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106TH CONGRESS

1ST SESSION H. R. 907

To amend title 49, United States Code, to authorize the Secretary of Transportation to implement a pilot program to improve access to the national

transportation system for small communities, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 2, 1999

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

Committee on Transportation and Infrastructure

A BILL

To amend title 49, United States Code, to authorize the

Secretary of Transportation to implement a pilot program to improve access to the national transportation

system for small communities, 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; REFERENCES.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Air Service Restoration Act’’.

6 (b) REFERENCES.—Except as otherwise specifically

7 provided, whenever in this Act an amendment or repeal

8 is expressed in terms of an amendment to, or repeal of,
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1 a section or other provision of law, the reference shall be

2 considered to be made to a section or other provision of

3 title 49, United States Code.

4 SEC. 2. FINDINGS.

5 The Congress finds that—

6 (1) a national transportation system providing

7 safe, high quality service to all areas of the United

8 States is essential to interstate commerce and the

9 economic well-being of cities and towns throughout

10 the United States;

11 (2) taxpayers throughout the United States

12 have supported and helped to fund the United

13 States aviation infrastructure and have a right to

14 expect that aviation services will be provided in an

15 equitable and fair manner to every region of the

16 country;

17 (3) some communities have not benefited from

18 airline deregulation and access to essential airports

19 and air services has been limited;

20 (4) air service to a number of small commu21 nities has suffered since deregulation;

22 (5) studies by the Department of Transpor23 tation have documented that, since the airline indus24 try was deregulated in 1978—
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1 (A) 34 small communities have lost service

2 and many small communities have had jet air3 craft service replaced by turboprop aircraft

4 service;

5 (B) out of a total of 320 small commu6 nities, the number of small communities being

7 served by major air carriers declined from 213

8 in 1978 to 33 in 1995;

9 (C) the number of small communities re10 ceiving service to only one major hub airport in11 creased from 79 in 1978 to 134 in 1995; and

12 (D) the number of small communities re13 ceiving multiple-carrier service decreased from

14 136 in 1978 to 122 in 1995; and

15 (6) improving air service to small and medium16 sized communities that have not benefited from fare

17 reductions and improved service since deregulation

18 will likely entail a range of Federal, State, regional,

19 local, and private sector initiatives.

20 SEC. 3. PURPOSE.

21 The purpose of this Act is to facilitate, through a

22 pilot program, incentives and projects that will help com23 munities to improve their access to the essential airport

24 facilities of the national air transportation system through

25 public-private partnerships and to identify and establish
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1 ways to overcome the unique policy, economic, geographic,

2 and marketplace factors that may inhibit the availability

3 of quality, affordable air service to small communities.

4 SEC. 4. ESTABLISHMENT OF SMALL COMMUNITY AVIATION

5 DEVELOPMENT PROGRAM.

6 Section 102 is amended by adding at the end the fol7 lowing:

8 ‘‘(g) SMALL COMMUNITY AIR SERVICE DEVELOP9 MENT PROGRAM.—

10 ‘‘(1) ESTABLISHMENT.—The Secretary shall es11 tablish a 5-year pilot aviation development program

12 to be administered by a program director designated

13 by the Secretary.

14 ‘‘(2) FUNCTIONS.—The program director

15 shall—

16 ‘‘(A) function as a facilitator between

17 small communities and air carriers;

18 ‘‘(B) carry out section 41743 of this title;

19 ‘‘(C) carry out the airline service restora20 tion program under sections 41744, 41745, and

21 41746 of this title;

22 ‘‘(D) ensure that the Bureau of Transpor23 tation Statistics collects data on passenger in24 formation to assess the service needs of small

25 communities;
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1 ‘‘(E) work with and coordinate efforts with

2 other Federal, State, and local agencies to in3 crease the viability of service to small commu4 nities and the creation of aviation development

5 zones; and

6 ‘‘(F) provide policy recommendations to

7 the Secretary and the Congress that will ensure

8 that small communities have access to quality,

9 affordable air transportation services.

