I

106TH CONGRESS

1ST SESSION H. R. 951

To amend title 49, United States Code, to provide assistance and slots

with respect to air carrier service between high density airports and

airports not receiving sufficient air service, to improve jet aircraft service

to underserved markets, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 3, 1999

Mr. DUNCAN introduced the following bill; which was referred to the

Committee on Transportation and Infrastructure

A BILL

To amend title 49, United States Code, to provide assistance

and slots with respect to air carrier service between

high density airports and airports not receiving sufficient

air service, to improve jet aircraft service to underserved

markets, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Airline Service Im5 provement Act of 1999’’.
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1 TITLE I—SERVICE TO AIRPORTS

2 NOT RECEIVING SUFFICIENT

3 SERVICE

4 SEC. 101. AVAILABILITY OF SLOTS.

5 (a) PERIOD OF EFFECTIVENESS.—

6 (1) SLOTS FOR FOREIGN AIR TRANSPOR7 TATION.—Section 41714(b) of title 49, United

8 States Code, is amended by striking paragraph (4).

9 (2) SLOTS FOR NEW ENTRANTS.—Section

10 41714(c) of such title is amended—

11 (A) by striking ‘‘(1) IN GENERAL.—’’;

12 (B) by striking paragraph (2); and

13 (C) by moving the text of paragraph (1) so

14 that it follows the subsection heading and its

15 margin is aligned with the margin for sub16 section (g).

17 (b) SLOTS FOR AIRPORTS NOT RECEIVING SUFFI18 CIENT SERVICE.—Section 41714 of such title is

19 amended—

20 (1) by striking subsections (e) and (f) and in21 serting the following:

22 ‘‘(e) SLOTS FOR AIRPORTS NOT RECEIVING SUFFI23 CIENT SERVICE.—

24 ‘‘(1) EXEMPTIONS.—Notwithstanding part D of

25 chapter 491 of this title, the Secretary may by order
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1 grant exemptions from the requirements under sub2 parts K and S of part 93 of title 14, Code of Fed3 eral Regulations (pertaining to slots at high density

4 airports), to enable air carriers to provide nonstop

5 air transportation using jet aircraft that comply with

6 the stage 3 noise levels of part 36 of such title 14

7 between a high density airport and an airport that

8 had less than 2,000,000 enplanements in the most

9 recent year for which such enplanement data is

10 available or between a high density airport and an

11 airport that does not have such nonstop transpor12 tation on the date on which the application for an

13 exemption is filed.

14 ‘‘(2) LIMITATIONS.—No more than 2 exemp15 tions per hour may be granted under this subsection

16 for slots at any high density airport, and no more

17 than 6 exemptions per day may be granted under

18 this subsection for slots at Ronald Reagan Washing19 ton National Airport. An exemption may be granted

20 under this subsection for a slot at Ronald Reagan

21 Washington National Airport only if the flight utiliz22 ing such slot begins or ends within 1,250 miles of

23 the Airport and a stage 3 aircraft is used for such

24 flight.
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1 ‘‘(3) APPLICATION.—An air carrier interested

2 in an exemption under this subsection shall submit

3 to the Secretary an application for such exemption.

4 No application may be submitted to the Secretary

5 before the last day of the 30-day period beginning

6 on the date of the enactment of this paragraph.

7 ‘‘(4) DEADLINE FOR DECISION.—Notwithstand8 ing any other provision of law, the Secretary shall

9 make a decision with regard to granting an exemp10 tion under this subsection on or before the 120th

11 day following the date of the application for the ex12 emption. If the Secretary does not make the decision

13 on or before such 120th day, the air carrier applying

14 for the service may provide such service until the

15 Secretary makes the decision or the Administrator of

16 the Federal Aviation Administration determines that

17 providing such service would have an adverse effect

18 on air safety.

19 ‘‘(5) PERIOD OF EFFECTIVENESS.—An exemp20 tion granted under this subsection may remain in ef21 fect only while the air carrier for whom the exemp22 tion is granted continues to provide nonstop air

23 transportation between the airport for which the ex24 emption was granted under paragraph (1) and the

25 high density airport.
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1 ‘‘(f) TREATMENT OF CERTAIN COMMUTER AIR CAR2 RIERS.—The Secretary shall treat all commuter air car3 riers that have cooperative agreements, including code

4 share agreements with other air carriers, equally for deter5 mining eligibility for exemptions under this section regard6 less of the form of the corporate relationship between the

7 commuter air carrier and the other air carrier.’’.

