To amend title 49, United States Code, to provide relief to the airline industry, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Aviation Industry Stabilization Act 
of 2003''.

SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or a 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of title 49, 
United States Code.

SEC. 3. AVIATION INSURANCE.

    (a) Authority.--Section 44302(a)(1) is amended by striking ``may'' 
and inserting ``shall''.
    (b) Extension of Policies.--Section 44302(f)(1) is amended by 
striking ``August 31, 2003, and may extend through December 31, 2003,'' 
and inserting ``December 31, 2007,''.
    (c) Coverage.--Section 44303 is amended--
            (1) in subsection (a) by striking ``In general.--'' and 
        inserting ``In General.--''; and
            (2) in subsection (b)--
                    (A) by striking ``during the period beginning on'' 
                and inserting ``on or after''; and
                    (B) by striking ``and ending on December 31, 
                2003,''.
    (d) Termination Date.--Section 44310 and the item relating to such 
section in the analysis for chapter 443 are repealed.

SEC. 4. LOAN GUARANTEES AND LINES OF CREDIT FOR AVIATION FUEL COSTS.

    (a) Extension of Application Period.--Notwithstanding section 
1300.16 of title 14, Code of Federal Regulations, or any other 
provision of law or regulation, applications for Federal credit 
instruments authorized by section 101 of the Air Transportation Safety 
and System Stabilization Act (49 U.S.C. 40101 note; 115 Stat. 230) may 
be filed for a period of 30 days following the date on which the 
President authorizes the military to use force against the Republic of 
Iraq in calendar year 2003, and the Air Transportation Stabilization 
Board determines that an extraordinary increase in jet fuel prices (as 
defined in section 11(a)(3)) has occurred.
    (b) Publication of Notice.--The Board shall publish a notice in the 
Federal Register announcing that applications may be filed under 
subsection (a) and another notice when the time for such applications 
will end.
    (c) Limitations on Federal Credit Instruments.--A Federal credit 
instrument issued by the Board in accordance with this section shall--
            (1) be for the purpose of allowing an air carrier to secure 
        financial obligations to pay for its aviation fuel purchases 
        for a period of 6 months or the period that begins on the date 
        the Board determines that an extraordinary increase in jet fuel 
        prices has occurred and ends on the date that the Secretary of 
Transportation determines that the average price for jet fuel in 
calendar year 2003 is equal to or less than the average price reported 
by major air carriers for calendar year 2002, whichever period ends 
sooner; and
            (2) be for the actual increased aviation fuel cost incurred 
        by the air carrier or a reasonable estimate of such cost over 
        the average price of commercial aviation fuel reported to the 
        Secretary of Transportation by air carriers during calendar 
        year 2002, as determined by the Board.
    (d) Maximum Amount of Federal Credit Instruments.--The maximum 
amount of Federal credit instruments that may be issued by the Board in 
accordance with this section shall be $3,000,000,000. The Board shall 
establish a formula setting the maximum amount of Federal credit 
instruments that may be issued to any air carrier based on the 
percentage of gallons of aviation fuel consumed by that air carrier in 
proportion to the total gallons of aviation fuel consumed by all air 
carriers during calendar year 2002.
    (e) Special Rules.--
            (1) Limitation on applicability.--Sections 102(c), 
        102(d)(1), and 102(d)(2) of the Air Transportation Safety and 
        System Stabilization Act (49 U.S.C. 40101 note; 115 Stat. 231-
        232) shall not apply to Federal credit instruments to be issued 
        in accordance with this section.
            (2) Inclusion of lines of credit.--For purposes of Federal 
        credit instruments to be issued in accordance with this 
        section, the term ``Federal credit instrument'', as used in 
        section 107(2) of the Air Transportation Safety and System 
        Stabilization Act (115 Stat. 234), includes a line of credit 
        and a guarantee of a line of credit issued by a third party.
            (3) Treatment of time period.--The 2-year period referred 
        to in section 104(a) of the Air Transportation Safety and 
        System Stabilization Act (49 U.S.C. 40101 note; 115 Stat. 233) 
        shall be treated with respect to an application filed in 
        accordance with subsection (a) of this section as being the 2-
        year period beginning on the date of enactment of this Act.
    (f) Savings Clause.--Nothing in this section shall be construed as 
affecting an application filed before the date of enactment of this Act 
for a Federal credit instrument authorized by section 101 of the Air 
Transportation Safety and Stabilization Act (49 U.S.C. 40101 note; 115 
Stat. 230).
    (g) Major Air Carrier Defined.--In this section, the term ``major 
air carrier'' has the meaning such term has under section 41720(a) of 
title 49, United States Code.

