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(2) The term ‘‘commuter operator’’ means an air
carrier as described in section 93.124(c)(2) of title 14,
Code of Federal Regulations (as in effect on March 1,
1994).
(3) The term ‘‘high density airport’’ means an
airport at which the Administrator limits the number
of instrument flight rule takeoffs and landings of an
aircraft.
(4) The term ‘‘new entrant air carrier’’ means
an air carrier that does not hold a slot at the airport
concerned and has never sold or given up a slot at
that airport after December 16, 1985.
(5) The term ‘‘slot’’ means a reservation, by an
air carrier or foreign air carrier at an airport, for
an instrument flight rule takeoff or landing of an air-
craft in air transportation.
SEC. 205. AIR SERVICE TERMINATION NOTICE.
(a) IN GENERAL.—(1) Title IV of the Federal Aviation
Act of 1958 (49 App. U.S.C. 1371 et seq.) is amended by
adding at the end the following new section:
‘‘SEC. 420. AIR SERVICE TERMINATION NOTICE.
‘‘(a) IN GENERAL.—An air carrier may not terminate
interstate or overseas air transportation from a nonhub air-
port included on the Secretary’s latest published list of such
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airports, unless such air carrier has given the Secretary at
least 60 days’ notice before such termination.
‘‘(b) EXCEPTIONS.—The Secretary shall not apply the
requirements of subsection (a) when—
‘‘(1) the carrier involved is experiencing a sud-
den or unforeseen financial emergency, including nat-
ural weather related emergencies, equipment-related
emergencies, and strikes;
‘‘(2) the termination of transportation is made
for seasonal purposes only;
‘‘(3) the carrier involved has operated at the af-
fected nonhub airport for 180 days or less;
‘‘(4) the carrier involved provides other transpor-
tation by jet from another airport serving the same
community as the affected nonhub airport; or
‘‘(5) the carrier involved makes alternative ar-
rangements, such as a change of aircraft size, or other
types of arrangements with a part 121 or part 135
air carrier, that continues uninterrupted service from
the affected nonhub airport.
‘‘(c) 
WAIVERS
FOR
REGIONAL/COMMUTER
CAR-
RIERS.—Prior to October 1, 1994, the Secretary shall estab-
lish terms and conditions under which regional/commuter
carriers can be excluded from the termination notice re-
quirement.
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‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) NONHUB AIRPORT.—The term ‘nonhub air-
port’ has the meaning that term has under section
419(k)(4).
‘‘(2) PART 121 AIR CARRIER.—The term ‘part
121 air carrier’ means an air carrier to which part
121 of title 14, Code of Federal Regulations, applies.
‘‘(3) PART 135 AIR CARRIER.—The term ‘part
135 air carrier’ means an air carrier to which part
135 of title 14, Code of Federal Regulations, applies.
‘‘(4) 
REGIONAL/COMMUTER
CARRIERS.—The
term ‘regional/commuter carrier’ means—
‘‘(A) a part 135 air carrier; or
‘‘(B) a part 121 air carrier that provides
air transportation exclusively with aircraft hav-
ing a seating capacity of no more than 70 pas-
sengers.
‘‘(5) TERMINATION.—The term ‘termination’
means the cessation of all service at an airport by an
air carrier.’’.
(2) The portion of the table of contents of the Federal
Aviation Act of 1958 relating to title IV is amended by in-
serting immediately after the item relating to section 419
the following new item:
‘‘Sec. 420. Air service termination notice.
‘‘(a) In general.
‘‘(b) Exceptions.
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‘‘(c) Waivers for regional/commuter carriers.
‘‘(d) Definitions.’’.
(b) CIVIL PENALTIES.—Section 901(a)(1) of the Fed-
eral Aviation Act of 1958 (49 App. U.S.C. 1471(a)(1)) is
amended by inserting ‘‘section 420 or’’ immediately after
‘‘$10,000 for each violation of’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall be effective beginning on October 1, 1994.
SEC. 206. COOPERATIVE AGREEMENTS FOR RESEARCH, EN-
GINEERING, AND DEVELOPMENT.
(a) IN GENERAL.—Section 312 of the Federal Aviation
Act of 1958 (49 App. U.S.C. 1353) is amended by adding
at the end the following new subsection:
‘‘(j) COOPERATIVE AGREEMENTS.—The Administrator
may enter into cooperative agreements on a cost-shared
basis with Federal and non-Federal entities that the Ad-
ministrator may select in order to conduct, encourage, and
promote aviation research, engineering, and development,
including the development of prototypes and demonstration
models.’’.
(b) CONFORMING AMENDMENT.—The table of contents
of the Federal Aviation Act of 1958 is amended by adding
at the end of the item relating to section 312 the following:
‘‘(j) Cooperative agreements.’’.
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SEC. 207. TECHNICAL AMENDMENTS.
Section 1112 of the Federal Aviation Act of 1958 (49
App. U.S.C. 1512) is amended—
(1) by striking ‘‘50 per centum’’ wherever it ap-
pears and inserting in lieu ‘‘50 percent’’;
(2) by redesignating subsection (c) as subsection
(d); and
(3) by inserting immediately after subsection (b)
the following new subsection:
‘‘(c) Compensation paid by an air carrier to an em-
ployee described in subsection (a) in connection with such
employee’s authorized leave or other authorized absence
from regular duties on the carrier’s aircraft in order to per-
form services on behalf of the employee’s airline union shall
not be subject to the income tax laws of a State or subdivi-
sion thereof, other than the State or subdivision thereof of
the employee’s residence and the State or subdivision thereof
in which the employee’s scheduled flight time would have
been more than 50 percent of the employee’s total scheduled
flight time for the calendar year had the employee been en-
gaged full time in the performance of regularly assigned du-
ties on the carrier’s aircraft.’’.
SEC. 208. REVIEW OF PASSENGER FACILITY CHARGE PRO-
GRAM.
The Secretary shall conduct a review of section
158.49(b) of title 14, Code of Federal Regulations, to assess
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the effectiveness of such section in light of the objectives of
section 1113(e) of the Federal Aviation Act of 1958 (49 App.
U.S.C. 1513(e)) and shall take such corrective action as the
Secretary determines to be necessary to address any prob-
lems discovered in the review.
SEC. 209. EXCEPTIONS APPLICABLE TO STATE OF HAWAII.
(a) DEFINITIONS.—(1) Section 101(24) of the Federal
Aviation Act of 1958 (49 App. U.S.C. 1301(24)) is amended
by adding at the end the following new sentence: ‘‘For pur-
poses of title IV, the term ‘interstate air transportation’
does not include air transportation of passengers commenc-
ing and terminating in the State of Hawaii.’’.
(2) Section 101(26) of the Federal Aviation Act of
1958 (49 App. U.S.C. 1301(26)) is amended by adding at
the end the following: ‘‘With respect to transportation of
passengers by air within the State of Hawaii, the term
‘intrastate air transportation’ means the carriage of per-
sons by a common carrier for compensation or hire, by such
aircraft, commencing and terminating in the State of Ha-
waii; except that the carriage of passengers moving as a
part of a single itinerary on a single ticket for transpor-
tation on an air carrier or air carriers, beginning and/or
ending outside the State of Hawaii, is deemed to be in
interstate transportation.’’.