‘‘(2) if the scheduled arrival time of the alter-
nate transportation is not within 2 hours of the pas-
senger’s originally scheduled arrival time, a refund
or voucher for air transportation equal in value to
the amount paid by the passenger for the original
flight.
‘‘(f) FLIGHT SEGMENT DEFINED.—In this section,
the term ‘flight segment’ means a flight segment in air
transportation.
‘‘(g) FOREIGN AIR TRANSPORTATION.—Nothing in
this Act shall be construed to affect any treaty or other
provision of law regulating flight segments in foreign air
transportation.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for such title is amended by inserting after the item
relating to section 41715 the following:
‘‘41716. Air carrier passenger protection.’’.
SEC. 102. CIVIL PENALTIES.
Section 46301(a) of title 49, United States Code, is
amended—
(1) in paragraph (6) by inserting ‘‘MAXIMUM
PENALTY FOR VIOLATIONS RELATING TO AIR SERV-
ICE
TERMINATION
NOTICES.—’’ before ‘‘Notwith-
standing’’;
(2) by aligning paragraph (6) with paragraph
(5) of such section; and
(3) by adding at the end the following:
‘‘(7) MAXIMUM PENALTY FOR VIOLATIONS RE-
LATING
TO
PASSENGER
ACCESS
TO
NECESSARY
SERVICES AND CONDITIONS.—Notwithstanding para-
graph (1), the maximum civil penalty for violating
paragraph (1) or (2) of section 41716(a) shall be
$10,000 instead of $1,000.’’.
SEC. 103. PASSENGER RIGHTS PUBLICATION.
Not later than 180 days after the date of enactment
of this Act, the Secretary shall, by rule—
(1) issue a statement that outlines consumer
rights of air passengers, including each of the rights
specified in section 41716 of title 49, United States
Code, as added by section 2 of this Act; and
(2) requires an air carrier to provide the state-
ment to each passenger of the carrier, by conspicu-
ous written material included—
(A) on a safety placard given to the pas-
senger on board an aircraft;
(B) on information available to the pas-
senger at each ticket counter of the air carrier;
and
(C) on or with the passenger’s ticket.
TITLE II—AIR CARRIER
COMPETITION
SEC. 201. REDISTRIBUTION OF SLOTS BY AUCTION.
(a) IN GENERAL.—Subpart III of part A of subtitle
VII of title 49, United States Code, is amended by adding
at the end the following:
‘‘CHAPTER 455—SLOT AUCTIONS
‘‘Sec.
‘‘45501. General authority to create, withdraw, and auction slots.
‘‘45502. Auction.
‘‘45503. Special rules.
‘‘45504. Definitions.
‘‘§ 45501. General authority to create, withdraw, and
auction slots
‘‘(a) IN GENERAL.—The Secretary of Transportation
shall allocate slots at each slot-controlled airport for as-
signment to new entrant air carriers and limited incum-
bent carriers in accordance with this chapter.
‘‘(b) APPLICATION PROCESS—
‘‘(1) REQUEST FOR SLOTS.—An air carrier with
appropriate Federal Aviation Administration safety
certification and Department of Transportation eco-
nomic certification may submit a request to the Sec-
retary for slots at a high density airport. The appli-
cation shall include—
‘‘(A) the markets to be served;
‘‘(B) the times requested;
‘‘(C) information on the passenger demand
for the service to be provided; and
‘‘(D) such additional information as the
Secretary may require.
‘‘(2) ACTION ON REQUEST; FAILURE TO ACT.—
Within 45 days after a request under paragraph (1)
is received by the Secretary, the Secretary shall—
‘‘(A) approve the request for processing if
the Secretary believes that—
‘‘(i) the applicant can operate the
service for a period of not less than 180
days; and
‘‘(ii) the service will improve the com-
petitive environment; or
‘‘(B) return the request to the applicant
for further information.
If the Secretary neither approves the request under
subparagraph (A) nor returns the request under
subparagraph (B) within the 45-day period begin-
ning on the date it is received, then the request is
deemed to have been approved on the 45th day.
