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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
ENGROSSED SENATE
BILL NO. 1461 By: Rosino of the Senate
and
Echols of the House
An Act relating to aircraft; creating the Oklahoma
Air Service Development Grant Program; providing for
legislative findings; providing certain definitions;
providing for certain grant service for certain air
service development; providing for certain gran t
application process; creating Oklahoma Air Service
Development Grant Program Revolving Fund; providing
for codification; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 411 of Title 3, unless there is
created a duplication in numbering, reads a s follows:
This act shall be known and may be cited as the “Oklahoma Air
Service Development Grant Program”.
SECTION 2. NEW LAW A new section o f law to be codified
in the Oklahoma Statutes as Section 412 of Title 3, unless there is
created a duplication in numbering, reads as follows:
As used in the Oklahoma Air Service Development Grant Program:
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1. “Aircraft” means any contrivance now kno wn, or hereafter
invented, used, or designed for navigation of or f light in the air
or airspace;
2. “Airport” means an area of land or water that is used, or
intended to be used, for the landing and takeoff of aircr aft, and
buildings and facilities, if any ;
3. “Airport sponsor” means the owner of a publicly owned
airport;
4. “Commercial air servi ce” means the operation of a company
that provides scheduled air transport s ervices to the state for
traveling passengers ;
5. “Commercial service air port” means an airport meeting the
current Federal Aviatio n Administration definition for commercial
service airport;
6. “Municipality” means any incorporated city, village , or town
of this state and any county or political sub division or district in
this state, or any public trust thereof, which is, or may be,
authorized by law to acquire, establish, constru ct, maintain,
improve, and operate airports, airstrips , and aeronautical
navigation facilities;
7. “New airline service” means a commercial service carrier or
company that provides regularly scheduled new air transport services
to the state for traveling passengers and freight;
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8. “Nonstop flight” means a flight made without intermediate
stops between source and destination ;
9. “Primary airport” means a commercial service airport that
has more than ten thousan d (10,000) passenger boardings each year;
and
10. “State” or “this state” means the State of Oklahoma.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 413 of Title 3, unless there is
created a duplication in numbering, reads as follows:
A. There is hereby created within the Oklahoma Aeronautics
Commission, the Oklahoma Air Service Development Grant Program. The
Oklahoma Air Service Dev elopment Grant Program (OASDGP) is designed
to offer financial assistan ce by grant to private or pu blic entities
for the purpose of assisting commercial air service deve lopment.
Grant funding is administered based on merit and the potential for a
specific project to enhance the state’s economy. Grants are one -
time awards.
B. Grant funding can be used for commercial air service
development projects and include minimum r evenue guarantees for
specific new routes, marketi ng and advertising of service, market
study and research projects to d evelop data for a business case for
new service, start-up cost offsets to reduce the cost of an airline
beginning service, and other innovative risk sharing models to
support the introduc tion of new airline service in the state.
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Grants must be used to recr uit service in an airport -pair that has
no current, daily schedul ed airline service. Grants may not be used
to support current routes o r to recruit a second carrier to an
airport-pair.
C. Public, private and nonprofit entities within Oklahoma that
have sufficient financial and management ca pacity to complete the
requested project are eligible for funding under this program.
Eligible entities include:
1. Airport sponsors of publicly owned airports;
2. Oklahoma municipalities;
3. Chambers of commerce; o r
4. Community organizations that pr omote economic development.
D. Each application must include a detailed business plan with
supporting data for the proposed project. T he business plan should
include:
1. Available passengers for the route including local demand
and connecting demand;
2. Detail on available revenue;
3. Current and historical fare data relative to peers and how
the project will lower fares; and
4. Business demand for companies based in Oklahoma or do ing
business in Oklahoma that may use the proposed route.
E. Projects with airline support will be considered first for
funding under this program. Airline support can be evidenced by a
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letter, dated, signed, and on airline letterhead, or other
communication directly from an airline stati ng its support for the
funding and its interest in the proposed route. An airline letter
of support is not required for funding to be allocated to a project
but will be used in prioritizing fund awards.
F. To be considered for state funding under this pr ogram,
applicants must demonstrate t he ability to provide a mini mum twenty
percent (20%) of all funding for the project throu gh local sources.
Local funding should be dedicat ed to the project and evidenced by
letters of commitment before an application is submitted. Any
private enterprise or nonairport, nonmunicipal, nonprofit entity
must have a letter of credit to qualif y for a grant without a public
partner.
G. Each application should include a narrative organized into
seven (7) sections:
1. A proposal summary;
2. Applicant organizatio n description, history, and ability to
fund the project;
3. Air service background and history of the airport/market;
4. Project description, target route, and specific business
plan for service;
5. Timeline;
6. Budget including local funding; and
7. Letters of support.
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H. Applications will first be vetted for completeness. Any
application which does not include the information lis ted in
subsection G will be eliminated from cons ideration. Any application
that does not include local funding for at le ast twenty percent
(20%) of the project cost will be eliminated from consideration.
Any applicant that cannot demons trate he or she is working with an
airport sponsor on the project will be eliminated from
consideration.
I. Once applications have been de emed to meet minimum
requirements, they will be evaluated for funding against each other,
with special attention paid to the following criteria i n this order:
1. The viability of the business case for service and the
opportunity for service to be sustaina ble;
2. The need for the service in the community and region;
3. The challenges with current air service that could be
rectified with grant fun ding;
4. Share of local funding vers us grant funding;
5. Airline support for the project;
6. Broad-based stakeholder support for the project; and
7. The ability to use the funding in a timely manner.
The Oklahoma Department of Commerce shall be part of this review
process. The state may request additional information from the
applicant and may require a writte n response from the applican t for
any outstanding questions. The state reserves the right to require
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formal presentations from each applicant to explain the proposed
project.
J. The state will enter into a grant agreement contract with
recipients prior to distributing program funds . The agreement shall
include:
1. The specific project re ceiving grant funding;
2. The maximum dollar amount of state funding;
3. Effective dates of th e grant;
4. Rights to terminate the grant agreement;
5. Inspection and reporting requirements to ve rify project
status and expenditures; and
6. Conditions of disbursement of grant funds including
obligation to repay funds if the terms of the agreement a re not met.
The grant agreement contract shall require the awardee to
provide ongoing quarterly repor ts stating progress and detailing any
activity related to the project.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 414 of Title 3, unless there is
created a duplication in numbering, re ads as follows:
There is hereby created in the State Treasur y a revolving fund
for the Oklahoma Aeronautics Commission to be designated the
“Oklahoma Air Service Development Grant Program Revolving Fund”.
The fund shall be a continuing fund, not subject t o fiscal year
limitations, and shall consist of all mo nies received by the Tax
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Commission which are specifically required by law to be deposited in
the fund, any public or private donations, con tributions and gifts
received for the benefit of the fund, and any amounts appropriated
by the Legislature. All monies accruing to the credit of the fund
are hereby appropriat ed and may be budgeted and expended b y the
Oklahoma Aeronautics Commission for the purpose of funding grants as
provided in this act. Expenditures from the fund shall be made upon
warrants issued by the St ate Treasurer against claims filed as
prescribed by law wit h the Director of the Office of Man agement and
Enterprise Services for a pproval and payment.
SECTION 5. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
04/11/2022 - DO PASS.