Title 49 — Transportation
Part A · Chapter 417 — Operations of Carriers
§ 41737. Compensation guidelines, limitations, and claims
Statutory text
Compensation Guidelines.—
The Secretary of Transportation shall prescribe guidelines governing the rate of compensation payable under this subchapter. The guidelines shall be used to determine the reasonable amount of compensation required to ensure the continuation of air service or air transportation under this subchapter. The guidelines shall—
provide for a reduction in compensation when an air carrier does not provide service or transportation agreed to be provided;
consider amounts needed by an air carrier to promote public use of the service or transportation for which compensation is being paid;
include expense elements based on representative costs of air carriers providing scheduled air transportation of passengers, property, and mail on aircraft of the type the Secretary decides is appropriate for providing the service or transportation for which compensation is being provided;
include provisions under which the Secretary may encourage an air carrier to improve air service for which compensation is being paid under this subchapter by incorporating financial incentives in an essential air service contract based on specified performance goals, including goals related to improving on-time performance, reducing the number of flight cancellations, establishing reasonable fares (including joint fares beyond the hub airport), establishing convenient connections to flights providing service beyond hub airports, and increasing marketing efforts; and
include provisions under which the Secretary may execute a long-term essential air service contract to encourage an air carrier to provide air service to an eligible place if it would be in the public interest to do so.
Promotional amounts described in paragraph (1)(B) of this subsection shall be a special, segregated element of the compensation provided to a carrier under this subchapter.
Required Finding.—
The Secretary may pay compensation to an air carrier for providing air service or air transportation under this subchapter only if the Secretary finds the carrier is able to provide the service or transportation in a reliable way.
Claims.—
Not later than 15 days after receiving a written claim from an air carrier for compensation under this subchapter, the Secretary shall—
pay or deny the United States Government’s share of a claim; and
if denying the claim, notify the carrier of the denial and the reasons for the denial.
Authority To Make Agreements and Incur Obligations.—
The Secretary may make agreements and incur obligations from the Airport and Airway Trust Fund established under section 9502 of the Internal Revenue Code of 1986 (26 U.S.C. 9502) to pay compensation under this subchapter. An agreement by the Secretary under this subsection is a contractual obligation of the Government to pay the Government’s share of the compensation.
Adjustments to Account for Significantly Increased Costs.—
In general.—
If the Secretary determines that air carriers are experiencing significantly increased costs in providing air service or air transportation for which compensation is being paid under this subchapter, the Secretary may increase the rates of compensation payable under this subchapter without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734.
Readjustment if costs subsequently decline.—
If an adjustment is made under paragraph (1), and total unit costs subsequently decrease to at least the total unit cost reflected in the compensation rate, then the Secretary may reverse the adjustment previously made under paragraph (1) without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734.
