I
107TH CONGRESS
1ST SESSION
H. R. 2926
To preserve the continued viability of the United States air transportation
system.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 21, 2001
Mr. YOUNG of Alaska introduced the following bill; which was referred to the
Committee on Transportation and Infrastructure, and in addition to the
Committees on Ways and Means, the Judiciary, and the Budget, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
SEPTEMBER 21, 2001
The Committees on Transportation and Infrastructure, Ways and Means, the
Judiciary, and the Budget discharged; considered and passed
A BILL
To preserve the continued viability of the United States
air transportation system.
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 ‘‘Air Transportation
Safety and System Stabilization Act’’.
TITLE I—AIRLINE
STABILIZATION
SEC. 101. AVIATION DISASTER RELIEF.
(a) IN GENERAL.—Notwithstanding any other provi-
sion 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 in-
struments to air carriers that do not, in the aggre-
gate, exceed $10,000,000,000 and provide the sub-
sidy amounts necessary for such instruments in ac-
cordance 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 stop-
page; and
(B) the incremental losses incurred begin-
ning September 11, 2001, and ending Decem-
ber 31, 2001, by air carriers as a direct result
of such attacks.
(b) 
EMERGENCY
DESIGNATION.—Congress 
des-
ignates 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 available 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.
SEC. 102. AIR TRANSPORTATION STABILIZATION BOARD.
(a) DEFINITIONS.—In this section, the following defi-
nitions apply:
(1) BOARD.—The term ‘‘Board’’ means the Air
Transportation 
Stabilization 
Board 
established
under subsection (b).
(2) FINANCIAL OBLIGATION.—The term ‘‘finan-
cial obligation’’ means any note, bond, debenture, or
other debt obligation issued by an obligor in connec-
tion 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 regulation) known as
Rule 144A(a) of the Securities and Exchange Com-
mission 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 in-
stitutional 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, partnership, joint ven-
ture, trust, or governmental entity, agency, or in-
strumentality.
(b) AIR TRANSPORTATION STABILIZATION BOARD.—
(1) ESTABLISHMENT.—There is established a
board (to be known as the ‘‘Air Transportation Sta-
bilization Board’’) to review and decide on applica-
tions 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 Gov-
ernors 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 Gen-
eral, 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 discretion, 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 com-
mercial 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 form and on such
terms and conditions and contain such cov-
enants, representatives, warranties, and require-
ments (including requirements for audits) as
the Board determines appropriate.
(B) PROCEDURES.—Not later than 14
days after the date of enactment of this Act,
the Director of the Office of Management and
Budget shall issue regulations setting forth pro-
cedures for application and minimum require-
ments, which may be supplemented by the
Board in its discretion, for the issuance of Fed-
eral credit instruments under section 101(a)(1).
(d) FINANCIAL PROTECTION OF GOVERNMENT.—
(1) IN GENERAL.—To the extent feasible and
practicable, the Board shall ensure that the Govern-
ment is compensated for the risk assumed in making
guarantees under this title.
(2) GOVERNMENT PARTICIPATION IN GAINS.—
To the extent to which any participating corporation
accepts financial assistance, in the form of accepting
the proceeds of any loans guaranteed by the Govern-
ment under this title, the Board is authorized to
enter into contracts under which the Government,
contingent on the financial success of the partici-
pating corporation, would participate in the gains of
the participating corporation or its security holders
through the use of such instruments as warrants,
stock options, common or preferred stock, or other
appropriate equity instruments.
(3) DEPOSIT IN TREASURY.—All amounts col-
lected by the Secretary of the Treasury under this
subsection shall be deposited in the Treasury as mis-
cellaneous receipts.
SEC. 103. SPECIAL RULES FOR COMPENSATION.
(a) DOCUMENTATION.—Subject to subsection (b), the
amount of compensation payable to an air carrier under
section 101(a)(2) may not exceed the amount of losses de-
scribed in section 101(a)(2) that the air carrier dem-
onstrates to the satisfaction of the President, using sworn
financial statements or other appropriate data, that the
air carrier incurred. The Secretary of Transportation and
the Comptroller General of the United States may audit
such statements and may request any information that the
Secretary and the Comptroller General deems necessary
to conduct such audit.
