I
103D CONGRESS
1ST SESSION
H. R. 470
To amend the Federal Aviation Act of 1958 to provide for review of certain
acquisitions of voting securities of air carriers, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1993
Mr. OBERSTAR 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 provide for
review of certain acquisitions of voting securities of air
carriers, 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. AMENDMENTS TO THE FEDERAL AVIATION ACT
OF 1958.
(a) REVIEW PROCESS.—Title IV of the Federal Avia-
tion Act of 1958 (49 U.S.C. App. 1371–1389) is amended
by adding at the end thereof the following new section:
‘‘SEC. 420. REVIEW OF CERTAIN ACQUISITIONS OF VOTING
SECURITIES OF AIR CARRIERS.
‘‘(a) GENERAL RULE.—No person shall acquire, di-
rectly or indirectly, any voting securities of a major air
carrier or person who controls a major air carrier unless
the acquiring person files notification pursuant to the
rules under subsection (d), the waiting period described
in subsection (b)(1) has expired, and the Secretary has
not disapproved such acquisition under subsection (c)—
‘‘(1) if such acquisition is of 15 percent or more
of the voting securities of the acquired person; or
‘‘(2) if, before such acquisition, the acquiring
person holds less than 15 percent of the voting secu-
rities of the acquired person and, as a result of such
acquisition, the acquiring person would hold 15 per-
cent or more of the voting securities of the acquired
person.
‘‘(b) WAITING PERIOD.—
‘‘(1) GENERAL RULE.—The waiting period re-
quired under subsection (a) shall—
‘‘(A) begin on the date of receipt by the
Secretary of the completed notification required
under this section from the acquiring person;
and
‘‘(B) end on the 30th day after the date of
such receipt or such later date as may be set
under subsection (e)(2).
‘‘(2) TERMINATION.—The Secretary may, in in-
dividual cases, terminate the waiting period specified
in paragraph (1) and allow any person to proceed
with any acquisition subject to this section and
promptly shall cause to be published in the Federal
Register a notice that the Secretary does not intend
to take any action within such period with respect
to such acquisition.
‘‘(c) DISAPPROVAL.—The Secretary shall disapprove
an acquisition of voting securities subject to this section
if the Secretary finds—
‘‘(1) that the acquistion is likely to weaken the
acquired person financially to such an extent—
‘‘(A) that a deterioration in the ability of
the air carrier to comply with its established
safety procedures would occur;
‘‘(B) that the air carrier would be unable
to take the steps necessary to continue to oper-
ate with the highest degree of safety;
‘‘(C) that the air carrier would be required
to dispose of a substantial portion of its avia-
tion-related assets in order to meet its financial
obligations; or
‘‘(D) that a substantial deterioration in the
air carrier’s ability to compete in providing air
transportation would result;
‘‘(2) that the probable intent of the acquiring
person is to make a major reduction in the size of
the air carrier by disposing of aviation-related as-
sets; except in any case in which—
‘‘(A) such disposition would be necessary,
in the absence of the acquisition, to avoid the
financial failure of the air carrier,
‘‘(B) the assets to be disposed of could not
be used profitably by the air carrier, or
‘‘(C) such disposition would be in the pub-
lic interest;
‘‘(3) that the acquisition would result in a per-
son who is not a citizen of the United States having
power to exercise control over the air carrier;
‘‘(4) that the acquisition would result in a
major reduction in wages, benefits, or number of
employees of the air carrier which is not agreed to
by the employees and is required primarily as a re-
sult of added costs arising out of the acquisition; or
‘‘(5) that the acquiring person is not providing,
in a timely manner, the documentary material and
information required by the Secretary to make a de-
cision regarding the acquisition under this section.
‘‘(d) FORM OF NOTIFICATION AND OTHER RULES.—
‘‘(1) IN GENERAL.—The Secretary, by regula-
tion—
‘‘(A) shall require that the notification
under subsection (a) be in such form and con-
tain such information and documentary mate-
rial relevant to a proposed acquisition as is nec-
essary to enable the Secretary to determine
whether such acquisition should be disapproved
under this section, and
‘‘(B) may prescribe such other rules as
may be necessary and appropriate to carry out
the purposes of this section, including rules re-
lating to the submission by the air carrier of in-
formation or documentary material described in
subparagraph (A).
‘‘(2) DEADLINE
FOR
ISSUANCE
OF
REGULA-
TIONS.—Not later than 10 days after the date of the
enactment of this section, the Secretary shall issue
regulations necessary to carry out the objectives of
this section.
‘‘(e) EXTENSION OF WAITING PERIOD.—
‘‘(1) SUBMISSION
OF
ADDITIONAL
INFORMA-
TION.—The Secretary may, before the expiration of
the 30-day waiting period specified in subsection
(b)(1), require the submission of additional informa-
tion or documentary material relevant to the pro-
posed acquisition, from a person required to file no-
tification with respect to such acquisition under sub-
section (a), from the air carrier, or from any officer,
director, partner, agent, or employee of such person.
‘‘(2) DURATION.—The Secretary, in his discre-
tion, may extend the 30-day waiting period specified
in subsection (b)(1) for an additional period of not
more than 20 days after the later of—
‘‘(A) the date on which the Secretary re-
ceives from the acquiring person or any officer,
director, partner, agent, or employee of such
person all of the information and documentary
material required to be submitted pursuant to
a request under paragraph (1); or
‘‘(B) the date by which the air carrier or
any officer, director, partner, agent, or em-
ployee of the air carrier is directed to submit
information or documentary material pursuant
to a request under paragraph (1).
‘‘(f) PROTECTION OF INFORMATION.—Any informa-
tion or documentary material filed with the Secretary
pursuant to this section shall be exempt from disclosure
under section 552 of title 5, United States Code, and no
such information or documentary material may be made
public, except as may be relevant to any administrative
or judicial action or proceeding. Nothing in this section
is intended to prevent disclosure to either House of Con-
gress or to any duly authorized committee or subcommit-
tee of Congress.
‘‘(g) COMPUTATION OF VOTING SECURITIES.—For
purposes of this section, the amount or percentage of vot-
ing securities of a person which are acquired or held by
another person shall be determined by aggregating the
amount or percentage of such voting securities held or ac-
quired by such other person and each affiliate thereof.
‘‘(h) DEFINITIONS.—As used in this section—
‘‘(1) MAJOR AIR CARRIER.—The term ‘major
air carrier’ means an air carrier with annual reve-
nues of more than $750,000,000.
‘‘(2) VOTING
SECURITIES.—The term ‘voting
securities’ means any securities which at present or
upon conversion entitle the owner or holder thereof
to vote for the election of directors of the issuer or,
with respect to unincorporated issuers, persons exer-
cising similar functions.’’.
(b) CONFORMING AMENDMENT.—The portion of the
table of contents contained in the first section of the Fed-
eral Aviation Act of 1958 relating to title IV of such Act
is amended by adding at the end thereof the following new
item:
‘‘Sec. 420. Review of certain acquisitions of voting securities of air carriers.’’.
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