130 
(1) by redesignating paragraphs (3) and (4) as 
(4) and (5), respectively; and 
(2) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) SLOTS.—The Administrator of the Federal 
Aviation Administration shall reduce the hourly air 
carrier slot quota for Ronald Reagan Washington 
National Airport in section 93.123(a) of title 14, 
Code of Federal Regulations, by a total of 10 slots 
that are available for allocation. Such reductions 
shall be taken in the 6:00 a.m., 10:00 p.m., or 11:00 
p.m. hours, as determined by the Administrator, in 
order to grant exemptions under subsection (a).’’. 
(d) SCHEDULING
PRIORITY.—Section 41718 is 
amended— 
(1) by redesignating subsections (e) and (f) as 
subsections (f) and (g), respectively; and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) SCHEDULING PRIORITY.—Operations conducted 
by new entrant air carriers and limited incumbent air car-
riers shall be afforded a scheduling priority over oper-
ations conducted by other air carriers granted exemptions 
pursuant to this section, with the highest scheduling pri-
ority to be afforded to beyond-perimeter operations con-
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ducted by new entrant air carriers and limited incumbent 
air carriers.’’. 
SEC. 403. EAS CONTRACT GUIDELINES. 
(a) 
COMPENSATION
GUIDELINES.—Section 
41737(a)(1) is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (B); 
(2) in subparagraph (C) by striking the period 
at the end and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(D) include provisions under which the Sec-
retary may encourage an air carrier to improve air 
service for which compensation is being paid under 
this subchapter by incorporating financial incentives 
in an essential air service contract based on specified 
performance goals, including goals related to improv-
ing on-time performance, reducing the number of 
flight cancellations, establishing reasonable fares (in-
cluding joint fares beyond the hub airport), estab-
lishing convenient connections to flights providing 
service beyond hub airports, and increasing mar-
keting efforts; and 
‘‘(E) include provisions under which the Sec-
retary may execute a long-term essential air service 
contract to encourage an air carrier to provide air 
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service to an eligible place if it would be in the pub-
lic interest to do so.’’. 
(b) DEADLINE FOR ISSUANCE OF REVISED GUID-
ANCE.—Not later than 90 days after the date of enact-
ment of this Act, the Secretary of Transportation shall 
issue revised guidelines governing the rate of compensa-
tion payable under subchapter II of chapter 417 of title 
49, United States Code, that incorporate the amendments 
made by subsection (a). 
(c) REPORT.—Not later than 2 years after the date 
of issuance of revised guidelines pursuant to subsection 
(b), the Secretary shall submit to the Committee on 
Transportation and Infrastructure of the House of Rep-
resentatives and the Committee on Commerce, Science, 
and Transportation of the Senate a report on the extent 
to which the revised guidelines have been implemented and 
the impact, if any, such implementation has had on air 
carrier performance and community satisfaction with air 
service for which compensation is being paid under sub-
chapter II of chapter 417 of title 49, United States Code. 
SEC. 404. ESSENTIAL AIR SERVICE REFORM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 
41742(a)(2) of title 49, United States Code, is amended 
by striking ‘‘there is authorized to be appropriated 
$77,000,000’’ and inserting ‘‘there is authorized to be ap-
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propriated out of the Airport and Airway Trust Fund 
$150,000,000’’. 
(b) DISTRIBUTION OF EXCESS FUNDS.— 
(1) IN GENERAL.—Section 41742(a) is amend-
ed by adding at the end the following: 
‘‘(4) DISTRIBUTION
OF
EXCESS
FUNDS.—Of 
the funds, if any, credited to the account established 
under section 45303 in a fiscal year that exceed the 
$50,000,000 made available for such fiscal year 
under paragraph (1)— 
‘‘(A) one-half shall be made available im-
mediately for obligation and expenditure to 
carry out section 41743; and 
‘‘(B) one-half shall be made available im-
mediately for obligation and expenditure to 
carry out subsection (b).’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
41742(b) is amended— 
(A) in the first sentence by striking ‘‘mon-
eys credited’’ and all that follows before ‘‘shall 
be used’’ and inserting ‘‘amounts made avail-
able under subsection (a)(4)(B)’’; and 
(B) in the second sentence by striking 
‘‘any amounts from those fees’’ and inserting 
‘‘any of such amounts’’. 
