II

105TH CONGRESS

2D SESSION S. 1968

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 for small communities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 22, 1998

Mr. FORD (for himself, Mr. ROCKEFELLER, Mr. DORGAN, Mr. HOLLINGS, and

Mr. HARKIN) 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 for 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 has been limited;

15 (4) air service to a number of small commu16 nities has 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 to 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.

3 Section 102 of title 49, United States Code, is

4 amended by adding at the end thereof the following:

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

7 ‘‘(1) ESTABLISHMENT.—The Secretary shall es8 tablish within the Department of Transportation an

9 Office of Aviation Development. The Office shall be

10 headed by a Director, designated by the Secretary.

11 ‘‘(2) FUNCTIONS.—The Director shall—

12 ‘‘(A) function as a facilitator between

13 small communities and air carriers;

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

15 ‘‘(C) carry out the airline service restora16 tion program under subchapter III of chapter

17 417 of this title;

18 ‘‘(D) ensure that the Bureau of Transpor19 tation Statistics collects data on passenger in20 formation to assess the service needs of small

21 communities;

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

23 other Federal, State, and local agencies to in24 crease the viability of service to small commu25 nities and the creation of aviation development

26 zones; and
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1 ‘‘(F) provide policy recommendations to

2 the Secretary and the Congress that will ensure

3 that small communities have access to quality,

4 affordable air transportation services.

5 ‘‘(3) REPORTS.—The Director shall provide an

6 annual report to the Secretary and the Congress be

7 ginning in 1999 that—

8 ‘‘(A) analyzes the availability of air trans9 portation services in small communities, includ10 ing, but not limited to, an assessment of the air

11 fares charged for air transportation services in

12 small communities compared to air fares

13 charged for air transportation services in larger

14 metropolitan areas and an assessment of the

15 levels of service, measured by types of aircraft

16 used, the availability of seats, and scheduling of

17 flights provided to small communities;

18 ‘‘(B) identifies the policy, economic, geo19 graphic and marketplace factors that inhibit the

20 availability of quality, affordable air transpor21 tation services to small communities; and

22 ‘‘(C) provides policy recommendations to

23 address the policy, economic, geographic, and

24 marketplace factors inhibiting the availability of
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1 quality, affordable air transportation services to

2 small communities.’’.

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

4 (a) IN GENERAL.—Subchapter II of title 49, United

5 States Code, is amended by adding at the end thereof the

6 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 Director of the Office

13 of Aviation Development may require, and submit the as14 sessment and service proposal to the Office.

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

16 community programs for participation in the communities

17 program under subsection (a), the Director shall apply cri18 teria, including geographical diversity and the presen19 tation of unique circumstances, that will demonstrate the

20 feasibility of the program.

21 ‘‘(c) CARRIERS PROGRAM.—The Director shall invite

22 part 121 air carriers and regional/commuter carriers (as

23 such terms are defined in section 41715(d) of this title)

24 to offer service proposals in response to, or in conjunction

25 with, community aircraft assessments submitted to the of-
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1 fice under subsection (a). A service proposal under this

2 paragraph shall include—

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

4 traffic, revenues, and costs necessary for the carrier

5 to offer the service;

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

7 that traffic the carrier would require the community

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

9 maintain the service; and

10 ‘‘(3) the costs and benefits of providing jet serv11 ice by regional or other jet aircraft.

12 ‘‘(d) OFFICE SUPPORT FUNCTION.—The Director

13 shall work with small communities and air carriers, taking

14 into account their proposals and needs, to facilitate the

15 initiation of service. The Director—

16 ‘‘(1) may work with communities to develop in17 novative means and incentives for the initiation of

18 service;

19 ‘‘(2) may obligate funds available to carry out

20 this subchapter to make up the difference between

21 the carrier’s forecast and the community’s ability to

22 generate the necessary percentage of traffic;

23 ‘‘(3) shall continue to work with both the car24 riers and the communities to develop a combination
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1 of community incentives and carrier service levels

2 that—

3 ‘‘(A) are acceptable to communities and

4 carriers; and

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

6 State programs to facilitate air transportation

7 to the communities;

8 ‘‘(4) may designate an airport in the program

9 as an Air Service Development Zone and work with

10 the community on means to attract business to the

11 area surrounding the airport, to develop land use op12 tions for the area, and provide data, working with

13 the Department of Commerce and other agencies;

14 and

15 ‘‘(5) may take such other action under sub16 chapter III of this chapter as may be appropriate.

