II

106TH CONGRESS

1ST SESSION S. 379

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 to small communities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 4, 1999

Mr. ROCKEFELLER (for himself, Mr. DORGAN, Mr. WYDEN, Mr. HARKIN, and

Mr. BINGAMAN) introduced the following bill; which was read twice and

referred to the Committee on Commerce, Science, and Transportation

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 to 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.

4 This Act may be cited as the ‘‘Air Service Restoration

5 Act’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—
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1 (1) a national transportation system providing

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

3 States is essential to interstate commerce and the

4 economic well-being of cities and towns throughout

5 the United States;

6 (2) taxpayers throughout the United States

7 have supported and helped to fund the United

8 States aviation infrastructure and have a right to

9 expect that aviation services will be provided in an

10 equitable and fair manner to every region of the

11 country;

12 (3) some communities have not benefited from

13 airline deregulation and access to essential airports

14 and air services have been limited;

15 (4) air service to a number of small commu16 nities have suffered since deregulation;

17 (5) studies by the Department of Transpor18 tation have documented that, since the airline indus19 try was deregulated in 1978—

20 (A) 34 small communities have lost service

21 and many small communities have had jet air22 craft service replaced by turboprop aircraft

23 service;

24 (B) out of a total of 320 small commu25 nities, the number of small communities being
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1 served by major air carriers declined from 213

2 in 1978 to 33 in 1995;

3 (C) the number of small communities re4 ceiving service to only one major hub airport in5 creased from 79 in 1978 to 134 in 1995; and

6 (D) the number of small communities re7 ceiving multiple-carrier service decreased from

8 136 in 1978 to 122 in 1995; and

9 (6) improving air service to small and medium10 sized communities that have not benefited from fare

11 reductions and improved service since deregulation

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

13 local, and private sector initiatives.

14 SEC. 3. PURPOSE.

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

16 pilot program, incentives and projects that will help com17 munities to improve their access to the essential airport

18 facilities of the national air transportation system through

19 public-private partnerships and to identify and establish

20 ways to overcome the unique policy, economic, geographic,

21 and marketplace factors that may inhibit the availability

22 of quality, affordable air service to small communities.
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1 SEC. 4. ESTABLISHMENT OF SMALL COMMUNITY AVIATION

2 DEVELOPMENT PROGRAM.

3 Section 102 is amended by adding at the end thereof

4 the following:

5 ‘‘(g) SMALL COMMUNITY AIR SERVICE DEVELOP6 MENT PROGRAM.—

7 ‘‘(1) ESTABLISHMENT.—The Secretary shall es8 tablish a 5-year pilot aviation development program

9 to be administered by a program director designated

10 by the Secretary.

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

12 shall—

13 ‘‘(A) function as a facilitator between

14 small communities and air carriers;

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

16 ‘‘(C) carry out the airline service restora17 tion program under sections 41744, 41745, and

18 41746 of this title;

19 ‘‘(D) ensure that the Bureau of Transpor20 tation Statistics collects data on passenger in21 formation to assess the service needs of small

22 communities;

23 ‘‘(E) work with and coordinate efforts with

24 other Federal, State, and local agencies to in25 crease the viability of service to small commu-
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1 nities and the creation of aviation development

2 zones; and

3 ‘‘(F) provide policy recommendations to

4 the Secretary and the Congress that will ensure

5 that small communities have access to quality,

6 affordable air transportation services.

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

8 provide an annual report to the Secretary and the

9 Congress beginning in 2000 that—

10 ‘‘(A) analyzes the availability of air trans11 portation services in small communities, includ12 ing, but not limited to, an assessment of the air

13 fares charged for air transportation services in

14 small communities compared to air fares

15 charged for air transportation services in larger

16 metropolitan areas and an assessment of the

17 levels of service, measured by types of aircraft

18 used, the availability of seats, and scheduling of

19 flights, provided to small communities;

20 ‘‘(B) identifies the policy, economic, geo21 graphic and marketplace factors that inhibit the

22 availability of quality, affordable air transpor23 tation services to small communities; and

24 ‘‘(C) provides policy recommendations to

25 address the policy, economic, geographic and
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1 marketplace factors inhibiting the availability of

2 quality, affordable air transportation services to

3 small communities.’’.

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

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

6 amended by adding at the end thereof the following:

7 ‘‘§ 41743. Air service program for small communities

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

9 guidelines prescribed by the Secretary of Transportation,

10 a small community or a consortia of small communities

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

12 requirements, in such form as the program director des13 ignated by the Secretary under section 102(g) may re14 quire, and submit the assessment and service proposal to

15 the program director.

