Aviation Industry Revitalization Act of 1993

Summary: Aviation Industry Revitalization Act of 1993 - Amends the Airport Noise and Capacity Act of 1990 to authorize the Secretary of Transportation to guarantee loans to eligible air carriers to finance their acquisition of new aircraft. 
Establishes the New Aircraft Guarantee Program Fund consisting of subsidy fees, annual administrative fees, and surcharges paid by the air carriers. 
Authorizes appropriations.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Aviation Industry Revitalization Act 
of 1993''.

SEC. 2. DECLARATION OF POLICY.

    Congress finds and declares the following:
            (1) The United States commercial airline industry is 
        currently suffering severe financial distress.
            (2) Sustained record losses and excessive debt burdens are 
        causing air carriers to cancel new aircraft options and orders 
        which, in turn is threatening the economic viability of the 
        United States aerospace manufacturing industry.
            (3) Many air carriers are increasingly unable to obtain 
        financing at reasonable interest rates for purchasing new 
        equipment.
            (4) The inability of many air carriers to acquire new, 
        quieter, more fuel efficient Stage 3 aircraft may jeopardize 
        the planned phaseout of noisier stage 2 aircraft.
            (5) The national goal of conserving scarce natural 
        resources and the airline industry goal of reducing soaring 
        fuel costs would both be enhanced by increasing the average 
        fuel-efficiency of aircraft fleets.
            (6) States and local communities, the traveling public, 
        aerospace manufacturing companies and workers, airline 
        employees, and airline shareholders would all benefit from 
        stronger, healthy air carriers operating modern, fuel-
        efficient, quieter aircraft.
            (7) Prudent investment to facilitate modernization of the 
        industry's aircraft fleet can provide vitally needed economic 
        stimulus for carriers and manufacturers and will ensure that 
        both industries remain competitive into the next century.
            (8) A revolving fund should, therefore, be established for 
        the purpose of carrying out a Federal loan guarantee program to 
        support the financing of new aircraft in a way that assures the 
        phasing out of less fuel-efficient, noisier, and older aircraft 
        at the same time.

SEC. 3. AUTHORIZATION TO GUARANTEE FINANCING OF NEW AIRCRAFT.

    The Airport Noise and Capacity Act of 1990 (49 App. U.S.C. 2151 et 
seq.) is amended by adding at the end the following new section:

``SEC. 9310. FINANCING OF NEW AIRCRAFT.

