SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Air Service Improvement Act of 
1997''.

     TITLE I--SERVICE TO AIRPORTS NOT RECEIVING SUFFICIENT SERVICE

SEC. 101. AVAILABILITY OF SLOTS.

    (a) Period of Effectiveness.--
            (1) Slots for foreign air transportation.--Section 41714(b) 
        of title 49, United States Code, is amended by striking 
        paragraph (4).
            (2) Slots for new entrants.--Section 41714(c) of title 49, 
        United States Code, is amended--
                    (A) by striking paragraph (2); and
                    (B) in paragraph (1), by striking the subsection 
                heading and all that follows through ``If the 
                Secretary'' and inserting the following:
    ``(c) Slots for New Entrants.--If the Secretary''.
    (b) Slots for Airports Not Receiving Sufficient Service.--Section 
41714 of title 49, United States Code, is amended--
            (1) by striking subsections (e) and (f) and inserting the 
        following:
    ``(e) Slots for Airports Not Receiving Sufficient Service.--
            ``(1) Exemptions.--The Secretary may, by order, grant 
        exemptions from the requirements under subparts K and S of part 
        93 of title 14, Code of Federal Regulations (pertaining to 
        slots at high density airports) (or any subsequent similar 
        regulations), to enable air carriers to provide nonstop air 
        transportation using aircraft that comply with the stage 3 
        noise levels contained in part 36 of such title 14 between a 
        high density airport and a small hub airport or nonhub airport 
        that the Secretary determines is not receiving sufficient air 
        carrier service to and from that high density airport.
            ``(2) Limitations.--
                    ``(A) In general.--No more than 2 exemptions per 
                hour may be granted under this subsection for slots at 
                any high density airport.
                    ``(B) Washington national airport.--Not more than 6 
                exemptions per day may be granted under this subsection 
                for slots at Washington National Airport.
            ``(3) Application.--An air carrier interested in an 
        exemption under this subsection shall submit to the Secretary 
        an application for that exemption. No application may be 
        submitted to the Secretary before the last day of the 30-day 
        period beginning on the date of enactment of the Air Service 
        Improvement Act of 1997.
            ``(4) Deadline for decision.--
                    ``(A) In general.--The Secretary shall make a 
                decision with regard to granting an exemption under 
                this subsection not later than the 120th day following 
                the date on which the application for the exemption is 
                submitted under paragraph (3).
                    ``(B) Effects of failure of secretary to make a 
                decision.--If the Secretary does not make a decision on 
                or before the date specified in subparagraph (A), the 
                air carrier requesting the service may provide the 
                service that is subject to the exemption until such 
                time as--
                            ``(i) the Secretary makes a decision to 
                        deny that request; or
                            ``(ii) the Administrator of the Federal 
                        Aviation Administration decides that providing 
                        that service would have an adverse effect on 
                        air safety.
            ``(5) Period of effectiveness.--An exemption granted under 
        this subsection may remain in effect while the air carrier with 
        respect to which the exemption is granted continues to provide 
        nonstop air transportation between the airport that the 
        Secretary determined was not receiving sufficient air carrier 
        service and the high density airport involved.
            ``(6) Definitions.--In this subsection, the following 
        definitions apply:
                    ``(A) Nonhub airport.--The term `nonhub airport' 
                means an airport that each year has less than 0.05 
                percent of the total annual boardings in the United 
                States.
                    ``(B) Secretary.--The term `Secretary' means the 
                Secretary of Transportation.
                    ``(C) Small hub airport.--The term `small hub 
                airport' means an airport that for an annual period, 
                has, with respect to the total annual boardings of the 
                United States--
                            ``(i) at least 0.05 percent of those 
                        boardings; and
                            ``(ii) less than 0.25 percent of those 
                        boardings.''; and
            (2) by redesignating subsections (g) and (h) as subsections 
        (e) and (f), respectively.

SEC. 102. FUNDING FOR AIR CARRIER SERVICE TO AIRPORTS NOT RECEIVING 
              SUFFICIENT SERVICE.

