I
106TH CONGRESS
1ST SESSION
H. R. 951
To amend title 49, United States Code, to provide assistance and slots
with respect to air carrier service between high density airports and
airports not receiving sufficient air service, to improve jet aircraft service
to underserved markets, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 3, 1999
Mr. DUNCAN 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 airports not receiving sufficient
air service, to improve jet aircraft service to underserved
markets, 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 ‘‘Airline Service Im-
provement Act of 1999’’.
TITLE I—SERVICE TO AIRPORTS
NOT RECEIVING SUFFICIENT
SERVICE
SEC. 101. AVAILABILITY OF SLOTS.
(a) PERIOD OF EFFECTIVENESS.—
(1) SLOTS
FOR
FOREIGN
AIR
TRANSPOR-
TATION.—Section 41714(b) of title 49, United
States Code, is amended by striking paragraph (4).
(2) SLOTS
FOR
NEW
ENTRANTS.—Section
41714(c) of such title is amended—
(A) by striking ‘‘(1) IN GENERAL.—’’;
(B) by striking paragraph (2); and
(C) by moving the text of paragraph (1) so
that it follows the subsection heading and its
margin is aligned with the margin for sub-
section (g).
(b) SLOTS FOR AIRPORTS NOT RECEIVING SUFFI-
CIENT
SERVICE.—Section 41714 of such title is
amended—
(1) by striking subsections (e) and (f) and in-
serting the following:
‘‘(e) SLOTS FOR AIRPORTS NOT RECEIVING SUFFI-
CIENT SERVICE.—
‘‘(1) EXEMPTIONS.—Notwithstanding part D of
chapter 491 of this title, the Secretary may by order
grant exemptions from the requirements under sub-
parts K and S of part 93 of title 14, Code of Fed-
eral Regulations (pertaining to slots at high density
airports), to enable air carriers to provide nonstop
air transportation using jet aircraft that comply with
the stage 3 noise levels of part 36 of such title 14
between a high density airport and an airport that
had less than 2,000,000 enplanements in the most
recent year for which such enplanement data is
available or between a high density airport and an
airport that does not have such nonstop transpor-
tation on the date on which the application for an
exemption is filed.
‘‘(2) LIMITATIONS.—No more than 2 exemp-
tions per hour may be granted under this subsection
for slots at any high density airport, and no more
than 6 exemptions per day may be granted under
this subsection for slots at Ronald Reagan Washing-
ton National Airport. An exemption may be granted
under this subsection for a slot at Ronald Reagan
Washington National Airport only if the flight utiliz-
ing such slot begins or ends within 1,250 miles of
the Airport and a stage 3 aircraft is used for such
flight.
‘‘(3) APPLICATION.—An air carrier interested
in an exemption under this subsection shall submit
to the Secretary an application for such exemption.
No application may be submitted to the Secretary
before the last day of the 30-day period beginning
on the date of the enactment of this paragraph.
‘‘(4) DEADLINE FOR DECISION.—Notwithstand-
ing any other provision of law, the Secretary shall
make a decision with regard to granting an exemp-
tion under this subsection on or before the 120th
day following the date of the application for the ex-
emption. If the Secretary does not make the decision
on or before such 120th day, the air carrier applying
for the service may provide such service until the
Secretary makes the decision or the Administrator of
the Federal Aviation Administration determines that
providing such service would have an adverse effect
on air safety.
‘‘(5) PERIOD OF EFFECTIVENESS.—An exemp-
tion granted under this subsection may remain in ef-
fect only while the air carrier for whom the exemp-
tion is granted continues to provide nonstop air
transportation between the airport for which the ex-
emption was granted under paragraph (1) and the
high density airport.
‘‘(f) TREATMENT OF CERTAIN COMMUTER AIR CAR-
RIERS.—The Secretary shall treat all commuter air car-
riers that have cooperative agreements, including code
share agreements with other air carriers, equally for deter-
mining eligibility for exemptions under this section regard-
less of the form of the corporate relationship between the
commuter air carrier and the other air carrier.’’.