    ``(a) Authorization of Loan Guarantee Program.--The Secretary is 
authorized to guarantee loans for the financing of new aircraft for use 
by air carriers that meet the terms and conditions set forth in 
subsection (d) and that agree to pay (directly if the carrier is the 
loan guarantee recipient, or indirectly if another person is loan 
guarantee recipient) subsidy fees, annual administrative fees, and 
surcharges assessed under subsection (g). Subject to subsection (d), 
such guarantees may be made with respect to loans to an air carrier 
that will use such new aircraft or loans to a person purchasing such 
new aircraft for lease to and use by an air carrier.
    ``(b) Establishment of Fund.--There is established in the Treasury 
a fund, to be known as the `New Aircraft Guarantee Program Fund', for 
the purpose of carrying out the loan guarantee program authorized by 
subsection (a). The Fund shall consist of amounts paid for subsidy 
fees, annual administrative fees, and surcharges required under 
subsection (g). Amounts in the Fund shall be available to the Secretary 
without further appropriations to carry out the purposes of the Fund 
and shall remain available until expended.
    ``(c) Initial Authorization.--There are authorized to be 
appropriated for deposit in the Fund such sums as are necessary for the 
Secretary to pay the initial administrative expenses of the loan 
guarantee program under this section. Within 2 years after such an 
appropriation, the Secretary shall ensure that an amount from the Fund 
equal to the appropriated amount, together with interest thereon, is 
deposited in the treasury as miscellaneous receipts.
    ``(d) Terms and Conditions.--A loan guarantee under this section 
shall be subject to the following terms and conditions:
            ``(1) The loan guarantee must lead to the delivery of new 
        aircraft to an air carrier certificated under part 121 of title 
        14, Code of Federal Regulations, and such delivery shall occur 
        no later than December 31, 1999.
            ``(2) The loan guarantee must be made for the purpose of 
        financing the acquisition of new aircraft that comply with 
        stage 3 noise standards.
            ``(3) The loan guarantee shall only be available for the 
        purchase of new aircraft from companies that both--
                    ``(A) publish independently audited financial 
                disclosure information and financial results; and
                    ``(B) also are domiciled in countries that comply 
                with all major international agreements governing 
                aerospace trade, including but not limited to the GATT 
                Civil Aircraft Agreement, the GATT Subsidies Code, the 
                United States-European Community bilateral aircraft 
                agreement, the OECD Large Aircraft Sector 
                Understanding, and bilateral air services agreements 
                with the United States.
            ``(4) In the case of any air carrier taking delivery of a 
        new aircraft financed under this section which owns or operates 
        either aging aircraft or Stage 2 aircraft, such air carrier as 
        borrower or lessee must, except as provided in paragraph (5), 
        agree that no later than the sixtieth day after the aircraft 
        being financed is placed on the air carrier's operations 
        specifications under part 121 of title 14, Code of Federal 
        Regulations, or December 31, 1999, whichever occurs first, it 
        will remove from service within the contiguous United States--
                    ``(A) the number of aging aircraft or Stage 2 
                aircraft which, in the aggregate and pursuant to rules 
                promulgated by the Secretary, are certified as equaling 
                or exceeding 200 percent of the number of seats (or in 
                the case of all-cargo aircraft 200 percent of cargo 
                capacity) of the new aircraft being financed; or
                    ``(B) all of its remaining aging aircraft and Stage 
                2 aircraft,
        whichever number of aircraft is less.
            ``(5) When an air carrier described in paragraph (4) is 
        taking delivery of only all-cargo aircraft, the carrier may, in 
        lieu of removing Stage 2 all-cargo aircraft from service, 
        modify on or after April 15, 1993, such Stage 2 aircraft in 
        order to meet Stage 3 noise standards on the same number of 
        such Stage 2 aircraft that otherwise would have had to be 
        removed from service under paragraph (4); except that such 
        modified aircraft must remain configured for all-cargo service 
        and shall not be converted to passenger-cargo combination 
        service.
            ``(6) Each aircraft removed from service by an air carrier 
        under paragraph (4) shall be taken off the registry of 
        certificated aircraft by the Secretary unless the air carrier 
        continues to use such aircraft solely outside the contiguous 
        United States and may not subsequently be registered in the 
        United States; except that--
                    ``(A) the Secretary may continue to keep an 
                aircraft on the registry of certificated aircraft if 
                such aircraft is not based in any of the several States 
                of the United States and is engaged in common carriage 
                entirely outside the several States; and
                    ``(B) in a case where the aircraft removed from 
                service is owned by a person not affiliated with such 
                air carrier and was operated by such air carrier under 
                lease on or before April 1, 1993, the Secretary may 
                continue to keep such aircraft on the registry of 
                certificated aircraft if such owner brings such 
                aircraft into compliance with Stage 3 noise standards 
                prior to its lease or sale to another air carrier or 
                lessor.
            ``(7) An air carrier which is to take delivery of a new 
        aircraft financed under this section must warrant that it did 
        not after April 1, 1993, and will not on and after the date of 
        enactment of this section, place in service any aging aircraft 
        or Stage 2 aircraft to its fleet, except--
                    ``(A) as incidental to a merger with or acquisition 
                of another air carrier that as of April 1, 1993, was 