‘‘(c) ALLOCATION PROCESS.—
‘‘(1) IF SLOTS ARE AVAILABLE.—If an applica-
tion under subsection (b) is approved for processing,
the Secretary first shall allocate slots within 60 min-
utes of the requested times if—
‘‘(A) unused slots are available; or
‘‘(B) slots may be awarded through the ex-
emption process in accordance with the Federal
Aviation Administration’s air traffic priorities.
‘‘(2) IF SLOTS ARE UNAVAILABLE.—If an appli-
cation under subsection (b) is approved for process-
ing but the requested slots are not available for allo-
cation under paragraph (1), then the Secretary may
withdraw slots under subsection (d) for auction
under section 45502 or create new slots.
‘‘(d) WITHDRAWAL OF SLOTS FOR AUCTION.—
‘‘(1) WITHDRAWAL OF EXISTING SLOT ASSIGN-
MENTS.—The Secretary shall withdraw, from major
carriers at each airport—
‘‘(A) for the first auction under this sec-
tion, not more than 10 percent of the
auctionable slots assigned to such carriers at
that airport; and
‘‘(B) for any subsequent auction under this
section, not more than 5 percent of the
auctionable slots assigned to such carriers at
that airport.
‘‘(2) FREQUENCY.—Auctions under this section
shall not be held more frequently than 24 months
after the date of the preceding auction.
‘‘(3) AUCTIONABLE
SLOTS.—For purposes of
this subsection, an auctionable slot is—
‘‘(A) a slot assigned to an air carrier in
1985 that is still assigned to that air carrier, or
a slot received in even exchange with another
air carrier for a slot assigned to that air carrier
in 1985; and
‘‘(B) any slot other than a slot used by a
major carrier to provide direct service to an air-
port that is a small or medium hub airport.
‘‘(4) AUTHORITY
TO
WITHDRAW
SLOTS
FOR
USE
INCONSISTENT
WITH
OBJECTIVES.—The Sec-
retary may withdraw an auctionable slot from a
major air carrier at any time if the Secretary deter-
mines in writing that the slot is being used by the
carrier in a manner inconsistent with the objectives
set forth in section 45502(c). Any slot so withdrawn
may be reassigned by the Secretary at any subse-
quent auction under this section.
‘‘§ 45502. Auction
‘‘(a) GENERAL
AUTHORITY.—The Secretary of
Transportation shall assign a slot to a qualified applicant
through the use of a system of competitive bidding.
‘‘(b) USES TO WHICH BIDDING MAY APPLY.—A slot
may be assigned under this subsection if the Secretary de-
termines that the assignment of such slot will, or is rea-
sonably likely to, increase competition among air carriers
nationally, regionally, or in the markets affected by the
slot assignment in accordance with section 45501(b).
‘‘(c) DESIGN OF SYSTEMS OF COMPETITIVE BID-
DING.—In identifying slots to be withdrawn for auction
under section 45501(d)(1), in specifying eligibility and
other characteristics of such slots, and in designing the
methodologies for use under this subsection, the Secretary
shall include safeguards to protect the public interest in
the use of the slots and shall promote the following objec-
tives:
‘‘(1) Increasing competition in the provision of
air transportation in a way that benefits the public.
‘‘(2) Promoting economic opportunity and com-
petition and ensuring that air transportation at com-
petitive rates and levels of customer service is read-
ily accessible to the American people by avoiding ex-
cessive concentration of slots among major air car-
riers.
‘‘(3) Recovery for the public of a portion of the
value of the slots made available by competitive bid-
ding and the avoidance of unjust enrichment
through the methods employed to award slots.
‘‘(4) Efficient and intensive use of slots.
‘‘(d) BIDDER QUALIFICATION.—No air carrier (other
than a new entrant air carrier or a limited incumbent car-
rier) may participate in a system of competitive bidding
under this section. No license shall be granted to an appli-
cant selected pursuant to this section unless the Secretary
determines that the applicant is qualified to utilize the slot
or slots to be so assigned.
‘‘(e) RULES OF CONSTRUCTION.—Nothing in this
section, or in the use of competitive bidding, shall—
‘‘(1) alter slots allocation criteria and proce-
dures established by the other provisions of this sub-
title;
‘‘(2) diminish the authority of the Secretary
under the other provisions of this subtitle to regulate
or reclaim slots;
‘‘(3) be construed to convey any rights, includ-
ing any expectation of renewal of a slot assignment,
that differ from the rights that apply to other slots
at the same airport that were not issued pursuant
to this section; or
‘‘(4) be construed to prohibit the Secretary
from issuing additional slots.
