```

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 780 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 780

     To amend title 49, United States Code, to establish consumer 
      protections for airline passengers, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 23, 1999

 Mr. Dingell introduced the following bill; which was referred to the 
             Committee on Transportation and Infrastructure

_______________________________________________________________________

                                 A BILL

 
     To amend title 49, United States Code, to establish consumer 
      protections for airline passengers, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Passenger Entitlement and 
Competition Enhancement Act of 1999''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) airline passenger complaints, as reported by the 
        Department of Transportation, have increased substantially and 
        continue to rise;
            (2) a series of recent events related to weather and 
        management-labor relations have heightened concerns regarding 
        airline passenger rights and welfare;
            (3) airline passengers should have more information about 
        their rights and the level of service to which they are 
        entitled;
            (4) the Airline Deregulation Act of 1978 was intended to 
        open markets and result in increased competition and service 
        for the United States public;
            (5) airline competition benefits communities and consumers 
        and is under the jurisdiction of, and should be promoted by, 
        the Federal government;
            (6) the Department of Transportation has proposed rules to 
        address complaints of unfair exclusionary conduct engaged in by 
        major air carriers against new entrant air carriers, including 
        drastic price cuts and flooding the market with new low-fare 
        capacity;
            (7) unfair exclusionary conduct hurts consumers in the long 
        run because it deprives the public of the benefits of 
        competition and alternative carriers;
            (8) due to mergers and alliances, there is increasing 
        concentration within the airline industry and most major hub 
        airports are dominated by one carrier;
            (9) the introduction of low-fare competition into certain 
        markets has enabled more consumers to fly in those markets, 
        resulting in enormous economic growth for those communities;
            (10) although the deregulation of the domestic airline 
        industry has led to lower fares for many air travelers, the 
        promised benefits of airline deregulation have yet to be fully 
        realized;
            (11) the Secretary of Transportation would be aided by 
        additional authority to promulgate and enforce standards of 
        fair competition in the airline industry under section 41712 of 
        title 49, United States Code;
            (12) studies by the General Accounting Office and 
        independent entities show that concentration in the domestic 
        airline industry continues to increase and that, where such 
        concentration exists, consumers pay prices for air 
        transportation more than 20 percent higher than consumers 
        traveling in competitive markets;
            (13) in addition, the General Accounting Office has 
        identified a number of issues that the Department of 
        Transportation could address to lower barriers to entry and 
        increase competition in the airline market, such as slot 
        restrictions and exclusive airport gate leases;
            (14) of the more than 3,100 domestic air carrier slots at 
        the 4 slot-controlled airports in the United States, known as 
        ``high density airports''--
                    (A) fewer than 45 slots are held collectively by 
                new entrant air carriers; and
                    (B) foreign carriers hold approximately twice as 
                many slots as new entrant air carriers;
            (15) the Department of Transportation allowed the 
        established air carriers to retain a large portion of their 
        slots free-of-charge when the current ``Buy-Sell Rule'' was 
        instituted in 1985;
            (16) access to slot-controlled airports is crucial to 
        establishing new air service in the heavily-traveled eastern 
        and midwestern markets and if carriers are going to be able to 
        increase services to markets served by small hub airports and 
        medium hub airports, particularly in the Southeast and Midwest; 
        and
            (17) the National Commission to Ensure a Strong Competitive 
        Airline Industry recommended that the Federal Aviation 
        Administration review the rule that limits operations at high 
        density airports with the aim of either removing these 
        artificial limits or raising them to the highest practicable 
        level consistent with safety requirements.

                     TITLE I--PASSENGER PROTECTIONS

SEC. 101. AIRLINE PASSENGER PROTECTION.

    (a) In General.--Subchapter I of chapter 417 of title 49, United 
States Code, is amended by adding at the end the following:
``Sec. 41716. Air carrier passenger protection
    ``(a) Emergency Plans.--
            ``(1) In general.--An air carrier shall ensure access to 
        necessary services and conditions, including food, water, 
        restroom facilities, and emergency medical services for all 
        passengers boarded on a flight segment of the air carrier.
