[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1441 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1441

To provide for the transfer of operating responsibility for air traffic 
 services currently provided by the Federal Aviation Administration on 
behalf of the United States to a separate corporate entity, in order to 
     provide for more efficient operation and development of these 
  transportation services and related assets, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 6, 1995

   Mr. Mineta (by request) introduced the following bill; which was 
referred to the Committee on Transportation and Infrastructure, and in 
  addition to the Committees on Ways and Means 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 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide for the transfer of operating responsibility for air traffic 
 services currently provided by the Federal Aviation Administration on 
behalf of the United States to a separate corporate entity, in order to 
     provide for more efficient operation and development of these 
  transportation services and related assets, 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. TITLE; TABLE OF CONTENTS.

    (a) This Act may be cited as the ``United States Air Traffic 
Service Corporation Act''.
    (b) Table of Contents.--

                            TITLE I--GENERAL

Sec.
101. Findings and purpose.
102. Definitions.
  TITLE II--TRANSFER OF AIR TRAFFIC SERVICE FROM THE FEDERAL AVIATION 
                             ADMINISTRATION

201. Establishment of the Corporation.
202. Status and applicable laws.
203. Board of directors.
204. Committees of the board; independent auditor.
205. Officers and their responsibilities.
206. General authority.
207. Authority over aircraft movement for the United States; related 
                            authority.
208. Authority to incur indebtedness.
209. Fees and other charges for services.
210. Limitation on State and local taxation.
211. Preemption of authority over air traffic services.
212. Suits by and against the Corporation.
213. Acquiring interest in property by eminent domain.
214. Relationships with Federal agencies.
               TITLE III--PERMANENT FEDERAL REQUIREMENTS

301. Corporation subject to direct Federal control in time of war or 
                            national emergency.
302. Collective bargaining.
303. International agreements and activities.
             TITLE IV--AMENDMENTS TO FEDERAL AVIATION LAWS

401. Access to the air traffic system.
402. Definitions.
403. Airspace control and air traffic rules.
404. Emergency powers.
405. Presidential transfers in time of war.
406. Preemption of prices, routes, and service regulations.
407. Airway capital investment plan; research and development planning.
408. Aviation facilities.
409. Regulation of the United States Air Traffic Service Corporation.
                   TITLE V--OTHER APPLICABLE STATUTES

501. Employee management and exemptions from title 5, United States 
                            Code.
502. Applicability of Government Corporation Control Act.
503. Extension and amendment of aviation-related taxes and Trust Fund 
                            spending authority.
504. Transfers from the Airport and Airway Trust Fund.
505. Exclusion of Corporation from budget and budget enforcement.
506. Discretionary spending limits.
                    TITLE VI--TRANSITION PROVISIONS

601. Transfer of federal personnel to the Corporation.
602. Payments to the United States, and reimbursements.
603. Transfer of facilities to the Corporation.
604. Savings provisions.
605. Administrative and budgetary transition; ethics standards.
606. Reference.
607. Separability.
608. Effective date.

                            TITLE I--GENERAL

SEC. 101. FINDINGS AND PURPOSE.