17 ‘‘(e) LIMITATIONS.—

18 ‘‘(1) COMMUNITY SUPPORT.—The Director may

19 not provide financial assistance under subsection

20 (c)(2) to any community unless the Director deter21 mines that—

22 ‘‘(A) a public-private partnership exists at

23 the community level to carry out the commu24 nity’s proposal;
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1 ‘‘(B) the community will make a substan2 tial financial contribution that is appropriate

3 for that community’s resources;

4 ‘‘(C) the community has established an

5 open process for soliciting air service proposals;

6 and

7 ‘‘(D) the community will accord similar

8 benefits to air carriers that are similarly situ9 ated.

10 ‘‘(2) AMOUNT.—The Director may not provide

11 financial assistance under subsection (d)(2) to any

12 community in excess of the lesser of—

13 ‘‘(A) up to 75 percent of the financial con14 tribution made by the community; or

15 ‘‘(B) $500,000 per year.

16 ‘‘(f) REPORT.—The Director shall report through the

17 Secretary to the Congress annually on the progress made

18 under this section during the preceding year in expanding

19 commercial aviation service to smaller communities.’’.

20 (b) CONFORMING AMENDMENT.—The chapter analy21 sis for chapter 417 of such title is amended by inserting

22 after the item relating to section 41742 the following:

‘‘41743. Air service program for small communities.’’.

23 (c) WAIVER OF LOCAL CONTRIBUTION.—Section

24 41736(b) of title 49, United States Code, is amended by

25 inserting after paragraph (4) the following:
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1 ‘‘Paragraph (4) does not apply to any community ap2 proved for service under this section during the period be3 ginning October 1, 1991, and ending December 31,

4 1997.’’.

5 SEC. 6. AIRLINE SERVICE RESTORATION PILOT PROGRAM.

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

7 States Code, is amended by adding at the end thereof the

8 following:

‘‘SUBCHAPTER III—AIRLINE SERVICE RESTORATION

‘‘41761. Pilot program project authority.

‘‘41762. Assistance to communities for service.

‘‘41763. Additional authority.

‘‘41764. Air traffic control services pilot program.

9 ‘‘§ 41761. Pilot program project authority

10 ‘‘(a) IN GENERAL.—The Director of the Office of

11 Aviation Development shall establish a pilot program—

12 ‘‘(1) to assist communities and States with in13 adequate access to the national transportation sys14 tem to improve their access to that system; and

15 ‘‘(2) to facilitate better link-ups to support the

16 improved access.

17 ‘‘(b) PROJECT AUTHORITY.—Under the pilot pro18 gram established pursuant to subsection (a), the Director

19 may—

20 ‘‘(1) provide financial assistance by way of

21 grants to small communities under section 41743;

22 and
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1 ‘‘(2) take such other action as may be appro2 priate.

3 ‘‘(c) OTHER ACTION.—Under the pilot program es4 tablished pursuant to subsection (a), the Director may fa5 cilitate service by—

6 ‘‘(1) working with airports and air carriers to

7 ensure that appropriate facilities are made available

8 at essential airports;

9 ‘‘(2) requiring interline or joint-fare agreements

10 between air carriers for domestic United States serv11 ice if necessary to facilitate access to essential facili12 ties for participants in the program subject to the

13 right of a carrier being required to enter into such

14 agreements to impose reasonable safety, service, and

15 other obligations on the potential partner;

16 ‘‘(3) collecting data on air carrier service to

17 small communities; and

18 ‘‘(4) providing policy recommendations to the

19 Secretary to stimulate air service and competition to

20 small communities.

21 ‘‘§ 41762. Assistance to communities for service

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

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

24 pilot program established under section 41761(a) shall be

25 implemented for not more than—
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1 (1) 4 communities within any State at any

2 given time; and

3 (2) 40 communities in the entire program at

4 any time.

5 For purposes of this subsection, a consortium of commu6 nities shall be treated as a single community.

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

8 project under this subchapter, a State, community, or

9 group of communities shall apply to the Secretary in such

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

11 as the Secretary may require, and shall demonstrate to

12 the satisfaction of the Secretary that—

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

14 access, or improved access, to the national air trans15 portation system that would benefit the public;

16 ‘‘(2) the pilot project will provide material bene17 fits to a broad section of the travelling public, busi18 nesses, educational institutions, and other enter19 prises whose access to the national air transpor20 tation system is limited;

21 ‘‘(3) the pilot project will not impede competi22 tion; and

23 ‘‘(4) the applicant has established, or will estab24 lish, public-private partnerships in connection with

25 the pilot project to facilitate service to the public.
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1 ‘‘(c) COORDINATION WITH SUBCHAPTER II.—The

2 Secretary shall carry out this subchapter in such a manner

3 as to complement action taken under subchapter II of this

4 chapter. To the extent the Secretary determines to be ap5 propriate, the Secretary may adopt criteria for implemen6 tation of this subchapter that are the same as, or similar

7 to, the criteria developed under subchapter II for deter8 mining which airports are eligible under that subchapter.