SEC. 102. FUNDING FOR AIR CARRIER SERVICE TO AIR-
PORTS NOT RECEIVING SUFFICIENT SERV-
ICE.
(a) FUNDING FOR SMALL COMMUNITY AIR SERV-
ICE.—Section 41742(b) of title 49, United States Code,
is amended to read as follows:
‘‘(b) FUNDING FOR SMALL COMMUNITY AIR SERV-
ICE.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, from moneys credited to the ac-
count established under section 45303(a), including
the funds derived from fees imposed under the au-
thority contained in section 45301(a)—
‘‘(A) not to exceed $45,000,000 for each
fiscal year beginning after September 30, 1999,
shall be used to carry out the essential air serv-
ice program under this subchapter; and
‘‘(B) not to exceed $5,000,000 for such fis-
cal year shall be used—
‘‘(i) for assisting an air carrier to sub-
sidize service to and from an underserved
airport for a period not to exceed 3 years;
and
‘‘(ii) for assisting an underserved air-
port to obtain jet aircraft service to and
from the underserved airport and to pro-
mote passenger usage of that service.
‘‘(2) RURAL AIR SAFETY.—Any funds that are
made available by paragraph (1) for a fiscal year
and that the Secretary determines will not be obli-
gated or expended before the last day of such fiscal
year shall be available to the Administrator for use
under this subchapter in improving rural air safety
at airports with less than 100,000 annual boardings.
‘‘(3) ALLOCATION OF ADDITIONAL FUNDING.—
If, for a fiscal year beginning after September 30,
1999, more than $50,000,000 is made available
under subsection (a) to carry out the small commu-
nity air service program, 1⁄2 of the amounts in excess
of $50,000,000 shall be used for the purposes speci-
fied in paragraph (1)(B), in addition to amounts
made available for such purposes under paragraph
(1)(B).
‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—In
addition to amounts made available under paragraph
(1), there is authorized to be appropriated to the
Secretary of Transportation for each fiscal year be-
ginning after September 30, 1999, $15,000,000—
‘‘(A) to provide assistance to an air carrier
to subsidize service to and from an underserved
airport for a period not to exceed 3 years; and
‘‘(B) to provide assistance to an under-
served airport to obtain jet aircraft service to
and from the underserved airport and to pro-
mote passenger usage of that service.
‘‘(5) PRIORITY CRITERIA FOR ASSISTING AIR-
PORTS
NOT
RECEIVING
SUFFICIENT
SERVICE.—In
providing assistance to airports under paragraphs
(1)(B) and (4), the Administrator shall give priority
to those airports for which a community will provide,
from local sources (other than airport revenues), a
portion of the cost of the activity to be assisted.
‘‘(6) UNDERSERVED AIPORT DEFINED.—In this
subsection, the term ‘underserved airport’ means a
nonhub airport or small hub airport (as such terms
are defined in section 41714(e)) that the Secretary
determines is not receiving sufficient air carrier serv-
ice.’’.
(b) CONFORMING AMENDMENTS.—Chapter 417 of
such title is amended—
(1) section 41742 is amended—
(A) in the section heading by striking ‘‘Es-
sential’’ and inserting ‘‘Small commu-
nity’’; and
(B) in each of subsections (a) and (c) by
striking ‘‘essential air’’ and inserting ‘‘small
community’’; and
(2) in the analysis for such chapter by striking
the item relating to section 41742 and inserting the
following:
‘‘41742. Small community air service authorization.’’.
SEC. 103. WAIVER OF LOCAL CONTRIBUTION.
Section 41736(b) of title 49, United States Code, is
amended by adding at the end the following:
‘‘Paragraph (4) shall not apply to any place for which a
proposal was approved or that was designated as eligible
under this section in the period beginning on October 1,
1991, and ending on December 31, 1997.’’.
TITLE II—REGIONAL AIR
SERVICE INCENTIVE PROGRAM
SEC. 201. AMENDMENT OF TITLE 49, UNITED STATES CODE.
