II

105TH CONGRESS

1ST SESSION S. 1353

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

with respect to air carrier service between high density airports and

airports that do not receive sufficient air service, to improve jet aircraft

service to underserved markets, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 31, 1997

Mr. FRIST (for himself, Mr. LOTT, and Mr. THOMPSON) 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 provide assistance

and slots with respect to air carrier service between

high density airports and airports that do not receive

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 ‘‘Air Service Improve5 ment Act of 1997’’.
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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 title 49, United States Code, is amend11 ed—

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

13 (B) in paragraph (1), by striking the sub14 section heading and all that follows through ‘‘If

15 the Secretary’’ and inserting the following:

16 ‘‘(c) SLOTS FOR NEW ENTRANTS.—If the Sec17 retary’’.

18 (b) SLOTS FOR AIRPORTS NOT RECEIVING SUFFI19 CIENT SERVICE.—Section 41714 of title 49, United States

20 Code, is amended—

21 (1) by striking subsections (e) and (f) and in22 serting the following:

23 ‘‘(e) SLOTS FOR AIRPORTS NOT RECEIVING SUFFI24 CIENT SERVICE.—
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1 ‘‘(1) EXEMPTIONS.—The Secretary may, by

2 order, grant exemptions from the requirements

3 under subparts K and S of part 93 of title 14, Code

4 of Federal Regulations (pertaining to slots at high

5 density airports) (or any subsequent similar regula6 tions), to enable air carriers to provide nonstop air

7 transportation using aircraft that comply with the

8 stage 3 noise levels contained in part 36 of such title

9 14 between a high density airport and a small hub

10 airport or nonhub airport that the Secretary deter11 mines is not receiving sufficient air carrier service to

12 and from that high density airport.

13 ‘‘(2) LIMITATIONS.—

14 ‘‘(A) IN GENERAL.—No more than 2 ex15 emptions per hour may be granted under this

16 subsection for slots at any high density airport.

17 ‘‘(B) WASHINGTON NATIONAL AIRPORT.—

18 Not more than 6 exemptions per day may be

19 granted under this subsection for slots at

20 Washington National Airport.

21 ‘‘(3) APPLICATION.—An air carrier interested

22 in an exemption under this subsection shall submit

23 to the Secretary an application for that exemption.

24 No application may be submitted to the Secretary

25 before the last day of the 30-day period beginning
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1 on the date of enactment of the Air Service Improve2 ment Act of 1997.

3 ‘‘(4) DEADLINE FOR DECISION.—

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

5 make a decision with regard to granting an ex6 emption under this subsection not later than

7 the 120th day following the date on which the

8 application for the exemption is submitted

9 under paragraph (3).

10 ‘‘(B) EFFECTS OF FAILURE OF SECRETARY

11 TO MAKE A DECISION.—If the Secretary does

12 not make a decision on or before the date speci13 fied in subparagraph (A), the air carrier re14 questing the service may provide the service

15 that is subject to the exemption until such time

16 as—

17 ‘‘(i) the Secretary makes a decision to

18 deny that request; or

19 ‘‘(ii) the Administrator of the Federal

20 Aviation Administration decides that pro21 viding that service would have an adverse

22 effect on air safety.

23 ‘‘(5) PERIOD OF EFFECTIVENESS.—An exemp24 tion granted under this subsection may remain in ef25 fect while the air carrier with respect to which the
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1 exemption is granted continues to provide nonstop

2 air transportation between the airport that the Sec3 retary determined was not receiving sufficient air

4 carrier service and the high density airport involved.

5 ‘‘(6) DEFINITIONS.—In this subsection, the fol6 lowing definitions apply:

7 ‘‘(A) NONHUB AIRPORT.—The term

8 ‘nonhub airport’ means an airport that each

9 year has less than 0.05 percent of the total an10 nual boardings in the United States.

11 ‘‘(B) SECRETARY.—The term ‘Secretary’

12 means the Secretary of Transportation.

