably. See Section E.8 (“Local Contributions”), for more information on the application of this selection criterion.

The community or consortium has established or will establish a public-private partnership to facilitate air carrier service to the public. The Department will consider a community’s or consortium’s commitment to facilitate air carrier service in the form of a public-private partnership. Applications that describe in detail how the partnership will actively participate in the implementation of the proposed project will be viewed more favorably.21

The assistance will be used to help restore scheduled passenger air service that has been terminated or substantially reduced (as measured by enplanements, capacity (seats), schedule, connections, or routes). The Department will consider factors including the circumstances surrounding the cessation or substantial reduction of service, the extent to which market circumstances have now changed, warranting the restoration of service, and the reasonableness of the applicant’s plan to restore service (and, where appropriate, the length of time since the service was last operated).22 Applications where changed circumstances would

21 An air carrier may not be a participant in any public-private partnership that a community or consortium has established, or is working with, to seek a grant in this proceeding.

22 We consider a 10-year period since cessation of a service for a proposed new service to be considered as a restoration of service.

support the viability of replacement service, and for which the community has put forth a robust plan to obtain that service, will be viewed more favorably.23

In determining whether a proposed service qualifies as a restoration of air service in the context of this proceeding, the Department will look closely at the current situation affecting the community involved. For example, in the case of a community that has lost all of its air service, the Department would consider a proposal to initiate new service to any city to qualify as a restoration of air service. Where a community currently has any existing air service, the

Department would normally expect a qualifying proposal to consist of new service to the same city or air service market as that previously operated. To the extent that a proposed service was not to the same city/hub airport as that which was previously operated, we would expect the applicant to explain in detail why its proposal, while not exactly matching the former service, would meet the air transportation needs of the segment of the community affected by the loss of that former service, and should therefore be accepted by the Department as a qualifying restored service.24

The assistance will provide material benefits to a broad segment of the traveling public, including businesses, educational institutions, and other enterprises, whose access to the national air transportation system is limited. The Department will consider whether the proposed project would provide, to a broad segment of the community’s traveling public, important benefits relevant to the community.