H. R. 2926
One Hundred Seventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, two thousand and one
An Act
To preserve the continued viability of the United States air transportation system.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Air Transportation Safety and
System Stabilization Act’’.
TITLE I—AIRLINE STABILIZATION
SEC. 101. AVIATION DISASTER RELIEF.
(a) IN GENERAL.—Notwithstanding any other provision of law,
the President shall take the following actions to compensate air
carriers for losses incurred by the air carriers as a result of the
terrorist attacks on the United States that occurred on September
11, 2001:
(1) Subject to such terms and conditions as the President
deems necessary, issue Federal credit instruments to air car-
riers that do not, in the aggregate, exceed $10,000,000,000
and 
provide 
the 
subsidy 
amounts 
necessary 
for 
such
instruments in accordance with the provisions of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
(2) Compensate air carriers in an aggregate amount equal
to $5,000,000,000 for—
(A) direct losses incurred beginning on September 11,
2001, by air carriers as a result of any Federal ground
stop order issued by the Secretary of Transportation or
any subsequent order which continues or renews such a
stoppage; and
(B) the incremental losses incurred beginning Sep-
tember 11, 2001, and ending December 31, 2001, by air
carriers as a direct result of such attacks.
(b) 
EMERGENCY
DESIGNATION.—Congress 
designates 
the
amount of new budget authority and outlays in all fiscal years
resulting from this title as an emergency requirement pursuant
to section 252(e) of the Balanced Budget and Emergency Deficit
Control Act of 1985 (2 U.S.C. 901(e)). Such amount shall be avail-
able only to the extent that a request, that includes designation
of such amount as an emergency requirement as defined in such
Act, is transmitted by the President to Congress.
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SEC. 102. AIR TRANSPORTATION STABILIZATION BOARD.
(a) DEFINITIONS.—In this section, the following definitions
apply:
(1) BOARD.—The term ‘‘Board’’ means the Air Transpor-
tation Stabilization Board established under subsection (b).
(2) FINANCIAL OBLIGATION.—The term ‘‘financial obligation’’
means any note, bond, debenture, or other debt obligation
issued by an obligor in connection with financing under this
section and section 101(a)(1).
(3) LENDER.—The term ‘‘lender’’ means any non-Federal
qualified institutional buyer (as defined by section 230.144A(a)
of title 17, Code of Federal Regulations (or any successor regula-
tion) known as Rule 144A(a) of the Securities and Exchange
Commission and issued under the Security Act of 1933,
including—
(A) a qualified retirement plan (as defined in section
4974(c) of the Internal Revenue Code of 1986 (26 U.S.C.
4974(c)) that is a qualified institutional buyer; and
(B) a governmental plan (as defined in section 414(d)
of the Internal Revenue Code of 1986 (26 U.S.C. 414(d))
that is a qualified institutional buyer.
(4) OBLIGOR.—The term ‘‘obligor’’ means a party primarily
liable for payment of the principal of or interest on a Federal
credit instrument, which party may be a corporation, partner-
ship, joint venture, trust, or governmental entity, agency, or
instrumentality.
(b) AIR TRANSPORTATION STABILIZATION BOARD.—
(1) ESTABLISHMENT.—There is established a board (to be
known as the ‘‘Air Transportation Stabilization Board’’) to
review 
and 
decide 
on 
applications 
for 
Federal 
credit
instruments under section 101(a)(1).
(2) COMPOSITION.—The Board shall consist of—
(A) the Secretary of Transportation or the designee
of the Secretary;
(B) the Chairman of the Board of Governors of the
Federal Reserve System, or the designee of the Chairman,
who shall be the Chair of the Board;
(C) the Secretary of the Treasury or the designee of
the Secretary; and
(D) the Comptroller General of the United States, or
the designee of the Comptroller General, as a nonvoting
member of the Board.