13 ‘‘(C) SMALL HUB AIRPORT.—The term

14 ‘small hub airport’ means an airport that for an

15 annual period, has, with respect to the total an16 nual boardings of the United States—

17 ‘‘(i) at least 0.05 percent of those

18 boardings; and

19 ‘‘(ii) less than 0.25 percent of those

20 boardings.’’; and

21 (2) by redesignating subsections (g) and (h) as

22 subsections (e) and (f), respectively.
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1 SEC. 102. FUNDING FOR AIR CARRIER SERVICE TO AIR2 PORTS NOT RECEIVING SUFFICIENT SERV3 ICE.

4 Section 41742(b) is amended to read as follows:

5 ‘‘(b) FUNDING FOR SMALL COMMUNITY AIR SERV6 ICE.—

7 ‘‘(1) SOURCE OF FUNDING.—Notwithstanding

8 any other provision of law, amounts credited to the

9 account established under section 45303(a) of this

10 title, including the funds derived from fees imposed

11 under the authority contained in section 45301(a) of

12 this title, shall be used to carry out the essential air

13 service program under this subchapter.

14 ‘‘(2) FUNDING FOR AIR CARRIER SERVICE TO

15 AIRPORTS NOT RECEIVING SUFFICIENT SERVICE AND

16 RURAL AIR SAFETY.—Any amounts from fees im17 posed under section 45301(a) that the Secretary de18 termines will not be obligated or expended by the

19 last day of a fiscal year for the purpose of funding

20 the essential air service program under this sub21 chapter shall be made available in that fiscal year to

22 the Administration as follows:

23 ‘‘(A) Not more than $10,000,000 for fiscal

24 year 1998, and for each fiscal year thereafter,

25 shall be used—
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1 ‘‘(i) for assisting an air carrier in pur2 chasing aircraft to provide air transpor3 tation to an airport that serves an under4 served market;

5 ‘‘(ii) to purchase slots to provide air

6 service between a high density airport and

7 an airport that the Secretary determines is

8 not receiving sufficient air carrier service

9 to and from such high density airport;

10 ‘‘(iii) to subsidize service to and from

11 an underserved airport for a period not to

12 exceed 3 years; and

13 ‘‘(iv) for assisting an underserved air14 port to market service to and from the un15 derserved airport.

16 ‘‘(B) Any remaining amounts of the

17 amounts determined by the Secretary under

18 this paragraph shall be available for use under

19 this subchapter in improving rural air safety at

20 airports with less than 100,000 annual

21 boardings.

22 ‘‘(3) UNDERSERVED AIRPORT.—In this sub23 section, the term ‘underserved airport’ means an air24 port that the Secretary determines is not receiving

25 sufficient air carrier service.’’.
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1 SEC. 103. UNFAIR COMPETITION COMPLAINTS.

2 Section 41712 of title 49, United States Code, is

3 amended—

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

5 ‘‘On’’; and

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

7 ‘‘(b) DEADLINE FOR DECISION ON UNFAIR COMPETI8 TION COMPLAINTS.—The Secretary shall make a decision

9 with respect to any complaint that the Secretary receives

10 under this section regarding whether an air carrier has

11 been, or is, engaged in an unfair method of competition

12 in air transportation or the sale of air transportation not

13 later than 180 days after the date of receipt of the com14 plaint.’’.

15 TITLE II—REGIONAL AIR

16 SERVICE INCENTIVE PROGRAM

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

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

19 States Code, is amended by adding at the end the follow20 ing:

21 ‘‘SUBCHAPTER III—REGIONAL AIR SERVICE

22 INCENTIVE PROGRAM

23 ‘‘§ 41761. Purpose

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

25 by jet aircraft to underserved markets by providing assist26 ance, in the form of loan guarantees, to commuter air car-
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1 riers that purchase regional jet aircraft for use in serving

2 those markets.