(a) IN GENERAL.—Chapter 417 of title 49, United
States Code, is amended by adding at the end the follow-
ing:
‘‘SUBCHAPTER III—REGIONAL AIR SERVICE
INCENTIVE PROGRAM
‘‘§ 41761. Purpose
‘‘The purpose of this subchapter is to improve service
by jet aircraft to underserved markets by providing assist-
ance, in the form of loan guarantees, to commuter air car-
riers that purchase regional jet aircraft for use in serving
those markets.
‘‘§ 41762. Definitions
‘‘In this subchapter, the following definitions apply:
‘‘(1) AIRCRAFT
PURCHASE
LOAN.—The term
‘aircraft purchase loan’ means any loan made for the
purchase of commercial transport aircraft, including
spare parts normally associated with the aircraft.
‘‘(2) COMMUTER
AIR
CARRIER.—The term
‘commuter air carrier’ means an air carrier that pri-
marily operates aircraft designed to have a maxi-
mum passenger seating capacity of 75 or less in ac-
cordance with published flight schedules.
‘‘(3) NEW ENTRANT AIR CARRIER.—The term
‘new entrant air carrier’ means an air carrier that
has been providing air transportation according to a
published schedule for less than 5 years, including
any person that has received authority from the Sec-
retary to provide air transportation but is not pro-
viding air transportation.
‘‘(4) NONHUB
AIRPORT.—The term ‘nonhub
airport’ means an airport that each year has at least
2,500 passenger boardings, but less than .05 percent
of the total annual boardings in the United States.
‘‘(5) REGIONAL JET AIRCRAFT.—The term ‘re-
gional jet aircraft’ means a civil aircraft—
‘‘(A) powered by jet propulsion; and
‘‘(B) designed to have a maximum pas-
senger seating capacity of not less than 30 nor
more than 60.
‘‘(6) SMALL HUB AIRPORT.—The term ‘small
hub airport’ means an airport that each year has at
least .05 percent, but less than .25 percent, of the
total annual boardings in the United States.
‘‘(7) UNDERSERVED AIRPORT.—The term ‘un-
derserved airport’ means an airport that—
‘‘(A) is a nonhub airport or a small hub
airport;
‘‘(B) is not within a 40-mile radius of an-
other airport that each year has at least .25
percent of the total annual boardings in the
United States; and
‘‘(C) the Secretary determines does not
have sufficient air service.
‘‘§ 41763. Loan guarantees
‘‘(a) IN GENERAL.—Subject to advance appropria-
tions, the Secretary of Transportation may guarantee any
lender against loss of principal or interest on any aircraft
purchase loan made by that lender to a commuter air car-
rier or new entrant air carrier.
‘‘(b) FORM, TERMS, AND CONDITIONS.—A guarantee
shall be made under subsection (a)—
‘‘(1) in such form and on such terms and condi-
tions; and
‘‘(2) pursuant to such regulations;
as the Secretary considers to be necessary and consistent
with this subchapter.
‘‘(c) TREATMENT OF CERTAIN COMMUTER AIR CAR-
RIERS.—The Secretary shall treat all commuter air car-
riers that have cooperative agreements, including code
share agreements with other air carriers, equally for deter-
mining eligibility for guarantees under this section regard-
less of the form of the corporate relationship between the
commuter air carrier and the other air carrier.
‘‘§ 41764. Conditions and limitations
‘‘(a) LIMITATIONS ON FUNDS.—Subject to subsection
(d), no loan guarantee shall be made under this
subchapter—
‘‘(1) extending to more than the unpaid interest
and 80 percent of the unpaid principal of any loan;
‘‘(2) on any loan or combination of loans for
more than 80 percent of the purchase price of the
aircraft, including spare parts, to be purchased with
the loan or loan combination;
‘‘(3) on any loan with respect to which terms
permit repayment more than 15 years after the date
the loan is made;
‘‘(4) in any case in which the total face amount
of the loan and any other loans to the same air car-
rier or corporate predecessor of that air carrier that
are guaranteed and outstanding under the terms of
this subchapter exceed $100,000,000.
