B-90072, NOVEMBER 15, 1949, 29 COMP. GEN. 227

B-90072: Nov 15, 1949

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1949: I HAVE YOUR LETTER OF OCTOBER 14. IT IS STATED IN YOUR LETTER THAT THE CIVIL AERONAUTICS BOARD HAS ISSUED A NUMBER OF CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY. THE CARRIERS ARE RECEIVING COMPENSATION FROM THE GOVERNMENT UNDER THE RATES THUS ESTABLISHED. IT IS STATED THAT EACH OF THE CERTIFICATES REFERRED TO IS OF TEMPORARY DURATION AND CONTAINS A SPECIFIC EXPIRATION DATE. THE BOARD HAS BEEN CONFRONTED WITH A PROBLEM CONCERNING THE RIGHTS OF THE FEEDER CARRIERS WITH RESPECT TO THE RECEIPT OF MAIL PAY IN THOSE INSTANCES WHERE A REQUEST FOR EXTENSION OF ITS CERTIFICATE HAS BEEN FILED BY THE CARRIER BUT FINAL DISPOSITION THEREOF HAS NOT BEEN AND WILL NOT BE HAD BY THE DATE OF EXPIRATION OF THE ORIGINAL CERTIFICATE.

B-90072, NOVEMBER 15, 1949, 29 COMP. GEN. 227

TRANSPORTATION - AIR MAIL - COMPENSATION AFTER EXPIRATION OF TEMPORARY CERTIFICATE OF CONVENIENCE AND NECESSITY THE PROVISIONS OF SECTION 9 (B) OF THE ADMINISTRATIVE PROCEDURE ACT, EXTENDING THE TERMINATION DATE OF LICENSES RELATING TO CONTINUING ACTIVITIES TO THE DATE OF FINAL ACTION ON APPLICATIONS FOR RENEWALS TIMELY MADE, APPLY TO PERMIT PAYMENT FOR THE TRANSPORTATION OF MAIL AT RATES FIXED UNDER SECTION 406 OF THE CIVIL AERONAUTICS ACT, AS AMENDED, UNTIL THE DATE OF FINAL ACTION BY THE CIVIL AERONAUTICS BOARD ON THE RENEWAL APPLICATION OF AN AIR LINE OPERATING UNDER A TEMPORARY CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY, EVEN THOUGH SUCH CERTIFICATE EXPIRES AT AN EARLIER DATE.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, CIVIL AERONAUTICS BOARD, NOVEMBER 15, 1949:

I HAVE YOUR LETTER OF OCTOBER 14, 1949, RELATIVE TO THE PROPRIETY OF PAYMENT TO CERTAIN FEEDER CARRIERS OF COMPENSATION FOR CARRYING MAIL SUBSEQUENT TO THE EXPIRATION DATE FIXED IN THE CERTIFICATES OF CONVENIENCE AND NECESSITY ISSUED TO SAID CARRIERS BY YOUR BOARD.