    (a) Findings.--(1) The United States air traffic control system, 
spanning civil and military sectors and the busiest in the world, has 
set the standard since its inception for the utmost in aviation safety 
and efficiency of traffic movements.
    (2) This Federal air traffic control system is integral to the 
United States aviation industry, a leading exporter and employer in the 
national economy, and contributes directly to this vital national 
resource and its links to an increasingly global economy.
    (3) It is the continuing role of Congress and the Executive Branch 
to evaluate each Federal Government activity to determine whether its 
services continue to be needed and, if so, whether these services can 
be best provided by a Federal agency.
    (4) The provision of more than 500,000 air traffic operations and 
the use of over 28,000 air navigation facilities in the National 
Airspace System daily by the Federal Aviation Administration (FAA), 
operating 24 hours a day, 365 days a year, and the reliance of the 
United States aviation industry on these services, constitutes a unique 
Federal operational role, one that is increasingly burdened by 
traditional governmental management processes.
    (5) Air traffic control is increasingly reliant on high-quality, 
well motivated staff and automated, electronic tracking and 
communication systems that require state-of-the-art computer equipment 
and applications, technology that advances extremely rapidly and has 
left current air traffic control operations behind.
    (6) Current government-wide requirements for procurement, 
personnel, financial, and other fundamental elements of management are 
being updated but, despite the general changes achieved to date as a 
result of the National Performance Review, are not suited to the type 
of operating enterprise needed to bring the United States air traffic 
control system into the 21st century.
    (7) Effective financing of air traffic modernization can be 
improved by a transition from the current Federal, excise-based user 
fees to a system of fees that more closely reflect the costs of 
providing air traffic control services, but changes of this nature are 
complicated by the ongoing, successful effort to reduce Federal budget 
deficits, an objective which should not be undercut.
    (8) The FAA and the Department of Defense share a unique 
relationship as users and suppliers of air traffic services, and it is 
vital to safe and efficient air traffic control and defense readiness 
that this relationship continue to evolve under any new operational 
arrangement for civilian air traffic service.
    (9) More user input, simpler procurement methods, more flexible 
personnel policies and incentives with improved labor-management 
partnerships, greater management longevity, and access to capital 
markets are necessary and achievable to maintain the FAA's enviable 
record of efficiency in air traffic management, but not within the 
confines of a traditional Federal Government agency.
    (10) The clear success of a much smaller, but similar, transfer of 
a long-time FAA activity (operation of National and Dulles Airports) to 
a non-Federal operator in 1987 demonstrates the efficacy of creating a 
self-governing, self-financing entity to manage inherently operational 
activities.
    (11) Transfer legislation can relieve the Federal Government of 
operating roles and include the kind of safety, security, national 
defense, international, personnel and other mandates needed to 
guarantee that the successor entity will not compromise any of the 
benefits that have been produced by the FAA throughout its long and 
successful history of air traffic control operations.
    (b) Purpose.--It is declared to be the purpose of Congress in this 
Act, pursuant to its authority under the Constitution to regulate 
commerce among the several states, to transfer operating responsibility 
for air traffic services currently provided by the Federal Aviation 
Administration on behalf of the United States to a separate corporate 
entity, to provide for more efficient operation and development of 
these services and related assets, without any reduction in 
accountability for aviation safety, security, national defense, airport 
development, or other necessary aviation functions currently entrusted 
to the Federal Aviation Administration.

SEC. 102. DEFINITIONS.

    (a) In this Act:
            (1) ``Administrator'' means the Administrator of the 
        Federal Aviation Administration.
            (2) ``Air traffic control system'' means the combination of 
        elements used to safely and efficiently monitor, direct, 
        control, and guide aircraft in the United States and United 
        States-assigned airspace, including--
                    (A) frequency licenses and physical, real, 
                personal, and intellectual property assets making up 
                facilities and systems employed to detect, track, and 
                guide aircraft movement;
                    (B) laws, regulations, agreements, and licenses;
                    (C) publishes procedures that explain required 
                actions, activities, and techniques used to assure 
                adequate aircraft separation; and
                    (D) trained personnel with specific technical 
                capabilities to satisfy the operational, engineering, 
                management, and planning requirements for air traffic 
                control.
            (3) ``Corporation'' means the United States Air Traffic 
        Service Corporation created under the authority of this Act, 
        unless otherwise specified.
            (4) ``Date of transfer'' means the date the United States 
        Air Traffic Service Corporation succeeds to functions of the 
        Federal Aviation Administration pursuant to this Act, which 
        shall be October 1, 1996, or a later date established by the 
        Administrator as the date that air traffic control 
        responsibilities may be safely transferred to the Corporation.
            (5) ``Secretary'' means the Secretary of Transportation.
    (b) A term used in this Act that is not defined, but which is 
defined in subtitle VII of title 49, United States Code, has the 
meaning set forth in that subtitle.

  TITLE II--TRANSFER OF AIR TRAFFIC SERVICE FROM THE FEDERAL AVIATION 
                             ADMINISTRATION

SEC. 201. ESTABLISHMENT OF THE CORPORATION.

    There is hereby created a body corporate to be known as the United 
States Air Traffic Service Corporation (hereinafter referred to in this 
Act as the Corporation).

SEC. 202. STATUS AND APPLICABLE LAWS.