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134 
SEC. 405. SMALL COMMUNITY AIR SERVICE. 
(a) PRIORITIES.—Section 41743(c)(5) is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (D); 
(2) in subparagraph (E) by striking ‘‘fashion.’’ 
and inserting ‘‘fashion; and’’; and 
(3) by adding at the end the following: 
‘‘(F) multiple communities cooperate to 
submit a regional or multistate application to 
improve air service.’’. 
(b) 
EXTENSION
OF
AUTHORIZATION.—Section 
41743(e)(2) is amended by striking ‘‘2009’’ and inserting 
‘‘2012’’. 
SEC. 406. AIR PASSENGER SERVICE IMPROVEMENTS. 
(a) IN GENERAL.—Subtitle VII is amended by insert-
ing after chapter 421 the following: 
‘‘CHAPTER 423—AIR PASSENGER SERVICE 
IMPROVEMENTS 
‘‘Sec. 
‘‘42301. Emergency contingency plans. 
‘‘42302. Consumer complaints. 
‘‘42303. Use of insecticides in passenger aircraft. 
‘‘§ 42301. Emergency contingency plans 
‘‘(a) SUBMISSION OF AIR CARRIER AND AIRPORT 
PLANS.—Not later than 90 days after the date of enact-
ment of this section, each air carrier providing covered air 
transportation at a large hub airport or medium hub air-
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135 
port and each operator of a large hub airport or medium 
hub airport shall submit to the Secretary of Transpor-
tation for review and approval an emergency contingency 
plan in accordance with the requirements of this section. 
‘‘(b) COVERED AIR TRANSPORTATION DEFINED.—In 
this section, the term ‘covered air transportation’ means 
scheduled passenger air transportation provided by an air 
carrier using aircraft with more than 30 seats. 
‘‘(c) AIR CARRIER PLANS.— 
‘‘(1) PLANS
FOR
INDIVIDUAL
AIRPORTS.—An 
air carrier shall submit an emergency contingency 
plan under subsection (a) for— 
‘‘(A) each large hub airport and medium 
hub airport at which the carrier provides cov-
ered air transportation; and 
‘‘(B) each large hub airport and medium 
hub airport at which the carrier has flights for 
which it has primary responsibility for inventory 
control. 
‘‘(2) CONTENTS.—An emergency contingency 
plan submitted by an air carrier for an airport under 
subsection (a) shall contain a description of how the 
air carrier will— 
‘‘(A) provide food, water that meets the 
standards of the Safe Drinking Water Act (42 
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(b) CLERICAL AMENDMENT.—The analysis for sub-
title VII is amended by inserting after the item relating 
to chapter 421 the following: 
‘‘423. Air Passenger Service Improvements ............................................. 42301’’. 
(c) PENALTIES.—Section 46301 is amended in sub-
sections (a)(1)(A) and (c)(1)(A) by inserting ‘‘chapter 
423,’’ after ‘‘chapter 421,’’. 
(d) APPLICABILITY OF REQUIREMENTS.—Except as 
otherwise specifically provided, the requirements of chap-
ter 423 of title 49, United States Code, as added by this 
section, shall begin to apply 60 days after the date of en-
actment of this Act. 
SEC. 407. CONTENTS OF COMPETITION PLANS. 
Section 47106(f)(2) is amended— 
(1) by striking ‘‘patterns of air service,’’; 
(2) by inserting ‘‘and’’ before ‘‘whether’’; and 
(3) by striking ‘‘ , and airfare levels’’ and all 
that follows before the period. 
SEC. 408. EXTENSION OF COMPETITIVE ACCESS REPORTS. 
Section 47107(s)(3) is amended by striking ‘‘April 1, 
2009’’ and inserting ‘‘September 30, 2012’’. 