IT IS STATED IN YOUR LETTER THAT THE CIVIL AERONAUTICS BOARD HAS ISSUED A NUMBER OF CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY, PURSUANT TO SECTION 401 OF THE CIVIL AERONAUTICS ACT OF 1938, AS AMENDED (49 U.S.C. 481), AUTHORIZING CERTAIN SO-CALLED FEEDER CARRIERS TO ENGAGE IN AIR TRANSPORTATION WITH RESPECT TO PERSONS, PROPERTY, AND MAIL OVER ROUTES FOUND TO BE REQUIRED BY THE PUBLIC CONVENIENCE AND NECESSITY; THAT, FOLLOWING THE ISSUANCE OF SUCH CERTIFICATES, THE BOARD HAS, FROM TIME TO TIME, FIXED AND DETERMINED THE MAIL RATES OF THE CERTIFICATE HOLDERS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 406 OF THE ACT (49 U.S.C. 486); AND THAT, AT THE PRESENT TIME, THE CARRIERS ARE RECEIVING COMPENSATION FROM THE GOVERNMENT UNDER THE RATES THUS ESTABLISHED. HOWEVER, IT IS STATED THAT EACH OF THE CERTIFICATES REFERRED TO IS OF TEMPORARY DURATION AND CONTAINS A SPECIFIC EXPIRATION DATE; THAT IN CONNECTION WITH THE EXPIRATION OF THE VARIOUS FEEDER CERTIFICATES AND THE PROCEEDINGS TO CONSIDER THE RENEWAL OR EXTENSION THEREOF, THE BOARD HAS BEEN CONFRONTED WITH A PROBLEM CONCERNING THE RIGHTS OF THE FEEDER CARRIERS WITH RESPECT TO THE RECEIPT OF MAIL PAY IN THOSE INSTANCES WHERE A REQUEST FOR EXTENSION OF ITS CERTIFICATE HAS BEEN FILED BY THE CARRIER BUT FINAL DISPOSITION THEREOF HAS NOT BEEN AND WILL NOT BE HAD BY THE DATE OF EXPIRATION OF THE ORIGINAL CERTIFICATE. IN THIS CONNECTION, THERE IS CITED THE CASE OF THE PIONEER AIR LINES, INC., WHOSE CERTIFICATE, AS AMENDED, EXPIRES ON NOVEMBER 14, 1949. IT IS STATED THAT, BY OPINION AND ORDER DATED APRIL 4, 1949 ( ORDER SERIAL NO. E-2680), IN THE SO-CALLED PIONEER RENEWAL CASE, DOCKET NO. 3719, THE BOARD DIRECTED PIONEER TO SHOW CAUSE WHY ITS CERTIFICATE SHOULD NOT BE EXTENDED, SUBJECT TO CERTAIN MODIFICATIONS, BEYOND THE PRESENT EXPIRATION DATE; THAT, THEREAFTER, ON JUNE 13, 1949, PIONEER FILED AN APPLICATION, DOCKET NO. 3856, REQUESTING AN EXTENSION OF ITS CERTIFICATE UNTIL SUCH TIME AS THE BOARD ISSUES A FINAL DECISION IN THE PIONEER RENEWAL CASE; THAT BY ORDER SERIAL NO. E- 2956, DATED JUNE 23, 1949, THE BOARD CONSOLIDATED PIONEER'S APPLICATION FOR EXTENSION WITH THE PIONEER RENEWAL CASE; AND THAT, WHILE HEARINGS HAVE BEEN CONCLUDED IN THAT CONSOLIDATED PROCEEDING, IT APPEARS THAT FINAL DISPOSITION OF THE CASE WILL NOT BE POSSIBLE BEFORE NOVEMBER 14, 1949, THE PRESENT EXPIRATION DATE OF PIONEER'S CERTIFICATE.