‘‘(b) CONDITIONS FOR MAKING LOANS.—Subject to
subsection (c), the Secretary of Transportation may only
make a loan guarantee under this subchapter if—
‘‘(1) the Secretary finds that the aircraft to be
purchased with the loan is a regional jet aircraft to
be used by the commuter air carrier or new entrant
air carrier;
‘‘(2) the commuter air carrier or new entrant
air carrier agrees to use the aircraft to provide at
least 2 round-trips per day 5 days per week to the
underserved airport; and
‘‘(3) the Secretary finds that the prospective
earning power of the commuter air carrier or new
entrant air carrier, together with the character and
value of the security pledged, furnish—
‘‘(A) reasonable assurances of the air car-
rier’s ability and intention to repay the loan
within the term of the loan—
‘‘(i) to continue its operations as an
air carrier; and
‘‘(ii) to the extent that the Secretary
determines to be necessary, to continue its
operations as an air carrier between the
same route or routes being operated by the
air carrier at the time of the loan guaran-
tee; and
‘‘(B) reasonable protection to the United
States.
‘‘(c) REQUIREMENT.—Subject to subsection (d), no
loan guarantee may be made under this subchapter on any
loan or combination of loans for the purchase of any re-
gional jet aircraft that does not comply with the stage 3
noise levels of part 36 of title 14 of the Code of Federal
Regulations, as in effect on January 1, 1999.
‘‘(d) OTHER LIMITATIONS.—
‘‘(1) ON
PURCHASE
OF
REGIONAL
JET
AIR-
CRAFT.—No loan guarantee shall be made by the
Secretary under this subchapter on any loan for the
purchase of a regional jet aircraft unless the com-
muter air carrier or new entrant air carrier agrees
that it will provide scheduled passenger air transpor-
tation to the underserved airport for which the air-
craft is purchased, or to another underserved air-
port, for a period of not less than 24 consecutive
months after the aircraft is placed in service.
‘‘(2) ON SUBORDINATION.—No loan guarantee
made under this subchapter may be subordinated to
another debt of the carrier or to any other claims
against the carrier.
‘‘(3) TO
PROTECT
INTERESTS
OF
UNITED
STATES.—No loan may be guaranteed under this
subchapter unless the Secretary determines that the
lender is responsible and that adequate provision is
made for servicing the loan on reasonable terms and
protecting the financial interests of the United
States.
‘‘§ 41765. Payment of losses
‘‘(a) IN GENERAL.—If, as a result of a default by
a carrier under a loan guaranteed under this subchapter
and after the holder of the loan has made such further
collection efforts as the Secretary of Transportation may
require, the Secretary determines that the holder has suf-
fered a loss, the Secretary shall pay the holder the amount
of the loss under the guarantee contract. Upon making
the payment, the Secretary shall be subrogated to all the
rights of the recipient of the payment.
‘‘(b) ENFORCEMENT OF UNITED STATES RIGHTS.—
The Attorney General shall take such action as may be
necessary to enforce any right accruing to the United
States as a result of the issuance of any guarantee under
this subchapter.
‘‘(c) LIMITATION ON STATUTORY CONSTRUCTION.—
Nothing in this subchapter shall be construed as preclud-
ing any forbearance for the carrier which may be agreed
upon by the parties to the guaranteed loan and approved
by the Secretary.
‘‘(d) AUTHORITY OF SECRETARY.—Notwithstanding
any other provision of law relating to the acquisition, han-
dling, or disposal of property by the United States, the
Secretary may complete, recondition, reconstruct, ren-
ovate, repair, maintain, operate, or sell any property ac-
quired under this subchapter.
‘‘§ 41766. Fees
‘‘The Secretary of Transportation shall prescribe and
collect from a lending institution a reasonable administra-
tive fee in connection with each loan guaranteed under this
subchapter.