            ``(2) Submittal of plans.--The Secretary of Transportation 
        shall require each air carrier to submit to the Secretary an 
        emergency plan containing a detailed description of actions 
        that will be taken by the carrier to comply with paragraph (1).
            ``(3) Failure to submit plans.--The Secretary shall suspend 
        the authority of an air carrier to provide air transportation 
        if the carrier fails to submit a plan in accordance with 
        paragraph (2). The suspension shall continue until the carrier 
        submits the plan.
            ``(4) Regulations.--Not later than 180 days after the date 
        of enactment of this Act, the Secretary shall issue final 
        regulations to require plans under paragraph (2).
    ``(b) Notice of Delays.--An air carrier shall provide to each 
passenger on a flight segment of the carrier sufficient and accurate 
notice, based on information reasonably available to the carrier, of 
any potential or actual significant delays in the departure or arrival 
of the flight segment. Whenever possible, such notice shall be provided 
before the passenger boards an aircraft.
    ``(c) Excessive Departure and Arrival Delay.--
            ``(1) Liability imposed.--An air carrier shall be liable to 
        each passenger on an aircraft for an excessive departure or 
        arrival delay of the aircraft.
            ``(2) Amount of liability.--
                    ``(A) Delays of more than 2 but less than 3 
                hours.--If the excessive departure or arrival delay is 
                more than 2 but less than 3 hours, the amount of 
                liability under paragraph (1) shall be 200 percent of 
                the price paid by the passenger for transportation by 
                the air carrier.
                    ``(B) Delays of 3 hours or more.--If the excessive 
                departure or arrival delay is 3 hours or more, the 
                amount of liability under paragraph (1) shall be--
                            ``(i) the amount determined under 
                        subparagraph (A), plus
                            ``(ii) an additional 100 percent of the 
                        price paid by the passenger for such 
                        transportation multiplied by the number of 
                        hours (or portion thereof) that such period 
                        exceeds 3 hours.
            ``(3) Excessive departure or arrival delay.--In paragraph 
        (1), the term `excessive departure or arrival delay' means a 
        period of time in excess of 2 hours--
                    ``(A) in the case of departure delay, beginning 
                when the door of an aircraft is closed at an airport 
                and ending when the aircraft takes off from the airport 
                or when the door of the aircraft is open for deplaning 
                of passengers at the airport; and
                    ``(B) in the case of arrival delay, beginning upon 
                touchdown of an aircraft at an airport and ending when 
                the door of the aircraft is open for deplaning of 
                passengers at the airport.
            ``(4) Treatment of certain delays.--Notwithstanding 
        paragraph (3), a departure delay in excess of 2 hours shall not 
        be treated as an excessive departure delay for purposes of 
        paragraph (1) if the Administrator of the Federal Aviation 
        Administration determines that the departure delay was the 
        result of--
                    ``(A) an air traffic control directive and that the 
                carrier did not receive notification that it would 
                receive such directive prior to the scheduled departure 
                time of the flight; or
                    ``(B) a mechanical problem with the aircraft or 
                other safety concern.
    ``(d) Lost Baggage.--An air carrier may not limit its liability for 
provable direct or consequential damages resulting from the 
disappearance of, damage to, or delay in delivery of a passenger's 
personal property, including luggage, in its custody to an amount less 
than $2,500 per passenger.
    ``(e) Overbooking.--An air carrier shall provide, at a minimum, to 
a passenger who is denied boarding involuntarily from an oversold 
flight segment on which the passenger has a confirmed seat--
            ``(1) alternate transportation to the passenger's final 
        destination; and
            ``(2) if the scheduled arrival time of the alternate 
        transportation is not within 2 hours of the passenger's 
        originally scheduled arrival time, a refund or voucher for air 
        transportation equal in value to the amount paid by the 
        passenger for the original flight.
