Calendar No. 274

105TH CONGRESS

1ST SESSION S. 1193

[Report No. 105–140]

A BILL

To amend chapter 443 of title 49, United States

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

NOVEMBER 6, 1997

Reported with an amendment in the nature of a

substitute
II

Calendar No. 274

105TH CONGRESS

1ST SESSION S. 1193

[Report No. 105–140]

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

NOVEMBER 6, 1997

Reported by Mr. MCCAIN, with an amendment in the nature of a substitute

[Strike all after the enacting clause and insert the part printed in italic]

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 Re5 authorization Act of 1997’’.
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1 SEC. 2. VALUATION OF AIRCRAFT.

2 (a) GENERAL AUTHORITY FOR INSURANCE AND RE3 INSURANCE.—Section 44302(a)(2) of title 49, United

4 States Code, is amended by striking ‘‘as determined by

5 the Secretary.’’ and inserting ‘‘as determined by the Sec6 retary in accordance with reasonable business practices in

7 the commercial aviation insurance industry.’’.

8 (b) LIMITATION ON MAXIMUM INSURED AMOUNT.—

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

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

11 and inserting ‘‘as determined by the Secretary in accord12 ance with reasonable business practices in the commercial

13 aviation insurance industry.’’.

14 SEC. 3. EFFECT OF INDEMNITY AGREEMENTS.

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

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

17 agreement is countersigned by the President or the Presi18 dent’s designee, the agreement shall constitute, for pur19 poses of section 44302(b), a determination that continu20 ation of the aircraft operations to which the agreement

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

22 United States.’’.

23 SEC. 4. BORROWING AUTHORITY.

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

25 States Code, is amended by adding at the end the follow26 ing:
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1 ‘‘(e) BORROWING.—

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

3 the provisions of this subsection, the Administrator

4 of the Federal Aviation Administration may issue

5 and sell such notes or other obligations to the Sec6 retary of the Treasury as the Administrator deter7 mines are necessary to provide funds to carry out

8 this chapter. This authority, while available for ini9 tial payments made by the Department of Transpor10 tation for any loss covered by Department of De11 fense-related non-premium aviation insurance, does

12 not remove the Department of Defense’s responsibil13 ities under section 9514 of title 10, United States

14 Code, to provide prompt indemnification to the De15 partment of Transportation for the amount of the

16 loss.

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

18 under this subsection shall be issued in the forms

19 and denominations, bearing the maturities, and sub20 ject to the terms and conditions that the Secretary

21 of the Treasury may prescribe.

22 ‘‘(3) NOTIFICATION OF CONGRESS.—At least

23 25 days before the Administrator intends to issue

24 and sell a note or other obligation under paragraph

25 (1), the Administrator shall notify, in writing, the
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1 Senate and House of Representatives of such inten2 tion and the dollar amount of such note or obliga3 tion.

4 ‘‘(4) PURCHASE OF OBLIGATIONS.—The Sec5 retary of the Treasury shall purchase any obligations

6 issued under this subsection. For such purpose, the

7 Secretary of the Treasury may use as a public debt

8 transaction the proceeds from the sale of any securi9 ties issued under the Second Liberty Bond Act. The

10 purposes for which securities may be issued under

11 such Act are extended to include any purchase of ob12 ligations issued under this subsection.

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

14 the Treasury may sell any obligations issued under

15 this subsection at the times and prices and upon the

16 terms and conditions that the Secretary of the

17 Treasury shall determine.

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

19 and sales of obligations under this subsection by the

20 Secretary of the Treasury shall be treated as public

21 debt transactions of the United States.’’.

22 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

23 44307(a) of such title is amended by striking paragraph

24 (2) and inserting the following:
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1 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—

2 Necessary amounts to carry out this chapter, includ3 ing amounts required to pay the interest accrued on,

4 or to repay the principal of, obligations issued under

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

6 ‘‘(3) DEPOSIT IN FUND.—The amounts appro7 priated and other amounts received, including the

8 proceeds of the sale of obligations issued under sub9 section (e), shall be deposited in the fund.’’.