    (a) Status.--The Corporation--
            (1) is a wholly owned Government corporation of the United 
        States subject to Chapter 91 of title 31, United States Code 
        (Government Corporations), as provided in this Act, and may not 
        sell equity interests in the Corporation to the public;
            (2) is subject to the regulatory authority of the Federal 
        Aviation Administration and the safety investigatory authority 
        of the National Transportation Safety Board (NTSB);
            (3) shall operate the Federal air traffic control system as 
        a business enterprise on a safe and efficient, self-supporting, 
        and not-for-profit basis without Federal Government 
        appropriations or other sources of Federal financing other than 
        transfers specified in this Act;
            (4) shall not be subject to apportionment pursuant to 
        section 1513(b) of title 31, United States Code; and
            (5) may establish offices in places necessary or 
        appropriate in the conduct of its business.
    (b) Limited Application of Title 5 U.S.C. and Personnel 
Requirements.--Title 5, United States Code, applies to the Corporation 
and its employees and activities only to the extent set forth in 
sections 501 and 601 of this Act. For purposes of section 5 of Public 
Law 103-226 (March 30, 1994) (the Federal Workforce Restructuring Act 
of 1994), the Corporation does not qualify as an Executive agency (as 
defined by section 105 of title 5, United States Code.) The Corporation 
shall fulfill the requirements of title VI of this Act, and shall 
establish appropriate personnel policies to manage its employees 
efficiently.
    (c) Nonapplication of Certain Federal Acquisition and Related 
Requirements.--The Corporation does not qualify as a department, 
agency, establishment, or instrumentality of the United States 
Government for purposes of Federal laws, regulations, or other 
requirements concerning acquisition of supplies and services, and the 
acquisition, use, and disposal of real and personal property, including 
the Federal Property and Administrative Services Act (40 U.S.C. 471, et 
seq.), except that the Corporation does qualify as a department, 
agency, establishment, or instrumentality of the United States 
Government for the purposes of the Davis-Bacon Act (40 U.S.C. 276a-276-
7), the McNamara-O'Hara Service Contract Act (41 U.S.C. 351, et seq.), 
and the Contract Work Hours and Safety Standards Act (40 U.S.C. 327, et 
seq.), and civil rights laws and regulations that are applicable to 
Federal contractors and subcontractors.
    (d) Federal Environmental Requirements.--(1) The Corporation is 
subject to the requirements of the National Environmental Policy Act, 
as amended (42 U.S.C. 4321, et seq.), and the actions of the 
Corporation shall be Federal actions under the Act.
    (2) The Corporation shall be an agency of the United States 
Government for purposes of compliance with Federal law relating to the 
environment, including laws relating to clean air, clean water 
hazardous waste, park lands, wilderness areas, wildlife, and historic 
properties.
    (3) The Corporation shall be subject to a State law or order 
relating to the environment only to the extent that a Federal agency 
should be subject to that law or order as a result of an express waiver 
of sovereign immunity by statute or executive order.
    (e) Transfer of Air Traffic System.--The Federal Aviation 
Administration shall transfer its control over the air traffic system 
in the United States to the Corporation on the date of transfer, in a 
systematic and orderly manner that assures complete continuity in air 
traffic control operations.
    (f) Continued Applicability of the Act.--The requirements of this 
Act shall continue to apply to the Corporation throughout its 
existence. No entity other than the United States Air Traffic Service 
Corporation, Department of Defense units providing air traffic 
services, or entities to which the Corporation has delegated air 
traffic service responsibilities or contracted with for the provision 
of air traffic control services, is authorized or permitted to perform 
air traffic control services on behalf of the United States.

SEC. 203. BOARD OF DIRECTORS.

