[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 472 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 472

To amend the Federal Aviation Act of 1958 for the purpose of enhancing 
  competition among air carriers and protection of passengers of air 
                   carriers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 6, 1993

 Mr. Oberstar introduced the following bill; which was referred to the 
              Committee on Public Works and Transportation

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Aviation Act of 1958 for the purpose of enhancing 
  competition among air carriers and protection of passengers of air 
                   carriers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Airline Competition Enhancement and 
Passenger Protection Act of 1993''.

                TITLE I--AIRLINE COMPETITION ENHANCEMENT

SEC. 101. ENHANCEMENT OF COMPETITION RELATING TO CERTIFICATES.

    (a) In General.--Section 401(h) of the Federal Aviation Act of 1958 
(49 U.S.C. 1371(h)) is amended to read as follows:
    ``(h) Transfer of Certificate.--
            ``(1) Approval required.--No air carrier may transfer a 
        certificate issued under this section authorizing the carrier 
        to engage in foreign air transportation or any portion of such 
        a certificate unless the carrier has submitted to the Secretary 
        an application for approval of the transfer and the Secretary 
        has approved the transfer under this subsection.
            ``(2) Opportunity for competing proposals.--Not later than 
        180 days after the date of the enactment of the Airline 
        Competition Enhancement and Passenger Protection Act of 1993, 
        the Secretary shall modify the rules promulgated under 
        subsection (p) to establish procedures for ensuring that, in 
        any case in which an air carrier has applied under this 
        subsection for approval of a transfer of a certificate to 
        another air carrier, all other air carriers interested in 
        obtaining the certificate or any portion thereof are provided 
        an opportunity to submit, to the carrier seeking to transfer 
        the certificate and the Secretary, proposals for obtaining the 
        certificate or portion.
            ``(3) Approval if no competing proposals.--If no proposal 
        to obtain a certificate or portion thereof is submitted to the 
        Secretary pursuant to paragraph (2), the Secretary, subject to 
        paragraph (5), shall approve the proposed transfer of the 
        certificate for which approval was sought under paragraph (1) 
        if the Secretary determines that the proposed transfer is 
        consistent with the public interest.
            ``(4) Approval standard if competing proposals.--If 1 or 
        more proposals to obtain a certificate or portion thereof are 
        submitted to the Secretary pursuant to paragraph (2), the 
        Secretary, subject to paragraph (5), shall approve the proposed 
        transfer of the certificate for which approval was sought under 
        paragraph (1) or the proposal or proposals submitted under 
        paragraph (2) which the Secretary determines are consistent 
        with the public interest and provide the maximum enhancement of 
        the public interest, unless the Secretary determines that the 
        proposed transfer or proposal or proposals, as the case may be, 
        do not include a purchase price or other consideration that is 
        fair. The Secretary shall disapprove the proposed transfer and 
        all such proposals if the Secretary determines that none of 
        them would be consistent with the public interest.
            ``(5) Service requirement.--The Secretary may not approve 
        the transfer of a certificate to provide service on a route in 
        foreign air transportation issued to an air carrier under this 
        section unless the air carrier has provided the service for at 
        least 1 year.
            ``(6) Public interest factors.--In making a determination 
        with respect to public interest under paragraphs (3) and (4), 
        the Secretary shall consider as being in the public interest 
        the following factors:
                    ``(A) The factors listed in section 102 of this 
                Act.