‘‘(f) CONSIDERATION OF REVENUES IN PUBLIC IN-
TEREST DETERMINATIONS.—
‘‘(1) CONSIDERATION PROHIBITED.—In making
a decision to assign slots pursuant to this section,
and in prescribing regulations pursuant to this sec-
tion, the Secretary may not base a finding of public
interest, convenience, and necessity on the expecta-
tion of Federal revenues from the use of a system
of competitive bidding under this section.
‘‘(2) CONSIDERATION LIMITED.—In prescribing
regulations pursuant to this section, the Secretary
may not base a finding of public interest, conven-
ience, and necessity solely or predominantly on the
expectation of Federal revenues from the use of a
system of competitive bidding under this section.
‘‘(3) 
CONSIDERATION
OF
DEMAND
FOR
SLOTS.—Nothing in this subsection shall be con-
strued to prevent the Secretary from considering
consumer demand for slots-based services.
‘‘(g) TREATMENT OF REVENUES.—
‘‘(1) GENERAL RULE.—Except as provided in
paragraph (2), all proceeds from the use of a com-
petitive bidding system under this subsection shall
be deposited in the Airport and Airway Trust Fund
established under section 9502 of the Internal Reve-
nue Code of 1986.
‘‘(2) DEPOSIT AND USE OF AUCTION ESCROW
ACCOUNTS.—Any deposits the Secretary may require
for the qualification of any person to bid in a system
of competitive bidding pursuant to this subsection
shall be deposited in an interest bearing account at
a financial institution designated for purposes of this
subsection by the Secretary (after consultation with
the Secretary of the Treasury). Within 45 days fol-
lowing the conclusion of the competitive bidding—
‘‘(A) the deposits of successful bidders
shall be paid to the Treasury;
‘‘(B) the deposits of unsuccessful bidders
shall be returned to such bidders; and
‘‘(C) the interest accrued to the account
shall be returned to each successful and unsuc-
cessful bidder in the ratio that the amount de-
posited by the bidder bears to the total amount
deposited by all bidders, except that before re-
turning such amounts the Secretary shall de-
duct a sum equal to the administrative expenses
incurred by the Secretary in conducting the
auction and shall transfer such sum to the Air-
port and Airway Trust Fund.
‘‘(h) EVALUATION.—Not later than 180 days after
the initiation of competitive bidding under this section, the
Secretary shall conduct a public inquiry and submit to the
Congress a report—
‘‘(1) containing a statement of the revenues ob-
tained, and a projection of the future revenues, from
the use of competitive bidding systems under this
section;
‘‘(2) describing the methodologies established
by the Secretary pursuant to subsections (c) and
(d);
‘‘(3) comparing the relative advantages and dis-
advantages of such methodologies in terms of attain-
ing the objectives described in such subsections; and
‘‘(4) recommending any statutory changes that
are needed to improve the competitive bidding proc-
ess.
‘‘§ 45503. Special rules
‘‘(a) RESALE
OR
REVERSION
OF
PURCHASED
SLOTS.—
‘‘(1) RESALE.—A slot assigned by competitive
bidding under section 45502 may be—
‘‘(A) sold by the air carrier to which it was
assigned only to a new entrant air carrier or
limited incumbent carrier within 24 months of
the slot acquisition; or
‘‘(B) leased to any new entrant air carrier
or limited incumbent carrier.
‘‘(2) REVERSION.—A slot assigned by competi-
tive bidding under section 45502 that is lost by the
air carrier to which it was assigned under section
93.227 of title 14 of the Code of Federal Regula-
tions shall be returned to the Federal Aviation Ad-
ministration.
‘‘(b) OTHER EXISTING SLOTS.—
‘‘(1) EXPIRATION.—Any slot not withdrawn for
assignment under this chapter shall continue in ef-
fect until the earlier of—
‘‘(A) the date on which it is subsequently
withdrawn for such assignment; or
‘‘(B) the date on which it expires or is
withdrawn according to the terms of its assign-
ment.