SEC. 409. CONTRACT TOWER PROGRAM. 
(a) 
COST-BENEFIT
REQUIREMENT.—Section 
47124(b) is amended— 
(1) by striking ‘‘(1) The Secretary’’ and insert-
ing the following: 
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‘‘(1) CONTRACT TOWER PROGRAM.— 
‘‘(A) CONTINUATION
AND
EXTENSION.— 
The Secretary’’; 
(2) by adding at the end of paragraph (1) the 
following: 
‘‘(B) SPECIAL RULE.—If the Secretary de-
termines that a tower already operating under 
the program continued under this paragraph 
has a benefit to cost ratio of less than 1.0, the 
airport sponsor or State or local government 
having jurisdiction over the airport shall not be 
required to pay the portion of the costs that ex-
ceeds the benefit for a period of 18 months 
after such determination is made. 
‘‘(C) USE OF EXCESS FUNDS.—If the Sec-
retary finds that all or part of an amount made 
available to carry out the program continued 
under this paragraph is not required during a 
fiscal year, the Secretary may use, during such 
fiscal year, the amount not so required to carry 
out the program established under paragraph 
(3).’’; and 
(3) by striking ‘‘(2) The Secretary’’ and insert-
ing the following: 
‘‘(2) GENERAL AUTHORITY.—The Secretary’’. 
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(b) CONTRACT AIR TRAFFIC CONTROL TOWER COST- 
SHARING PROGRAM.— 
(1) 
FUNDING.—Section 
47124(b)(3)(E) 
is 
amended— 
(A) by striking ‘‘and’’; and 
(B) by inserting ‘‘, $8,500,000 for fiscal 
year 2008, $9,000,000 for fiscal year 2009, 
$9,500,000 for fiscal year 2010, $10,000,000 
for fiscal year 2011, and $10,000,000 for fiscal 
year 2012’’ after ‘‘2007’’. 
(2) 
USE
OF
EXCESS
FUNDS.—Section 
47124(b)(3) is amended— 
(A) by redesignating subparagraph (E) (as 
amended by paragraph (1) of this subsection) 
as subparagraph (F); and 
(B) by inserting after subparagraph (D) 
the following: 
‘‘(E) USE OF EXCESS FUNDS.—If the Sec-
retary finds that all or part of an amount made 
available under this subparagraph is not re-
quired during a fiscal year to carry out this 
paragraph, the Secretary may use, during such 
fiscal year, the amount not so required to carry 
out the program continued under paragraph 
(1).’’. 
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142 
(c) FEDERAL SHARE.—Section 47124(b)(4)(C) is 
amended 
by 
striking 
‘‘$1,500,000’’ 
and 
inserting 
‘‘$2,000,000’’. 
(d) SAFETY AUDITS.—Section 47124 is amended by 
adding at the end the following: 
‘‘(c) SAFETY AUDITS.—The Secretary shall establish 
uniform standards and requirements for safety assess-
ments of air traffic control towers that receive funding 
under this section.’’. 
SEC. 410. AIRFARES FOR MEMBERS OF THE ARMED 
FORCES. 
(a) FINDINGS.—Congress finds that— 
(1) the Armed Forces is comprised of approxi-
mately 1,400,000 members who are stationed on ac-
tive duty at more than 6,000 military bases in 146 
different countries; 
(2) the United States is indebted to the mem-
bers of the Armed Forces, many of whom are in 
grave danger due to their engagement in, or expo-
sure to, combat; 
(3) military service, especially in the current 
war against terrorism, often requires members of the 
Armed Forces to be separated from their families on 
short notice, for long periods of time, and under 
very stressful conditions; 
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(4) the unique demands of military service often 
preclude members of the Armed Forces from pur-
chasing discounted advance airline tickets in order 
to visit their loved ones at home and require mem-
bers of the Armed Forces to travel with heavy bags; 
and 
(5) it is the patriotic duty of the people of the 
United States to support the members of the Armed 
Forces who are defending the Nation’s interests 
around the world at great personal sacrifice. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that each United States air carrier should— 
(1) establish for all members of the Armed 
Forces on active duty reduced air fares that are 
comparable to the lowest airfare for ticketed flights; 
and 
(2) offer flexible terms that allow members of 
the Armed Forces on active duty to purchase, mod-
ify, or cancel tickets without time restrictions, fees, 
and penalties and waive baggage fees for a minimum 
of 3 bags. 