10 ‘‘(3) REPORTS.—The program director shall

11 provide an annual report to the Secretary and Con12 gress beginning in 2000 that—

13 ‘‘(A) analyzes the availability of air trans14 portation services in small communities, includ15 ing, but not limited to, an assessment of the air

16 fares charged for air transportation services in

17 small communities compared to air fares

18 charged for air transportation services in larger

19 metropolitan areas and an assessment of the

20 levels of service, measured by types of aircraft

21 used, the availability of seats, and scheduling of

22 flights, provided to small communities;

23 ‘‘(B) identifies the policy, economic, geo24 graphic, and marketplace factors that inhibit
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1 the availability of quality, affordable air trans2 portation services to small communities; and

3 ‘‘(C) provides policy recommendations to

4 address the policy, economic, geographic, and

5 marketplace factors inhibiting the availability of

6 quality, affordable air transportation services to

7 small communities.’’.

8 SEC. 5. COMMUNITY-CARRIER AIR SERVICE PROGRAM.

9 (a) IN GENERAL.—Subchapter II of chapter 417 is

10 amended by adding at the end the following:

11 ‘‘§ 41743. Air service program for small communities

12 ‘‘(a) COMMUNITIES PROGRAM.—Under advisory

13 guidelines prescribed by the Secretary of Transportation,

14 a small community or a consortia of small communities

15 or a State may develop an assessment of its air service

16 requirements, in such form as the program director des17 ignated by the Secretary under section 102(g) may re18 quire, and submit the assessment and service proposal to

19 the program director.

20 ‘‘(b) SELECTION OF PARTICIPANTS.—In selecting

21 community programs for participation in the communities

22 program under subsection (a), the program director shall

23 apply criteria, including geographical diversity and the

24 presentation of unique circumstances, that will dem25 onstrate the feasibility of the program. For purposes of
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1 this subsection, the application of geographical diversity

2 criteria means criteria that—

3 ‘‘(1) will promote the development of a national

4 air transportation system; and

5 ‘‘(2) will involve the participation of commu6 nities in all regions of the country.

7 ‘‘(c) CARRIERS PROGRAM.—The program director

8 shall invite part 121 air carriers and regional/commuter

9 carriers (as such terms are defined in section 41715(d)

10 of this title) to offer service proposals in response to, or

11 in conjunction with, community aircraft service assess12 ments submitted to the office under subsection (a). A serv13 ice proposal under this subsection shall include—

14 ‘‘(1) an assessment of potential daily passenger

15 traffic, revenues, and costs necessary for the carrier

16 to offer the service;

17 ‘‘(2) a forecast of the minimum percentage of

18 that traffic the carrier would require the community

19 to garner in order for the carrier to start up and

20 maintain the service; and

21 ‘‘(3) the costs and benefits of providing jet serv22 ice by regional or other jet aircraft.

23 ‘‘(d) PROGRAM SUPPORT FUNCTION.—The program

24 director shall work with small communities and air car-
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1 riers, taking into account their proposals and needs, to

2 facilitate the initiation of service. The program director—

3 ‘‘(1) may work with communities to develop in4 novative means and incentives for the initiation of

5 service;

6 ‘‘(2) may obligate funds authorized under sec7 tion 6 of the Air Service Restoration Act to carry

8 out this section;

9 ‘‘(3) shall continue to work with both the car10 riers and the communities to develop a combination

11 of community incentives and carrier service levels

12 that—

13 ‘‘(A) are acceptable to communities and

14 carriers; and

15 ‘‘(B) do not conflict with other Federal or

16 State programs to facilitate air transportation

17 to the communities;

18 ‘‘(4) designate an airport in the program as an

19 Air Service Development Zone and work with the

20 community on means to attract business to the area

21 surrounding the airport, to develop land use options

22 for the area, and provide data, working with the De23 partment of Commerce and other agencies; and

24 ‘‘(5) take such other action under this sub25 chapter as may be appropriate.
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1 ‘‘(e) LIMITATIONS.—

2 ‘‘(1) COMMUNITY SUPPORT.—The program di3 rector may not provide financial assistance under

4 subsection (c)(2) to any community unless the pro5 gram director determines that—

6 ‘‘(A) a public-private partnership exists at

7 the community level to carry out the commu8 nity’s proposal;

9 ‘‘(B) the community will make a substan10 tial financial contribution that is appropriate

11 for that community’s resources, but of not less

12 than 25 percent of the cost of the project in

13 any event;

14 ‘‘(C) the community has established an

15 open process for soliciting air service proposals;

16 and

17 ‘‘(D) the community will accord similar

18 benefits to air carriers that are similarly situ19 ated.

