SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Essential Air Service Modernization 
Act of 2003''.

SEC. 2. AUTHORIZATION.

    Section 41742(a)(2) is amended by striking ``$15,000,000'' and 
inserting ``$75,000,000''.

SEC. 3. TERMINATION NOTICE.

    Section 41733 of title 49, United States Code, is amended by adding 
at the end the following--
    ``(f) Termination Notice.--If the Secretary decides to terminate 
basic essential service to an eligible place, the Secretary shall 
notify the affected community not less than 90 days before such service 
is to be terminated.''.

SEC. 4. JOINT PROPOSALS.

    (a) In General.--Section 41740 of title 49, United States Code, is 
amended by adding at the end the following: ``The Secretary shall 
facilitate and assist in establishing negotiations between major and 
national air carriers and air carriers that provide essential air 
service to an eligible place in order to determine equitable joint 
fares.''.
    (b) Report.--Not later than 12 months after enactment of this Act, 
the Secretary shall transmit a report to Congress regarding the 
progress and effectiveness of implementation of the amendment made by 
subsection (a).

SEC. 5. COMMUNITY AND REGIONAL CHOICE PROGRAM.

    (a) In General.--Subchapter II of chapter 417 of title 49, United 
States Code, is amended by adding at the end the following:
``Sec. 41745. Community and regional choice program
    ``(a) Establishment.--The Secretary of Transportation shall 
establish an alternate essential air service program in accordance with 
the requirements of this section.
    ``(b) Compensation to Eligible Places.--In carrying out the 
program, the Secretary, instead of paying compensation to an air 
carrier to provide essential air service to an eligible place, may pay 
compensation directly to a unit of local government having jurisdiction 
over the eligible place or a State within the boundaries of which the 
eligible place is located.
    ``(c) Use of Compensation.--A unit of local government or State 
receiving compensation for an eligible place under the program shall 
use the compensation for any of the following purposes:
            ``(1) To provide assistance to an air carrier to provide 
        scheduled air service to and from the eligible place, without 
        being subject to the requirements of 41732(b).
            ``(2) To provide assistance to a person to provide 
        scheduled or on-demand air taxi service to and from the 
eligible place and a non-hub or a small, medium, or large hub.
            ``(3) To provide assistance to a person to provide 
        scheduled or on-demand surface transportation to and from the 
        eligible place and a non-hub or a small, medium, or large hub.
            ``(4) In combination with other units of local government 
        in the same region, to provide transportation services to and 
        from all the eligible places in that region at an airport or 
        other transportation center that can serve all the eligible 
        places in that region.
    ``(d) Applications.--
            ``(1) In general.--A unit of local government or State 
        seeking to participate in the program for an eligible place 
        shall submit to the Secretary an application in such form and 
        containing such information as the Secretary may require.
            ``(2) Required information.--At a minimum, the application 
        shall include--
                    ``(A) a statement of the amount of compensation 
                required; and
                    ``(B) a description of how the compensation will be 
                used.
    ``(e) Participation Requirements.--An eligible place for which 
compensation is received under the program in a fiscal year shall not 
be eligible to receive in that fiscal year the essential air service 
that it would otherwise be entitled to under this subchapter.
    ``(f) Subsequent Participation.--A unit of local government 
participating in the program under this section in a fiscal year shall 
not be prohibited from participating in the basic essential air service 
program under this chapter in a subsequent fiscal year if such unit is 
otherwise eligible to participate in such basic program.
    ``(g) Funding.--Amounts appropriated or otherwise made available to 
carry out the essential air service program under this subchapter shall 
be available to carry out this section.
``Sec. 41746. Compensation for units of local government
    ``Of the amounts made available under section 41742(a) the 
Secretary shall pay directly to a unit of local government having 
jurisdiction over the eligible place not less than $5,000 for such 
fiscal year to promote public use of the air service or transportation 
for which compensation is being paid.''.
    (b) Conforming Amendment.--The analysis for such chapter is amended 
by inserting after the item relating to section 41744 the following:

``41745. Community and regional choice program.
``41746. Compensation for units of local government.''.
Output: Essential Air Service Modernization Act of 2003 - Increases the authorization of appropriations to carry out the essential air service program.

Requires the Secretary to: (1) notify an affected community at least 90 days before the basic essential service to that community is terminated: (2) facilitate and assist in negotiations between major and national air carriers and carriers that provide essential air service in order to determine equitable joint fares; (3) establish an alternate essential air service program which would provide compensation directly to local governments, instead of to air carriers, to use to obtain air service, to obtain surface transportation to and from air hubs, or to participate with other local governments in providing regional transportation services to airports; and (4) pay $5,000 to local governments to promote public use of air service or transportation for which compensation is received under the program.