    (a) Composition and Terms.--(1) The powers of the Corporation are 
vested in a Board of Directors that governs the Corporation and is 
composed of the following 11 Directors, each of whom shall be a citizen 
of the United States, and shall not be an employee of the Corporation 
(the Corporation's employee bargaining unit representative excepted):
            (A) The Secretary of Transportation, or the Deputy 
        Secretary of Transportation as designee of the Secretary;
            (B) The Secretary of Defense, or the Secretary's designee.
            (C) Nine individuals appointed by the President of the 
        United States, by and with the advice and consent of the 
        Senate, who have knowledge of sound corporate business practice 
        and who, by virtue of background and expertise, are equipped to 
        represent the interests of--
                    (i) air traffic system commercial users subject to 
                the imposition of user fees in the case of four 
                appointments, but who are not employed by an airline;
                    (ii) non-commercial aviation;
                    (iii) employee bargaining units, as signified by 
                being a Corporation employee bargaining unit 
                representative;
                    (iv) airports subject to air traffic service 
                requirements; and
                    (v) sound corporate business practice in the case 
                of two appointments.
    (2) The Chairman of the Board is chosen from among the nine members 
specified under subparagraph (a)(1)(C) of this section, by majority 
vote of the members and shall serve until replaced by majority vote of 
the members.
    (3) Members other than the Secretaries shall be appointed to the 
Board for a term of 5 years except that, of the members first 
appointed, two shall be appointed by the President for 2-year terms, 
two shall be appointed by the President for 3-year terms, and two shall 
be appointed by the President for 4-year terms. A member may serve 
after the expiration of that member's term until a successor has taken 
office. The Secretaries shall serve terms coincident with their 
appointments to their positions.
    (b) Pay and Expenses.--Each Director not employed by the United 
States Government is entitled to compensation, which may be comparable 
to other corporate boards when performing Board duties and powers. Each 
Director is entitled to reimbursement for necessary travel, reasonable 
secretarial support, and subsistence expenses incurred in attending 
board meetings.
    (c) Vacancies.--A vacancy on the Board is filled in the same way as 
the original selection. A member of the Board may be reappointed to a 
position, subject to the advice and consent of the Senate, but may 
serve no more than two consecutive terms.
    (d) Removal of Board Members.--A member of the Board serves at the 
pleasure of the President.
    (e) Board Action Required.--The Board shall meet at the call of the 
Chairman and should meet, at a minimum, on a quarterly basis. The Board 
shall be responsible for actions of the Corporation, including the 
following matters:
            (1) Adoption of an annual budget and approval of the 
        Corporation's strategic plan.
            (2) Authorization for issuance of indebtedness.
            (3) Establishment and modification of user fees and other 
        charges to the public.
            (4) Appointment of the Chief Executive Officer.
    (f) Bylaws.--The Board may adopt and amend bylaws governing the 
operation of the Corporation. The bylaws shall be consistent with this 
Act.
    (g) Review of Borrowing.--The issuance of indebtedness by the 
Corporation may be disapproved by the Secretary of Transportation if 
the Secretary determines that the total revenues of the Corporation are 
insufficient to satisfy obligations incurred by the Corporation, 
including those that are held by the United States. Within 30 days of 
the receipt of a proposal for the issuance of indebtedness, the 
Secretary shall notify the Chairman of the Board of any disapproval, 
with justification for a disapproval.

SEC. 204. COMMITTEES OF THE BOARD; INDEPENDENT AUDITOR.

    (a) Creation of Committees of the Board.--The Board of Directors of 
the Corporation shall create and maintain a Safety Committee and any 
other committees of the Board that are needed or desirable to carry out 
Board responsibilities effectively.
    (b) Safety Committee of the Board.--(1) The Safety Committee shall 
include the Secretaries of Transportation and Defense, or designees.
    (2) It shall be the continuing duty of the Safety Committee to 
supervise the aviation safety activities of the Corporation, and in 
particular actions taken in response to safety agencies, including the 
Federal Aviation Administration and the National Transportation Safety 
Board.
    (c) Independent Audit and Investigation Function.--To fulfill the 
responsibilities of the Corporation as a Federal entity, as set forth 
in section 8G(h)(2) of the Inspector General Act (Appendix 3 of title 
5, United States Code), the Chairman of the Board shall appoint a 
qualified individual to establish and administer an independent audit 
and investigatory organization that reports directly to the Board of 
Directors of the Corporation. The organization shall conduct and 
supervise audits and investigations of the economy, efficiency, and 
effectiveness of the Corporation's programs and operations, act to 
detect and prevent fraud, waste, and abuse in such programs and 
operations, and make any necessary and desirable recommendations for 
corrective actions to the Board.

SEC. 205. OFFICERS AND THEIR RESPONSIBILITIES.