20 ‘‘(2) AMOUNT.—The program director may not

21 obligate more than $100,000,000 of the amounts au22 thorized under section 6 of the Air Service Restora23 tion Act over the 5 years of the program.

24 ‘‘(3) NUMBER OF PARTICIPANTS.—The pro25 gram established under subsection (a) shall not in-
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1 volve more than 40 communities or consortia of

2 communities.

3 ‘‘(f) REPORT.—The program director shall report

4 through the Secretary to Congress annually on the

5 progress made under this section during the preceding

6 year in expanding commercial aviation service to smaller

7 communities.

8 ‘‘§ 41744. Pilot program project authority

9 ‘‘(a) IN GENERAL.—The program director designated

10 by the Secretary of Transportation under section

11 102(g)(1) shall establish a 5-year pilot program—

12 ‘‘(1) to assist communities and States with in13 adequate access to the national transportation sys14 tem to improve their access to that system; and

15 ‘‘(2) to facilitate better air service link-ups to

16 support the improved access.

17 ‘‘(b) PROJECT AUTHORITY.—Under the pilot pro18 gram established pursuant to subsection (a), the program

19 director may—

20 ‘‘(1) out of amounts authorized under section 6

21 of the Air Service Restoration Act, provide financial

22 assistance by way of grants to small communities or

23 consortia of small communities under section 41743

24 of up to $500,000 per year; and
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1 ‘‘(2) take such other action as may be appro2 priate.

3 ‘‘(c) OTHER ACTION.—Under the pilot program es4 tablished pursuant to subsection (a), the program director

5 may facilitate service by—

6 ‘‘(1) working with airports and air carriers to

7 ensure that appropriate facilities are made available

8 at essential airports;

9 ‘‘(2) collecting data on air carrier service to

10 small communities; and

11 ‘‘(3) providing policy recommendations to the

12 Secretary to stimulate air service and competition to

13 small communities.

14 ‘‘(d) ADDITIONAL ACTION.—Under the pilot program

15 established pursuant to subsection (a), the Secretary shall

16 work with air carriers providing service to participating

17 communities and major air carriers serving large hub air18 ports (as defined in section 41731(a)(3)) to facilitate joint

19 fare arrangements consistent with normal industry prac20 tice.

21 ‘‘§ 41745. Assistance to communities for service

22 ‘‘(a) IN GENERAL.—Financial assistance provided

23 under section 41743 during any fiscal year as part of the

24 pilot program established under section 41744(a) shall be

25 implemented for not more than—
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1 ‘‘(1) 4 communities within any State at any

2 given time; and

3 ‘‘(2) 40 communities in the entire program at

4 any time.

5 For purposes of this subsection, a consortium of commu6 nities shall be treated as a single community.

7 ‘‘(b) ELIGIBILITY.—In order to participate in a pilot

8 project under this subchapter, a State, community, or

9 group of communities shall apply to the Secretary in such

10 form and at such time, and shall supply such information,

11 as the Secretary may require, and shall demonstrate to

12 the satisfaction of the Secretary that—

13 ‘‘(1) the applicant has an identifiable need for

14 access, or improved access, to the national air trans15 portation system that would benefit the public;

16 ‘‘(2) the pilot project will provide material bene17 fits to a broad section of the travelling public, busi18 nesses, educational institutions, and other enter19 prises whose access to the national air transpor20 tation system is limited;

21 ‘‘(3) the pilot project will not impede competi22 tion; and

23 ‘‘(4) the applicant has established, or will estab24 lish, public-private partnerships in connection with

25 the pilot project to facilitate service to the public.
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1 ‘‘(c) COORDINATION WITH OTHER PROVISIONS OF

2 SUBCHAPTER.—The Secretary shall carry out the 5-year

3 pilot program authorized by this subchapter in such a

4 manner as to complement action taken under the other

5 provisions of this subchapter. To the extent the Secretary

6 determines to be appropriate, the Secretary may adopt cri7 teria for implementation of the 5-year pilot program that

8 are the same as, or similar to, the criteria developed under

9 the preceding sections of this subchapter for determining

10 which airports are eligible under those sections. The Sec11 retary shall also, to the extent possible, provide incentives

12 where no direct, viable, and feasible alternative service ex13 ists, taking into account geographical diversity and appro14 priate market definitions.