‘‘§ 41767. Use of Federal facilities and assistance
‘‘(a) USE OF FEDERAL FACILITIES.—To permit the
Secretary of Transportation to make use of such expert
advice and services as the Secretary may require in carry-
ing out this subchapter, the Secretary may use available
services and facilities of other agencies and instrumental-
ities of the Federal Government—
‘‘(1) with the consent of the appropriate Fed-
eral officials; and
‘‘(2) on a reimbursable basis.
‘‘(b) ASSISTANCE.—The head of each appropriate de-
partment or agency of the Federal Government shall exer-
cise the duties and functions of that head in such manner
as to assist in carrying out the policy specified in section
41761.
‘‘(c) OVERSIGHT.—The Secretary shall make avail-
able to the Comptroller General of the United States such
information with respect to the loan guarantee program
conducted under this subchapter as the Comptroller Gen-
eral may require to carry out the duties of the Comptroller
General under chapter 7 of title 31.
‘‘§ 41768. Payments; administrative expenses
‘‘(a) PAYMENTS.—Payments to lenders required as a
consequence of any loan guarantee made under this sub-
chapter may be made from funds appropriated pursuant
to the authorization under section 202 of the Airline Serv-
ice Improvement Act of 1999.
‘‘(b) ADMINISTRATIVE EXPENSES.—In carrying out
this subchapter, the Secretary shall use funds made avail-
able by appropriations to the Department of Transpor-
tation for the purpose of administration to cover adminis-
trative expenses of the loan guarantee program under this
subchapter.
‘‘§ 41769. Termination
‘‘The authority of the Secretary of Transportation
under section 41763 shall terminate on the date that is
5 years after the date of the enactment of this sub-
chapter.’’.
(b) CONFORMING AMENDMENT.—The analysis for
chapter 417 of such title is amended by adding at the end
the following:
‘‘SUBCHAPTER III—REGIONAL AIR SERVICE INCENTIVE PROGRAM
‘‘41761. Purpose.
‘‘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.’’.
SEC. 202. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated for the cost
of loan guarantee commitments authorized in subchapter
III of chapter 417 of title 49, United States Code,
$120,000,000 per fiscal year for fiscal years 2000, 2001,
2002, 2003, and 2004.
TITLE III—CONTRACT TOWER
PROGRAM
SEC. 301. CONTRACT TOWERS.
Section 47124(b) of title 49, United States Code, is
amended by adding at the end the following:
‘‘(3) NONQUALIFYING
AIR
TRAFFIC
CONTROL
TOWERS.—
‘‘(A) IN
GENERAL.—The Secretary shall
establish a program to contract for air traffic
control services at not more than 20 level I air
traffic control towers, as defined by the Admin-
istrator of the Federal Aviation Administration,
that do not qualify for the program established
under subsection (a) and continued under para-
graph (1).
‘‘(B) PRIORITY.—In selecting facilities to
participate in the program under this para-
graph, the Administrator shall give priority to
the following:
‘‘(i) Air traffic control towers that are
participating in the program continued
under paragraph (1) but have been notified
that they will be terminated from such pro-
gram because the Administrator has deter-
mined that the benefit-to-cost ratio for
their continuation in such program is less
than 1.
‘‘(ii) Level I air traffic control towers
of the Federal Aviation Administration
that are closed as a result of the air traffic
controllers strike in 1981.
‘‘(iii) Air traffic control towers that
are located at airports that receive air
service from an air carrier that is receiving
compensation under the essential air serv-
ice program of subchapter II of chapter
417.
‘‘(iv) Air traffic control towers located
at airports that are prepared to assume re-
sponsibility for tower construction and
maintenance costs.
‘‘(v) Air traffic control towers that are
located at airports with safety or oper-
ational problems related to topography,
weather, runway configuration, or mix of
aircraft.
‘‘(C) COSTS
EXCEEDING
BENEFITS.—If
the costs of operating a control tower under the
program established under this paragraph ex-
ceed the benefits, the airport sponsor or State
or local government having jurisdiction over the
airport shall pay the portion of the costs that
exceed such benefits.
‘‘(D) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated
$6,000,000 per fiscal year to carry out this
paragraph.’’.
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