Significantly increased costs defined.—
In this subsection, the term “significantly increased costs” means a total unit cost increase (but not increases in individual unit costs) of 10 percent or more in relation to the total unit cost reflected in the compensation rate, based on the carrier’s internal audit of its financial statements if such cost increase is incurred for a period of at least 2 consecutive months.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Pub. L. 103–272 § 1(e) · 108 Stat. 745
Enacted · 49 U.S.C. § 41737
Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1151
Source evidence
Code source credit
Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1151Enacted provision · exact public law section
Section 1. subtitles ii, ii, and v-x of title 49, united states code (a) Certain general and permanent laws of the 49 USC prec. 101 note. United States, related to transportation, are revised, codified, and enacted by subsections (c)–(e) of this section without substantive change as subtitles II, III, and V–X of title 49, United States Code, “Transportation”. Those laws may be cited as “49 U.S.C. ________”. (b) Title 49, United States Code, is amended by striking the table of subtitles at the beginning of the title and substituting the following new table of subtitles: “Subtitle “I. DEPARTMENT OF TRANSPORTATION “II. OTHER GOVERNMENT AGENCIES “III. GENERAL AND INTERMODAL PROGRAMS “IV. INTERSTATE COMMERCE “V. RAIL PROGRAMS “VI. MOTOR VEHICLE AND DRIVER PROGRAMS “VII. AVIATION PROGRAMS “VIII. PIPELINES “IX. COMMERCIAL SPACE TRANSPORTATION “X. MISCELLANEOUS (c) Title 49, United States Code, is amended by striking subtitle II, except that chapter 31 (comprising sections 3101–3104) of subtitle II is redesignated and restated as chapter 315 (comprising sections 31501–31504) of subtitle VI of title 49, as enacted by subsection (e) of this section. (d) Title 49, United States Code, is amended by adding the following immediately after subtitle I:Pub. L. 108–176 title IV § 402(a) · 117 Stat. 2490
Added · 49 U.S.C. § 41737(e)
Pub. L. 108–176 added subsec. (e)
Source evidence
Code amendment note
Subsec. (e). Pub. L. 108–176 added subsec. (e).Enacted provision · exact public law section
(a) In General.— Section 41737 is amended by adding at the end the following: “(e) Adjustments to Account for Significantly Increased Costs.— “(1) In general.— If the Secretary determines that air carriers are experiencing significantly increased costs in providing air service or air transportation for which compensation is being paid under this subchapter, the Secretary may increase the rates of compensation payable under this subchapter without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734. “(2) Readjustment if costs subsequently decline.— If an adjustment is made under paragraph (1), and total unit costs subsequently decrease to at least the total unit cost reflected in the compensation rate, then the Secretary may reverse the adjustment previously made under paragraph (1) without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734. “(3) Significantly increased costs defined.— In this subsection, the term ‘significantly increased costs’ means a total unit cost increase (but not increases in individual unit costs) of 10 percent or more in relation to the total unit cost reflected in the compensation rate, based on the carrier’s internal audit of its financial statements if such cost increase is incurred for a period of at least 2 consecutive months.” .Effective date note
Pub. L. 108–176, title IV, § 402(b), Dec. 12, 2003, 117 Stat. 2543, provided that: “The amendment made by subsection (a) [amending this section] shall take effect 30 days after the date of enactment of this Act [Dec. 12, 2003].”FAA Modernization and Reform Act of 2012
Pub. L. 112–95 title IV § 427(a) · 126 Stat. 11
Added · 49 U.S.C. § 41737(a)(1)(D); 49 U.S.C. § 41737(a)(1)(E)
Pub. L. 112–95 added subpars. (D) and (E)
Source evidence
Code amendment note
Subsec. (a)(1)(D), (E). Pub. L. 112–95 added subpars. (D) and (E).Enacted provision · exact public law section
(a) Compensation Guidelines.— Section 41737(a)(1) is amended— (1) by striking “and” at the end of subparagraph (B); (2) in subparagraph (C) by striking the period at the end and inserting a semicolon; and (3) by adding at the end the following: “(D) include provisions under which the Secretary may encourage an air carrier to improve air service for which compensation is being paid under this subchapter by incorporating financial incentives in an essential air service contract based on specified performance goals, including goals related to improving on-time performance, reducing the number of flight cancellations, establishing reasonable fares (including joint fares beyond the hub airport), establishing convenient connections to flights providing service beyond hub airports, and increasing marketing efforts; and “(E) include provisions under which the Secretary may execute a long-term essential air service contract to encourage an air carrier to provide air service to an eligible place if it would be in the public interest to do so.” .Pub. L. 118–63 title V § 561(h) · 138 Stat. 1216
Struck · 49 U.S.C. § 41737(d)
Pub. L. 118–63 struck out par. (1) designation before “The Secretary” and par. (2) which read as follows: “Not more than $38,600,000 is available to the Secretary out of the Fund for each of the fiscal years ending September 30, 1993–1998, to incur obligations under this section. Amounts made available under this section remain available until expended.”