15 ‘‘(d) MAXIMIZATION OF PARTICIPATION.—The Sec16 retary shall structure the program established pursuant

17 to section 41744(a) in a way designed to—

18 ‘‘(1) permit the participation of the maximum

19 feasible number of communities and States over a 5-

20 year period by limiting the number of years of par21 ticipation or otherwise; and

22 ‘‘(2) obtain the greatest possible leverage from

23 the financial resources available to the Secretary and

24 the applicant by—
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1 ‘‘(A) progressively decreasing, on a project2 by-project basis, any Federal financial incen3 tives provided under this subchapter over the 5-

4 year period; and

5 ‘‘(B) terminating as early as feasible Fed6 eral financial incentives for any project deter7 mined by the Secretary after its implementation

8 to be—

9 ‘‘(i) viable without further support

10 under this subchapter; or

11 ‘‘(ii) failing to meet the purposes of

12 this subchapter or criteria established by

13 the Secretary under the pilot program.

14 ‘‘(e) SUCCESS BONUS.—If Federal financial incen15 tives to a community are terminated under subsection

16 (d)(2)(B) because of the success of the program in that

17 community, then that community may receive a one-time

18 incentive grant to ensure the continued success of that

19 program.

20 ‘‘(f) PROGRAM TO TERMINATE IN 5 YEARS.—No new

21 financial assistance may be provided under this sub22 chapter for any fiscal year beginning more than 5 years

23 after the date of enactment of the Air Service Restoration

24 Act.
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1 ‘‘§ 41746. Additional authority

2 ‘‘In carrying out this subchapter, the Secretary—

3 ‘‘(1) may provide assistance to States and com4 munities in the design and application phase of any

5 project under this subchapter, and oversee the im6 plementation of any such project;

7 ‘‘(2) may assist States and communities in put8 ting together projects under this subchapter to uti9 lize private sector resources, other Federal re10 sources, or a combination of public and private re11 sources;

12 ‘‘(3) may accord priority to service by jet air13 craft;

14 ‘‘(4) take such action as may be necessary to

15 ensure that financial resources, facilities, and admin16 istrative arrangements made under this subchapter

17 are used to carry out the purposes of the Air Service

18 Restoration Act; and

19 ‘‘(5) shall work with the Federal Aviation Ad20 ministration on airport and air traffic control needs

21 of communities in the program.’’.

22 (b) CONFORMING AMENDMENT.—The analysis for

23 subchapter II of chapter 417 of such title is amended by

24 inserting after the item relating to section 41742 the fol25 lowing:

‘‘41743. Air service program for small communities.
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‘‘41744. Pilot program project authority.

‘‘41745. Assistance to communities for service.

‘‘41746. Additional authority.’’.

1 SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

2 To carry out sections 41743 through 41746 of title

3 49, United States Code, for the 5 fiscal year period begin4 ning with fiscal year 2000 there are authorized to be ap5 propriated to the Secretary of Transportation not more

6 than $100,000,000.

7 SEC. 7. MARKETING PRACTICES.

8 Section 41712 is amended—

9 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

10 ‘‘On’’; and

11 (2) by adding at the end the following:

12 ‘‘(b) MARKETING PRACTICES THAT ADVERSELY AF13 FECT SERVICE TO SMALL OR MEDIUM COMMUNITIES.—

14 Within 180 days after the date of enactment of the Air

15 Service Restoration Act, the Secretary shall review the

16 marketing practices of air carriers that may inhibit the

17 availability of quality, affordable air transportation serv18 ices to small- and medium-sized communities, including—

19 ‘‘(1) marketing arrangements between airlines

20 and travel agents;

21 ‘‘(2) code-sharing partnerships;

22 ‘‘(3) computer reservation system displays;

23 ‘‘(4) gate arrangements at airports;

24 ‘‘(5) exclusive dealing arrangements; and
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1 ‘‘(6) any other marketing practice that may

2 have the same effect.