8 SEC. 102. FUNDING FOR AIR CARRIER SERVICE TO AIR9 PORTS NOT RECEIVING SUFFICIENT SERV10 ICE.

11 (a) FUNDING FOR SMALL COMMUNITY AIR SERV12 ICE.—Section 41742(b) of title 49, United States Code,

13 is amended to read as follows:

14 ‘‘(b) FUNDING FOR SMALL COMMUNITY AIR SERV15 ICE.—

16 ‘‘(1) IN GENERAL.—Notwithstanding any other

17 provision of law, from moneys credited to the ac18 count established under section 45303(a), including

19 the funds derived from fees imposed under the au20 thority contained in section 45301(a)—

21 ‘‘(A) not to exceed $45,000,000 for each

22 fiscal year beginning after September 30, 1999,

23 shall be used to carry out the essential air serv24 ice program under this subchapter; and
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1 ‘‘(B) not to exceed $5,000,000 for such fis2 cal year shall be used—

3 ‘‘(i) for assisting an air carrier to sub4 sidize service to and from an underserved

5 airport for a period not to exceed 3 years;

6 and

7 ‘‘(ii) for assisting an underserved air8 port to obtain jet aircraft service to and

9 from the underserved airport and to pro10 mote passenger usage of that service.

11 ‘‘(2) RURAL AIR SAFETY.—Any funds that are

12 made available by paragraph (1) for a fiscal year

13 and that the Secretary determines will not be obli14 gated or expended before the last day of such fiscal

15 year shall be available to the Administrator for use

16 under this subchapter in improving rural air safety

17 at airports with less than 100,000 annual boardings.

18 ‘‘(3) ALLOCATION OF ADDITIONAL FUNDING.—

19 If, for a fiscal year beginning after September 30,

20 1999, more than $50,000,000 is made available

21 under subsection (a) to carry out the small community air service program, 1 22 ⁄2 of the amounts in excess

23 of $50,000,000 shall be used for the purposes speci24 fied in paragraph (1)(B), in addition to amounts
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1 made available for such purposes under paragraph

2 (1)(B).

3 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—In

4 addition to amounts made available under paragraph

5 (1), there is authorized to be appropriated to the

6 Secretary of Transportation for each fiscal year be7 ginning after September 30, 1999, $15,000,000—

8 ‘‘(A) to provide assistance to an air carrier

9 to subsidize service to and from an underserved

10 airport for a period not to exceed 3 years; and

11 ‘‘(B) to provide assistance to an under12 served airport to obtain jet aircraft service to

13 and from the underserved airport and to pro14 mote passenger usage of that service.

15 ‘‘(5) PRIORITY CRITERIA FOR ASSISTING AIR16 PORTS NOT RECEIVING SUFFICIENT SERVICE.—In

17 providing assistance to airports under paragraphs

18 (1)(B) and (4), the Administrator shall give priority

19 to those airports for which a community will provide,

20 from local sources (other than airport revenues), a

21 portion of the cost of the activity to be assisted.

22 ‘‘(6) UNDERSERVED AIPORT DEFINED.—In this

23 subsection, the term ‘underserved airport’ means a

24 nonhub airport or small hub airport (as such terms

25 are defined in section 41714(e)) that the Secretary
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1 determines is not receiving sufficient air carrier serv2 ice.’’.

3 (b) CONFORMING AMENDMENTS.—Chapter 417 of

4 such title is amended—

5 (1) section 41742 is amended—

6 (A) in the section heading by striking ‘‘Es7 sential’’ and inserting ‘‘Small commu8 nity’’; and

9 (B) in each of subsections (a) and (c) by

10 striking ‘‘essential air’’ and inserting ‘‘small

11 community’’; and

12 (2) in the analysis for such chapter by striking

13 the item relating to section 41742 and inserting the

14 following:

‘‘41742. Small community air service authorization.’’.

15 SEC. 103. WAIVER OF LOCAL CONTRIBUTION.

16 Section 41736(b) of title 49, United States Code, is

17 amended by adding at the end the following:

18 ‘‘Paragraph (4) shall not apply to any place for which a

19 proposal was approved or that was designated as eligible

20 under this section in the period beginning on October 1,

21 1991, and ending on December 31, 1997.’’.
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1 TITLE II—REGIONAL AIR

2 SERVICE INCENTIVE PROGRAM

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

4 (a) IN GENERAL.—Chapter 417 of title 49, United

5 States Code, is amended by adding at the end the follow6 ing:

7 ‘‘SUBCHAPTER III—REGIONAL AIR SERVICE

8 INCENTIVE PROGRAM

9 ‘‘§ 41761. Purpose

10 ‘‘The purpose of this subchapter is to improve service

11 by jet aircraft to underserved markets by providing assist12 ance, in the form of loan guarantees, to commuter air car13 riers that purchase regional jet aircraft for use in serving

14 those markets.