    ``(f) Flight Segment Defined.--In this section, the term `flight 
segment' means a flight segment in air transportation.
    ``(g) Foreign Air Transportation.--Nothing in this Act shall be 
construed to affect any treaty or other provision of law regulating 
flight segments in foreign air transportation.''.
    (b) Conforming Amendment.--The table of sections for such title is 
amended by inserting after the item relating to section 41715 the 
following:

``41716. Air carrier passenger protection.''.

SEC. 102. CIVIL PENALTIES.

    Section 46301(a) of title 49, United States Code, is amended--
            (1) in paragraph (6) by inserting ``Maximum penalty for 
        violations relating to air service termination notices.--'' 
        before ``Notwithstanding'';
            (2) by aligning paragraph (6) with paragraph (5) of such 
        section; and
            (3) by adding at the end the following:
            ``(7) Maximum penalty for violations relating to passenger 
        access to necessary services and conditions.--Notwithstanding 
        paragraph (1), the maximum civil penalty for violating 
        paragraph (1) or (2) of section 41716(a) shall be $10,000 
        instead of $1,000.''.

SEC. 103. PASSENGER RIGHTS PUBLICATION.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary shall, by rule--
            (1) issue a statement that outlines consumer rights of air 
        passengers, including each of the rights specified in section 
        41716 of title 49, United States Code, as added by section 2 of 
        this Act; and
            (2) requires an air carrier to provide the statement to 
        each passenger of the carrier, by conspicuous written material 
        included--
                    (A) on a safety placard given to the passenger on 
                board an aircraft;
                    (B) on information available to the passenger at 
                each ticket counter of the air carrier; and
                    (C) on or with the passenger's ticket.

                   TITLE II--AIR CARRIER COMPETITION

SEC. 201. REDISTRIBUTION OF SLOTS BY AUCTION.

    (a) In General.--Subpart III of part A of subtitle VII of title 49, 
United States Code, is amended by adding at the end the following:

                      ``CHAPTER 455--SLOT AUCTIONS

``Sec.
``45501. General authority to create, withdraw, and auction slots.
``45502. Auction.
``45503. Special rules.
``45504. Definitions.
``Sec. 45501. General authority to create, withdraw, and auction slots
    ``(a) In General.--The Secretary of Transportation shall allocate 
slots at each slot-controlled airport for assignment to new entrant air 
carriers and limited incumbent carriers in accordance with this 
chapter.
    ``(b) Application Process--
            ``(1) Request for slots.--An air carrier with appropriate 
        Federal Aviation Administration safety certification and 
        Department of Transportation economic certification may submit 
        a request to the Secretary for slots at a high density airport. 
        The application shall include--
                    ``(A) the markets to be served;
                    ``(B) the times requested;
                    ``(C) information on the passenger demand for the 
                service to be provided; and
                    ``(D) such additional information as the Secretary 
                may require.
            ``(2) Action on request; failure to act.--Within 45 days 
        after a request under paragraph (1) is received by the 
        Secretary, the Secretary shall--
                    ``(A) approve the request for processing if the 
                Secretary believes that--
                            ``(i) the applicant can operate the service 
                        for a period of not less than 180 days; and
                            ``(ii) the service will improve the 
                        competitive environment; or
                    ``(B) return the request to the applicant for 
                further information.
        If the Secretary neither approves the request under 
        subparagraph (A) nor returns the request under subparagraph (B) 
        within the 45-day period beginning on the date it is received, 
        then the request is deemed to have been approved on the 45th 
        day.
    ``(c) Allocation Process.--
            ``(1) If slots are available.--If an application under 
        subsection (b) is approved for processing, the Secretary first 
        shall allocate slots within 60 minutes of the requested times 
        if--
                    ``(A) unused slots are available; or
                    ``(B) slots may be awarded through the exemption 
                process in accordance with the Federal Aviation 
                Administration's air traffic priorities.
