I

106TH CONGRESS

1ST SESSION H. R. 1679

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

with respect to air carrier service between high density airports and

certain small and nonhub airports that have unreasonably high airfares,

to improve jet aircraft service to markets that have unreasonably high

airfares, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 4, 1999

Mr. SWEENEY introduced the following bill; which was referred to the

Committee on Transportation and Infrastructure

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 certain small and nonhub airports that have unreasonably high airfares, to improve

jet aircraft service to markets that have unreasonably

high airfares, 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 ‘‘Airfare Relief Act of

5 1999’’.
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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 such title is amended—

11 (A) by striking ‘‘(1) IN GENERAL.—’’;

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

13 (C) by moving the text of paragraph (1) so

14 that it follows the subsection heading and its

15 margin is aligned with the margin for sub16 section (g).

17 (b) SLOTS FOR AIRPORTS WITH UNREASONABLY

18 HIGH AIRFARES.—Section 41714 of such title is

19 amended—

20 (1) by striking subsections (e) and (f) and in21 serting the following:

22 ‘‘(e) SLOTS FOR AIRPORTS WITH UNREASONABLY

23 HIGH AIRFARES.—

24 ‘‘(1) EXEMPTIONS.—Notwithstanding part D of

25 chapter 491 of this title, the Secretary may by order
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1 grant exemptions from the requirements under sub2 parts K and S of part 93 of title 14, Code of Fed3 eral Regulations (pertaining to slots at high density

4 airports), to enable air carriers to provide nonstop

5 air transportation using jet aircraft that comply with

6 the stage 3 noise levels of part 36 of such title 14

7 between a high density airport and a small hub air8 port or nonhub airport that has unreasonably high

9 airfares.

10 ‘‘(2) LIMITATIONS.—No more than 4 exemp11 tions per hour may be granted under this subsection

12 for slots at any high density airport, and no more

13 than 6 exemptions per day may be granted under

14 this subsection for slots at Ronald Reagan Wash15 ington National Airport. An exemption may be

16 granted under this subsection for a slot at Ronald

17 Reagan Washington National Airport only if the

18 flight utilizing such slot begins or ends within 1,250

19 miles of the Airport and a stage 3 aircraft is used

20 for such flight.

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

22 in an exemption under this subsection shall submit

23 to the Secretary an application for such exemption.

24 No application may be submitted to the Secretary
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1 before the last day of the 30-day period beginning

2 on the date of the enactment of this paragraph.

3 ‘‘(4) DEADLINE FOR DECISION.—Notwith4 standing any other provision of law, the Secretary

5 shall make a decision with regard to granting an ex6 emption under this subsection on or before the

7 120th day following the date of the application for

8 the exemption. If the Secretary does not make the

9 decision on or before such 120th day, the air carrier

10 applying for the service may provide such service

11 until the Secretary makes the decision or the Admin12 istrator of the Federal Aviation Administration de13 termines that providing such service would have an

14 adverse effect on air safety.

15 ‘‘(5) PERIOD OF EFFECTIVENESS.—An exemp16 tion granted under this subsection may remain in ef17 fect only while the air carrier for whom the exemp18 tion is granted continues to provide nonstop air

19 transportation between the airport that has unrea20 sonably high airfares and the high density airport.

21 ‘‘(6) DEFINITIONS.—In this subsection, the fol22 lowing definitions apply:

23 ‘‘(A) NONHUB AIRPORT.—The term

24 ‘nonhub airport’ means an airport that each

25 year has at least 2,500 passenger boardings but
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1 less than .05 percent of the total annual

2 boardings in the United States.

3 ‘‘(B) SMALL HUB AIRPORT.—The term

4 ‘small hub airport’ means an airport that each

5 year has at least .05 percent but less than .25

6 percent of the total annual boardings in the

7 United States.

8 ‘‘(C) UNREASONABLY HIGH AIRFARE.—

9 The term ‘unreasonably high airfare’, as used

10 with respect to an airport, means that the air11 fare listed in the table entitled ‘Top 1,000 City12 Pair Market Summarized by City’, contained in

13 the Domestic Airline Fares Consumer Report of

14 the Department of Transportation, for one or

15 more markets for which the airport is a part of

16 has an average yield listed in such table that is

17 more than 19 cents.’’.