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

17 community programs for participation in the communities

18 program under section (a), the program director shall

19 apply criteria, including geographical diversity and the

20 presentation of unique circumstances, that will dem21 onstrate the feasibility of the program. For purposes of

22 this subsection, the application of geographical diversity

23 criteria means criteria that—

24 ‘‘(1) will provide the development of a national

25 air transportation system; and
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1 ‘‘(2) will involve the participation of commu2 nities in all regions of the country.

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

4 shall invite part 121 air carriers and regional/commuter

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

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

7 in conjunction with, community aircraft service assess8 ments submitted to the office under subsection (a). A serv9 ice proposal under this paragraph shall include—

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

11 traffic, revenues, and costs necessary for the carrier

12 to offer the service;

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

14 that traffic the carrier would require the community

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

16 maintain the service; and

17 ‘‘(3) the costs and benefits of providing jet serv18 ice by regional or other jet aircraft.

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

20 director shall work with small communities and air car21 riers, taking into account their proposals and needs, to

22 faciliate the initiation of service. The program director—

23 ‘‘(1) may work with communities to develop in24 novative means and incentives for the initiation of

25 service;
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1 ‘‘(2) may obligate funds authorized under sec2 tion 6 of the Air Service Restoration Act to carry

3 out this section;

4 ‘‘(3) shall continue to work with both the car5 riers and the communities to develop a combination

6 of community incentives and carrier service levels

7 that—

8 ‘‘(A) are acceptable to communities and

9 carriers; and

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

11 State programs to facilitate air transportation

12 to the communities;

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

14 Air Service Development Zone and work with the

15 community on means to attract business to the area

16 surrounding the airport, to develop land use options

17 for the area, and provide data, working with the De18 partment of Commerce and other agencies;

19 ‘‘(5) take such other action under this chapter

20 as may be appropriate.

21 ‘‘(e) LIMITATIONS.—

22 ‘‘(1) COMMUNITY SUPPORT.—The program di23 rector may not provide financial assistance under

24 subsection (c)(2) to any community unless the pro25 gram director determines that—
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1 ‘‘(A) a public-private partnership exists at

2 the community level to carry out the commu3 nity’s proposal;

4 ‘‘(B) the community will make a substan5 tial financial contribution that is appropriate

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

7 than 25 percent of the cost of the project in

8 any event;

9 ‘‘(C) the community has established an

10 open process for soliciting air service proposals;

11 and

12 ‘‘(D) the community will accord similar

13 benefits to air carriers that are similarly situ14 ated.

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

16 obligate more than $100,000,000 of the amounts au17 thorized under section 6 of the Air Service Restora18 tion Act over the 5 years of the program.

19 ‘‘(3) NUMBER OF PARTICIPANTS.—The pro20 gram established under subsection (a) shall not in21 volve more than 40 communities or consortia of

22 communities.

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

24 through the Secretary to the Congress annually on the

25 program made under this section during the preceding
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1 year in expanding commercial aviation service to smaller

2 communities.

3 ‘‘§ 41744. Pilot program project authority

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

5 by the Secretary of Transportation under section

6 102(g)(1) shall establish a 5-year pilot program—

7 ‘‘(1) to assist communities and States with in8 adequate access to the national transportation sys9 tem to improve their access to that system; and

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

11 support the improved access.

12 ‘‘(b) PROJECT AUTHORITY.—Under the pilot pro13 gram established pursuant to subsection (a), the program

14 director may—

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

16 of the Air Service Restoration Act, provide financial

17 assistance by way of grants to small communities or

18 consortia of small communities under section 41743

19 of up to $500,000 per year; and

20 ‘‘(2) take such other action as may be appro21 priate.

22 ‘‘(c) OTHER ACTION.—Under the pilot program es23 tablished pursuant to subsection (a), the program director

24 may facilitate service by—
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1 ‘‘(1) working with airports and air carriers to

2 ensure that appropriate facilities are made available

3 at essential airports;

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

5 small communities; and

6 ‘‘(3) providing policy recommendations to the

7 Secretary to stimulate air service and competition to

8 small communities.

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

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

11 work with air carriers providing service to participating

12 communities and major air carriers serving large hub air13 ports (as defined in section 41731(a)(3)) to facilitate joint

14 fare arrangements consistent with normal industry prac15 tice.