9 The Secretary shall also, to the extent possible, provide

10 incentives where no direct, viable, and feasible alternative

11 service exists, taking into account geographical diversity

12 and appropriate market definitions.

13 ‘‘(d) MAXIMIZATION OF PARTICIPATION.—The Sec14 retary shall structure the program established pursuant

15 to section 41761(a) in a way designed to—

16 ‘‘(1) permit the participation of the maximum fea17 sible number of communities and States over a 5-

18 year period by limiting the number of years of par19 ticipation or otherwise; and

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

21 the financial resources available to the Secretary and

22 the applicant by—

23 ‘‘(A) progressively decreasing, on a project24 by-project basis, any Federal financial incen-
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1 tives provided under this chapter over the 5-

2 year period; and

3 ‘‘(B) terminating as early as feasible Fed4 eral financial incentives for any project deter5 mined by the Secretary after its implementation

6 to be—

7 ‘‘(i) viable without further support

8 under this subchapter; or

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

10 this chapter or criteria established by the

11 Secretary under the pilot program.

12 ‘‘(e) SUCCESS BONUS.—If Federal financial incen13 tives to a community are terminated under subsection

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

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

16 incentive grant to ensure the continued success of that

17 program.

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

19 financial assistance may be provided under this sub20 chapter for any fiscal year beginning more than 5 years

21 after the date of enactment of the Air Service Restoration

22 Act.

23 ‘‘§ 41763. Additional authority

24 ‘‘In carrying out this chapter, the Secretary—
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1 ‘‘(1) may provide assistance to States and com2 munities in the design and application phase of any

3 project under this chapter, and oversee the imple4 mentation of any such project;

5 ‘‘(2) may assist States and communities in put6 ting together projects under this chapter to utilize

7 private sector resources, other Federal resources, or

8 a combination of public and private resources;

9 ‘‘(3) may accord priority to service by jet air10 craft;

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

12 ensure that financial resources, facilities, and admin13 istrative arrangements made under this chapter are

14 used to carry out the purposes of the Air Service

15 Restoration Act; and

16 ‘‘(5) shall work with the Federal Aviation Ad17 ministration on airport and air traffic control needs

18 of communities in program.

19 § 41764. Air traffic control services pilot program

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

21 and improve the safety at, small airports, the Adminis22 trator of the Federal Aviation Administration shall estab23 lish a pilot program to contract for Level I air traffic con24 trol at 20 facilities not eligible for participation in the

25 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 any facility will19 ing to fund a pro rata share of construction used by

20 the Federal Aviation Administration to calculate,

21 and, as necessary, a 1:1 benefit-to-cost ratio, as re22 quired for eligibility under the Federal Contract

23 Tower Program.

24 ‘‘(c) REPORT.—One year before the pilot program es25 tablished under subsection (a) terminates, the Adminis-
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1 trator shall report to the Congress on the effectiveness of

2 the program, with particular emphasis on the safety and

3 economic benefits provided to program participants and

4 the national air transportation system.’’.

5 (b) CLERICAL AMENDMENT.—The chapter analysis

6 for chapter 417 of title 49, United States Code, is amend7 ed by adding at the end thereof the following:

‘‘SUBCHAPTER III—AIRLINE SERVICE RESTORATION

‘‘41761. Pilot programs.

‘‘41762. Financial assistance to States.

‘‘41763. Additional authority.

‘‘41764. Air traffic control services pilot program.’’.

8 SEC. 7. FUNDING AUTHORITY.

9 (a) IN GENERAL.—The Secretary of Transportation

10 may obligate not more than $20,000,000 for each of fiscal

11 years 1999 through 2002 to carry out subchapter III of

12 chapter 417 of title 49, United States Code, out of funds

13 otherwise available for aviation programs other than funds

14 appropriated, obligated, or made available to carry out

15 subchapter II of such chapter.