18 SEC. 102. FUNDING FOR AIR CARRIER SERVICE TO AIR19 PORTS NOT RECEIVING SUFFICIENT SERV20 ICE.

21 (a) FUNDING FOR SMALL COMMUNITY AIR SERV22 ICE.—Section 41742(b) of title 49, United States Code,

23 is amended to read as follows:

24 ‘‘(b) FUNDING FOR SMALL COMMUNITY AIR SERV25 ICE.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding any other

2 provision of law, from moneys credited to the ac3 count established under section 45303(a), including

4 the funds derived from fees imposed under the au5 thority contained in section 45301(a)—

6 ‘‘(A) not to exceed $45,000,000 for each

7 fiscal year beginning after September 30, 1999,

8 shall be used to carry out the essential air serv9 ice program under this subchapter; and

10 ‘‘(B) not to exceed $5,000,000 for such fis11 cal year shall be used—

12 ‘‘(i) for assisting an air carrier to sub13 sidize service to and from an small hub or

14 nonhub airport that has unreasonably high

15 airfares for a period not to exceed 3 years;

16 and

17 ‘‘(ii) for assisting such an airport to

18 obtain jet aircraft service to and from the

19 airport and to promote passenger usage of

20 that service.

21 ‘‘(2) RURAL AIR SAFETY.—Any funds that are

22 made available by paragraph (1) for a fiscal year

23 and that the Secretary determines will not be obli24 gated or expended before the last day of such fiscal

25 year shall be available to the Administrator for use
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1 under this subchapter in improving rural air safety

2 at airports with less than 100,000 annual boardings.

3 ‘‘(3) ALLOCATION OF ADDITIONAL FUNDING.—

4 If, for a fiscal year beginning after September 30,

5 1999, more than $50,000,000 is made available

6 under subsection (a) to carry out the small community air service program, 1 7 ⁄2 of the amounts in excess

8 of $50,000,000 shall be used for the purposes speci9 fied in paragraph (1)(B), in addition to amounts

10 made available for such purposes under paragraph

11 (1)(B).

12 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—In

13 addition to amounts made available under paragraph

14 (1), there is authorized to be appropriated to the

15 Secretary of Transportation for each fiscal year be16 ginning after September 30, 1999, $15,000,000—

17 ‘‘(A) to provide assistance to an air carrier

18 to subsidize service to and from a small hub or

19 nonhub airport that has unreasonably high air20 fares for a period not to exceed 3 years; and

21 ‘‘(B) to provide assistance to such an air22 port to obtain jet aircraft service to and from

23 the airport and to promote passenger usage of

24 that service.
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1 ‘‘(5) PRIORITY CRITERIA FOR ASSISTING AIR2 PORTS NOT RECEIVING SUFFICIENT SERVICE.—In

3 providing assistance to airports under paragraphs

4 (1)(B) and (4), the Administrator shall give priority

5 to those airports for which a community will provide,

6 from local sources (other than airport revenues), a

7 portion of the cost of the activity to be assisted.

8 ‘‘(6) DEFINITIONS.—In this subsection, the

9 terms ‘nonhub airport’, ‘small hub airport’, and ‘un10 reasonably high airfare’ have the meaning such

11 terms have in section 41714(e)(6).’’.

12 (b) CONFORMING AMENDMENTS.—Chapter 417 of

13 such title is amended—

14 (1) section 41742 is amended—

15 (A) in the section heading by striking ‘‘Es16 sential’’ and inserting ‘‘Small commu17 nity’’; and

18 (B) in each of subsections (a) and (c) by

19 striking ‘‘essential air’’ and inserting ‘‘small

20 community’’; and

21 (2) in the analysis for such chapter by striking

22 the item relating to section 41742 and inserting the

23 following:

‘‘41742. Small community air service authorization.’’.
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1 SEC. 103. JOINT FARES AND INTERLINE AGREEMENTS.