SEC. 5. AIR MARSHALS.

    Not later than 90 days after all cockpit doors that are required to 
be strengthened under section 104(a) of the Aviation and Transportation 
Security Act (49 U.S.C. 44903 note; 115 Stat. 605-606) are 
strengthened, the Under Secretary for Border and Transportation 
Security of the Department of Homeland Security shall consider whether 
it is necessary to require Federal air marshals to be seated in the 
first class cabin of an aircraft with strengthened cockpit doors and 
report to Congress (in classified form if necessary) on the results of 
such reconsideration.

SEC. 6. SCREENING OF MAIL.

    (a) Improved Screening.--Not later than 30 days after the date of 
enactment of this Act, the Under Secretary for Border and 
Transportation Security of the Department of Homeland Security shall 
undertake, without a decrease in aviation security, such action as may 
be necessary to improve the screening of mail so that it can be carried 
on passenger flights of air carriers.
    (b) Report.--Not later than 120 days after the date of enactment of 
this Act, the Under Secretary shall transmit to Congress a report on 
the Transportation Security Administration's pilot program to determine 
whether canine teams can be used to screen mail before being placed 
aboard passenger-carrying aircraft.

SEC. 7. REIMBURSEMENT OF AIR CARRIERS FOR CERTAIN SCREENING AND RELATED 
              ACTIVITIES.

    The Under Secretary for Border and Transportation Security of the 
Department of Homeland Security, within available resources, shall 
reimburse air carriers and airports for the following:
            (1) All screening and related activities that the air 
        carriers or airports perform or are responsible for performing, 
        including--
                    (A) the screening of catering supplies;
                    (B) checking documents at security checkpoints;
                    (C) screening of passengers; and
                    (D) screening of persons with access to aircraft.
            (2) The provision of space and facilities used to perform 
        screening functions if such space and facilities have been 
        previously used, or were intended to be used, for revenue-
        producing purposes.

SEC. 8. REIMBURSEMENT OF AIR CARRIERS FOR FORTIFYING COCKPIT DOOR.

    The Under Secretary for Border and Transportation Security of the 
Department of Homeland Security shall reimburse air carriers for the 
cost of fortifying cockpit doors in accordance with section 48301(b) of 
title 49, United States Code.

SEC. 9. REIMBURSEMENT OF AIR CARRIERS FOR CERTAIN LOSSES RESULTING FROM 
              WAR WITH IRAQ.

    (a) In General.--The Secretary of Transportation shall reimburse an 
air carrier for any financial losses that the Secretary determines are 
attributable to the loss of air traffic resulting from the use of force 
against the Republic of Iraq in calendar year 2003.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 10. AIRLIFT SERVICES.

    Section 41106 is amended by adding at the end the following:
    ``(e) Compensation of Contractors.--An airlift services contract 
entered into by the Secretary of Defense and an air carrier described 
in subsection (a) shall ensure that the air carrier is compensated for 
the positioning, de-positioning, and other ferry portions of missions 
performed under the contract.''.

SEC. 11. STRATEGIC PETROLEUM RESERVE.