            ``(2) If slots are unavailable.--If an application under 
        subsection (b) is approved for processing but the requested 
        slots are not available for allocation under paragraph (1), 
        then the Secretary may withdraw slots under subsection (d) for 
        auction under section 45502 or create new slots.
    ``(d) Withdrawal of Slots for Auction.--
            ``(1) Withdrawal of existing slot assignments.--The 
        Secretary shall withdraw, from major carriers at each airport--
                    ``(A) for the first auction under this section, not 
                more than 10 percent of the auctionable slots assigned 
                to such carriers at that airport; and
                    ``(B) for any subsequent auction under this 
                section, not more than 5 percent of the auctionable 
                slots assigned to such carriers at that airport.
            ``(2) Frequency.--Auctions under this section shall not be 
        held more frequently than 24 months after the date of the 
        preceding auction.
            ``(3) Auctionable slots.--For purposes of this subsection, 
        an auctionable slot is--
                    ``(A) a slot assigned to an air carrier in 1985 
                that is still assigned to that air carrier, or a slot 
                received in even exchange with another air carrier for 
                a slot assigned to that air carrier in 1985; and
                    ``(B) any slot other than a slot used by a major 
                carrier to provide direct service to an airport that is 
                a small or medium hub airport.
            ``(4) Authority to withdraw slots for use inconsistent with 
        objectives.--The Secretary may withdraw an auctionable slot 
        from a major air carrier at any time if the Secretary 
        determines in writing that the slot is being used by the 
        carrier in a manner inconsistent with the objectives set forth 
        in section 45502(c). Any slot so withdrawn may be reassigned by 
        the Secretary at any subsequent auction under this section.
``Sec. 45502. Auction
    ``(a) General Authority.--The Secretary of Transportation shall 
assign a slot to a qualified applicant through the use of a system of 
competitive bidding.
    ``(b) Uses to Which Bidding May Apply.--A slot may be assigned 
under this subsection if the Secretary determines that the assignment 
of such slot will, or is reasonably likely to, increase competition 
among air carriers nationally, regionally, or in the markets affected 
by the slot assignment in accordance with section 45501(b).
    ``(c) Design of Systems of Competitive Bidding.--In identifying 
slots to be withdrawn for auction under section 45501(d)(1), in 
specifying eligibility and other characteristics of such slots, and in 
designing the methodologies for use under this subsection, the 
Secretary shall include safeguards to protect the public interest in 
the use of the slots and shall promote the following objectives:
            ``(1) Increasing competition in the provision of air 
        transportation in a way that benefits the public.
            ``(2) Promoting economic opportunity and competition and 
        ensuring that air transportation at competitive rates and 
        levels of customer service is readily accessible to the 
        American people by avoiding excessive concentration of slots 
        among major air carriers.
            ``(3) Recovery for the public of a portion of the value of 
        the slots made available by competitive bidding and the 
        avoidance of unjust enrichment through the methods employed to 
        award slots.
            ``(4) Efficient and intensive use of slots.
    ``(d) Bidder Qualification.--No air carrier (other than a new 
entrant air carrier or a limited incumbent carrier) may participate in 
a system of competitive bidding under this section. No license shall be 
granted to an applicant selected pursuant to this section unless the 
Secretary determines that the applicant is qualified to utilize the 
slot or slots to be so assigned.
    ``(e) Rules of Construction.--Nothing in this section, or in the 
use of competitive bidding, shall--
            ``(1) alter slots allocation criteria and procedures 
        established by the other provisions of this subtitle;
            ``(2) diminish the authority of the Secretary under the 
        other provisions of this subtitle to regulate or reclaim slots;
            ``(3) be construed to convey any rights, including any 
        expectation of renewal of a slot assignment, that differ from 
        the rights that apply to other slots at the same airport that 
        were not issued pursuant to this section; or
            ``(4) be construed to prohibit the Secretary from issuing 
        additional slots.