2 (a) Subchapter I of chapter 417 is amended by add3 ing at the end the following:

4 ‘‘§ 41717. Joint fares and interline agreements for do5 mestic transportation

6 ‘‘(a) DEFINITIONS.—In this section, the following

7 definitions apply:

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

9 ‘qualifying air carrier’ means an air carrier that op10 erates under a certificate of public convenience and

11 necessity under chapter 411 of this title.

12 ‘‘(2) HIGH AIRFARE AIRPORT.—The term ‘high

13 airfare airport’ means a commercial service airport

14 that is a nonhub airport (as defined in section

15 41731 of this title) or a small hub airport (as de16 fined in section 41731 of this title) that has unrea17 sonably high airfares as defined in section

18 41714(e)(6).

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

20 ‘essential airport facility’ means a large hub airport

21 (as defined in section 41731 of this title) in the con22 tiguous 48 States.

23 ‘‘(b) SECRETARY MAY COMPEL JOINT FARE STRUC24 TURE.—If the Secretary of Transportation determines

25 that it is necessary to enhance competition at a high air26 fare airport, the Secretary may require an air carrier that
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1 serves an essential airport facility to enter into a joint2 fare or interline agreement, that the Secretary determines

3 is reasonable, with a qualifying air carrier that serves the

4 high airfare airport to facilitate air transportation in the

5 market.’’.

6 TITLE II—REGIONAL AIR

7 SERVICE INCENTIVE PROGRAM

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

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

10 States Code, is amended by adding at the end the fol11 lowing:

12 ‘‘SUBCHAPTER III—REGIONAL AIR SERVICE

13 INCENTIVE PROGRAM

14 ‘‘§ 41761. Purpose

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

16 by jet aircraft to underserved markets by providing assist17 ance, in the form of loan guarantees, to commuter air car18 riers that purchase regional jet aircraft for use in serving

19 those markets.

20 ‘‘§ 41762. Definitions

21 ‘‘In this subchapter, the following definitions apply:

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

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

24 purchase of commercial transport aircraft, including

25 spare parts normally associated with the aircraft.
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1 ‘‘(2) COMMUTER AIR CARRIER.—The term

2 ‘commuter air carrier’ means an air carrier that pri3 marily operates aircraft designed to have a max4 imum passenger seating capacity of 90 or less in ac5 cordance with published flight schedules.

6 ‘‘(3) NEW ENTRANT AIR CARRIER.—The term

7 ‘new entrant air carrier’ means an air carrier that

8 has been providing air transportation according to a

9 published schedule for less than 5 years, including

10 any person that has received authority from the Sec11 retary to provide air transportation but is not pro12 viding air transportation.

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

14 airport’ means an airport that each year has at least

15 2,500 passenger boardings, but less than .05 percent

16 of the total annual boardings in the United States.

17 ‘‘(5) REGIONAL JET AIRCRAFT.—The term ‘re18 gional jet aircraft’ means a civil aircraft—

19 ‘‘(A) powered by jet propulsion; and

20 ‘‘(B) designed to have a maximum pas21 senger seating capacity of not less than 30 nor

22 more than 90.

23 ‘‘(6) SMALL HUB AIRPORT.—The term ‘small

24 hub airport’ means an airport that each year has at
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1 least .05 percent, but less than .25 percent, of the

2 total annual boardings in the United States.

3 ‘‘(7) HIGH AIRFARE AIRPORT.—The term ‘high

4 airfare airport’ means a nonhub airport or small hub

5 airport that has unreasonably high airfares as de6 fined in section 41714(e)(6).

7 ‘‘§ 41763. Loan guarantees

8 ‘‘(a) IN GENERAL.—Subject to advance appropria9 tions, the Secretary of Transportation may guarantee any

10 lender against loss of principal or interest on any aircraft

11 purchase loan made by that lender to a commuter air car12 rier or new entrant air carrier.