16 ‘‘§ 41745. Assistance to communities for service

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

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

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

20 implemented for not more than—

21 ‘‘(1) 4 communities within any State at any

22 given time; and

23 ‘‘(2) 40 communities in the entire program at

24 any time.
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1 For purposes of this subsection, a consortium of commu2 nities shall be related as a single community.

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

4 project under this subchapter, a State community, or

5 group of communities shall apply to the Secretary in such

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

7 as the Secretary may require, and shall demonstrate to

8 the satisfaction of the Secretary that—

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

10 access, or improved access, to the national air trans11 portation system that would benefit the public;

12 ‘‘(2) the pilot project will provide material bene13 fits to a broad section of the travelling public, busi14 nesses, educational institutions, and other enter15 prises whose access to the national air transpor16 tation system is limited;

17 ‘‘(3) the pilot project will not impede competi18 tion; and

19 ‘‘(4) the applicant has established, or will estab20 lish, public-private partnerships in connection with

21 the pilot project to facilitate service to the public.

22 ‘‘(c) COORDINATION WITH OTHER PROVISIONS OF

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

24 pilot program authorized by this subchapter in such a

25 manner as to complement action taken under the other
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1 provisions of this subchapter. To the extent the Secretary

2 determines to be appropriate, the Secretary may adopt cri3 teria for implementation of the 5-year pilot program that

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

5 the preceding sections of this subchapter for determining

6 which airports are eligible under those sections. The Sec7 retary shall also, to the extent possible, provide incentives

8 where no direct, viable, and feasible alternative service ex9 ists, taking into account geographical diversity and appro10 priate market definitions.

11 ‘‘(d) MAXIMIZATION OF PARTICIPATION.—The Sec12 retary shall structure the program established pursuant

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

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

15 feasible number of communities and States over a 5-

16 year period by limiting the number of years of par17 ticipation or otherwise; and

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

19 the financial resources available to the Secretary and

20 the applicant by—

21 ‘‘(A) progressively decreasing, on a project22 by-project basis, any Federal financial incen23 tives provided under this chapter over the 5-

24 year period; and
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1 ‘‘(B) terminating as early as feasible Fed2 eral financial incentives for any project deter3 mined by the Secretary after its implementation

4 to be—

5 ‘‘(i) viable without further support

6 under this subchapter; or

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

8 this chapter or criteria established by the

9 Secretary under the pilot program.

10 ‘‘(e) SUCCESS BONUS.—If Federal financial incen11 tives to a community are terminated under subsection

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

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

14 incentive grant to ensure that continued success of that

15 program.

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

17 financial assistance may be provided under this subsection

18 chapter for any fiscal year beginning more than 5 years

19 after the date of enactment of the Air Service Restoration

20 Act.

21 ‘‘§ 41746 Additional authority

22 ‘‘In carrying out this chapter, the Secretary—

23 ‘‘(1) may provide assistance to State and com24 munities in the design and application phase of any
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1 project under this chapter, and oversee the imple2 mentation of any such project;

3 ‘‘(2) may assist States and communities in put4 ting together projects under this chapter to utilize

5 private sector resources, other Federal resources, or

6 a combination of public and private resources;

7 ‘‘(3) may accord priority to service by jet air8 craft;

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

10 ensure that financial resources, facilities, and admin11 istrative arrangements made under this chapter are

12 used to carry out the purposes of the Air Service

13 Restoration Act; and

14 ‘‘(5) shall work with the Federal Aviation Ad15 ministration on airport and air traffic control needs

16 of communities in the program.

17 ‘‘§ 41747. Air traffic control services pilot program

18 ‘‘(a) IN GENERAL.—To further facilitate the use of,

19 and improve the safety at, small airports, the Adminis20 trator of the Federal Aviation Administration shall estab21 lish a pilot program to contract for Level I air traffic con22 trol services at 20 facilities not eligible for participation

23 in the Federal Contract Tower Program.
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1 ‘‘(b) PROGRAM COMPONENTS.—In carrying out the

2 pilot program established under subsection (a), the Ad3 ministrator may—

4 ‘‘(1) utilize current, actual, site-specific data,

5 forecast estimates, or airport system plan data pro6 vided by a facility owner or operator;

7 ‘‘(2) take into consideration unique aviation

8 safety, weather, strategic national interest, disaster

9 relief, medical and other emergency management re10 lief services, status of regional airline service, and

11 related factors at the facility;

12 ‘‘(3) approve for participation any facility will13 ing to fund a pro rata share of the operating costs

14 used by the Federal Aviation Administration to cal15 culate, and, as necessary, a 1:1 benefit-to-cost ratio,