                certificated under part 121 of title 14, Code of 
                Federal Regulations;
                    ``(B) as incidental to the purchase of a route or 
                routes and necessary associated assets;
                    ``(C) in the case of aircraft that the air carrier 
                has agreed to lease pursuant to a signed term sheet 
                executed no later than April 30, 1993; or
                    ``(D) for the provision of air transportation 
                solely outside the contiguous United States.
            ``(8) An air carrier's violation of the warranty under 
        paragraph (7) shall constitute a revocation of all outstanding 
        loan guarantees under this section that were made for the 
        purpose of financing delivery of new aircraft to such air 
        carrier.
            ``(9) The Secretary may not grant a waiver, to any air 
        carrier that takes delivery of an aircraft financed by a loan 
        guarantee under this section, that would allow such air carrier 
        to operate Stage 2 aircraft beyond December 31, 1999, in 
        interstate air transportation.
    ``(e) Regulations.--No later than sixty days after the date of 
enactment of this section, the Secretary shall promulgate regulations 
implementing the loan guarantee program authorized by this section.
    ``(f) Fiduciary Duties of Secretary.--To implement this section, 
the Secretary--
            ``(1) shall apply reasonable and prudent fiduciary 
        standards in determining whether to make any specific loan 
        guarantee, and is authorized to take such action as may be 
        appropriate to enforce any right accruing to the United States 
        or any officer or agency thereof as a result of making a loan 
        guarantee under this section;
            ``(2) shall make loan guarantees on rates, terms, and 
        conditions which, in the judgment of the Secretary, offer 
        reasonable assurance of repayment;
            ``(3) may require that loans guaranteed under this section 
        be secured by the aircraft being financed, to provide 
        sufficient collateral; and
            ``(4) may not guarantee a loan amount that is more than 85 
        percent of the manufacturer's price to the air carrier of the 
        aircraft being financed.
    ``(g) Assessment of Fees.--
            ``(1) In general.--A loan guarantee under this section 
        shall remain in effect only so long as the loan guarantee 
        recipient pays the subsidy fee assessed under paragraph (2), 
        any annual administrative fee assessed under paragraph (3), and 
        any surcharge assessed under paragraph (4).
            ``(2) Subsidy fee.--For each loan guarantee under this 
        section, the Secretary shall assess and collect a subsidy fee 
        from the loan guarantee recipient that is equal to the cost, as 
        defined by section 502(5) of the Federal Credit Reform Act of 
        1990 (2 U.S.C. 661a(5)), of such guarantee.
            ``(3) Annual administrative fee.--Each year the Secretary 
        shall assess and collect an administrative fee for each loan 
        guarantee under this section. Such fees shall be set at a level 
        adequate to cover anticipated expenses for administering the 
        loan guarantee program authorized under this section.
            ``(4) Adjustments.--After completion of each fiscal year, 
        the Secretary shall calculate whether the administrative fee 
        collections were adequate, inadequate, or in excess of the 
        amounts needed to cover the actual administrative expenses for 
        such year. To the extent that the administrative fees were 
        inadequate or excessive, the Secretary shall assess a surcharge 
        to cover any shortfall, or shall provide a rebate from the Fund 
        or reduce future administrative fees to cover any overcharges.
    ``(h) Annual Report.--The Secretary shall, not later than March 1 
of each year, submit to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Public Works and 
Transportation of the House of Representatives a report that--
            ``(1) describes the progress of the loan guarantee program 
        authorized by this section;
            ``(2) identifies any problems with such program; and
            ``(3) describes the loan guarantees made under this 
        section, including the identity of the air carriers and other 
        persons receiving loans to which such guarantees apply.
    ``(i) Definitions.--As used in this section, the following 
definitions apply:
            ``(1) Aging aircraft.--The term `aging aircraft' means one 
        or more airplanes that were placed into service more than 
        fifteen years prior to the date of enactment of this section.
            ``(2) Air carrier; united states.--The terms `air carrier' 
        and `United States' have the meaning such terms have in section 
        101 of the Federal Aviation Act of 1958 (49 U.S.C. App. 1301).
            ``(3) Fund.--The term `Fund' means the New Aircraft 
        Guarantee Program Fund established by subsection (b).
            ``(4) New aircraft.--The term `new aircraft' means one or 
        more newly manufactured airplanes, including associated spare 
        parts and engines included in the original purchase, that have 
        not been previously registered or placed into service.
            ``(5) Remove from service.--The term `remove from service' 
        means to--
                    ``(A) eliminate, permanently and irrevocably, 
                aircraft from the fleet of an air carrier on or after 
                April 15, 1993;
                    ``(B) transfer aircraft to another air carrier, 
                after April 1, 1993, but before the date of enactment 
                of this section, for use in common carriage entirely 
                outside the several States of the United States; or
                    ``(C) remove aircraft permanently and entirely from 
                use in common carriage in the United States.
            ``(6) Stage 2 aircraft.--The term `Stage 2 aircraft' means 
        one or more airplanes as defined by section 36.1(f)(4) of title 
        14, Code of Federal Regulations, as in effect on the date of 
        enactment of this section.
            ``(7) Stage 3 aircraft.--The term `Stage 3 aircraft' means 
        one or more airplanes as defined by section 36.1(f)(6) of title 
        14, Code of Federal Regulations, as in effect on the date of 
        enactment of this section.''.