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As long as the helicopter operators hold their present valid certificates, they are entitled to the benefit of the subsidy provisions of section 406 of the act.

Under section 406, the Board is ordered to perform two functions. The first is to fix and determine the fair and reasonable compensation for the transportation of mail (sec. 406 (a) and (b)), including the "need" of each properly managed and eligible carrier for compensation sufficient to insure performance of the service and, together with other revenue-

to maintain and continue development of air transportation to the extent and of the character and quality required for the commerce of the United States, the postal service, and the national defense.

The second function is to make payments for this "need" or subsidy
element "out of appropriations made to the Board for that purpose" (sec. 406(c)). Obviously, if no money is appropriated, the Board cannot pay, or if the compensation fixed exceeds the money appropriated, the Board must ask for additional funds.

It has never been considered that the Board's function under section 406 to fix and determine the amount of subsidy due a carrier is dependent on the amount appropriated for the purpose of making subsidy payments. This principle was recognized as applicable to the comparable provisions of the Civil Aeronautics Act of 1938 in a Comptroller General's decision (34 Comp. Gen. 158).

It is against this background and the case law that our General Counsel has considered the appropriations acts enacts since 1961, including the conference reports and other pertinent material, and concluded that the Federal Aviation Act has not been amended.

If, as we believe, the statute has not been amended, then the Board has an obligation to fix a mail rate for the three helicopter carriers in accordance with the standards of section 406. Moreover, if we do not seek and obtain appropriation funds to pay the rate fixed, we believe that the carriers could successfully prosecute their claims in the Court of Claims.

It is because of these considerations that we earnestly hope that the Congress will clarify the role of the helicopter operators, and that our present position of being caught between the Aviation Act and the appropriations acts will be brought to an end.

Until there is an amendment, however, we are doing what we must; that is, proceeding under the existing law as we understand it. Accordingly, we have proposed a plan which is based on staff field study and analysis of all commercial helicopter operations and on consultations with the helicopter operators, manufacturers, and trunkline operators.

This plan will permit an orderly phaseout of subsidy payments over a 5-year period, and will be the subject of public hearings unless the Congress should enact legislation obviating any necessity or purpose for such proceedings. We are of the view on the basis of what is now before us that the Board's proposal is sound. If Congress thinks differently, we think its views should be conveyed by appropriate amendment of the Act.

The Board's proposal is set forth in three show cause orders issued on February 16, 1965, copies of which are available for the record. The purpose of these orders is to consider the future operations of