‘‘(2) FUTURE
REVENUES.—Any amount paid
for assignment or use of an expired slot shall be
treated in accordance with the provisions of section
45502(h) as if received under that section.
‘‘§ 45504. Definitions
‘‘In this chapter, the following definitions apply:
‘‘(1) HIGH DENSITY AIRPORT.—The term ‘high
density airport’ has the meaning given it by section
41714(h)(2).
‘‘(2) NEW ENTRANT AIR CARRIER; LIMITED IN-
CUMBENT
CARRIER.—The terms ‘new entrant air
carrier’ and ‘limited incumbent carrier’ have the
meaning given such terms by section 93.213 of title
14, Code of Federal Regulations, except that the
term does not include an air carrier at a high den-
sity airport that has a substantial marketing ar-
rangement, as determined by the Secretary, with an-
other air carrier holding more than 10 percent of the
slots at the airport or an air carrier that is owned
or controlled, in whole or in part, by such a carrier.
‘‘(3) MAJOR CARRIER.—The term ‘major car-
rier’ means an air carrier to which part 121 of such
title applies.
‘‘(4) MEDIUM HUB AIRPORT.—The term ‘me-
dium hub airport’ means an airport that each year
has at least 0.25 percent, but less than 1.00 percent,
of the total annual boardings in the United States.
‘‘(5) SLOT.—The term ‘slot’ has the meaning
given that term by section 41714(h)(4).
‘‘(6) SMALL HUB AIRPORT.—The term ‘small
hub airport’ has the meaning given that term by sec-
tion 41731(a)(5).’’.
(b) CLERICAL AMENDMENT.—The analysis for such
subtitle is amended by inserting after the item relating
to chapter 453 the following:
‘‘455. SLOT AUCTIONS ......................................................................... 45501’’.
SEC. 202. PENALTIES FOR UNFAIR METHODS OF COMPETI-
TION.
Section 46301(a) of title 49, United States Code, as
amended by section 102 of this Act, is amended by adding
at the end the following:
‘‘(8) MAXIMUM PENALTY FOR ENGAGING IN UN-
FAIR METHODS OF COMPETITION.—Notwithstanding
section 46301(a)(1), the maximum civil penalty for
violating section 41712 by engaging, with respect to
air transportation on any route, in an unfair method
of competition, as defined by regulation issued under
Docket Number OST–98–3713 or any other regula-
tion issued by the Department of Transportation,
shall be $10,000.’’.
SEC. 203. DISCLOSURE OF ROUTE COMPETITION AND CON-
SUMER VALUE INFORMATION.
(a) REPORTS RANKING AIR CARRIER ROUTES BY AV-
ERAGE COST TO PASSENGERS.—
(1) IN GENERAL.—The Secretary shall submit
to Congress, and make available to the public, a
quarterly report containing a ranking of the 10 do-
mestic routes with the highest average cost to the
passenger and the 10 domestic routes with the low-
est average cost to the passenger. The report shall
identify the airlines that operate on each of those
routes.
(2) REQUIREMENTS.—In developing reports
under this subsection, the Secretary shall consider
such factors and criteria as the Secretary considers
appropriate.
(b) REPORTS RANKING LARGE HUB AIRPORTS BY
MARKET CONCENTRATION.—The Secretary shall submit
to Congress, and make available to the public, a quarterly
report ranking the large hub airports by market con-
centration using the measure known as the Herfindahl-
Hirschmann Index and identifying the market share of
each airline operating at each of those airports.
(c) DEADLINE.—The Secretary shall begin submit-
ting reports under this section not later than 180 days
after the date of enactment of this Act.
SEC. 204. FACILITIES ACCESS.
(a) STUDY.—The Secretary of Transportation shall
conduct a study on the ability of and proposals for new
entrant carriers, and carriers with less than 5 percent of
the departures at a major hub airport, to obtain perma-
nent gates and other facilities at the airport on terms sub-
stantially equivalent to the terms provided to incumbent
carriers at the airport.
(b) REPORT.—Not later than 1 year after the date
of enactment of this Act, the Secretary shall transmit to
Congress a report containing the results of the study con-
ducted under subsection (a), including an assessment of
any impact of proposals referred to in subsection (a) on
State and local units of government.
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