(c) FEDERAL CREDIT INSTRUMENTS.—
(1) IN GENERAL.—The Board may enter into agreements
with 1 or more obligors to issue Federal credit instruments
under section 101(a)(1) if the Board determines, in its discre-
tion, that—
(A) the obligor is an air carrier for which credit is
not reasonably available at the time of the transaction;
(B) the intended obligation by the obligor is prudently
incurred; and
(C) such agreement is a necessary part of maintaining
a safe, efficient, and viable commercial aviation system
in the United States.
(2) TERMS AND LIMITATIONS.—
(A) FORMS; TERMS AND CONDITIONS.—A Federal credit
instrument shall be issued under section 101(a)(1) in such
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(B) flights involving cargo-only transportation, the
product of—
(i) $500,000,000; and
(ii) the ratio of—
(I) the revenue ton miles or other auditable
measure of the air carrier for cargo for the latest
quarter for which data is available as reported
to the Secretary; to
(II) the total revenue ton miles or other
auditable measure of all such air carriers for cargo
for such quarter as reported to the Secretary.
(c) PAYMENTS.—The President may provide compensation to
air carriers under section 101(a)(2) in 1 or more payments up
to the amount authorized by this title.
SEC. 104. LIMITATION ON CERTAIN EMPLOYEE COMPENSATION.
(a) IN GENERAL.—The President may only issue a Federal credit
instrument under section 101(a)(1) to an air carrier after the air
carrier enters into a legally binding agreement with the President
that, during the 2-year period beginning September 11, 2001, and
ending September 11, 2003, no officer or employee of the air carrier
whose total compensation exceeded $300,000 in calendar year 2000
(other than an employee whose compensation is determined through
an existing collective bargaining agreement entered into prior to
September 11, 2001)—
(1) will receive from the air carrier total compensation
which exceeds, during any 12 consecutive months of such 2-
year period, the total compensation received by the officer or
employee from the air carrier in calendar year 2000; and
(2) will receive from the air carrier severance pay or other
benefits upon termination of employment with the air carrier
which exceeds twice the maximum total compensation received
by the officer or employee from the air carrier in calendar
year 2000.
(b) TOTAL COMPENSATION DEFINED.—In this section, the term
‘‘total compensation’’ includes salary, bonuses, awards of stock, and
other financial benefits provided by an air carrier to an officer
or employee of the air carrier.
SEC. 105. CONTINUATION OF CERTAIN AIR SERVICE.
(a) ACTION OF SECRETARY.—The Secretary of Transportation
should take appropriate action to ensure that all communities that
had scheduled air service before September 11, 2001, continue
to receive adequate air transportation service and that essential
air service to small communities continues without interruption.
(b) ESSENTIAL AIR SERVICE.—There is authorized to be appro-
priated to the Secretary to carry out the essential air service pro-
gram under subchapter II of chapter 417 of title 49, United States
Code, $120,000,000 for fiscal year 2002.
(c) SECRETARIAL OVERSIGHT.—
(1) IN GENERAL.—Notwithstanding any other provision of
law, the Secretary is authorized to require an air carrier
receiving direct financial assistance under this Act to maintain
scheduled air service to any point served by that carrier before
September 11, 2001.
(2) AGREEMENTS.—In applying paragraph (1), the Secretary
may require air carriers receiving direct financial assistance
under this Act to enter into agreements which will ensure,
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to the maximum extent practicable, that all communities that
had scheduled air service before September 11, 2001, continue
to receive adequate air transportation service.
SEC. 106. REPORTS.
(a) REPORT.—Not later than February 1, 2001, the President
shall transmit to the Committee on Transportation and Infrastruc-
ture, the Committee on Appropriations, and the Committee on
the Budget of the House of Representatives and the Committee
on Commerce, Science, and Transportation, the Committee on
Appropriations, and the Committee on the Budget of the Senate
a report on the financial status of the air carrier industry and
the amounts of assistance provided under this title to each air
carrier.