    (a) Requirement.--
            (1) Drawdown.--Notwithstanding any other provision of law, 
        if the President authorizes the military to use force against 
        the Republic of Iraq in calendar year 2003, the Secretary of 
        Energy shall drawdown and distribute petroleum from the 
        Strategic Petroleum Reserve in quantities of not less than 
        500,000 barrels per day, to the extent necessary to remedy a 
        dislocation in the jet fuel market or an extraordinary increase 
        in the price of jet fuel.
            (2) Dislocation in jet fuel market.--For purposes of 
        paragraph (1), a dislocation in the jet fuel market occurs when 
        the inventories of United States domestic jet fuel (as reported 
        by the Department of Energy) decrease by more than 25 percent 
        over the previous 3-year rolling average.
            (3) Extraordinary price increase.--
                    (A) In general.--For purposes of paragraph (1) and 
                section 4, an extraordinary increase in the price of 
                jet fuel occurs when the quotient exceeds by 50 percent 
                the average price for jet fuel reported to the 
                Secretary of Transportation by air carriers for 2002.
                    (B) Calculation of quotient.--For purposes of 
                subparagraph (A), the quotient is calculated by 
                dividing by 2 the sum of the Gulf Coast and New York 
                Harbor 5-day spot average prices of jet fuel.
    (b) Cessation.-- The Secretary of Energy may cease any drawdown 
under subsection (a) if the Secretary determines that--
            (1) there no longer is any dislocation in the jet fuel 
        market; or
            (2) in the case of a drawdown resulting from an 
        extraordinary increase in the price of jet fuel, the quotient 
        calculated under subsection (a)(3) no longer exceeds by 50 
        percent the average price for jet fuel reported to the 
        Secretary of Transportation by air carriers for 2002.

SEC. 12. CARGO CARRIED ABOARD PASSENGER-CARRYING AIRCRAFT.

    (a) Establishment of Working Group.--The Under Secretary for Border 
and Transportation Security of the Department of Homeland Security 
shall establish an air cargo security working group with industry 
experts from the Transportation Security Administration, passenger 
airlines, indirect air carriers, shippers, small businesses, and other 
related groups to develop recommendations on the enhancement of the 
current known shipper program.
    (b) Duties of Working Group.--The working group shall analyze the 
effectiveness of the current known shipper program, develop recommended 
enhancements, and present its findings and recommendations to the Under 
Secretary. In developing its recommendations, the working group shall 
take into consideration the extraordinary air transportation needs of 
small or isolated communities and unique operational aspects of 
carriers that serve such communities.

SEC. 13. FACTORS CONTRIBUTING TO AIR CARRIER FINANCIAL DIFFICULTIES.

    (a) Analysis.--The Comptroller General shall analyze the factors 
contributing to the financial difficulties of air carriers for the 
purpose of determining possible approaches to alleviate such 
difficulties.
    (b) Report.--Not later than 90 days after the date of enactment of 
this Act, the Comptroller General shall transmit to Congress a report 
on the results of the analysis, together with recommendations.

Summary: Aviation Industry Stabilization Act of 2003 - Amends Federal transportation law to change from discretionary to mandatory the authority of the Secretary of Transportation to provide insurance and reinsurance against loss or damage arising out of any risk from the operation of an American aircraft or foreign-flag aircraft. Grants the Secretary authority to extend through calendar year 2007 the termination date of any insurance policy issued to an air carrier. Makes permanent the Secretary's authority to declare an air carrier a victim of terrorism not liable for third party claims arising out of acts of terrorism. Extends the period for an air carrier to apply for a loan guarantee or line of credit to pay for its aviation fuel costs or increases in aviation fuel costs under the Air Transportation Safety and System Stabilization Act. Requires the Under Secretary for Border and Transportation Security, after all cockpit doors are strengthened, to consider and report to Congress on whether it is necessary to require Federal air marshals to be seated in the first class cabin of an aircraft with strengthened cockpit doors. Requires the Under Secretary to: (1) undertake action necessary to improve the screening of mail so that it can be carried on passenger flights. And (2) reimburse air carriers for certain screening and related activities as well as the cost of fortifying cockpit doors, and for any financial losses attributed to the loss of air traffic resulting from the use of force against Iraq in calendar year 2003. Requires that an airlift services contract entered into by the Secretary of Defense and an air carrier provide for the air carrier to be compensated for the positioning, repositioning, and other ferry portions of missions performed under the contract. Requires the Secretary of Energy, if the use of force against Iraq is authorized in calendar year 2003, to drawdown and distribute petroleum from the Strategic Petroleum Reserve to the extent necessary to remedy a dislocation in the jet fuel market or an extraordinary increase in the price of jet fuel. Establishes an air cargo security working group composed of various groups to develop recommendations on the enhancement of the current known shipper program. Directs the Comptroller General to analyze factors contributing to the financial difficulties of air carriers to determine possible approaches to alleviate such difficulties.