15 ‘‘§ 41762. Definitions

16 ‘‘In this subchapter, the following definitions apply:

17 ‘‘(1) AIRCRAFT PURCHASE LOAN.—The term

18 ‘aircraft purchase loan’ means any loan made for the

19 purchase of commercial transport aircraft, including

20 spare parts normally associated with the aircraft.

21 ‘‘(2) COMMUTER AIR CARRIER.—The term

22 ‘commuter air carrier’ means an air carrier that pri23 marily operates aircraft designed to have a maxi24 mum passenger seating capacity of 75 or less in ac25 cordance with published flight schedules.
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1 ‘‘(3) NEW ENTRANT AIR CARRIER.—The term

2 ‘new entrant air carrier’ means an air carrier that

3 has been providing air transportation according to a

4 published schedule for less than 5 years, including

5 any person that has received authority from the Sec6 retary to provide air transportation but is not pro7 viding air transportation.

8 ‘‘(4) NONHUB AIRPORT.—The term ‘nonhub

9 airport’ means an airport that each year has at least

10 2,500 passenger boardings, but less than .05 percent

11 of the total annual boardings in the United States.

12 ‘‘(5) REGIONAL JET AIRCRAFT.—The term ‘re13 gional jet aircraft’ means a civil aircraft—

14 ‘‘(A) powered by jet propulsion; and

15 ‘‘(B) designed to have a maximum pas16 senger seating capacity of not less than 30 nor

17 more than 60.

18 ‘‘(6) SMALL HUB AIRPORT.—The term ‘small

19 hub airport’ means an airport that each year has at

20 least .05 percent, but less than .25 percent, of the

21 total annual boardings in the United States.

22 ‘‘(7) UNDERSERVED AIRPORT.—The term ‘un23 derserved airport’ means an airport that—

24 ‘‘(A) is a nonhub airport or a small hub

25 airport;
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1 ‘‘(B) is not within a 40-mile radius of an2 other airport that each year has at least .25

3 percent of the total annual boardings in the

4 United States; and

5 ‘‘(C) the Secretary determines does not

6 have sufficient air service.

7 ‘‘§ 41763. Loan guarantees

8 ‘‘(a) IN GENERAL.—Subject to advance appropria9 tions, the Secretary of Transportation may guarantee any

10 lender against loss of principal or interest on any aircraft

11 purchase loan made by that lender to a commuter air car12 rier or new entrant air carrier.

13 ‘‘(b) FORM, TERMS, AND CONDITIONS.—A guarantee

14 shall be made under subsection (a)—

15 ‘‘(1) in such form and on such terms and condi16 tions; and

17 ‘‘(2) pursuant to such regulations;

18 as the Secretary considers to be necessary and consistent

19 with this subchapter.

20 ‘‘(c) TREATMENT OF CERTAIN COMMUTER AIR CAR21 RIERS.—The Secretary shall treat all commuter air car22 riers that have cooperative agreements, including code

23 share agreements with other air carriers, equally for deter24 mining eligibility for guarantees under this section regard-
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1 less of the form of the corporate relationship between the

2 commuter air carrier and the other air carrier.

3 ‘‘§ 41764. Conditions and limitations

4 ‘‘(a) LIMITATIONS ON FUNDS.—Subject to subsection

5 (d), no loan guarantee shall be made under this

6 subchapter—

7 ‘‘(1) extending to more than the unpaid interest

8 and 80 percent of the unpaid principal of any loan;

9 ‘‘(2) on any loan or combination of loans for

10 more than 80 percent of the purchase price of the

11 aircraft, including spare parts, to be purchased with

12 the loan or loan combination;

13 ‘‘(3) on any loan with respect to which terms

14 permit repayment more than 15 years after the date

15 the loan is made;

16 ‘‘(4) in any case in which the total face amount

17 of the loan and any other loans to the same air car18 rier or corporate predecessor of that air carrier that

19 are guaranteed and outstanding under the terms of

20 this subchapter exceed $100,000,000.

