Airline Competition and Lower Fares Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Airline Competition and Lower Fares 
Act''.

SEC. 2. WITHDRAWAL OF SLOTS.

    (a) Written Determination.--Not later than 1 year after the date of 
the enactment of this Act, the Secretary shall issue a separate written 
determination with respect to each high-density airport as to whether 
the demand among air carriers for slots at the airport can be met with 
the slots at the airport that are available to the Secretary.
    (b) Initial Withdrawal of Slots.--If the Secretary determines under 
subsection (a) that the demand among air carriers for slots at a high-
density airport cannot be met with the slots at the airport that are 
available to the Secretary, the Secretary shall withdraw slots at that 
airport from dominant air carriers at the airport for redistribution 
pursuant to this Act. Such withdrawals shall be made in accordance with 
section 41714 of title 49, United States Code, and other applicable 
laws and regulations.
    (c) Subsequent Withdrawals.--
            (1) Written determination.--Not later than 2 years after 
        the date of the auction under section 3(a), and every 2 years 
        thereafter, the Secretary shall issue a written determination 
        as to whether the redistribution of additional slots under this 
        Act would significantly increase competition between air 
        carriers.
            (2) Requirement to withdraw slots.--If the Secretary 
        determines under paragraph (1) that the redistribution of 
        additional slots would significantly increase competition, the 
        Secretary shall withdraw slots, in accordance with this 
        section, in a manner which will ensure such an increase. Such 
        withdrawals shall be made in accordance with section 41714 of 
        title 49, United States Code, and other applicable laws and 
        regulations.
    (d) Limitation on Slot Withdrawals.--
            (1) Initial auction.--The Secretary may not withdraw for 
        redistribution under this Act more than 10 percent of the total 
        number of slots held at a high-density airport by a dominant 
        air carrier for auction pursuant to section 3(a).
            (2) Subsequent auctions.--The Secretary may not withdraw 
        for redistribution under this Act more than 5 percent of the 
        total number of slots held at a high-density airport by a 
        dominant air carrier for auction pursuant to section 3(b).
            (3) Calculation of percentage.--In calculating under this 
        subsection the total number of slots held at a high-density 
        airport by a dominant air carrier, the Secretary shall not take 
        into account slots used by the carrier for direct flights 
        between the high-density airport and low-competition airports.
    (e) Prohibition on Certain Slot Withdrawals.--The Secretary may not 
withdraw for redistribution under this Act a slot of a dominant air 
carrier at a high-density airport if--
            (1) the Secretary determines that the slot has been used by 
        the carrier for direct flights between the airport and a low-
        competition airport throughout at least 24 of the preceding 30 
        calendar months; or
            (2) the slot is used for international flights.

SEC. 3. AUCTIONS.

