To amend title 49, United States Code, to make certain conforming changes to provisions governing the registration of aircraft and the recordation of instruments in order to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, known as the "Cape Town Treaty".

SECTION 1. SHORT TITLE.

    This Act may be cited as ``Cape Town Treaty Implementation Act of 
2004''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
        (1) The Cape Town Treaty (as defined in section 44113 of title 
    49, United States Code) extends modern commercial laws for the 
    sale, finance, and lease of aircraft and aircraft engines to the 
    international arena in a manner consistent with United States law 
    and practice.
        (2) The Cape Town Treaty provides for internationally 
    established and recognized financing and leasing rights that will 
    provide greater security and commercial predictability in 
    connection with the financing and leasing of highly mobile assets, 
    such as aircraft and aircraft engines.
        (3) The legal and financing framework of the Cape Town Treaty 
    will provide substantial economic benefits to the aviation and 
    aerospace sectors, including the promotion of exports, and will 
    facilitate the acquisition of newer, safer aircraft around the 
    world.
        (4) Only technical changes to United States law and regulations 
    are required since the asset-based financing and leasing concepts 
    embodied in the Cape Town Treaty are already reflected in the 
    United States in the Uniform Commercial Code.
        (5) The new electronic registry system established under the 
    Cape Town Treaty will work in tandem with current aircraft document 
    recordation systems of the Federal Aviation Administration, which 
    have served United States industry well.
        (6) The United States Government was a leader in the 
    development of the Cape Town Treaty.
    (b) Purpose.--Accordingly, the purpose of this Act is to provide 
for the implementation of the Cape Town Treaty in the United States by 
making certain technical amendments to the provisions of chapter 441 of 
title 49, United States Code, directing the Federal Aviation 
Administration to complete the necessary rulemaking processes as 
expeditiously as possible, and clarifying the applicability of the 
Treaty during the rulemaking process.

SEC. 3. RECORDATION OF SECURITY INSTRUMENTS.

    (a) Establishment of System.--Section 44107(a) of title 49, United 
States Code, is amended--
        (1) in paragraph (2)(A) by striking ``750'' and inserting 
    ``550''; and
        (2) in paragraph (3) by striking ``clause (1) or (2) of this 
    subsection'' and inserting ``paragraph (1) or (2)''.
    (b) International Registry.--Section 44107 of such title is amended 
by adding at the end the following:
    ``(e) International Registry.--
        ``(1) Designation of united states entry point.--As permitted 
    under the Cape Town Treaty, the Federal Aviation Administration 
    Civil Aviation Registry is designated as the United States Entry 
    Point to the International Registry relating to--
            ``(A) civil aircraft of the United States;
            ``(B) an aircraft for which a United States identification 
        number has been assigned but only with regard to a notice filed 
        under paragraph (2); and
            ``(C) aircraft engines.
        ``(2) System for filing notice of prospective interests.--
            ``(A) Establishment.--The Administrator shall establish a 
        system for filing notices of prospective assignments and 
        prospective international interests in, and prospective sales 
        of, aircraft or aircraft engines described in paragraph (1) 
        under the Cape Town Treaty.
            ``(B) Maintenance of validity.--A filing of a notice of 
        prospective assignment, interest, or sale under this paragraph 
        and the registration with the International Registry relating 
        to such assignment, interest, or sale shall not be valid after 
        the 60th day following the date of the filing unless documents 
        eligible for recording under subsection (a) relating to such 
        notice are filed for recordation on or before such 60th day.
        ``(3) Authorization for registration of aircraft.--A 
    registration with the International Registry relating to an 
    aircraft described in paragraph (1) (other than subparagraph (C)) 
    is valid only if (A) the person seeking the registration first 
    files documents eligible for recording under subsection (a) and 
    relating to the registration with the United States Entry Point, 
    and (B) the United States Entry Point authorizes the 
    registration.''.

SEC. 4. REGULATIONS.

