II

105TH CONGRESS

1ST SESSION S. 1193

To amend chapter 443 of title 49, United States Code, to extend the

authorization of the aviation insurance program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 18, 1997

Mr. GORTON (for himself, Mr. MCCAIN, Mr. HOLLINGS, and Mr. FORD) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

A BILL

To amend chapter 443 of title 49, United States Code,

to extend the authorization of the aviation insurance

program, 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 ‘‘Aviation Insurance

5 Reauthorization Act of 1997’’.

6 SEC. 2. VALUATION OF AIRCRAFT.

7 (a) GENERAL AUTHORITY FOR INSURANCE AND

8 REINSURANCE.—Section 44302(a)(2) of title 49, United

9 States Code, is amended by striking ‘‘as determined by
2

S 1193 IS

1 the Secretary.’’ and inserting ‘‘as determined by the Sec2 retary in accordance with reasonable business practices in

3 the commercial aviation insurance industry.’’.

4 (b) LIMITATION ON MAXIMUM INSURED AMOUNT.—

5 Section 44306(c) of title 49, United States Code, is

6 amended by striking ‘‘as determined by the Secretary.’’

7 and inserting ‘‘as determined by the Secretary in accord8 ance with reasonable business practices in the commercial

9 aviation insurance industry.’’.

10 SEC. 3. EFFECT OF INDEMNITY AGREEMENTS.

11 Section 44305(b) of title 49, United States Code, is

12 amended by adding at the end the following: ‘‘If such an

13 agreement is countersigned by the President or the Presi14 dent’s designee, the agreement shall constitute, for pur15 poses of section 44302(b), a determination that continu16 ation of the aircraft operations to which the agreement

17 applies is necessary to carry out the foreign policy of the

18 United States.’’.

19 SEC. 4. BORROWING AUTHORITY.

20 (a) IN GENERAL.—Section 44307 of title 49, United

21 States Code, is amended by adding at the end the follow22 ing:

23 ‘‘(e) BORROWING.—

24 ‘‘(1) ISSUANCE OF OBLIGATIONS.—Subject to

25 the provisions of this subsection, the Administrator
3

S 1193 IS

1 of the Federal Aviation Administration may issue

2 and sell such notes or other obligations to the Sec3 retary of the Treasury as the Administrator deter4 mines are necessary to provide funds to carry out

5 this chapter. This authority, while available for ini6 tial payments made by the Department of Transpor7 tation for any loss covered by the Department of De8 fense-related non-premium aviation insurance, does

9 not remove the Department of Defense’s responsibil10 ities under section 9514 of title 10, United States

11 Code, to provide prompt indemnification to the De12 partment of Transportation for the amount of the

13 loss.

14 ‘‘(2) TERMS AND CONDITIONS.—Obligations

15 under this subsection shall be issued in the forms

16 and denominations, bearing the maturities, and sub17 ject to the terms and conditions that the Secretary

18 of the Treasury may prescribe.

19 ‘‘(3) NOTIFICATION OF CONGRESS.—At least 25

20 days before the Administrator intends to issue and

21 sell a note or other obligation under paragraph (1),

22 the Administrator shall notify, in writing, the Senate

23 and House of Representatives of such intention and

24 the dollar amount of such note or obligation.
4

S 1193 IS

1 ‘‘(4) PURCHASE OF OBLIGATIONS.—The Sec2 retary of the Treasury shall purchase any obligations

3 issued under this subsection. For such purpose, the

4 Secretary of the Treasury may use as a public debt

5 transaction the proceeds from the sale of any securi6 ties issued under the Second Liberty Bond Act. The

7 purposes for which securities may be issued under

8 such Act are extended to include any purchase of

9 obligations issued under this subsection.

10 ‘‘(5) RESALE AUTHORITY.—The Secretary of

11 the Treasury may sell any obligations issued under

12 this subsection at the times and prices and upon the

13 terms and conditions that the Secretary of the

14 Treasury shall determine.

15 ‘‘(6) TREATMENT.—All purchases, redemptions,

16 and sales of obligations under this subsection by the

17 Secretary of the Treasury shall be treated as public

18 debt transactions of the United States.’’.

19 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

20 44307(a) of such title is amended by striking paragraph

21 (2) and inserting the following:

22 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—

23 Necessary amounts to carry out this chapter, includ24 ing amounts required to pay the interest accrued on,
5

S 1193 IS

1 or to repay the principal of, obligations issued under

2 subsection (e), may be appropriated to the fund.

3 ‘‘(3) DEPOSIT IN FUND.—The amounts appro4 priated and other amounts received, including the

5 proceeds of the sale of obligations issued under sub6 section (e), shall be deposited in the fund.’’.

7 (c) CONFORMING AMENDMENT.—Section 44307(d)

8 of such title is amended by adding at the end the follow9 ing: ‘‘This subsection does not apply to amounts appro10 priated for paying interest accrued on, or for repaying the

11 principal of, obligations issued under subsection (e).’’.

12 SEC. 5. ARBITRATION AUTHORITY.

13 (a) AUTHORIZATION OF BINDING ARBITRATION.—

14 Section 44308(b)(1) of title 49, United States Code, is

15 amended by inserting after the second sentence the follow16 ing: ‘‘Any such policy may authorize the binding arbitra17 tion of claims made thereunder in such manner as may

18 be agreed to by the Secretary and any commercial insurer

19 that may be responsible for any part of a loss to which

20 such policy relates.’’.

21 (b) AUTHORITY TO PAY ARBITRATION AWARD.—

22 Section 44308(b)(2) of such title is amended—

23 (1) by striking ‘‘and’’ at the end of subpara24 graph (A);
6

S 1193 IS

1 (2) by redesignating subparagraph (B) as sub2 paragraph (C); and

3 (3) by inserting after subparagraph (A) the fol4 lowing:

5 ‘‘(B) pay the amount of a binding arbitra6 tion award made under paragraph (1); and’’.

7 SEC. 6. EXTENSION OF PROGRAM.

8 Section 44310 of title 49, United States Code, is

9 amended by striking ‘‘1997’’ and inserting ‘‘2002’’.

10 SEC. 7. USE OF AIRCRAFT FOR DEMONSTRATION.

11 Section 40102(37)(A) of title 49, United States Code,

12 is amended—

13 (1) by striking ‘‘or’’ in clause (i);

14 (2) by redesignating clause (ii) as clause (iii);

15 and

16 (3) by inserting after clause (i) the following:

17 ‘‘(ii) owned by the United States Gov18 ernment and operated by any person for

19 purposes related to crew training, equip20 ment development, or demonstration; or’’.

Æ