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

14 shall be made under subsection (a)—

15 ‘‘(1) in such form and on such terms and condi16 tions; and

17 ‘‘(2) pursuant to such regulations;

18 as the Secretary considers to be necessary and consistent

19 with this subchapter.

20 ‘‘(c) TREATMENT OF CERTAIN COMMUTER AIR CAR21 RIERS.—The Secretary shall treat all commuter air car22 riers that have cooperative agreements, including code

23 share agreements with other air carriers, equally for deter24 mining eligibility for guarantees under this section regard-
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1 less of the form of the corporate relationship between the

2 commuter air carrier and the other air carrier.

3 ‘‘§ 41764. Conditions and limitations

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

5 (d), no loan guarantee shall be made under this

6 subchapter—

7 ‘‘(1) extending to more than the unpaid interest

8 and 80 percent of the unpaid principal of any loan;

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

10 more than 80 percent of the purchase price of the

11 aircraft, including spare parts, to be purchased with

12 the loan or loan combination;

13 ‘‘(3) on any loan with respect to which terms

14 permit repayment more than 15 years after the date

15 the loan is made;

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

17 of the loan and any other loans to the same air car18 rier or corporate predecessor of that air carrier that

19 are guaranteed and outstanding under the terms of

20 this subchapter exceed $100,000,000.

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

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

23 make a loan guarantee under this subchapter if—

24 ‘‘(1) the Secretary finds that the aircraft to be

25 purchased with the loan is a regional jet aircraft to
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1 be used by the commuter air carrier or new entrant

2 air carrier;

3 ‘‘(2) the commuter air carrier or new entrant

4 air carrier agrees to use the aircraft to provide at

5 least 2 round-trips per day 5 days per week to the

6 high airfare airport; and

7 ‘‘(3) the Secretary finds that the prospective

8 earning power of the commuter air carrier or new

9 entrant air carrier, together with the character and

10 value of the security pledged, furnish—

11 ‘‘(A) reasonable assurances of the air car12 rier’s ability and intention to repay the loan

13 within the term of the loan—

14 ‘‘(i) to continue its operations as an

15 air carrier; and

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

17 determines to be necessary, to continue its

18 operations as an air carrier between the

19 same route or routes being operated by the

20 air carrier at the time of the loan guar21 antee; and

22 ‘‘(B) reasonable protection to the United

23 States.

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

25 loan guarantee may be made under this subchapter on any
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1 loan or combination of loans for the purchase of any re2 gional jet aircraft that does not comply with the stage 3

3 noise levels of part 36 of title 14 of the Code of Federal

4 Regulations, as in effect on January 1, 1999.

5 ‘‘(d) OTHER LIMITATIONS.—

6 ‘‘(1) ON PURCHASE OF REGIONAL JET AIR7 CRAFT.—No loan guarantee shall be made by the

8 Secretary under this subchapter on any loan for the

9 purchase of a regional jet aircraft unless the com10 muter air carrier or new entrant air carrier agrees

11 that it will provide scheduled passenger air transpor12 tation to the high airfare airport for which the air13 craft is purchased, or to another underserved air14 port, for a period of not less than 24 consecutive

15 months after the aircraft is placed in service.

16 ‘‘(2) ON SUBORDINATION.—No loan guarantee

17 made under this subchapter may be subordinated to

18 another debt of the carrier or to any other claims

19 against the carrier.

20 ‘‘(3) TO PROTECT INTERESTS OF UNITED

21 STATES.—No loan may be guaranteed under this

22 subchapter unless the Secretary determines that the

23 lender is responsible and that adequate provision is

24 made for servicing the loan on reasonable terms and
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1 protecting the financial interests of the United

2 States.

3 ‘‘§ 41765. Payment of losses

4 ‘‘(a) IN GENERAL.—If, as a result of a default by

5 a carrier under a loan guaranteed under this subchapter

6 and after the holder of the loan has made such further

7 collection efforts as the Secretary of Transportation may

8 require, the Secretary determines that the holder has suf9 fered a loss, the Secretary shall pay the holder the amount

10 of the loss under the guarantee contract. Upon making

11 the payment, the Secretary shall be subrogated to all the

12 rights of the recipient of the payment.