3 ‘‘§ 41762. Definitions

4 ‘‘In this subchapter:

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

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

7 purchase of commercial transport aircraft, including

8 spare parts normally associated with the aircraft.

9 ‘‘(2) AIR CARRIER.—The term ‘air carrier’

10 means any air carrier holding a certificate of public

11 convenience and necessity issued by the Secretary of

12 Transportation under section 41102.

13 ‘‘(3) COMMUTER AIR CARRIER.—The term

14 ‘commuter air carrier’ means an air carrier that pri15 marily operates aircraft designed to have a maxi16 mum passenger seating capacity of 75 passengers or

17 less in accordance with published flight schedules.

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

19 airport’ means an airport that for an annual period

20 has less than 0.05 percent of the total annual

21 boardings in the United States.

22 ‘‘(5) REGIONAL JET AIRCRAFT.—The term ‘re23 gional jet aircraft’ means a civil aircraft—

24 ‘‘(A) powered by jet propulsion; and
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1 ‘‘(B) designed to have a maximum pas2 senger seating capacity of—

3 ‘‘(i) not less than 30 passengers; and

4 ‘‘(ii) not more than 75 passengers.

5 ‘‘(6) SECRETARY.—The term ‘Secretary’ means

6 the Secretary of Transportation.

7 ‘‘(7) SMALL HUB AIRPORT.—The term ‘small

8 hub airport’ means an airport that for an annual pe9 riod has with respect to the total annual boardings

10 of the United States—

11 ‘‘(A) at least 0.05 percent of these

12 boardings; and

13 ‘‘(B) less than 0.25 percent of these

14 boardings.

15 ‘‘(8) UNDERSERVED MARKET.—The term ‘un16 derserved market’ means a passenger air transpor17 tation market (as defined by the Secretary) that—

18 ‘‘(A) is served (as determined by the Sec19 retary) by a nonhub airport or a small hub air20 port;

21 ‘‘(B) is not within a 40-mile radius of an

22 airport that each year has at least .25 percent

23 of the total annual boardings in the United

24 States; and
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1 ‘‘(C) the Secretary determines does not

2 have sufficient air service.

3 ‘‘§ 41763. Loan guarantees

4 ‘‘(a) IN GENERAL.—The Secretary may guarantee

5 any lender against loss of principal or interest on any air6 craft purchase loan made by that lender to a commuter

7 air carrier.

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

9 shall be made under subsection (a)—

10 ‘‘(1) in such form and on such terms and condi11 tions; and

12 ‘‘(2) pursuant to such regulations,

13 as the Secretary considers to be necessary and consistent

14 with this subchapter.

15 ‘‘§ 41764. Conditions and limitations

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

17 (d), no loan guarantee shall be made under this sub18 chapter—

19 ‘‘(1) extending to an amount greater than the

20 unpaid interest and 90 percent of the unpaid prin21 cipal of any loan;

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

23 aggregate amount greater than 90 percent of the

24 purchase price of the aircraft, including spare parts,

25 to be purchased with the loan or loan combination;
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1 ‘‘(3) on any loan with respect to which terms

2 permit repayment later than 15 years after the date

3 the loan is made; and

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

5 of the loan and any other loans to the same com6 muter air carrier or corporate predecessor of that

7 commuter air carrier that are guaranteed and out8 standing under the terms of this subchapter exceed

9 $100,000,000.