Unresolved: Pub. L. 118–63 was not found in the local Statutes at Large index.
Source evidence
Code amendment note
Subsec. (d). Pub. L. 118–63 struck out par. (1) designation before “The Secretary” and par. (2) which read as follows: “Not more than $38,600,000 is available to the Secretary out of the Fund for each of the fiscal years ending September 30, 1993–1998, to incur obligations under this section. Amounts made available under this section remain available until expended.”
3 of 4 references resolved to an enrolled provision · 1 unresolved
Notes
historicalAndRevision
| Historical and Revision Notes | ||
|---|---|---|
| RevisedSection | Source (U.S. Code) | Source (Statutes at Large) |
| 41737(a) | 49 App.:1389(f). | Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(e)(2)–(g); added Oct. 24, 1978, Pub. L. 95–504, § 33(a), 92 Stat. 1732; Dec. 8, 1983, Pub. L. 98–213, § 10, 97 Stat. 1461; Oct. 4, 1984, Pub. L. 98–443, § 9(r), 98 Stat. 1708; restated Dec. 30, 1987, Pub. L. 100–223, § 202(a)(1), (2), (b)(1), 101 Stat. 1507, 1515. |
| 41737(b) | 49 App.:1389(e)(2). | |
| 41737(c) | 49 App.:1389(g). | |
| 41737(d) | 49 App.:1389(l). | Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(l); added Nov. 5, 1990, Pub. L. 101–508, § 9113(b)(1), 104 Stat. 1388–363. |
In subsection (a)(1), before clause (A), the word “prescribe” is substituted for “establish” to eliminate an executed word. The words “air service or air transportation under this subchapter” are substituted for “air service under this section” for consistency with the source provisions restated in sections 41733, 41735, and 41736 of the revised title. In clause (C), the words “the service or transportation for which compensation is being provided” are substituted for “such service” for clarity.
In subsection (a)(2), the words “compensation provided to a carrier under this subchapter” are substituted for “required compensation” for clarity.
In subsection (b), the words “air service or air transportation” are substituted for “air service” for consistency with the source provisions restated in sections 41733, 41735, and 41736 of the revised title.
In subsection (d)(2), the reference to fiscal year 1992 is omitted as obsolete.
Editorial Notes
Amendments2003–2024 · 3 rounds
2024
Subsec. (d). Pub. L. 118–63 struck out par. (1) designation before “The Secretary” and par. (2) which read as follows: “Not more than $38,600,000 is available to the Secretary out of the Fund for each of the fiscal years ending –1998, to incur obligations under this section. Amounts made available under this section remain available until expended.”
2012
Subsec. (a)(1)(D), (E). Pub. L. 112–95 added subpars. (D) and (E).
2003
Subsec. (e). Pub. L. 108–176 added subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Pub. L. 108–176, title IV, § 402(b), , 117 Stat. 2543, provided that: “The amendment made by subsection (a) [amending this section] shall take effect 30 days after the date of enactment of this Act [].”
Emergency Across-the-Board Adjustment to Compensation for Significantly Increased Costs
Pub. L. 112–95, title IV, § 426(a), , 126 Stat. 98; Pub. L. 115–254, div. B, title V, § 539(s)(1), , 132 Stat. 3371, provided that: “Subject to the availability of funds, the Secretary of Transportation may increase the rates of compensation payable to air carriers under subchapter II of chapter 417 of title 49, United States Code, to compensate such carriers for increased aviation fuel costs without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734 of such title.”
Deadline for Issuance of Revised Guidance
Pub. L. 112–95, title IV, § 427(b), , 126 Stat. 99, provided that: “Not later than 1 year after the date of enactment of this Act [], the Secretary of Transportation shall issue revised guidelines governing the rate of compensation payable under subchapter II of chapter 417 that incorporate the amendments made by this section [amending this section].”