13 ‘‘(b) ENFORCEMENT OF UNITED STATES RIGHTS.—

14 The Attorney General shall take such action as may be

15 necessary to enforce any right accruing to the United

16 States as a result of the issuance of any guarantee under

17 this subchapter.

18 ‘‘(c) LIMITATION ON STATUTORY CONSTRUCTION.—

19 Nothing in this subchapter shall be construed as pre20 cluding any forbearance for the carrier which may be

21 agreed upon by the parties to the guaranteed loan and

22 approved by the Secretary.

23 ‘‘(d) AUTHORITY OF SECRETARY.—Notwithstanding

24 any other provision of law relating to the acquisition, han25 dling, or disposal of property by the United States, the
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1 Secretary may complete, recondition, reconstruct, ren2 ovate, repair, maintain, operate, or sell any property ac3 quired under this subchapter.

4 ‘‘§ 41766. Fees

5 ‘‘The Secretary of Transportation shall prescribe and

6 collect from a lending institution a reasonable administra7 tive fee in connection with each loan guaranteed under this

8 subchapter.

9 ‘‘§ 41767. Use of Federal facilities and assistance

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

11 Secretary of Transportation to make use of such expert

12 advice and services as the Secretary may require in car13 rying out this subchapter, the Secretary may use available

14 services and facilities of other agencies and instrumental15 ities of the Federal Government—

16 ‘‘(1) with the consent of the appropriate Fed17 eral officials; and

18 ‘‘(2) on a reimbursable basis.

19 ‘‘(b) ASSISTANCE.—The head of each appropriate de20 partment or agency of the Federal Government shall exer21 cise the duties and functions of that head in such manner

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

23 41761.

24 ‘‘(c) OVERSIGHT.—The Secretary shall make avail25 able to the Comptroller General of the United States such
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1 information with respect to the loan guarantee program

2 conducted under this subchapter as the Comptroller Gen3 eral may require to carry out the duties of the Comptroller

4 General under chapter 7 of title 31.

5 ‘‘§ 41768. Payments; administrative expenses

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

7 consequence of any loan guarantee made under this sub8 chapter may be made from funds appropriated pursuant

9 to the authorization under section 202 of the Airfare Re10 lief Act of 1999.

11 ‘‘(b) ADMINISTRATIVE EXPENSES.—In carrying out

12 this subchapter, the Secretary shall use funds made avail13 able by appropriations to the Department of Transpor14 tation for the purpose of administration to cover adminis15 trative expenses of the loan guarantee program under this

16 subchapter.

17 ‘‘§ 41769. Termination

18 ‘‘The authority of the Secretary of Transportation

19 under section 41763 shall terminate on the date that is

20 5 years after the date of the enactment of this sub21 chapter.’’.

22 (b) CONFORMING AMENDMENT.—The analysis for

23 chapter 417 of such title is amended by adding at the end

24 the following:

‘‘SUBCHAPTER III—REGIONAL AIR SERVICE INCENTIVE PROGRAM

‘‘41761. Purpose.
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‘‘41762. Definitions.

‘‘41763. Loan guarantees.

‘‘41764. Conditions and limitations.

‘‘41765. Payment of losses.

‘‘41766. Fees.

‘‘41767. Use of Federal facilities and assistance.

‘‘41768. Payments; administrative expenses.

‘‘41769. Termination.’’.

1 SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

2 There is authorized to be appropriated for the cost

3 of loan guarantee commitments authorized in subchapter

4 III of chapter 417 of title 49, United States Code,

5 $120,000,000 per fiscal year for fiscal years 2000, 2001,

6 2002, 2003, and 2004.

Æ