16 as required for eligibility under the Federal Contract

17 Tower Program; and

18 ‘‘(4) approve for participation no more than 3

19 facilities willing to fund a pro rata share of con20 struction costs for an air traffic control tower so as

21 to achieve, at a minimum, a 1:1 benefit-to-cost ratio,

22 as required for eligibility under the Federal Contract

23 Tower Program, and for each of such facilities the

24 Federal share of construction costs does not exceed

25 $1,000,000.
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1 ‘‘(c) REPORT.—One year before the pilot program es2 tablished under subsection (a) terminates, the Adminis3 trator shall report to the Congress on the effectiveness of

4 the program, with particular emphasis on the safety and

5 economic benefits provided to program participants and

6 the national air transportation system.’’.

7 (b) CONFORMING AMENDMENT.—The chapter analy8 sis for subchapter II of chapter 417 is amended by insert9 ing after the item relating to section 41742 the following:

‘‘41743. Air service program for small communities.

‘‘41744. Pilot program project authority.

‘‘41745. Assistance to communities for service.

‘‘41746. Additional authority.

‘‘41747. Air traffic control services pilot program.’’.

10 (c) WAVIER OF LOCAL CONTRIBUTION.—Section

11 41736(b) is amended by inserting after paragraph (4) the

12 following:

13 ‘‘Paragraph (4) does not apply to any community ap14 proved for service under this section during the period be15 ginning October 1, 1991, and ending December 31,

16 1997.’’.

17 (d) AUTHORIZATION OF APPROPRIATIONS.—There

18 are authorized to be appropriated to the Secretary of

19 Transportation such sums as may be necessary to carry

20 out section 41747 of title 49, United States Code.

21 SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

22 To carry out sections 41743 through 41746 of title

23 49, United States Code, for the 4 fiscal-year period begin-
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1 ning with fiscal year 2000 there are authorized to be ap2 propriated to the Secretary of Transportation not more

3 than $100,000,000.

4 SEC. 7. MARKETING PRACTICES.

5 Section 41712 is amended by—

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

7 ‘‘On’’; and

8 (2) adding at the end thereof the following:

9 ‘‘(b) MARKETING PRACTICES THAT ADVERSELY AF10 FECT SERVICE TO SMALL OR MEDIUM COMMUNITIES.—

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

12 Service Restoration Act, the Secretary shall review the

13 marketing practices of air carriers that may inhibit the

14 availability to quality, affordable air transportation serv15 ices to small and medium-sized communities, including—

16 ‘‘(1) marketing arrangements between airlines

17 and travel agents;

18 ‘‘(2) code-sharing partnerships;

19 ‘‘(3) computer reservation system displays;

20 ‘‘(4) gate arrangements at airports;

21 ‘‘(5) exclusive dealings arrangements; and

22 ‘‘(6) any other marketing practice that may

23 have the same effect.

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

25 conducting the review required by subsection (b), that
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1 marketing practices inhibit the availability of such services

2 to such communities, then, after public notice and an op3 portunity for comment, the Secretary shall promulgate

4 regulations that address the problem.’’.

5 SEC. 8. NONDISCRIMINATORY INTERLINE INTERCONNEC6 TION REQUIREMENTS.

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

8 amended by adding at the end thereof the following:

9 ‘‘§ 41717. Interline agreements for domestic transpor10 tation

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

12 major air carrier that provides air service to an essential

13 airport facility has any agreement involving ticketing, bag14 gage and ground handling, and terminal and gate access

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

16 any requesting air carrier that offers service to a commu17 nity selected for participation in the program under sec18 tion 41743 under similar terms and conditions and on a

19 nondiscriminatory basis within 30 days after receiving the

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

21 safety, service, financial, and maintenance requirements,

22 if any, as the Secretary may by regulation establish con23 sistent with public convenience and necessity. The Sec24 retary must review any proposed agreement to determine

25 if the requesting carrier meets operational requirements
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1 consistent with the rules, procedures, and policies of the

2 major carrier. This agreement may be terminated by ei3 ther party in the event of failure to meet the standards

4 and conditions outlined in the agreement.’’.

5 ‘‘(b) DEFINITIONS.—In this section the term ‘essen6 tial airport facility’ means a large hub airport (as defined

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

8 which one carrier has more than 50 percent of such air9 port’s total annual enplanements.’’.

10 (b) CLERICAL AMENDMENTS.—The chapter analysis

11 for subchapter I of chapter 417 is amended by adding at

12 the end thereof the following:

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

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