(b) UPDATE.—Not later than the last day of the 7-month period
following the date of enactment of this Act, the President shall
update and transmit the report to the Committees.
SEC. 107. DEFINITIONS.
In this title, the following definitions apply:
(1) AIR CARRIER.—The term ‘‘air carrier’’ has the meaning
such term has under section 40102 of title 49, United States
Code.
(2) FEDERAL
CREDIT
INSTRUMENT.—The term ‘‘Federal
credit instrument’’ means any guarantee or other pledge by
the Board issued under section 101(a)(1) to pledge the full
faith and credit of the United States to pay all or part of
any of the principal of and interest on a loan or other debt
obligation issued by an obligor and funded by a lender.
(3) INCREMENTAL LOSS.—The term ‘‘incremental loss’’ does
not include any loss that the President determines would have
been incurred if the terrorist attacks on the United States
that occurred on September 11, 2001, had not occurred.
TITLE II—AVIATION INSURANCE
SEC. 201. DOMESTIC INSURANCE AND REIMBURSEMENT OF INSUR-
ANCE COSTS.
(a) IN GENERAL.—Section 44302 of title 49, United States Code,
is amended—
(1) in subsection (a)(1)—
(A) by striking ‘‘subsection (b)’’ and inserting ‘‘sub-
section (c)’’; and
(B) by striking ‘‘foreign-flag aircraft—’’ and all that
follows through the period at the end of subparagraph
(B) and inserting ‘‘foreign-flag aircraft.’’;
(2) by redesignating subsections (b), (c), and (d) as sub-
sections (c), (d), and (e), respectively;
(3) by inserting after subsection (a) the following:
‘‘(b) REIMBURSEMENT OF INSURANCE COST INCREASES.—
‘‘(1) IN GENERAL.—The Secretary may reimburse an air
carrier for the increase in the cost of insurance, with respect
to a premium for coverage ending before October 1, 2002,
against loss or damage arising out of any risk from the oper-
ation of an American aircraft over the insurance premium
that was in effect for a comparable operation during the period
beginning September 4, 2001, and ending September 10, 2001,
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as the Secretary may determine. Such reimbursement is subject
to subsections (a)(2), (c), and (d) of this section and to section
44303.
‘‘(2) PAYMENT FROM REVOLVING FUND.—A reimbursement
under this subsection shall be paid from the revolving fund
established by section 44307.
‘‘(3) FURTHER
CONDITIONS.—The Secretary may impose
such further conditions on insurance for which the increase
in premium is subject to reimbursement under this subsection
as the Secretary may deem appropriate in the interest of air
commerce.
‘‘(4) 
TERMINATION
OF
AUTHORITY.—The 
authority 
to
reimburse air carriers under this subsection shall expire 180
days after the date of enactment of this paragraph.’’;
(4) in subsection (c) (as so redesignated)—
(A) in the first sentence by inserting ‘‘, or reimburse
an air carrier under subsection (b) of this section,’’ before
‘‘only with the approval’’; and
(B) in the second sentence—
(i) by inserting ‘‘or the reimbursement’’ before ‘‘only
after deciding’’; and
(ii) by inserting ‘‘in the interest of air commerce
or national security or’’ before ‘‘to carry out the foreign
policy’’; and
(5) in subsection (d) (as so redesignated) by inserting ‘‘or
reimbursing an air carrier’’ before ‘‘under this chapter’’.
(b) COVERAGE.—
(1) IN GENERAL.—Section 44303 of such title is amended—
(A) in the matter preceding paragraph (1) by inserting
‘‘, or reimburse insurance costs, as’’ after ‘‘insurance and
reinsurance’’; and
(B) in paragraph (1) by inserting ‘‘in the interest of
air commerce or national security or’’ before ‘‘to carry out
the foreign policy’’.