21 ‘‘(b) CONDITIONS FOR MAKING LOANS.—Subject to

22 subsection (c), the Secretary of Transportation may only

23 make a loan guarantee under this subchapter if—

24 ‘‘(1) the Secretary finds that the aircraft to be

25 purchased with the loan is a regional jet aircraft to
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1 be used by the commuter air carrier or new entrant

2 air carrier;

3 ‘‘(2) the commuter air carrier or new entrant

4 air carrier agrees to use the aircraft to provide at

5 least 2 round-trips per day 5 days per week to the

6 underserved airport; and

7 ‘‘(3) the Secretary finds that the prospective

8 earning power of the commuter air carrier or new

9 entrant air carrier, together with the character and

10 value of the security pledged, furnish—

11 ‘‘(A) reasonable assurances of the air car12 rier’s ability and intention to repay the loan

13 within the term of the loan—

14 ‘‘(i) to continue its operations as an

15 air carrier; and

16 ‘‘(ii) to the extent that the Secretary

17 determines to be necessary, to continue its

18 operations as an air carrier between the

19 same route or routes being operated by the

20 air carrier at the time of the loan guaran21 tee; and

22 ‘‘(B) reasonable protection to the United

23 States.

24 ‘‘(c) REQUIREMENT.—Subject to subsection (d), no

25 loan guarantee may be made under this subchapter on any
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1 loan or combination of loans for the purchase of any re2 gional jet aircraft that does not comply with the stage 3

3 noise levels of part 36 of title 14 of the Code of Federal

4 Regulations, as in effect on January 1, 1999.

5 ‘‘(d) OTHER LIMITATIONS.—

6 ‘‘(1) ON PURCHASE OF REGIONAL JET AIR7 CRAFT.—No loan guarantee shall be made by the

8 Secretary under this subchapter on any loan for the

9 purchase of a regional jet aircraft unless the com10 muter air carrier or new entrant air carrier agrees

11 that it will provide scheduled passenger air transpor12 tation to the underserved airport for which the air13 craft is purchased, or to another underserved air14 port, for a period of not less than 24 consecutive

15 months after the aircraft is placed in service.

16 ‘‘(2) ON SUBORDINATION.—No loan guarantee

17 made under this subchapter may be subordinated to

18 another debt of the carrier or to any other claims

19 against the carrier.

20 ‘‘(3) TO PROTECT INTERESTS OF UNITED

21 STATES.—No loan may be guaranteed under this

22 subchapter unless the Secretary determines that the

23 lender is responsible and that adequate provision is

24 made for servicing the loan on reasonable terms and
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1 protecting the financial interests of the United

2 States.

3 ‘‘§ 41765. Payment of losses

4 ‘‘(a) IN GENERAL.—If, as a result of a default by

5 a carrier under a loan guaranteed under this subchapter

6 and after the holder of the loan has made such further

7 collection efforts as the Secretary of Transportation may

8 require, the Secretary determines that the holder has suf9 fered a loss, the Secretary shall pay the holder the amount

10 of the loss under the guarantee contract. Upon making

11 the payment, the Secretary shall be subrogated to all the

12 rights of the recipient of the payment.

13 ‘‘(b) ENFORCEMENT OF UNITED STATES RIGHTS.—

14 The Attorney General shall take such action as may be

15 necessary to enforce any right accruing to the United

16 States as a result of the issuance of any guarantee under

17 this subchapter.

18 ‘‘(c) LIMITATION ON STATUTORY CONSTRUCTION.—

19 Nothing in this subchapter shall be construed as preclud20 ing any forbearance for the carrier which may be agreed

21 upon by the parties to the guaranteed loan and approved

22 by the Secretary.

23 ‘‘(d) AUTHORITY OF SECRETARY.—Notwithstanding

24 any other provision of law relating to the acquisition, han25 dling, or disposal of property by the United States, the
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1 Secretary may complete, recondition, reconstruct, ren2 ovate, repair, maintain, operate, or sell any property ac3 quired under this subchapter.

4 ‘‘§ 41766. Fees

5 ‘‘The Secretary of Transportation shall prescribe and

6 collect from a lending institution a reasonable administra7 tive fee in connection with each loan guaranteed under this

8 subchapter.

9 ‘‘§ 41767. Use of Federal facilities and assistance

10 ‘‘(a) USE OF FEDERAL FACILITIES.—To permit the

11 Secretary of Transportation to make use of such expert

12 advice and services as the Secretary may require in carry13 ing out this subchapter, the Secretary may use available

14 services and facilities of other agencies and instrumental15 ities of the Federal Government—

16 ‘‘(1) with the consent of the appropriate Fed17 eral officials; and

18 ‘‘(2) on a reimbursable basis.