(b) MAXIMUM AMOUNT OF COMPENSATION PAYABLE
PER AIR CARRIER.—The maximum total amount of com-
pensation payable to an air carrier under section
101(a)(2) may not exceed the lesser of—
(1) the amount of such air carrier’s direct and
incremental losses described in section 101(a)(2); or
(2) in the case of—
(A) flights involving passenger-only or
combined passenger and cargo transportation,
the product of—
(i) $4,500,000,000; and
(ii) the ratio of—
(I) the available seat miles of the
air carrier for the month of August
2001 as reported to the Secretary; to
(II) the total available seat miles
of all such air carriers for such month
as reported to the Secretary; and
(B) flights involving cargo-only transpor-
tation, 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 com-
pensation 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 COMPENSA-
TION.
(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 pe-
riod beginning September 11, 2001, and ending Sep-
tember 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 com-
pensation which exceeds, during any 12 consecutive
months of such 2-year period, the total compensa-
tion 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 employ-
ment 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 sec-
tion, the term ‘‘total compensation’’ includes salary, bo-
nuses, awards of stock, and other financial benefits pro-
vided 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 appropriated to the Secretary to carry out the essen-
tial air service program under subchapter II of chapter
417 of title 49, United States Code, $120,000,000 for fis-
cal year 2002.
(c) SECRETARIAL OVERSIGHT.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, the Secretary is authorized to re-
quire an air carrier receiving direct financial assist-
ance under this Act to maintain scheduled air serv-
ice to any point served by that carrier before Sep-
tember 11, 2001.
(2) AGREEMENTS.—In applying paragraph (1),
the Secretary may require air carriers receiving di-
rect financial assistance under this Act to enter into
agreements which will ensure, to the maximum ex-
tent practicable, that all communities that had
scheduled air service before September 11, 2001,
continue to receive adequate air transportation serv-
ice.
SEC. 106. REPORTS.
(a) REPORT.—Not later than February 1, 2001, the
President shall transmit to the Committee on Transpor-
tation and Infrastructure, the Committee on Appropria-
tions, and the Committee on the Budget of the House of
Representatives and the Committee on Commerce,
Science, and Transportation, the Committee on Appro-
priations, 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 prin-
cipal of and interest on a loan or other debt obliga-
tion issued by an obligor and funded by a lender.
(3) INCREMENTAL
LOSS.—The term ‘‘incre-
mental loss’’ does not include any loss that the
President determines would have been incurred if
the terrorist attacks on the United States that oc-
curred on September 11, 2001, had not occurred.
TITLE II—AVIATION INSURANCE
SEC. 201. DOMESTIC INSURANCE AND REIMBURSEMENT OF
INSURANCE 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 in-
serting ‘‘subsection (c)’’; and
(B) by striking ‘‘foreign-flag aircraft—’’
and all that follows through the period at the
end of subparagraph (B) and inserting ‘‘for-
eign-flag aircraft.’’;
(2) by redesignating subsections (b), (c), and
(d) as subsections (c), (d), and (e), respectively;
(3) by inserting after subsection (a) the fol-
lowing:
‘‘(b) REIMBURSEMENT
OF INSURANCE COST IN-
CREASES.—
‘‘(1) IN GENERAL.—The Secretary may reim-
burse 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 dam-
age arising out of any risk from the operation 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, as the Secretary may deter-
mine. Such reimbursement is subject to subsections
(a)(2), (c), and (d) of this section and to section
44303.
‘‘(2) PAYMENT FROM REVOLVING FUND.—A re-
imbursement 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 reim-
bursement under this subsection as the Secretary
may deem appropriate in the interest of air com-
merce.
‘‘(4) TERMINATION OF AUTHORITY.—The au-
thority to reimburse air carriers under this sub-
section shall expire 180 days after the date of enact-
ment 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 reimburse-
ment’’ 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 in-
serting ‘‘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 en-
actment 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 re-
garding 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 aggre-
gate, 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 car-
rier 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—
(1) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively; and
(2) by inserting after subsection (a) the fol-
lowing:
‘‘(b) ALLOWANCES IN SETTING PREMIUM RATES FOR
REINSURANCE.—In setting premium rates for reinsur-
ance, the Secretary may make allowances to the insurance
carrier for expenses incurred in providing services and fa-
cilities that the Secretary considers good business prac-
tices, except for payments by the air carrier for the stimu-
lation or solicitation of insurance business.’’.
(e) CONFORMING AMENDMENT.—Section 44305(b)
of such title is amended by striking ‘‘44302(b)’’ and in-
serting ‘‘44302(c)’’.
SEC. 
202. 
EXTENSION 
OF 
PROVISIONS 
TO 
VENDORS,
AGENTS, AND SUBCONTRACTORS 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 subcontrac-
tors of air carriers. For the 180-day period beginning on
the date of enactment of this Act, the Secretary may ex-
tend 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.