I
103D CONGRESS
1ST SESSION
H. R. 1433
To amend the Federal Aviation Act of 1958 to authorize the Secretary
of Transportation to guarantee loans for the acquisition of Stage 3
aircraft, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 23, 1993
Ms. DUNN introduced the following bill; which was referred to the Committee
on Public Works and Transportation
A BILL
To amend the Federal Aviation Act of 1958 to authorize
the Secretary of Transportation to guarantee loans for
the acquisition of Stage 3 aircraft, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Aviation Enhancement
Act of 1993’’.
SEC. 2. FINDINGS.
Congress finds and declares that—
(1) the United States commercial airline indus-
try is currently suffering severe financial distress;
(2) sustained record losses and excessive debt
burdens are causing air carriers to cancel new air-
craft options and orders, thereby threatening the
economic viability of the United States aerospace
manufacturing industry;
(3) although most air carriers would benefit
from acquiring new generation, quieter, more fuel-ef-
ficient aircraft, there is already more capacity than
demand for seats, resulting in downsizing, not ex-
pansion, of fleets;
(4) many air carriers are increasingly unable to
obtain financing at reasonable interest rates for pur-
chasing new equipment;
(5) the inability of many air carriers to acquire
new, quieter Stage 3 aircraft may jeopardize the
planned phase out of noisier Stage 2 aircraft;
(6) States and local communities, the traveling
public, airline employees, and airline shareholders
would all benefit from stronger, healthier air carriers
operating modern, fuel efficient, quieter aircraft;
(7) as the owner and operator of the Nation’s
air traffic control system, the Federal Government is
a partner of the commercial aviation industry and
must do its part to strengthen the air carrier and
aerospace industries;
(8) it is estimated that the Airport and Airway
Trust Fund will contain an unobligated surplus in
excess of $4,300,000,000 on October 1, 1993;
(9) a prudent shift of the investment of the Air-
port and Airway Trust Fund surplus into mod-
ernization of the commercial aviation industry’s fleet
can provide vitally needed economic stimulus for car-
riers and manufacturers and will ensure that both
industries remain competitive into the next century;
and
(10) the Airport and Airway Trust Fund sur-
plus should, therefore, be made available to guaran-
tee loans for the acquisition of new aircraft if such
acquisition will assure the phasing out of less fuel
efficient and noisier or older aircraft at the same
time.
SEC. 3. LOAN GUARANTEES FOR ACQUISITION OF STAGE 3
AIRCRAFT.
(a) IN GENERAL.—Title XI of the Federal Aviation
Act of 1958 (49 U.S.C. App. 1501–1518) is amended by
adding at the end the following new section:
‘‘SEC. 1119. LOAN GUARANTEES FOR ACQUISITION OF
STAGE 3 AIRCRAFT.
‘‘(a) IN GENERAL.—The Secretary is authorized,
subject to appropriations Acts, to guarantee any lender
against loss of principal or interest on any loan made to
an eligible air carrier for the purpose of financing the ac-
quisition of new Stage 3 aircraft.
‘‘(b) TERMS AND CONDITIONS.—A loan may be guar-
anteed by the Secretary under this section only if the loan
is made subject to the following terms and conditions:
‘‘(1) TERM.—The term of the loan does not ex-
ceed 20 years.
‘‘(2) RATE OF INTEREST.—The loan bears in-
terest at a rate which is less than the maximum rate
for such loans determined by the Secretary. The
maximum rate for such loans may not be less than
the current average market yield on outstanding ob-
ligations of the United States with remaining peri-
ods to maturity comparable to the maturity of the
loan.
‘‘(3) PREPAYMENT.—There is no penalty for
prepayment of the amount of the loan.
‘‘(4) USE OF LOAN AMOUNTS.—The loan will be
used only for the acquisition of Stage 3 aircraft
which—
‘‘(A) are manufactured in the United
States; and
‘‘(B) will be delivered to the borrower not
later than 3 years after the date on which
amounts are appropriated to carry out this sec-
tion.
‘‘(c) DOMESTIC MANUFACTURE.—For the purposes
of subsection (b)(4), an aircraft shall be considered to
have been manufactured in the United States only if 50
percent or more of the parts of the aircraft, by value, are
manufactured in the United States.
‘‘(d) RETIREMENT OF AGING AND STAGE 2 AIR-
CRAFT.—The Secretary may guarantee a loan under this
section to an air carrier which owns or operates aging air-
craft or Stage 2 aircraft only if the carrier agrees that,
upon delivery of the aircraft being acquired with amounts
of the loan, the air carrier will—
‘‘(1) retire from service Stage 2 aircraft or
aging aircraft containing a number of seats which
equals or exceeds 200 percent of the number of seats
contained in the aircraft being acquired; or
‘‘(2) retire from service all of the air carrier’s
remaining Stage 2 aircraft and aging aircraft.
‘‘(e) DEFAULT.—The Secretary may guarantee a
loan under this section only if the air carrier applying for
the loan agrees that, in the event of a default, the air car-
rier will transfer to the Department of Transportation title
to all equipment acquired with the proceeds of the loan.
‘‘(f) DISTRIBUTION OF LOAN GUARANTEES.
‘‘(1) DETERMINATION
OF
AVAILABLE
SEAT
MILES.—Not later than 30 days after the date on
which amounts are appropriated to carry out this
section, the Secretary shall determine the percentage
of available seat miles attributed, for the most re-
cent 12-month period for which such data is avail-
able, to each eligible air carrier certificated on or be-
fore October 1, 1992.
‘‘(2) ALLOCATION.—
‘‘(A) CARRIERS CERTIFICATED ON OR BE-
FORE OCTOBER 1, 1992.—An amount equal to
95 percent of the funds appropriated to carry
out this section shall be available for guarantee-
ing loans to eligible air carriers certificated on
or before October 1, 1992, and shall be allo-
cated among such carriers based on the per-
centage of available seat miles attributed to
each such carriers under paragraph (1).
‘‘(B) OTHER CARRIERS.—An amount equal
to 5 percent of the funds appropriated to carry
out this section shall be available for guarantee-
ing loans to eligible air carriers certificated
after October 1, 1992, and shall be allocated
among such carriers based on a fair and equi-
table formula to be established by the Sec-
retary.
‘‘(C) TRANSFER OF ALLOCATIONS.—An el-
igible air carrier may transfer to other eligible
air carriers all or part of the amount of loan
guarantees allocated to such carrier under this
paragraph.
‘‘(g) ENFORCEMENT.—
‘‘(1) IN GENERAL.—The Secretary is authorized
to take such actions as may be appropriate to en-
force any right accruing to the United States, or any
officer or agency thereof, as a result of the commit-
ment or issuance of a loan guarantee under this sec-
tion.
‘‘(2) COLLATERAL.—All loan guarantees under
this section shall be secured by the equipment being
financed and any other assets necessary to provide
sufficient collateral.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There
is authorized to be appropriated out of the Airport and
Airway 
Trust 
Fund 
to 
carry 
out 
this 
section