19 ‘‘(b) ASSISTANCE.—The head of each appropriate de20 partment or agency of the Federal Government shall exer21 cise the duties and functions of that head in such manner

22 as to assist in carrying out the policy specified in section

23 41761.

24 ‘‘(c) OVERSIGHT.—The Secretary shall make avail25 able to the Comptroller General of the United States such
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1 information with respect to the loan guarantee program

2 conducted under this subchapter as the Comptroller Gen3 eral may require to carry out the duties of the Comptroller

4 General under chapter 7 of title 31.

5 ‘‘§ 41768. Payments; administrative expenses

6 ‘‘(a) PAYMENTS.—Payments to lenders required as a

7 consequence of any loan guarantee made under this sub8 chapter may be made from funds appropriated pursuant

9 to the authorization under section 202 of the Airline Serv10 ice Improvement Act of 1999.

11 ‘‘(b) ADMINISTRATIVE EXPENSES.—In carrying out

12 this subchapter, the Secretary shall use funds made avail13 able by appropriations to the Department of Transpor14 tation for the purpose of administration to cover adminis15 trative expenses of the loan guarantee program under this

16 subchapter.

17 ‘‘§ 41769. Termination

18 ‘‘The authority of the Secretary of Transportation

19 under section 41763 shall terminate on the date that is

20 5 years after the date of the enactment of this sub21 chapter.’’.

22 (b) CONFORMING AMENDMENT.—The analysis for

23 chapter 417 of such title is amended by adding at the end

24 the following:

‘‘SUBCHAPTER III—REGIONAL AIR SERVICE INCENTIVE PROGRAM

‘‘41761. Purpose.
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‘‘41762. Definitions.

‘‘41763. Loan guarantees.

‘‘41764. Conditions and limitations.

‘‘41765. Payment of losses.

‘‘41766. Fees.

‘‘41767. Use of Federal facilities and assistance.

‘‘41768. Payments; administrative expenses.

‘‘41769. Termination.’’.

1 SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

2 There is authorized to be appropriated for the cost

3 of loan guarantee commitments authorized in subchapter

4 III of chapter 417 of title 49, United States Code,

5 $120,000,000 per fiscal year for fiscal years 2000, 2001,

6 2002, 2003, and 2004.

7 TITLE III—CONTRACT TOWER

8 PROGRAM

9 SEC. 301. CONTRACT TOWERS.

10 Section 47124(b) of title 49, United States Code, is

11 amended by adding at the end the following:

12 ‘‘(3) NONQUALIFYING AIR TRAFFIC CONTROL

13 TOWERS.—

14 ‘‘(A) IN GENERAL.—The Secretary shall

15 establish a program to contract for air traffic

16 control services at not more than 20 level I air

17 traffic control towers, as defined by the Admin18 istrator of the Federal Aviation Administration,

19 that do not qualify for the program established

20 under subsection (a) and continued under para21 graph (1).
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1 ‘‘(B) PRIORITY.—In selecting facilities to

2 participate in the program under this para3 graph, the Administrator shall give priority to

4 the following:

5 ‘‘(i) Air traffic control towers that are

6 participating in the program continued

7 under paragraph (1) but have been notified

8 that they will be terminated from such pro9 gram because the Administrator has deter10 mined that the benefit-to-cost ratio for

11 their continuation in such program is less

12 than 1.

13 ‘‘(ii) Level I air traffic control towers

14 of the Federal Aviation Administration

15 that are closed as a result of the air traffic

16 controllers strike in 1981.

17 ‘‘(iii) Air traffic control towers that

18 are located at airports that receive air

19 service from an air carrier that is receiving

20 compensation under the essential air serv21 ice program of subchapter II of chapter

22 417.

23 ‘‘(iv) Air traffic control towers located

24 at airports that are prepared to assume re-
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1 sponsibility for tower construction and

2 maintenance costs.

3 ‘‘(v) Air traffic control towers that are

4 located at airports with safety or oper5 ational problems related to topography,

6 weather, runway configuration, or mix of

7 aircraft.

8 ‘‘(C) COSTS EXCEEDING BENEFITS.—If

9 the costs of operating a control tower under the

10 program established under this paragraph ex11 ceed the benefits, the airport sponsor or State

12 or local government having jurisdiction over the

13 airport shall pay the portion of the costs that

14 exceed such benefits.

15 ‘‘(D) AUTHORIZATION OF APPROPRIA16 TIONS.—There is authorized to be appropriated

17 $6,000,000 per fiscal year to carry out this

18 paragraph.’’.

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