3 ‘‘(c) REGULATIONS.—If the Secretary finds, after

4 conducting the review required by subsection (b), that

5 marketing practices inhibit the availability of such service

6 to such communities, then, after public notice and an op7 portunity for comment, the Secretary shall promulgate

8 regulations that address the problem.’’.

9 SEC. 8. NONDISCRIMINATORY INTERLINE INTERCONNEC10 TION REQUIREMENTS.

11 (a) IN GENERAL.—Subchapter I of chapter 417 is

12 amended by adding at the end the following:

13 ‘‘§ 41717. Interline agreements for domestic transpor14 tation

15 ‘‘(a) NONDISCRIMINATORY REQUIREMENTS.—If a

16 major air carrier that provides air service to an essential

17 airport facility has any agreement involving ticketing, bag18 gage and ground handling, and terminal and gate access

19 with another carrier, it shall provide the same services to

20 any requesting air carrier that offers service to a commu21 nity selected for participation in the program under sec22 tion 41743 under similar terms and conditions and on a

23 nondiscriminatory basis within 30 days after receiving the

24 request, as long as the requesting air carrier meets such

25 safety, service, financial, and maintenance requirements,
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1 if any, as the Secretary may by regulation establish con2 sistent with public convenience and necessity. The Sec3 retary must review any proposed agreement to determine

4 if the requesting carrier meets operational requirements

5 consistent with the rules, procedures, and policies of the

6 major carrier. This agreement may be terminated by ei7 ther party in the event of failure to meet the standards

8 and conditions outlined in the agreement.’’.

9 ‘‘(b) DEFINITIONS.—In this section the term ‘essen10 tial airport facility’ means a large hub airport (as defined

11 in section 41731(a)(3)) in the contiguous 48 States in

12 which one carrier has more than 50 percent of such air13 port’s total annual enplanements.’’.

14 (b) CLERICAL AMENDMENT.—The analysis for sub15 chapter I of chapter 417 is amended by adding at the end

16 the following:

‘‘41717. Interline agreements for domestic transportation.’’.

17 SEC. 9. PRICES FOR AIR TRANSPORTATION ON ROUTES

18 USING SINGLE CARRIER DOMINATED AIR19 PORTS.

20 (a) IN GENERAL.—Chapter 415 is amended by add21 ing at the end the following:

22 ‘‘§ 41512. Prices for air transportation on routes

23 using single carrier dominated airports

24 ‘‘(a) AUTHORITY TO REQUEST SECRETARY’S DETER25 MINATION.—
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1 ‘‘(1) IN GENERAL.—The Secretary of Transpor2 tation shall issue a determination as to whether a

3 price established by an air carrier for a route in air

4 transportation that contains a flight segment to or

5 from an airport dominated by the carrier is reason6 able if any individual files with the Secretary a writ7 ten request for the determination.

8 ‘‘(2) SECRETARY NOT TO SET PRICE.—In deter9 mining whether a price is reasonable under this sec10 tion, the Secretary may only determine whether the

11 price is reasonable or unreasonable and shall not set

12 the price.

13 ‘‘(b) SINGLE CARRIER DOMINATED AIRPORTS.—For

14 purposes of subsection (a), an airport shall be treated as

15 an airport dominated by a carrier if more than 50 percent

16 of the daily passenger enplanements at the airport are

17 enplanements of the carrier.

18 ‘‘(c) PROCEDURAL REGULATIONS.—Not later than

19 90 days after the date of enactment of this section, the

20 Secretary shall publish in the Federal Register final regu21 lations, policy statements, or guidelines establishing—

22 ‘‘(1) the procedures for acting upon a written

23 request filed under subsection (a)(1); and
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1 ‘‘(2) the standards or guidelines that shall be

2 used by the Secretary in determining under this sec3 tion whether a price is reasonable.’’.

4 (b) CONFORMING AMENDMENT.—The analysis for

5 chapter 415 is amended by adding at the end the follow6 ing:

‘‘41512. Prices for air transportation on routes using single carrier dominated

airports.’’.

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