IT IS POINTED OUT IN YOUR LETTER THAT SECTION 9 (B) OF THE ADMINISTRATIVE PROCEDURE ACT (5 U.S.C. 1001, 1008B) PROVIDES, IN PART, THAT,"IN ANY CASE IN WHICH THE LICENSEE HAS, IN ACCORDANCE WITH AGENCY RULES, MADE TIMELY AND SUFFICIENT APPLICATION FOR A RENEWAL OR A NEW LICENSE, NO LICENSE WITH REFERENCE TO ANY ACTIVITY OF A CONTINUING NATURE SHALL EXPIRE UNTIL SUCH APPLICATION SHALL HAVE BEEN FINALLY DETERMINED BY THE AGENCY.' IT IS STATED THAT, WHILE THE BOARD HAS NOT ADOPTED ANY REGULATIONS WITH RESPECT TO THE ABOVE-QUOTED PROVISION OF THE ADMINISTRATIVE PROCEDURE ACT, THE BOARD HAS PREVIOUSLY--- IN CASES NOT INVOLVING MAIL PAY--- TAKEN THE POSITION THAT THE REFERRED-TO PROVISION OF SUCH ACT AUTHORIZES THE EXTENSION BY OPERATION OF LAW OF PERMITS OF TEMPORARY FOREIGN AIR CARRIERS IN INSTANCES WHERE THE BOARD HAS BEEN UNABLE TO DISPOSE OF A RENEWAL APPLICATION PRIOR TO THE EXPIRATION DATE SPECIFIED IN THE PERMIT; THAT IT IS THE BOARD'S POSITION THAT THE VIEW THUS ADOPTED IS APPLICABLE IN THE PIONEER CASE SINCE PIONEER'S RENEWAL APPLICATION CONSTITUTES A "TIMELY AND SUFFICIENT APPLICATION FOR RENEWAL" OF A "LICENSE WITH REFERENCE TO AN ACTIVITY OF A CONTINUING NATURE" WITHIN THE MEANING OF SECTION 9 (B) OF THE ADMINISTRATIVE PROCEDURE ACT, SUPRA; THAT, ACCORDINGLY, IT IS THE BOARD'S VIEW THAT PIONEER'S CERTIFICATE WILL NOT EXPIRE UNTIL ITS RENEWAL APPLICATION "SHALL HAVE BEEN FINALLY DETERMINED" BY THE BOARD; AND THAT, FOR THE PERIOD FROM NOVEMBER 14, 1949, THE EXPIRATION DATE STATED IN ITS CERTIFICATE, UNTIL FINAL DISPOSITION BY THE BOARD OF ITS APPLICATION, DURING WHICH TIME THE CERTIFICATE WILL BE CONTINUED IN EFFECT BY OPERATION OF LAW, PIONEER WILL BE SUBJECT TO ALL DUTIES AND ENTITLED TO ALL RIGHTS INCLUDING MAIL PAY FOR OPERATIONS CONDUCTED BY IT DURING SUCH PERIOD JUST AS THOUGH ITS CERTIFICATE WOULD NOT OTHERWISE HAVE EXPIRED BY ITS TERMS. IT APPEARS FROM CORRESPONDENCE SUBMITTED WITH YOUR LETTER THAT THE POST OFFICE DEPARTMENT HAS INDICATED ITS AGREEMENT WITH THE POSITION OF YOUR BOARD IN THE MATTER. HOWEVER, YOU REQUEST ASSURANCE BY THIS OFFICE THAT PAYMENTS TO SUCH CARRIERS FOR THE PERIODS CONCERNED WILL NOT BE QUESTIONED. SPECIFICALLY, YOU REQUEST A DECISION ON THE FOLLOWING QUESTION:

IN INSTANCES WHERE THE HOLDER OF A TEMPORARY CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY AUTHORIZING THE TRANSPORTATION OF MAIL PRIOR TO THE EXPIRATION DATE SPECIFIED IN THAT CERTIFICATE MAKES TIMELY APPLICATION TO THE BOARD FOR RENEWAL OR EXTENSION OF THE CERTIFICATE, IS THE CERTIFICATE HOLDER ENTITLED TO MAIL COMPENSATION UNDER SECTION 406 OF THE ACT FOR OPERATIONS CONDUCTED UP TO THE DATE OF THE BOARD'S FINAL DETERMINATION OF THE RENEWAL APPLICATION IN THE SAME EXTENT THAT IT WOULD HAVE BEEN SO ENTITLED IF THE CERTIFICATE HAD BY ITS OWN TERMS REMAINED IN EFFECT DURING THAT PERIOD?

BASED UPON THE REPRESENTATIONS MADE IN YOUR LETTER OF OCTOBER 14, AND THE LEGAL AUTHORITY THEREIN CITED, THIS OFFICE CONCURS IN THE POSITION TAKEN BY YOUR BOARD WITH RESPECT TO THE MATTER INVOLVED. ACCORDINGLY, YOUR SPECIFIC QUESTION IS ANSWERED IN THE AFFIRMATIVE AND YOU ARE ADVISED THAT OTHERWISE PROPER PAYMENTS OF MAIL COMPENSATION TO CARRIERS UNDER THE CIRCUMSTANCES DESCRIBED WILL NOT BE QUESTIONED BY THIS OFFICE.