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SEC. 411. REPEAL OF ESSENTIAL AIR SERVICE LOCAL PAR-
TICIPATION PROGRAM. 
(a) REPEAL.—Section 41747 of title 49, United 
States Code, and the item relating to such section in the 
analysis for chapter 417 of such title, are repealed. 
(b) APPLICABILITY.—Title 49, United States Code, 
shall be applied as if section 41747 of such title had not 
been enacted. 
SEC. 412. ADJUSTMENT TO SUBSIDY CAP TO REFLECT IN-
CREASED FUEL COSTS. 
(a) IN GENERAL.—The $200 per passenger subsidy 
cap initially established by Public Law 103–122 (107 
Stat. 1198; 1201) and made permanent by section 332 
of Public Law 106–69 (113 Stat. 1022) shall be increased 
by an amount necessary to account for the increase, if any, 
in the cost of aviation fuel in the 24 months preceding 
the date of enactment of this Act, as determined by the 
Secretary. 
(b) ADJUSTMENT OF CAP.—Not later than 60 days 
after the date of enactment of this Act, the Secretary shall 
publish in the Federal Register the increased subsidy cap 
as an interim final rule, pursuant to which public comment 
will be sought and a final rule issued. 
(c) LIMITATION ON ELIGIBILITY.—A community that 
has been determined, pursuant to a final order issued by 
the Department of Transportation before the date of en-
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145 
actment of this Act, to be ineligible for subsidized air serv-
ice under subchapter II of chapter 417 of title 49, United 
States Code, shall not be eligible for the increased subsidy 
cap established pursuant to this section. 
SEC. 413. NOTICE TO COMMUNITIES PRIOR TO TERMI-
NATION OF ELIGIBILITY FOR SUBSIDIZED ES-
SENTIAL AIR SERVICE. 
Section 41733 of title 49, United States Code, is 
amended by adding at the end the following: 
‘‘(f) NOTICE TO COMMUNITIES PRIOR TO TERMI-
NATION OF ELIGIBILITY.— 
‘‘(1) IN GENERAL.—The Secretary shall notify 
each community receiving basic essential air service 
for which compensation is being paid under this sub-
chapter on or before the 45th day before issuing any 
final decision to end the payment of such compensa-
tion due to a determination by the Secretary that 
providing such service requires a rate of subsidy per 
passenger in excess of the subsidy cap. 
‘‘(2) PROCEDURES TO AVOID TERMINATION.— 
The Secretary shall establish, by order, procedures 
by which each community notified of an impending 
loss of subsidy under paragraph (1) may work di-
rectly with an air carrier to ensure that the air car-
rier is able to submit a proposal to the Secretary to 
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146 
provide essential air service to such community for 
an amount of compensation that would not exceed 
the subsidy cap. 
‘‘(3) ASSISTANCE
PROVIDED.—The Secretary 
shall provide, by order, to each community notified 
under paragraph (1) information regarding— 
‘‘(A) the procedures established pursuant 
to paragraph (2); and 
‘‘(B) the maximum amount of compensa-
tion that could be provided under this sub-
chapter to an air carrier serving such commu-
nity that would comply with the subsidy cap. 
‘‘(4) SUBSIDY
CAP
DEFINED.—In this sub-
section, the term ‘subsidy cap’ means the subsidy 
cap established by section 332 of Public Law 106– 
69, including any increase to that subsidy cap estab-
lished by the Secretary pursuant to the FAA Reau-
thorization Act of 2009.’’. 