                    ``(B) The enhancement of the financial viability of 
                each of the air carriers involved in the transfer.
                    ``(C) The strengthening of smaller air carriers in 
                order to enhance competition among air carriers and 
                inhibit concentration in the air carrier industry.
                    ``(D) The enhancement of the trade position of the 
                United States in the international air transportation 
                market.
                    ``(E) A commitment by the carrier transferring the 
                certificate or portion thereof to use the funds 
                received from the transfer to provide air 
                transportation services in other markets.
                    ``(F) The quality of service likely to be provided 
                to passengers by the carrier to whom the certificate 
                would be transferred as demonstrated by information 
                submitted under title XVII of this Act and part 234 of 
                title 14 of the Code of Federal Regulations.
            ``(7) Purchase price factors.--In making a determination as 
        to fairness of a purchase price or other consideration under 
        paragraph (4), the Secretary shall consider the following 
        factors (among others):
                    ``(A) The price paid or other consideration 
                provided to obtain the certificate by the air carrier 
                seeking to transfer the certificate.
                    ``(B) The period of time the air carrier has used 
                the certificate and the funds expended by the air 
                carrier for marketing and for capital improvements, 
                facilities, and equipment in order to use the 
                certificate.
            ``(8) Opportunity to modify proposals.--If the purchase 
        price or other consideration included in a proposal for 
        transfer is determined not to be fair under paragraph (4), the 
        Secretary shall provide the person submitting the proposal a 
        reasonable opportunity to modify the proposal in order that a 
        fair price or other consideration may be offered. If, after 
        being provided the opportunity to modify the proposal, the 
        price or other consideration offered by the person is still not 
        determined by the Secretary to be fair, the Secretary may 
        approve in accordance with paragraph (4) the proposed transfer 
        for which approval was sought under paragraph (1) or any other 
        proposal or proposals for such transfer submitted pursuant to 
        paragraph (2).
            ``(9) Equal consideration of proposals to obtain portions 
        of certificates.--In considering proposals under this 
        subsection, the Secretary shall give the same consideration to 
        proposals to obtain only a portion of the routes covered by the 
        certificate that the air carrier is seeking to transfer as the 
        Secretary gives to proposals to obtain all of such routes.
            ``(10) Deadline for decision.--
                    ``(A) General rule.--The Secretary shall make a 
                decision to approve or disapprove transfer of a 
                certificate under this subsection not later than the 
                90th day following the last day of the period for 
                submitting proposals for obtaining the certificate 
                established pursuant to paragraph (2).
                    ``(B) Extension.--The Secretary may extend the 90-
                day period referred to in subparagraph (A) for an 
                additional period not to exceed 60 days if the 
                Secretary determines that such extension would not have 
                a significant adverse effect on the financial viability 
                on the carrier seeking to transfer the certificate 
                under paragraph (1).''.
    (b) Secretary Defined.--Section 101 of such Act (49 U.S.C. App. 
1301) is amended by redesignating paragraphs (37), (38), (39), (40), 
and (41), and any references thereto, as paragraphs (38), (39), (40), 
(41), and (42), respectively, and by inserting after paragraph (36) the 
following new paragraph:
    ``(37) `Secretary' means the Secretary of Transportation.''.