    Section 41742(b) is amended to read as follows:
    ``(b) Funding for Small Community Air Service.--
            ``(1) Source of funding.--Notwithstanding any other 
        provision of law, amounts credited to the account established 
        under section 45303(a) of this title, including the funds 
        derived from fees imposed under the authority contained in 
        section 45301(a) of this title, shall be used to carry out the 
        essential air service program under this subchapter.
            ``(2) Funding for air carrier service to airports not 
        receiving sufficient service and rural air safety.--Any amounts 
        from fees imposed under section 45301(a) that the Secretary 
        determines will not be obligated or expended by the last day of 
        a fiscal year for the purpose of funding the essential air 
        service program under this subchapter shall be made available 
        in that fiscal year to the Administration as follows:
                    ``(A) Not more than $10,000,000 for fiscal year 
                1998, and for each fiscal year thereafter, shall be 
                used--
                            ``(i) for assisting an air carrier in 
                        purchasing aircraft to provide air 
                        transportation to an airport that serves an 
                        underserved market;
                            ``(ii) to purchase slots to provide air 
                        service between a high density airport and an 
                        airport that the Secretary determines is not 
                        receiving sufficient air carrier service to and 
                        from such high density airport;
                            ``(iii) to subsidize service to and from an 
                        underserved airport for a period not to exceed 
                        3 years; and
                            ``(iv) for assisting an underserved airport 
                        to market service to and from the underserved 
                        airport.
                    ``(B) Any remaining amounts of the amounts 
                determined by the Secretary under this paragraph shall 
                be available for use under this subchapter in improving 
                rural air safety at airports with less than 100,000 
                annual boardings.
            ``(3) Underserved airport.--In this subsection, the term 
        `underserved airport' means an airport that the Secretary 
        determines is not receiving sufficient air carrier service.''.

SEC. 103. UNFAIR COMPETITION COMPLAINTS.

    Section 41712 of title 49, United States Code, is amended--
            (1) by inserting ``(a) In General.--'' before ``On''; and
            (2) by adding at the end the following:
    ``(b) Deadline for Decision on Unfair Competition Complaints.--The 
Secretary shall make a decision with respect to any complaint that the 
Secretary receives under this section regarding whether an air carrier 
has been, or is, engaged in an unfair method of competition in air 
transportation or the sale of air transportation not later than 180 
days after the date of receipt of the complaint.''.

            TITLE II--REGIONAL AIR SERVICE INCENTIVE PROGRAM

SEC. 201. AMENDMENT OF TITLE 49, UNITED STATES CODE.

    (a) In General.--Chapter 417 of title 49, United States Code, is 
amended by adding at the end the following:

        ``SUBCHAPTER III--REGIONAL AIR SERVICE INCENTIVE PROGRAM

``Sec. 41761. Purpose
    ``The purpose of this subchapter is to improve service by jet 
aircraft to underserved markets by providing assistance, in the form of 
loan guarantees, to commuter air carriers that purchase regional jet 
aircraft for use in serving those markets.
``Sec. 41762. Definitions
    ``In this subchapter:
            ``(1) Aircraft purchase loan.--The term `aircraft purchase 
        loan' means any loan made for the purchase of commercial 
        transport aircraft, including spare parts normally associated 
        with the aircraft.
            ``(2) Air carrier.--The term `air carrier' means any air 
        carrier holding a certificate of public convenience and 
        necessity issued by the Secretary of Transportation under 
        section 41102.
            ``(3) Commuter air carrier.--The term `commuter air 
        carrier' means an air carrier that primarily operates aircraft 
        designed to have a maximum passenger seating capacity of 75 
        passengers or less in accordance with published flight 
        schedules.
            ``(4) Nonhub airport.--The term `nonhub airport' means an 
        airport that for an annual period has less than 0.05 percent of 
        the total annual boardings in the United States.
            ``(5) Regional jet aircraft.--The term `regional jet 
        aircraft' means a civil aircraft--
                    ``(A) powered by jet propulsion; and
                    ``(B) designed to have a maximum passenger seating 
                capacity of--
                            ``(i) not less than 30 passengers; and
                            ``(ii) not more than 75 passengers.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of Transportation.
            ``(7) Small hub airport.--The term `small hub airport' 
        means an airport that for an annual period has with respect to 
        the total annual boardings of the United States--
                    ``(A) at least 0.05 percent of these boardings; and
                    ``(B) less than 0.25 percent of these boardings.
            ``(8) Underserved market.--The term `underserved market' 
        means a passenger air transportation market (as defined by the 
        Secretary) that--
                    ``(A) is served (as determined by the Secretary) by 
                a nonhub airport or a small hub airport;
                    ``(B) is not within a 40-mile radius of an airport 
                that each year has at least .25 percent of the total 
                annual boardings in the United States; and
                    ``(C) the Secretary determines does not have 
                sufficient air service.
``Sec. 41763. Loan guarantees
    ``(a) In General.--The Secretary may guarantee any lender against 
loss of principal or interest on any aircraft purchase loan made by 
that lender to a commuter air carrier.
    ``(b) Form, Terms, and Conditions.--A guarantee shall be made under 
subsection (a)--
            ``(1) in such form and on such terms and conditions; and
            ``(2) pursuant to such regulations,
as the Secretary considers to be necessary and consistent with this 
subchapter.
``Sec. 41764. Conditions and limitations
    ``(a) Limitations on Funds.--Subject to subsection (d), no loan 
guarantee shall be made under this subchapter--
            ``(1) extending to an amount greater than the unpaid 
        interest and 90 percent of the unpaid principal of any loan;
            ``(2) on any loan or combination of loans for an aggregate 
        amount greater than 90 percent of the purchase price of the 
        aircraft, including spare parts, to be purchased with the loan 
        or loan combination;
            ``(3) on any loan with respect to which terms permit 
        repayment later than 15 years after the date the loan is made; 
        and
            ``(4) in any case in which the total face amount of the 
        loan and any other loans to the same commuter air carrier or 
        corporate predecessor of that commuter air carrier that are 
        guaranteed and outstanding under the terms of this subchapter 
        exceed $100,000,000.
    ``(b) Conditions for Making Loans.--Subject to subsection (c), the 
Secretary of Transportation may only make a loan guarantee under this 
subchapter if the Secretary determines that--
            ``(1) the aircraft to be purchased with the loan is a 
        regional jet aircraft that is needed to improve the service and 
        efficiency of operation of the commuter air carrier;
            ``(2) the commuter air carrier agrees to use the aircraft 
        to provide service to underserved markets; and
            ``(3) the prospective earning power of the commuter air 
        carrier, together with the character and value of the security 
        pledged, furnish--
                    ``(A) reasonable assurances of the ability and 
                intention of the air carrier to repay the loan during 
                the term of the loan--
                            ``(i) to continue the operations of the air 
                        carrier as a commuter air carrier; and
                            ``(ii) to the extent that the Secretary 
                        determines to be necessary, to continue the 
                        operations of the air carrier as a commuter air 
                        carrier between the same route or routes that 
                        are operated by the air carrier at the time of 
                        the loan guarantee; and
                    ``(B) reasonable protection to the United States.
    ``(c) Requirement.--Subject to subsection (d), no loan guarantee 
may be made under this subchapter on any loan or combination of loans 
for the purchase of any regional jet aircraft that does not comply with 
the stage 3 noise levels contained in part 36 of title 14 of the Code 
of Federal Regulations, as in effect on January 1, 1997.
    ``(d) Other Limitations.--No loan guarantee shall be made by the 
Secretary under this subchapter on any loan for the purchase of a 
regional jet aircraft unless the commuter air carrier agrees that the 
air carrier will provide service to the underserved market for which 
the aircraft is purchased for a period of not less than 12 consecutive 
months after the aircraft is placed in service.
``Sec. 41765. Fees
    ``The Secretary of Transportation shall prescribe and collect from 
a lending institution a reasonable guarantee fee in connection with 
each loan guaranteed under this subchapter.
``Sec. 41766. Use of Federal facilities and assistance
    ``(a) Use of Federal Facilities.--To permit the Secretary of 
Transportation to make use of such expert advice and services as the 
Secretary may require in carrying out this subchapter, the Secretary 
may use available services and facilities of other agencies and 
instrumentalities of the Federal Government--
            ``(1) with the consent of the appropriate Federal 
        officials; and
            ``(2) on a reimbursable basis.
    ``(b) Assistance.--The head of each appropriate department or 
agency of the Federal Government shall exercise the duties and 
functions of that head in such manner as to assist in carrying out the 
policy specified in section 41761.
    ``(c) Oversight.--The Secretary shall make available to the 
Comptroller General of the United States such information with respect 
to the loan guarantee program conducted under this subchapter as the 
Comptroller General may require to carry out the duties of the 
Comptroller General under chapter 7 of title 31.
``Sec. 41767. Receipts; payments
    ``(a) Miscellaneous.--Amounts received by the Secretary under this 
subchapter shall be credited to miscellaneous receipts of the Treasury.
    ``(b) Payments.--Payments to lenders required as a consequence of 
any loan guarantee made under this subchapter may be made from funds 
appropriated pursuant to the authorization under section 202 of the Air 
Service Improvement Act of 1997.
    ``(c) Administrative Expenses.--In carrying out this subchapter, 
the Secretary shall use funds made available by appropriations to the 
Department of Transportation for the purpose of administration to cover 
administrative expenses of the loan guarantee program under this 
subchapter.
``Sec. 41768. Termination
    ``The authority of the Secretary under section 41763 shall 
terminate on the date that is 5 years after the date of the enactment 
of this subchapter.''.
    (b) Conforming Amendment.--The analysis for chapter 417 of title 
49, United States Code, is amended by adding at the end the following:

        ``SUBCHAPTER III--REGIONAL AIR SERVICE INCENTIVE PROGRAM

``Sec.
``41761. Purpose.
``41762. Definitions.
``41763. Loan guarantees.
``41764. Conditions and limitations.
``41765. Fees.
``41766. Use of Federal facilities and assistance.
``41767. Receipts; payments.
``41768. Termination.''.

SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out subchapter III of chapter 417 of title 49, 
United States Code.
TABLE OF CONTENTS: 
     Title I:  Service to Airports Not Receiving Sufficient 
          Service 
     Title II:  Regional Air Service Incentive Program 
Air Service Improvement Act of 1997 - 
Title I:  Service to Airports Not Receiving Sufficient Service
 - Authorizes the Secretary of Transportation to grant exemptions pertaining to the use of slots (arrival and departure spaces) at high density airports in order to enable air carriers to provide nonstop air transportation using noise-compliant aircraft between a high density airport and a small hub or nonhub airport that the Secretary determines is not receiving sufficient air service to and from the high density airport.  Provides exemption limitations, including a limitation of no more than six exemptions per day for slots at Washington National Airport.  Requires exemption decisions to be made by the Secretary within 120 days of application. 
Makes funds not otherwise obligated or expended for the Federal essential air service program available for:  (1) air carrier service to airports not receiving sufficient air service; and (2) rural air safety at airports with less than 100,000 annual boardings. 
Requires a decision by the Secretary within 180 days after receipt of a complaint alleging that an air carrier has been or is engaging in an unfair method of competition in the provision or sale of air transportation. 
Title II:  Regional Air Service Incentive Program
 - Authorizes the Secretary to guarantee any lender against loss on any loan made to a commuter air carrier (maximum seating capacity of 75 or less) for the purchase of jet aircraft when such aircraft are to be used to provide service to underserved markets.  Outlines loan conditions and limitations, including that:  (1) such aircraft comply with certain Federal noise-level requirements; and (2) the air carrier agrees to provide service to the underserved market(s) for at least 12 months after being placed in service.  Authorizes the Secretary to:  (1) collect a loan guarantee fee from such lenders; and (2) be given, and make use of, Federal facilities and assistance in carrying out the incentive program. 
Terminates the above authority five years after the enactment of this Act.  Authorizes appropriations.
Air Service Improvement Act of 1997