    ``(f) Consideration of Revenues in Public Interest 
Determinations.--
            ``(1) Consideration prohibited.--In making a decision to 
        assign slots pursuant to this section, and in prescribing 
        regulations pursuant to this section, the Secretary may not 
        base a finding of public interest, convenience, and necessity 
        on the expectation of Federal revenues from the use of a system 
        of competitive bidding under this section.
            ``(2) Consideration limited.--In prescribing regulations 
        pursuant to this section, the Secretary may not base a finding 
        of public interest, convenience, and necessity solely or 
        predominantly on the expectation of Federal revenues from the 
        use of a system of competitive bidding under this section.
            ``(3) Consideration of demand for slots.--Nothing in this 
        subsection shall be construed to prevent the Secretary from 
        considering consumer demand for slots-based services.
    ``(g) Treatment of Revenues.--
            ``(1) General rule.--Except as provided in paragraph (2), 
        all proceeds from the use of a competitive bidding system under 
        this subsection shall be deposited in the Airport and Airway 
        Trust Fund established under section 9502 of the Internal 
        Revenue Code of 1986.
            ``(2) Deposit and use of auction escrow accounts.--Any 
        deposits the Secretary may require for the qualification of any 
        person to bid in a system of competitive bidding pursuant to 
        this subsection shall be deposited in an interest bearing 
        account at a financial institution designated for purposes of 
        this subsection by the Secretary (after consultation with the 
        Secretary of the Treasury). Within 45 days following the 
        conclusion of the competitive bidding--
                    ``(A) the deposits of successful bidders shall be 
                paid to the Treasury;
                    ``(B) the deposits of unsuccessful bidders shall be 
                returned to such bidders; and
                    ``(C) the interest accrued to the account shall be 
                returned to each successful and unsuccessful bidder in 
                the ratio that the amount deposited by the bidder bears 
                to the total amount deposited by all bidders, except 
                that before returning such amounts the Secretary shall 
                deduct a sum equal to the administrative expenses 
                incurred by the Secretary in conducting the auction and 
                shall transfer such sum to the Airport and Airway Trust 
                Fund.
    ``(h) Evaluation.--Not later than 180 days after the initiation of 
competitive bidding under this section, the Secretary shall conduct a 
public inquiry and submit to the Congress a report--
            ``(1) containing a statement of the revenues obtained, and 
        a projection of the future revenues, from the use of 
        competitive bidding systems under this section;
            ``(2) describing the methodologies established by the 
        Secretary pursuant to subsections (c) and (d);
            ``(3) comparing the relative advantages and disadvantages 
        of such methodologies in terms of attaining the objectives 
        described in such subsections; and
            ``(4) recommending any statutory changes that are needed to 
        improve the competitive bidding process.
``Sec. 45503. Special rules
    ``(a) Resale or Reversion of Purchased Slots.--
            ``(1) Resale.--A slot assigned by competitive bidding under 
        section 45502 may be--
                    ``(A) sold by the air carrier to which it was 
                assigned only to a new entrant air carrier or limited 
                incumbent carrier within 24 months of the slot 
                acquisition; or
                    ``(B) leased to any new entrant air carrier or 
                limited incumbent carrier.
            ``(2) Reversion.--A slot assigned by competitive bidding 
        under section 45502 that is lost by the air carrier to which it 
        was assigned under section 93.227 of title 14 of the Code of 
        Federal Regulations shall be returned to the Federal Aviation 
        Administration.
    ``(b) Other Existing Slots.--
            ``(1) Expiration.--Any slot not withdrawn for assignment 
        under this chapter shall continue in effect until the earlier 
        of--
                    ``(A) the date on which it is subsequently 
                withdrawn for such assignment; or
                    ``(B) the date on which it expires or is withdrawn 
                according to the terms of its assignment.