    (a) Appointment and Terms.--(1) The Corporation has a Chief 
Executive Officer, who is selected and appointed by the Board of 
Directors to manage the Corporation. However, until the Board appointed 
pursuant to section 203 of this Act makes an appointment, an individual 
with the qualifications specified by this subsection may be appointed, 
by the President, within 30 days of the enactment of this Act, to 
exercise all of the authority of the Corporation set forth in this Act 
in order to prepare the Corporation to accept the transfer of air 
traffic control responsibilities by the date of transfer. The Chief 
Executive Officer is subject to the policy guidance of the Board, 
reports to the Board, and serves at the pleasure of the Board. The 
Board may revoke actions of the Chief Executive Officer.
    (2) The Chief Executive Officer shall be a persons who, by reason 
of professional background and experience, is especially qualified to 
manage the Corporation.
    (3) The Chief Executive Officer shall--
            (A) be responsible for the management and direction of the 
        Corporation, and for the exercise of all powers and 
        responsibilities of the Corporation;
            (B) establish Corporation offices and define their 
        responsibilities and duties, with full authority to reorganize 
        the Corporation as required;
            (C) before taking office, take an oath to bear full faith 
        and allegiance to the United States and faithfully discharge 
        the duties of the office; and
            (D) designate an officer of the Corporation who is vested 
        with the authority to act in the capacity of the Chief 
        Executive Officer if the Chief Executive Officer is absent or 
        incapacitated.
    (4) The Chief Executive Officer shall appoint the other officers 
and employees of the Corporation. The Chief Executive Officer may 
delegate to other officers or employees any of the functions of the 
Corporation. An officer, employee, or agency of the Corporation is 
subject only to the supervision of the Chief Executive Officer or 
designated subordinates of the Chief Executive Officer.
    (b) Pay.--The Chief Executive Officer has exclusive authority, 
subject to sections 302 and 501 of this Act, to fix the pay of the 
officers and other employees of the Corporation, except that the Board 
of Directors shall fix the pay of the Chief Executive Officer. However, 
the President shall fix the pay, at a rate not to exceed level III of 
the Executive Schedule, of the Chief Executive Officer until the Board 
is appointed.

SEC. 206. GENERAL AUTHORITY.

    Except as otherwise specifically provided in this Act, the 
Corporation--
            (1) shall have perpetual succession in its corporate name 
        unless dissolved by law;
            (2) may adopt and use a corporate seal, which shall be 
        judicially noticed;
            (3) may acquire, purchase, lease, and hold, possess, use, 
        and improve real and personal property, including housing 
        units, patents, trademarks, copyrights, and proprietary data, 
        it considers necessary in the transaction of its business, and 
        sell, lease, grant, transfer, and dispose of the real and 
        personal property it considers necessary to effectuate the 
        purpose of the Corporation;
            (4) may indemnify members of the board of directors, the 
        Chief Executive Officer, other officers, attorneys, agents, and 
        employees of the Corporation for liabilities and expenses 
        incurred in connection with their corporate activities;
            (5) may adopt, amend, and repeal Corporation bylaws, orders 
        and regulations governing the manner in which its business may 
        be conducted and the power granted to it by law may be 
        exercised;
            (6) may enter into the contracts, agreements, or other 
        arrangements, including financial assistance, it considers 
        appropriate to conduct its business with any entity, on the 
        terms it considers appropriate, and may sue and be sued in its 
        corporate name for purposes of this paragraph;
            (7) notwithstanding any other law, without need for 
        appropriation and without fiscal year limitation, may retain 
        and use its revenues and receipts from whatever source, 
        including obligations issued and disposition of real and 
        personal property, and its other assets to carry out its 
        purposes, including research and development and capital 
        investment;
            (8) shall have the priority of the United States with 
        respect to the payment of debts out of bankrupt, insolvent, an 
        decedents' estates;
            (9) may accept gifts or donations of services and property, 
        including real, personal, mixed, tangible, or intangible 
        property, except that no gift may be accepted that attaches 
        conditions inconsistent with applicable laws and regulations or 
        is conditioned upon or will require the expenditure of 
        appropriated funds that are not available to the Corporation; 
        provided, that the Corporation shall establish written 
        guidelines setting forth the criteria to be used in determining 
        whether the acceptance of gifts or donations authorized in this 
        subsection would reflect unfavorably upon the ability of the 
        Corporation or any employee to carry out its responsibilities 
        or official duties in a fair and objective manner, or would 
        compromise the integrity or the appearance of the integrity of 
        its programs or any official involved in those programs;
            (10) may perform such investigations, including aircraft 
        accident investigations, as it shall deem necessary to carry 
        out the provisions of and exercise and perform its powers and 
        duties under this Act, and shall be included as a party in all 
        NTSB accident investigations that involve activities of the 
        Corporation;
            (11) may establish training facilities and conduct such 
        training as it deems necessary;
            (12) may use frequency assignments or licenses (obtained 
        from the National Telecommunications and Information 
        Administration by the Federal Aviation Administration) it 
        considers necessary to effectuate the purpose of the 
        Corporation; and
            (13) shall have such other powers as may be incidental, 
        necessary or appropriate to carry out the purposes this Act and 
        of the Corporation.

SEC. 207. AUTHORITY OVER MOVEMENT OF AIRCRAFT FOR THE UNITED STATES; 
              RELATED AUTHORITY.