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

11 of such title is amended by adding at the end the follow12 ing: ‘‘This subsection does not apply to amounts appro13 priated for paying interest accrued on, or for repaying the

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

15 SEC. 5. ARBITRATION AUTHORITY.

16 (a) AUTHORIZATION OF BINDING ARBITRATION.—

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

18 amended by inserting after the second sentence the follow19 ing: ‘‘Any such policy may authorize the binding arbitra20 tion of claims made thereunder in such manner as may

21 be agreed to by the Secretary and any commercial insurer

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

23 such policy relates.’’.

24 (b) AUTHORITY TO PAY ARBITRATION AWARD.—Sec25 tion 44308(b)(2) of such title is amended—
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1 (1) by striking ‘‘and’’ at the end of subpara2 graph (A);

3 (2) by redesignating subparagraph (B) as sub4 paragraph (C); and

5 (3) by inserting after subparagraph (A) the fol6 lowing:

7 ‘‘(B) pay the amount of a binding arbitra8 tion award made under paragraph (1); and’’.

9 SEC. 6. EXTENSION OF PROGRAM.

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

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

12 SEC. 7. USE OF AIRCRAFT FOR DEMONSTRATION.

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

14 is amended—

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

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

17 and

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

19 ‘‘(ii) owned by the United States Gov20 ernment and operated by any person for

21 purposes related to crew training, equip22 ment development, or demonstration; or’’.

23 SECTION 1. SHORT TITLE.

24 This Act may be cited as the ‘‘Aviation Insurance Re25 authorization Act of 1997’’.
7

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1 SEC. 2. VALUATION OF AIRCRAFT.

2 (a) GENERAL AUTHORITY FOR INSURANCE AND REIN3 SURANCE.—Section 44302(a)(2) of title 49, United States

4 Code, is amended by striking ‘‘as determined by the Sec5 retary.’’ and inserting ‘‘as determined by the Secretary in

6 accordance with reasonable business practices in the com7 mercial aviation insurance industry.’’.

8 (b) LIMITATION ON MAXIMUM INSURED AMOUNT.—

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

10 by striking ‘‘as determined by the Secretary.’’ and inserting

11 ‘‘as determined by the Secretary in accordance with reason12 able business practices in the commercial aviation insur13 ance industry.’’.

14 SEC. 3. EFFECT OF INDEMNITY AGREEMENTS.

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

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

17 agreement is countersigned by the President or the Presi18 dent’s designee, the agreement shall constitute, for purposes

19 of section 44302(b), a determination that continuation of

20 the aircraft operations to which the agreement applies is

21 necessary to carry out the foreign policy of the United

22 States.’’.

23 SEC. 4. ARBITRATION AUTHORITY.

24 (a) AUTHORIZATION OF BINDING ARBITRATION.—Sec25 tion 44308(b)(1) of title 49, United States Code, is amended

26 by inserting after the second sentence the following: ‘‘Any
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1 such policy may authorize the binding arbitration of claims

2 made thereunder in such manner as may be agreed to by

3 the Secretary and any commercial insurer that may be re4 sponsible for any part of a loss to which such policy re5 lates.’’.

6 (b) AUTHORITY TO PAY ARBITRATION AWARD.—Sec7 tion 44308(b)(2) of such title is amended—

8 (1) by striking ‘‘and’’ at the end of subpara9 graph (A);

10 (2) by redesignating subparagraph (B) as sub11 paragraph (C); and

12 (3) by inserting after subparagraph (A) the fol13 lowing:

14 ‘‘(B) pay the amount of a binding arbitra15 tion award made under paragraph (1); and’’.

16 SEC. 5. EXTENSION OF PROGRAM.

17 (a) IN GENERAL.—Section 44310 of title 49, United

18 States Code, is amended by striking ‘‘September 30, 2002’’

19 and inserting ‘‘December 31, 1998’’.

20 (b) EFFECTIVE DATE.—The amendment made by sub21 section (a) takes effect on October 1, 1997.

22 SEC. 6. USE OF AIRCRAFT FOR DEMONSTRATION.

23 Section 40102(a)(37)(A) of title 49, United States

24 Code, is amended—

25 (1) by striking ‘‘or’’ in clause (i);
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1 (2) by redesignating clause (ii) as clause (iii);

2 and

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

4 ‘‘(ii) owned by the United States Gov5 ernment and operated by any person for

6 purposes related to crew training, equip7 ment development, or demonstration; or’’.