SEC. 102. ENHANCEMENT OF COMPETITION RELATING TO SLOTS.

    Title IV of the Federal Aviation Act of 1958 (49 U.S.C. App. 1371-
1389) is amended by adding at the end the following new section:

``SEC. 420. ENHANCEMENT OF COMPETITION WITH RESPECT TO SLOTS.

    ``(a) Approval of Transfers Required.--No air carrier may transfer 
to any 1 person in any 1-year period 10 or more of the slots allocated 
at a high density airport, unless the carrier has submitted to the 
Secretary an application for approval of the transfer and the Secretary 
has approved the transfer under this section.
    ``(b) Opportunity for Competing Proposals.--Not later than 180 days 
after the date of the enactment of this section, the Secretary shall 
issue regulations establishing procedures for ensuring that all 
carriers and other persons interested in obtaining slots the transfer 
of which are subject to subsection (a) or any portion of such slots, 
are provided an opportunity to submit, to the air carrier seeking to 
transfer such slots and the Secretary, proposals for obtaining such 
slots or portion of such slots.
    ``(c) Approval if no Competing Proposals.--If no proposal to obtain 
slots or a portion of such slots is submitted to the Secretary pursuant 
to subsection (b), the Secretary, subject to subsection (h), shall 
immediately approve the proposed transfer of the slots for which 
approval was sought under subsection (a).
    ``(d) Approval Standard if Competing Proposals.--If 1 or more 
proposals to obtain slots or a portion of such slots are submitted to 
the Secretary pursuant to subsection (b), the Secretary, subject to 
subsection (h), shall approve the proposed transfer of slots for which 
approval was sought under subsection (a) or the proposal or proposals 
submitted under subsection (b) which the Secretary determines provide 
the maximum enhancement of competition among air carriers, unless the 
Secretary determines that the proposed transfer or proposal or 
proposals, as the case may be, do not include a purchase price or other 
consideration that is fair.
    ``(e) Purchase Price Factors.--In making a determination as to 
fairness of a purchase price or other consideration under subsection 
(d), the Secretary shall consider the following factors (among others):
            ``(1) The price paid or other consideration provided to 
        obtain the slots by the air carrier seeking to transfer the 
        slots.
            ``(2) The period of time the air carrier has used the slots 
        and the funds expended by the air carrier for marketing and for 
        capital improvements, facilities, and equipment in order to use 
        the slots.
    ``(f) Opportunity To Modify Proposals.--If the purchase price or 
other consideration included in a proposal for transfer is determined 
not to be fair under subsection (d), the Secretary shall provide the 
person submitting the proposal a reasonable opportunity to modify the 
proposal in order that a fair price or other consideration may be 
offered. If, after being provided the opportunity to modify the 
proposal, the price or other consideration offered by the person is 
still not determined by the Secretary to be fair, the Secretary may 
approve in accordance with subsection (d) the proposed transfer for 
which approval was sought under subsection (a) or any other proposal or 
proposals for such transfer submitted pursuant to subsection (b).
    ``(g) Equal Consideration of Proposals To Obtain Portions of 
Slots.--In considering proposals under this section, the Secretary 
shall give the same consideration to proposals to obtain only a portion 
of the slots that the air carrier is seeking to transfer as the 
Secretary gives to proposals to obtain all such slots.
    ``(h) Limitation on Statutory Construction.--Nothing in this title 
shall be construed as limiting or otherwise affecting any authority of 
the Secretary, the Administrator, or the Attorney General to amend, 
modify, revoke, or terminate the right of an air carrier to use or have 
a slot or hold a certificate issued under section 401 of this Act.
    ``(i) Definitions.--As used in this section, the following 
definitions apply:
            ``(1) High density airport.--The term `high density 
        airport' means an airport at which the Administrator limits the 
        number of instrument flight rule takeoffs and landings of 
        aircraft.
            ``(2) Slot.--The term `slot' means a reservation for an 
        instrument flight rule takeoff or landing by an air carrier of 
        an aircraft in air transportation.''.

SEC. 103. REDUCTION OF UNITED STATES CITIZENSHIP VOTING INTEREST 
              OWNERSHIP REQUIREMENT.

    (a) In General.--Title IV of the Federal Aviation Act of 1958 (49 
U.S.C. App. 1371-1389) is further amended by adding at the end the 
following new section:

``SEC. 421. REDUCTION OF UNITED STATES CITIZENSHIP VOTING INTEREST 
              OWNERSHIP REQUIREMENT.