    (a) In General.--The Administrator of the Federal Aviation 
Administration shall issue regulations necessary to carry out this Act, 
including any amendments made by this Act.
    (b) Contents of Regulations.--Regulations to be issued under this 
Act shall specify, at a minimum, the requirements for--
        (1) the registration of aircraft previously registered in a 
    country in which the Cape Town Treaty is in effect; and
        (2) the cancellation of registration of a civil aircraft of the 
    United States based on a request made in accordance with the Cape 
    Town Treaty.
    (c) Expedited Rulemaking Process.--
        (1) Final rule.--The Administrator shall issue regulations 
    under this section by publishing a final rule by December 31, 2004.
        (2) Effective date.--The final rule shall not be effective 
    before the date the Cape Town Treaty enters into force with respect 
    to the United States.
        (3) Economic analysis.--The Administrator shall not be required 
    to prepare an economic analysis of the cost and benefits of the 
    final rule.
    (d) Applicability of Treaty.--Notwithstanding parts 47.37(a)(3)(ii) 
and 47.47(a)(2) of title 14, of the Code of Federal Regulations, 
Articles IX(5) and XIII of the Cape Town Treaty shall apply to the 
matters described in subsection (b) until the earlier of the effective 
date of the final rule under this section or December 31, 2004.

SEC. 5. LIMITATION ON VALIDITY OF CONVEYANCES, LEASES, AND SECURITY 
              INSTRUMENTS.

    Section 44108(c)(2) of title 49, United States Code, is amended by 
striking the period at the end and inserting ``or the Cape Town Treaty, 
as applicable.''.

SEC. 6. DEFINITIONS.

    (a) In General.--Chapter 441 of title 49, United States Code, is 
amended by adding at the end the following:

``Sec. 44113. Definitions

    ``In this chapter, the following definitions apply:
        ``(1) Cape town treaty.--The term `Cape Town Treaty' means the 
    Convention on International Interests in Mobile Equipment, as 
    modified by the Protocol to the Convention on International 
    Interests in Mobile Equipment on Matters Specific to Aircraft 
    Equipment, signed at Rome on May 9, 2003.
        ``(2) United states entry point.--The term `United States Entry 
    Point' means the Federal Aviation Administration Civil Aviation 
    Registry.
        ``(3) International registry.--The term `International 
    Registry' means the registry established under the Cape Town 
    Treaty.''.
    (b) Conforming Amendment.--The analysis for such chapter is amended 
by adding at the end the following:
``44113. Definitions.''.

SEC. 7. EFFECTIVE DATE AND PRESERVATION OF PRIOR RIGHTS.

    This Act, including any amendments made by this Act, shall take 
effect on the date the Cape Town Treaty (as defined in section 44113 of 
title 49, United States Code) enters into force with respect to the 
United States and shall not apply to any registration or recordation 
that was made before such effective date under chapter 441 of such 
title or any legal rights relating to such registration or recordation.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

Summary: Cape Town Treaty Implementation Act of 2004 - Provides for implementation of the Convention on International Interests in Mobile Equipment, as modified by the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, signed at Rome on May 9, 2003, or Cape Town Treaty (an electronic registry system for internationally established and recognized financing and leasing rights).

Amends Federal aviation law to revise requirements for the Federal Aviation Administration (FAA) system for recording conveyances that affect an interest in U.S. civil aircraft. Reduces from 750 to 550 the rated take-off horsepower (or equivalent) of any specifically identified aircraft engine with respect to which leases and security instruments are to be recorded in such system.

Designates the FAA Civil Aviation Registry as the United States Entry Point to the International Registry (established by the Cape Town Treaty) with respect to: (1) U.S. aircraft; (2) aircraft engines; and (3) any aircraft for which a U.S. identification number has been assigned, but only with regard to a notice filed under a system established by the Administrator for filing notices of prospective assignments and prospective international interests in, and prospective sales of, aircraft or aircraft engines under the Cape Town Treaty. Directs the FAA Administrator to establish such a system. Requires related documents to be filed for recordation within 60 days after such a notice is filed, or the notice, and any related registration with the International Registry, shall not be valid.

Makes any registration with the International Registry relating to an aircraft (other than aircraft engines) valid only if the person seeking the registration first files documents meeting the recordation requirements, and the U.S. Entry Point authorizes the registration.

Directs the Administrator to issue regulations which specify, at a minimum, the requirements for: (1) the registration of aircraft previously registered in a country in which the Cape Town Treaty is in effect; and (2) the cancellation of registration of a U.S. civil aircraft based on a request made in accordance with the Cape Town Treaty.