(2) DISCRETION OF THE SECRETARY.—For acts of terrorism
committed on or to an air carrier during the 180-day period
following the date of enactment of this Act, the Secretary of
Transportation may certify that the air carrier was a victim
of an act of terrorism and in the Secretary’s judgment, based
on the Secretary’s analysis and conclusions regarding the facts
and circumstances of each case, shall not be responsible for
losses suffered by third parties (as referred to in section
205.5(b)(1) of title 14, Code of Federal Regulations) that exceed
$100,000,000, in the aggregate, for all claims by such parties
arising out of such act. If the Secretary so certifies, the air
carrier shall not be liable for an amount that exceeds
$100,000,000, in the aggregate, for all claims by such parties
arising out of such act, and the Government shall be responsible
for any liability above such amount. No punitive damages may
be awarded against an air carrier (or the Government taking
responsibility for an air carrier under this paragraph) under
a cause of action arising out of such act.
(c) REINSURANCE.—Section 44304 of such title is amended—
(1) by striking ‘‘(a) GENERAL AUTHORITY.—’’; and
(2) by striking subsection (b).
(d) PREMIUMS.—Section 44306 of such title is amended—
H. R. 2926—7
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
‘‘(b) ALLOWANCES IN SETTING PREMIUM RATES FOR REINSUR-
ANCE.—In setting premium rates for reinsurance, the Secretary
may make allowances to the insurance carrier for expenses incurred
in providing services and facilities that the Secretary considers
good business practices, except for payments by the air carrier
for the stimulation or solicitation of insurance business.’’.
(e) CONFORMING AMENDMENT.—Section 44305(b) of such title
is amended by striking ‘‘44302(b)’’ and inserting ‘‘44302(c)’’.
SEC. 202. EXTENSION OF PROVISIONS TO VENDORS, AGENTS, AND SUB-
CONTRACTORS OF AIR CARRIERS.
Notwithstanding any other provision of this title, the Secretary
may extend any provision of chapter 443 of title 49, United States
Code, as amended by this title, and the provisions of this title,
to vendors, agents, and subcontractors of air carriers. For the 180-
day period beginning on the date of enactment of this Act, the
Secretary may extend or amend any such provisions so as to ensure
that the entities referred to in the preceding sentence are not
responsible in cases of acts of terrorism for losses suffered by
third parties that exceed the amount of such entities’ liability
coverage, as determined by the Secretary.
TITLE III—TAX PROVISIONS
SEC. 301. EXTENSION OF DUE DATE FOR EXCISE TAX DEPOSITS; TREAT-
MENT OF LOSS COMPENSATION.
(a) EXTENSION OF DUE DATE FOR EXCISE TAX DEPOSITS.—
(1) IN GENERAL.—In the case of an eligible air carrier,
any airline-related deposit required under section 6302 of the
Internal Revenue Code of 1986 to be made after September
10, 2001, and before November 15, 2001, shall be treated for
purposes of such Code as timely made if such deposit is made
on or before November 15, 2001. If the Secretary of the Treasury
so prescribes, the preceding sentence shall be applied by sub-
stituting for ‘‘November 15, 2001’’ each place it appears—
(A) ‘‘January 15, 2002’’; or
(B) such earlier date after November 15, 2001, as such
Secretary may prescribe.
(2) ELIGIBLE AIR CARRIER.—For purposes of this subsection,
the term ‘‘eligible air carrier’’ means any domestic corporation
engaged in the trade or business of transporting (for hire)
persons by air if such transportation is available to the general
public.
(3) AIRLINE-RELATED DEPOSIT.—For purposes of this sub-
section, the term ‘‘airline-related deposit’’ means any deposit
of—
(A) taxes imposed by subchapter C of chapter 33 of
such Code (relating to transportation by air); and
(B) taxes imposed by chapters 21, 22, and 24 with
respect to employees engaged in a trade or business
referred to in paragraph (2).
(b) TREATMENT OF LOSS COMPENSATION.—Nothing in any provi-
sion of law shall be construed to exclude from gross income under
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made by this Act) and the application thereof to other persons
or circumstances shall not be affected thereby.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.