    ``(a) General Rule.--Notwithstanding the requirement of section 
101(16) of this Act that at least 75 percent of the stock of an air 
carrier be owned or controlled by persons who are citizens of the 
United States or of one of its possessions, a person who is not a 
citizen of the United States may purchase stock of a corporation or 
association which is, or owns or controls, an air carrier without 
regard to whether or not such purchase would result in the corporation 
or association failing to meet the stock ownership and control 
requirement of section 101(16) if the Secretary of Transportation 
finds--
            ``(1) with respect to nonvoting shares of stock, that after 
        the purchase no person who is not a citizen of the United 
        States would have the power to exercise control over the air 
        carrier;
            ``(2) with respect to voting shares of stock--
                    ``(A) that the air service agreement between the 
                United States and the foreign country of which the 
                purchaser is a citizen is a procompetitive agreement 
                which, at a minimum, allows those air carriers 
                designated by the United States to provide air service 
                from any point in the United States to any significant 
                air service point in the foreign country;
                    ``(B) that after the purchase, the president, 
                chairman of the board of directors, chief operating 
                officer, and two-thirds or more of the board of 
                directors of the corporation or association which is, 
                or owns or controls, the air carrier would be citizens 
                of the United States;
                    ``(C) that the laws and regulations of the foreign 
                country would permit a citizen of the United States to 
                acquire, under similar terms and conditions, the same 
                percentage of stock (by vote or value) of a person who 
                provides in the foreign country transportation by 
                aircraft of person or property as a common carrier for 
                compensation as the percentage of ownership which the 
                person making the purchase would have in the air 
                carrier after the purchase;
                    ``(D) that the purchaser is not a corporation or 
                association of which 50 percent or more of its stock 
                (by vote or value) is owned or controlled by a 
                government of a foreign country;
                    ``(E) that after the purchase, no person who is not 
                a citizen of the United States would have the power to 
                exercise control over the air carrier;
                    ``(F) that the purchase is consistent with the 
                national security interests of the United States; and
                    ``(G) that the purchase is otherwise in the public 
                interest.
    ``(b) Maximum Reduced Percentage.--The 75 percent stock ownership 
and control requirement of section 101(16) of this Act may not be 
reduced to less than 51 percent of stock by vote or value under this 
section.
    ``(c) Application.--A person interested in purchasing stock with 
respect to which subsection (a) applies must submit an application with 
respect to such stock purchase to the Secretary. The application must 
be in such form and contain such information as the Secretary may 
require by regulation.''.
    (b) Definition of Citizen of the United States.--Section 101(16)(c) 
of such Act (49 U.S.C. App. 1301(16)(c)) is amended--
            (1) by striking ``voting interest'' and inserting ``stock 
        (by vote or value)''; and
            (2) by striking the period at the end and inserting ``and 
        over which no person who is not a citizen of the United States 
        has the power to exercise control.''.
    (c) Conforming Amendment to Table of Contents.--The table of 
contents contained in the first section of the Federal Aviation Act of 
1958 is amended by adding at the end of the matter relating to title IV 
of such Act the following:

``Sec. 420. Enhancement of competition with respect to slots.
                              ``(a) Approval of transfers required.
                              ``(b) Opportunity for competing 
                                        proposals.
                              ``(c) Approval if no competing proposals.
                              ``(d) Approval standard if competing 
                                        proposals.
                              ``(e) Purchase price factors.
                              ``(f) Opportunity to modify proposals.
                              ``(g) Equal consideration of proposals to 
                                        obtain portions of slots.
                              ``(h) Limitation on statutory 
                                        construction.
                              ``(i) Definitions.
``Sec. 421. Reduction of U.S. citizenship voting interest ownership 
                            requirement.
                              ``(a) General rule.
                              ``(b) Maximum reduced percentage.
                              ``(c) Application.''.

                 TITLE II--AIRLINE PASSENGER PROTECTION

SEC. 201. REQUIREMENTS RELATING TO BANKRUPTCY AND FREQUENT FLYER 
              PROGRAMS.

    (a) In General.--The Federal Aviation Act of 1958 (49 U.S.C. App. 
1301 et seq.) is amended by adding at the end the following new title:

               ``TITLE XVII--AIRLINE PASSENGER PROTECTION

``SEC. 1701. BANKRUPTCY PROTECTION.