16 (b) SUCCESS BONUS.—If the Secretary determines

17 that the program carried out under such subchapter III

18 is successful in providing enhanced air carrier service to

19 small communities, then the Secretary may obligate an ad20 ditional amount, not in excess of $5,000,000, for each of

21 fiscal years 2001 and 2002 to carry out that subchapter

22 out of such funds.
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1 SEC. 8. JOINT FARES AND INTERLINE AGREEMENTS.

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

3 title 49, United States Code, is amended by adding at the

4 end thereof the following:

5 ‘‘§ 41716. Joint fares and interline agreements for do6 mestic transportation

7 ‘‘(a) IN GENERAL.—In order to more effectively fa8 cilitate service to small communities, the Secretary of

9 Transportation may, if necessary, require an air carrier

10 that serves an essential airport facility in the United

11 States and an air carrier that offers service in an under12 served market within the United States to enter into an

13 agreement with a qualifying air carrier that files a request

14 with the Secretary, in such form and manner and at such

15 time as the Secretary may require.

16 ‘‘(b) SECRETARY MAY COMPEL JOINT FARE STRUC17 TURE.—If the Secretary determines that it is necessary

18 in order to facilitate service to small communities, the Sec19 retary may require any air carrier to enter into a joint20 fare or interline agreement with any qualifying air carrier

21 that serves an under-served market to facilitate air trans22 portation.

23 ‘‘(c) APPLICATION LIMITED TO SERVICE TO COMMU24 NITIES RECEIVING DOT ASSISTANCE.—The Secretary

25 may not require an air carrier to enter into an agreement

26 under subsection (a) or (b) except to the extent deter-
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1 mined by the Secretary to be necessary to the provision

2 of air service to a community receiving financial assistance

3 under section 41761. Nothing in this section provides au4 thority for the Secretary to establish air fares for service

5 to which this section applies.

6 ‘‘(d) DEFINITIONS.—For purposes of this section—

7 ‘‘(1) QUALIFYING AIR CARRIER.—The term

8 ‘qualifying air carrier’ means an air carrier that op9 erates pursuant to a certificate of public convenience

10 and necessity under chapter 411 of this title.

11 ‘‘(2) UNDER-SERVED MARKET.—The term

12 ‘under-served market’ means a commercial service

13 airport that is a nonhub airport (as defined in sec14 tion 41731(4) of this title), a small hub airport (as

15 defined in section 41731(5) of this title), or an air16 port that is smaller than a nonhub or small hub air17 port.

18 ‘‘(3) ESSENTIAL AIRPORT FACILITY.—The term

19 ‘essential airport facility’ means a hub airport (as

20 defined in section 41731(a)(3) of this title).’’.

21 (b) CLERICAL AMENDMENT.—The chapter analysis

22 for chapter 417 of title 49, United States Code, is amend23 ed by inserting after the item relating to section 41715

24 the following:

‘‘41716. Joint fares and interline agreements for domestic transportation.’’.
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1 SEC. 9. REVITALIZATION OF AIR SERVICE TO RURAL

2 AREAS.

3 Section 40101(a) of title 49, United States Code, is

4 amended by adding at the end thereof the following:

5 ‘‘(16) ensuring that consumers in all regions of

6 the United States, including those in small commu7 nities and rural and remote areas, have access to af8 fordable, regularly scheduled air service.

9 ‘‘(17) ensuring that any slots given to air car10 riers to provide small community air service are

11 withdrawn if the carrier fails to provide the serv12 ice.’’.

13 SEC. 10. MARKETING PRACTICES.

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

15 amended by—

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

17 ‘‘On’’; and

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

19 ‘‘(b) MARKETING PRACTICES THAT ADVERSELY AF20 FECT SERVICE TO SMALL OR MEDIUM COMMUNITIES.—

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

22 Service Restoration Act, the Secretary shall review the

23 marketing practices of air carriers that may inhibit the

24 availability of quality, affordable air transportation serv25 ices to small and medium-sized communities, including—
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1 ‘‘(1) marketing arrangements between airlines

2 and travel agents;

3 ‘‘(2) code-sharing partnerships;

4 ‘‘(3) computer reservation system displays;

5 ‘‘(4) gate arrangements at airports; and

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

7 have the same effect.

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

9 conducting the review required by subsection (b), that

10 marketing practices inhibit the availability of such service

11 to such communities, then, after public notice and an op12 portunity for a hearing, the Secretary shall promulgate

13 regulations that address the problem.’’.

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