    (a) In General.--After a withdrawal of slots at a high-density 
airport pursuant to section 2, the Secretary shall auction such slots 
to new entrant air carriers and limited incumbent air carriers at the 
airport and shall award each slot, pursuant to this section, to the 
highest bidder for the slot.
    (b) Limitation on Use of Slots.--The Secretary, in a manner which 
to the extent practicable represents the times and characteristics of 
all slots available for auction pursuant to this subsection, shall 
ensure that--
            (1) 40 percent of the slots redistributed under this Act at 
        each high-density airport other than John F. Kennedy 
        International Airport; and
            (2) 10 percent of the slots redistributed under this Act at 
        John F. Kennedy International Airport,
are distributed for use for flights between the airport and low-
competition airports.
    (c) Eligible Bidders.--A person may bid for or hold a slot at a 
high-density airport offered at an auction conducted under this section 
only if that person--
            (1) is a new entrant air carrier or limited incumbent air 
        carrier at the airport;
            (2) is a citizen of the United States, or in the case of a 
        partnership or corporation, organized under the laws of the 
        United States or a State;
            (3) has appropriate safety certification from the Federal 
        Aviation Administration;
            (4) has appropriate economic certification from the 
        Department of Transportation;
            (5) has not declined any slot at the airport for which the 
        new entrant air carrier or limited incumbent air carrier was 
        eligible before January 1, 1986;
            (6) is qualified, as determined by the Secretary, to use a 
        purchased slot; and
            (7) is not substantially owned or otherwise controlled, as 
        determined by the Secretary, by a person who fails to meet any 
        of the requirements established by paragraphs (1) through (6).
    (d) Limitation on Transfer of Slots.--A slot obtained by a new 
entrant air carrier or limited incumbent air carrier at a high-density 
airport through an auction conducted under this section may only be 
sold, leased, traded, or transferred to any other new entrant air 
carrier or limited incumbent air carrier at the airport that meets the 
requirements of subsection (c).
    (e) Changes in Ownership.--If there is a change in the ownership of 
a new entrant air carrier or limited incumbent air carrier that obtains 
a slot through an auction conducted under this section, the slot shall 
revert to the Secretary; except that the Secretary may allow the new 
entrant air carrier or limited incumbent air carrier to retain the slot 
if the Secretary determines that such action is in the best interest of 
promoting competition.
    (f) Limitation on Statutory Construction.--Nothing in this section 
or section 2, including the use of competitive bidding, may be 
construed--
            (1) to alter slots allocation criteria and procedures 
        established by section 41714 of title 49, United States Code, 
        or any other provision of law;
            (2) to diminish the authority of the Secretary under any 
        other provision of law to regulate or withdraw slots; or
            (3) to convey any rights, including 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.
    (g) Revenues.--The Secretary may use funds received from auctions 
held pursuant to this section to provide reimbursement to any dominant 
air carrier from which a slot has been withdrawn under this Act for 
investments made by the carrier in the withdrawn slot and airport 
improvements at the airport where the carrier held the withdrawn slot. 
Any funds remaining after providing such reimbursements shall be 
credited to the general fund of the Treasury as miscellaneous receipts.

SEC. 4. SLOTS NOT ASSETS.

    (a) In General.--A slot obtained under this Act or any other 
provision of law shall not be considered an asset for any purpose, 
including for collateral, for any agreement which would require 
forfeiture of the slot, or in any bankruptcy proceeding.
    (b) Applicability.--This section shall not apply to any agreement 
or any renewal provision of any agreement in effect on the date of the 
enactment of this Act.

SEC. 5. UNFAIR COMPETITION.

    (a) Determinations Regarding Actions Filed.--
            (1) Actions filed on or before december 31, 1998.--Not 
        later than 6 months after the date of the enactment of this 
        Act, the Secretary shall complete action on all complaints 
        alleging predatory practices by air carriers that were filed 
        with the Secretary on or before December 31, 1998.
            (2) Actions filed after december 31, 1998, and before the 
        date of the enactment of this act.--Not later than 9 months 
        after the date of the enactment of this Act, the Secretary 
        shall complete action on all complaints alleging predatory 
        practices by air carriers that were filed with the Secretary 
        after December 31, 1998, but before the date of the enactment 
        of this Act.
            (3) Actions filed on or after the date of the enactment of 
        this act.--The Secretary shall make an initial finding 
        regarding any complaint alleging a predatory practice by an air 
        carrier that is filed with the Secretary after the date of the 
        enactment of this Act, not later than 30 days after such 
        complaint is filed.
    (b) Restraining Order.--Not later than 15 days after date of an 
initial finding under subsection (a)(3), and after notice and 
opportunity for a hearing, the Secretary shall enjoin, pending final 
determination, any action that is found to be a predatory practice.
    (c) Report to Congress.--Not later than 6 months after the date of 
the enactment of this Act, and every 6 months thereafter, the Secretary 
shall transmit a report to Congress describing complaints received by 
the Secretary which allege predatory practices by air carriers and any 
action taken by the Secretary on those complaints.
    (d) Guidelines.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary, in consultation with the Attorney 
General of the United States, shall issue guidelines defining predatory 
practices and unfair competition practices under this section and under 
title 49, United States Code.

SEC. 6. ACCESS TO FACILITIES.

    The Secretary shall ensure that all airport facilities are 
available to new entrant air carriers at fees that are comparable to 
the average fees paid by incumbent air carriers.

SEC. 7. EVALUATION OF RULE.

    The Secretary shall initiate a rulemaking proceeding to determine 
whether the application of the 80-percent rule contained in section 
93.227(a) of title 49, Code of Federal Regulations, promotes, hinders, 
or has no effect on airline competition.