    ``(a) Interim Program.--
            ``(1) In general.--If an air carrier becomes a debtor in a 
        case under title 11, United States Code, and is not providing 
        air transportation of passengers between 2 points, covered air 
        carriers providing air transportation of passengers between 
        such points must provide, on a space available basis, such air 
        transportation for persons holding airline tickets sold by the 
        debtor air carrier or an agent thereof for such air 
        transportation before the date on which such case is commenced. 
        Any such transportation shall be provided at no additional 
        charge.
            ``(2) Limitation on applicability.--This subsection only 
        requires the provision of air transportation for passengers of 
        an air carrier which becomes a debtor described in paragraph 
        (1) before the date of issuance of an order under subsection 
        (d) or the date of issuance of regulations under subsection 
        (e), as the case may be.
    ``(b) Development of Bankruptcy Transportation Plans.--
            ``(1) Order.--Not later than 60 days after the date of the 
        enactment of this title, the Secretary shall issue an order 
        authorizing covered air carriers to develop a plan for 
        providing air transportation for any person who holds an 
        airline ticket for provision of such transportation by a 
        covered air carrier who, after the date of purchase of such 
        ticket, becomes a debtor in a case under title 11, United 
        States Code. In issuing such an order, the Secretary shall have 
        authority to grant an exemption with respect to interstate air 
        transportation, overseas air transportation, and foreign air 
        transportation in accordance with section 414.
            ``(2) Deadline for submission.--A plan developed under 
        paragraph (1) shall be submitted to the Secretary for approval 
        within 180 days after the date of the enactment of this 
        section.
    ``(c) Time Limit and Basis for Approval.--If a plan is submitted to 
the Secretary in accordance with subsection (b), the Secretary shall 
approve or disapprove such plan within 60 days after the date of such 
submission. If the Secretary determines that such plan will provide (or 
would provide if all covered air carriers participate in implementation 
of such plan) satisfactory protection for all persons who hold airline 
tickets described in subsection (b), the Secretary shall approve such 
plan. Otherwise, the Secretary shall disapprove such plan.
    ``(d) Implementation of Approved Plans.--If the Secretary approves 
a plan under this section, the Secretary shall issue an order requiring 
implementation of such plan by the covered air carriers who submitted 
such plan and any other covered air carriers. If there are any covered 
air carriers who did not participate in development of a plan approved 
under this section, such carriers shall be treated under such order and 
plan in the same manner as carriers who did participate in development 
of such plan.
    ``(e) Regulations.--If a plan described in subsection (a) is not 
submitted within 180 days after the date of the enactment of this 
title, or if the Secretary disapproves a plan submitted in accordance 
with subsection (b), or if the Secretary determines that a plan 
approved under this section is not being implemented in a manner which 
provides satisfactory protection for all persons who hold airline 
tickets described in subsection (b), the Secretary shall issue 
regulations requiring all covered air carriers to provide air 
transportation for persons who hold such tickets. Such regulations must 
be issued within 90 days after the expiration of such 180-day period, 
the date of disapproval of such plan, or the date of such 
determination, as the case may be.

``SEC. 1702. FREQUENT FLYER PROGRAMS.

    ``Not later than 180 days after the date of the enactment of this 
title, the Secretary shall initiate a rulemaking proceeding--
            ``(1) to consider methods of ensuring that each air carrier 
        makes enough seats available for persons redeeming frequent 
        flyer awards to meet anticipated demand;
            ``(2) to consider requirements to ensure that such air 
        carrier gives members of its frequent flyer program adequate 
        notice of any material change in such program; and
            ``(3) to consider whether or not frequent flyer mileage 
        obtained under a frequent flyer program of a covered air 
        carrier should be transferable to another passenger who is a 
        member of such program as a means of reducing the 
        anticompetitive effects of such programs.

``SEC. 1703. DEFINITIONS.

    ``For the purposes of this title, the following definitions apply:
            ``(1) Airline ticket.--The term `airline ticket' means any 
        written instrument that embodies a contract of carriage between 
        an air carrier and a passenger thereof for air transportation.
            ``(2) Covered air carrier.--The term `covered air carrier' 
        means an air carrier which, in the most recent calendar year 
        for which data is available, accounted for at least 1 percent 
        of the scheduled passenger revenues derived from interstate and 
        overseas air transportation in such year.''.
    (b) Conforming Amendment to Table of Contents.--The table of 
contents contained in the first section of the Federal Aviation Act of 
1958 is amended by adding at the end the following:

               ``Title XVII--Airline Passenger Protection

``Sec. 1701. Bankruptcy protection.
``Sec. 1702. Frequent flyer programs.
``Sec. 1703. Definitions.''.

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HR 472 IH----2