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

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

12 make a loan guarantee under this subchapter if the Sec13 retary determines that—

14 ‘‘(1) the aircraft to be purchased with the loan

15 is a regional jet aircraft that is needed to improve

16 the service and efficiency of operation of the com17 muter air carrier;

18 ‘‘(2) the commuter air carrier agrees to use the

19 aircraft to provide service to underserved markets;

20 and

21 ‘‘(3) the prospective earning power of the com22 muter air carrier, together with the character and

23 value of the security pledged, furnish—
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1 ‘‘(A) reasonable assurances of the ability

2 and intention of the air carrier to repay the

3 loan during the term of the loan—

4 ‘‘(i) to continue the operations of the

5 air carrier as a commuter air carrier; and

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

7 determines to be necessary, to continue the

8 operations of the air carrier as a commuter

9 air carrier between the same route or

10 routes that are operated by the air carrier

11 at the time of the loan guarantee; and

12 ‘‘(B) reasonable protection to the United

13 States.

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

15 loan guarantee may be made under this subchapter on any

16 loan or combination of loans for the purchase of any re17 gional jet aircraft that does not comply with the stage 3

18 noise levels contained in part 36 of title 14 of the Code

19 of Federal Regulations, as in effect on January 1, 1997.

20 ‘‘(d) OTHER LIMITATIONS.—No loan guarantee shall

21 be made by the Secretary under this subchapter on any

22 loan for the purchase of a regional jet aircraft unless the

23 commuter air carrier agrees that the air carrier will pro24 vide service to the underserved market for which the air-
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1 craft is purchased for a period of not less than 12 consecu2 tive months after the aircraft is placed in service.

3 ‘‘§ 41765. Fees

4 ‘‘The Secretary of Transportation shall prescribe and

5 collect from a lending institution a reasonable guarantee

6 fee in connection with each loan guaranteed under this

7 subchapter.

8 ‘‘§ 41766. Use of Federal facilities and assistance

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

10 Secretary of Transportation to make use of such expert

11 advice and services as the Secretary may require in carry12 ing out this subchapter, the Secretary may use available

13 services and facilities of other agencies and instrumental14 ities of the Federal Government—

15 ‘‘(1) with the consent of the appropriate Fed16 eral officials; and

17 ‘‘(2) on a reimbursable basis.

18 ‘‘(b) ASSISTANCE.—The head of each appropriate de19 partment or agency of the Federal Government shall exer20 cise the duties and functions of that head in such manner

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

22 41761.

23 ‘‘(c) OVERSIGHT.—The Secretary shall make avail24 able to the Comptroller General of the United States such

25 information with respect to the loan guarantee program
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1 conducted under this subchapter as the Comptroller Gen2 eral may require to carry out the duties of the Comptroller

3 General under chapter 7 of title 31.

4 ‘‘§ 41767. Receipts; payments

5 ‘‘(a) MISCELLANEOUS.—Amounts received by the

6 Secretary under this subchapter shall be credited to mis7 cellaneous receipts of the Treasury.

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

9 consequence of any loan guarantee made under this sub10 chapter may be made from funds appropriated pursuant

11 to the authorization under section 202 of the Air Service

12 Improvement Act of 1997.

13 ‘‘(c) ADMINISTRATIVE EXPENSES.—In carrying out

14 this subchapter, the Secretary shall use funds made avail15 able by appropriations to the Department of Transpor16 tation for the purpose of administration to cover adminis17 trative expenses of the loan guarantee program under this

18 subchapter.

19 ‘‘§ 41768. Termination

20 ‘‘The authority of the Secretary under section 41763

21 shall terminate on the date that is 5 years after the date

22 of the enactment of this subchapter.’’.

23 (b) CONFORMING AMENDMENT.—The analysis for

24 chapter 417 of title 49, United States Code, is amended

25 by adding at the end the following:

‘‘SUBCHAPTER III—REGIONAL AIR SERVICE INCENTIVE PROGRAM
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‘‘Sec.

‘‘41761. Purpose.

‘‘41762. Definitions.

‘‘41763. Loan guarantees.

‘‘41764. Conditions and limitations.

‘‘41765. Fees.

‘‘41766. Use of Federal facilities and assistance.

‘‘41767. Receipts; payments.

‘‘41768. Termination.’’.

1 SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

2 There are authorized to be appropriated such sums

3 as may be necessary to carry out subchapter III of chapter

4 417 of title 49, United States Code.

Æ