SEC. 414. RESTORATION OF ELIGIBILITY TO A PLACE DE-
TERMINED BY THE SECRETARY TO BE INELI-
GIBLE 
FOR 
SUBSIDIZED 
ESSENTIAL 
AIR 
SERVICE. 
Section 41733 (as amended by section 413 of this 
Act) is further amended by adding at the end the fol-
lowing: 
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‘‘(g) PROPOSALS OF STATE AND LOCAL GOVERN-
MENTS TO RESTORE ELIGIBILITY.— 
‘‘(1) IN GENERAL.—If the Secretary, after the 
date of enactment of this subsection, ends payment 
of compensation to an air carrier for providing basic 
essential air service to an eligible place because the 
Secretary has determined that providing such service 
requires a rate of subsidy per passenger in excess of 
the subsidy cap (as defined in subsection (f)), a 
State or local government may submit to the Sec-
retary a proposal for restoring compensation for 
such service. Such proposal shall be a joint proposal 
of the State or local government and an air carrier. 
‘‘(2) DETERMINATION
BY
SECRETARY.—If a 
State or local government submits to the Secretary 
a proposal under paragraph (1) with respect to an 
eligible place, and the Secretary determines that— 
‘‘(A) the rate of subsidy per passenger 
under the proposal does not exceed the subsidy 
cap (as defined in subsection (f)); and 
‘‘(B) the proposal is consistent with the 
legal and regulatory requirements of the essen-
tial air service program, 
the Secretary shall issue an order restoring the eligi-
bility of the otherwise eligible place to receive basic 
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148 
essential air service by an air carrier for compensa-
tion under subsection (c).’’. 
SEC. 415. OFFICE OF RURAL AVIATION. 
(a) IN GENERAL.—Subchapter II of chapter 417 is 
amended by adding at the end the following: 
‘‘§ 41749. Office of Rural Aviation 
‘‘(a) ESTABLISHMENT.—The Secretary of Transpor-
tation shall establish within the Department of Transpor-
tation an office to be known as the ‘Office of Rural Avia-
tion’ (in this section referred to as the ‘Office’). 
‘‘(b) FUNCTIONS.—The Office shall— 
‘‘(1) monitor the status of air service to small 
communities; 
‘‘(2) develop proposals to improve air service to 
small communities; and 
‘‘(3) carry out such other functions as the Sec-
retary considers appropriate.’’. 
(b) CLERICAL AMENDMENT.—The analysis for sub-
chapter II of chapter 417 is amended by adding at the 
end the following: 
‘‘41749. Office of Rural Aviation.’’. 
SEC. 416. ADJUSTMENTS TO COMPENSATION FOR SIGNIFI-
CANTLY INCREASED COSTS. 
(a) 
EMERGENCY
ACROSS-THE-BOARD
ADJUST-
MENT.—Subject to the availability of funds, the Secretary 
may increase the rates of compensation payable to air car-
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riers under subchapter II of chapter 417 of title 49, 
United States Code, to compensate such carriers for in-
creased aviation fuel costs, without regard to any agree-
ment or requirement relating to the renegotiation of con-
tracts or any notice requirement under section 41734 of 
such title. 
(b) EXPEDITED PROCESS FOR ADJUSTMENTS TO IN-
DIVIDUAL CONTRACTS.— 
(1) IN GENERAL.—Section 41734(d) of title 49, 
United States Code, is amended by striking ‘‘con-
tinue to pay’’ and all that follows through ‘‘com-
pensation sufficient—’’ and inserting ‘‘provide the 
carrier with compensation sufficient—’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to compensation to air 
carriers for air service provided after the 30th day 
following the date of enactment of this Act. 
SEC. 417. REVIEW OF AIR CARRIER FLIGHT DELAYS, CAN-
CELLATIONS, AND ASSOCIATED CAUSES. 
(a) REVIEW.—The Inspector General of the Depart-
ment of Transportation shall conduct a review regarding 
air carrier flight delays, cancellations, and associated 
causes to update its 2000 report numbered CR–2000–112 
and entitled ‘‘Audit of Air Carrier Flight Delays and Can-
cellations’’. 
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