            ``(2) Future revenues.--Any amount paid for assignment or 
        use of an expired slot shall be treated in accordance with the 
        provisions of section 45502(h) as if received under that 
        section.
``Sec. 45504. Definitions
    ``In this chapter, the following definitions apply:
            ``(1) High density airport.--The term `high density 
        airport' has the meaning given it by section 41714(h)(2).
            ``(2) New entrant air carrier; limited incumbent carrier.--
        The terms `new entrant air carrier' and `limited incumbent 
        carrier' have the meaning given such terms by section 93.213 of 
        title 14, Code of Federal Regulations, except that the term 
        does not include an air carrier at a high density airport that 
        has a substantial marketing arrangement, as determined by the 
        Secretary, with another air carrier holding more than 10 
        percent of the slots at the airport or an air carrier that is 
        owned or controlled, in whole or in part, by such a carrier.
            ``(3) Major carrier.--The term `major carrier' means an air 
        carrier to which part 121 of such title applies.
            ``(4) Medium hub airport.--The term `medium hub airport' 
        means an airport that each year has at least 0.25 percent, but 
        less than 1.00 percent, of the total annual boardings in the 
        United States.
            ``(5) Slot.--The term `slot' has the meaning given that 
        term by section 41714(h)(4).
            ``(6) Small hub airport.--The term `small hub airport' has 
        the meaning given that term by section 41731(a)(5).''.
    (b) Clerical Amendment.--The analysis for such subtitle is amended 
by inserting after the item relating to chapter 453 the following:

``455. SLOT AUCTIONS........................................   45501''.

SEC. 202. PENALTIES FOR UNFAIR METHODS OF COMPETITION.

    Section 46301(a) of title 49, United States Code, as amended by 
section 102 of this Act, is amended by adding at the end the following:
            ``(8) Maximum penalty for engaging in unfair methods of 
        competition.--Notwithstanding section 46301(a)(1), the maximum 
        civil penalty for violating section 41712 by engaging, with 
        respect to air transportation on any route, in an unfair method 
        of competition, as defined by regulation issued under Docket 
        Number OST-98-3713 or any other regulation issued by the 
        Department of Transportation, shall be $10,000.''.

SEC. 203. DISCLOSURE OF ROUTE COMPETITION AND CONSUMER VALUE 
              INFORMATION.

    (a) Reports Ranking Air Carrier Routes by Average Cost to 
Passengers.--
            (1) In general.--The Secretary shall submit to Congress, 
        and make available to the public, a quarterly report containing 
        a ranking of the 10 domestic routes with the highest average 
        cost to the passenger and the 10 domestic routes with the 
        lowest average cost to the passenger. The report shall identify 
        the airlines that operate on each of those routes.
            (2) Requirements.--In developing reports under this 
        subsection, the Secretary shall consider such factors and 
        criteria as the Secretary considers appropriate.
    (b) Reports Ranking Large Hub Airports by Market Concentration.--
The Secretary shall submit to Congress, and make available to the 
public, a quarterly report ranking the large hub airports by market 
concentration using the measure known as the Herfindahl-Hirschmann 
Index and identifying the market share of each airline operating at 
each of those airports.
    (c) Deadline.--The Secretary shall begin submitting reports under 
this section not later than 180 days after the date of enactment of 
this Act.

SEC. 204. FACILITIES ACCESS.

    (a) Study.--The Secretary of Transportation shall conduct a study 
on the ability of and proposals for new entrant carriers, and carriers 
with less than 5 percent of the departures at a major hub airport, to 
obtain permanent gates and other facilities at the airport on terms 
substantially equivalent to the terms provided to incumbent carriers at 
the airport.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall transmit to Congress a report containing 
the results of the study conducted under subsection (a), including an 
assessment of any impact of proposals referred to in subsection (a) on 
State and local units of government.
                                 <all>
```