SEC. 8. LIMITS ON COMPETITION IN AVIATION INDUSTRY.

    Not later than 1 year after the date of the enactment of this Act, 
and annually thereafter, the Secretary shall transmit to Congress a 
report on barriers to entry, predatory pricing, and other limits on 
competition in the aviation industry.

SEC. 9. CLARIFICATION OF LEGAL STANDING.

    Section 41713(b) of title 49, United States Code, is amended by 
adding at the end the following new paragraph:
    ``(5) Protection of certain causes of action.--This subsection 
shall not bar any cause of action brought against an air carrier by 1 
or more private parties seeking to enforce any right under the common 
law of any State or under any State statute, other than a statute 
purporting to directly prescribe fares, routes, or levels of air 
transportation service.''.

SEC. 10. DEFINITIONS.

    For the purposes of this Act, the following definitions apply:
            (1) Air carrier.--The term ``air carrier'' has the meaning 
        given the term in section 40102 of title 49, United States 
        Code.
            (2) Dominant air carrier.--The term ``dominant air 
        carrier'' means a person that holds 10 percent or more of the 
        slots at a high-density airport.
            (3) High-density airport.--.The term ``high-density 
        airport'' means each of the following airports:
                    (A) LaGuardia Airport.
                    (B) O'Hare International Airport.
                    (C) John F. Kennedy International Airport.
                    (D) Ronald Reagan Washington National Airport.
            (4) Limited incumbent air carrier.--The term ``limited 
        incumbent air carrier'' means a person that holds or operates 
        fewer than 12 slots at a high-density airport, not including 
        international slots, essential air service program slots, or 
        slots between the hours of 2200 and 0659 at Ronald Reagan 
        Washington National Airport or LaGuardia Airport.
            (5) Low-competition airport.--The term ``low-competition 
        airport'' means an airport that the Secretary determines--
                    (A) is not a large hub; and
                    (B) has substantially less service than average or 
                substantially higher than average airfares.
            (6) New entrant air carrier.--The term ``new entrant air 
        carrier'' means a person that does not hold a slot at a high-
        density airport and has not sold or given up a slot at that 
        airport after December 16, 1985.
            (7) Person.--The term ``person'' includes a commuter 
        operator or air carrier.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
            (9) Slot.--The term ``slot'' means the operational 
        authority to conduct one landing or takeoff operation each day 
        during a specific hour or 30 minute period at a high-density 
        airport.

Summary: Airline Competition and Lower Fares Act - Directs the Secretary of Transportation to determine whether the demand among air carriers for slots at a high density airport can be met with the slots available to the Secretary.  Requires the Secretary, if the demand among dominant air carriers for slots at such an airport cannot be met with the slots available, to withdraw from such carriers up to ten percent of such slots at such airport for redistribution to new entrants and limited incumbents through auction on a competitive bidding basis, as long as the redistribution of the additional slots significantly increases competition between air carriers.  Prohibits withdrawal of any slots used for international flights or for direct flights between a high density airport and a low-competition airport. 
(Sec. 4) Prohibits slots obtained under this Act from being considered an asset (including for collateral) for any agreement which would require its forfeiture, or in any bankruptcy proceeding. 
(Sec. 5) Directs the Secretary to complete action on all complaints alleging predatory practices by air carriers that were filed with the Secretary on or before December 31, 1998, and after such date, but before the enactment of this Act.  Directs the Secretary, after notice and opportunity for a hearing, to enjoin any action that is found to be a predatory practice.  Directs the Secretary to report biannually to the Congress about such complaints. 
(Sec. 7) Directs the Secretary to initiate a rulemaking to determine whether the application of the 80-percent rule with respect to the allocation of airport slots promotes, hinders, or has no effect on airline competition. 
(Sec. 8) Directs the Secretary to report annually to the Congress on barriers to entry, predatory pricing, and other limits on competition in the aviation industry. 
(Sec. 9) Amends Federal aviation law prohibiting State regulation of air prices, routes, and services to declare that such law shall not bar a cause of action brought against an air carrier by one or more private parties seeking to enforce any right under the common law of any State or State statute, other than a statute purporting to directly prescribe fares, routes, or levels of air transportation service.