    (a) Responsibility for Movement of Aircraft in United States 
Airspace.--(1) As successor to the Federal Aviation Administration 
pursuant to this Act, and subject to the requirements of section 44724 
of title 49, United States Code (as enacted by section 409 of this Act 
(Regulation of the United States Air Traffic Control Service 
Corporation)), and retention by the United States of exclusive 
sovereignty over airspace of the United States, the Corporation shall 
exercise day-to-day operational supervision and control over the 
movement of aircraft on behalf of the United States that was provided 
by the Federal Aviation Administration prior to the date of transfer.
    (2) The Corporation shall develop and implement airspace orders, 
procedures, and other directives with respect to the use of navigable 
airspace. This authority includes the ability to issue routine airspace 
actions and airspace assignments and designations in accordance with 
rules prescribed for the Corporation by the Administrator. 
Notwithstanding the Corporation's safety functions with regard to any 
orders or directives it may prescribe, responsibility for prescribing 
safety standards and the policies encompassing the safety structure of 
the National Airspace system remains with the Administrator.
    (3) The Corporation shall develop and implement air traffic orders, 
procedures, and other directives governing the flight of aircraft, for 
the navigation, protection, and identification of aircraft, for the 
protection of persons and property on the ground, and for the efficient 
utilization of the navigable airspace, including procedures as to safe 
altitudes of flight and the prevention of collision, between aircraft 
and land or water vehicles, and between aircraft and airborne objects.
    (4) The Corporation is authorized to--
            (A) acquire, establish, improve, dispose of, and eliminate 
        air navigation facilities wherever necessary;
            (B) operate and maintain such air-navigation facilities; 
        and
            (C) provide necessary facilities and personnel for the 
        management and protection of air traffic. The Corporation shall 
        update and arrange for publication of clearly defined routes 
        for navigation through airspace where the Corporation 
        determines that publication of such routes would promote safety 
        in air navigation.
    (5) To encourage and allow maximum use of the navigable airspace by 
civil aircraft consistent with national security, and subject to 
appropriate military authority exercised pursuant to section 40106 of 
title 49, United States Code, the Corporation shall recommend for 
issuance by the Administrator, in consultation with the Secretary of 
Defense, regulations that establish areas in the airspace the 
Administrator decides are necessary in the interest of national 
defense, and to restrict or prohibit flight of civil aircraft that the 
Corporation cannot identify, locate, and control with available 
facilities in those areas.
    (6) The Corporation shall recommend to the Administrator long-range 
plans and policy for the orderly development and use of the navigable 
airspace that will best meet the needs of, and serve the interests of, 
civil aeronautics and the national defense, except for needs of the 
armed forces that are peculiar to warfare and primarily of military 
concern. In making recommendations, the Corporation shall emphasize--
            (A) providing the highest degree of safety and efficiency 
        in air commerce;
            (B) meeting the forecasted needs of civil aeronautics; and
            (C) meeting the requirements that the Secretary of Defense 
        establishes for the support of the national defense.
    (7) To implement the authority in this section, the Corporation may 
undertake reasonable actions, including action to--
            (A) develop, alter, test, and evaluate systems, procedures, 
        facilities, and devices, and define their performance 
        characteristics, to meet the needs for safe and efficient 
        navigation and traffic control of civil and military aviation, 
        except for needs of the armed forces that are peculiar to 
        warfare and primarily of military concern; and
            (B) select systems, procedures, facilities, and devices 
        that will best serve those needs and promote maximum 
        coordination of air traffic control, air defense, and range 
        surveillance systems except for needs of the armed forces that 
        are peculiar to warfare and primarily of military concern.
    (8) The Corporation shall establish procedures, before transition, 
to notify the Administrator and the public when major changes in serve 
are contemplated.
    (9) In any case where negotiations with other countries over 
airspace control and air navigation may be necessary or desirable, the 
Corporation shall be subject to the requirements of section 303 of this 
Act and shall act through the Federal Aviation Administration, the 
Department of Transportation, and the Department of State and, to the 
degree possible, provide the Administrator with as much notice as 
possible of requirements in this area.
    (10) The Corporation shall refer for action by the Federal Aviation 
Administration, pursuant to chapter 447 and chapters 461 through 465 of 
title 49, United States Code, complaints against any person for 
violations of rules, regulations, orders, and other directives issued 
by the Corporation or by the Administrator. The Administrator shall 
take appropriate action promptly on complaints forwarded by the 
Corporation, consistent with procedural requirements of the 
Administration for enforcement of its rules, regulations, orders, and 
other directives. The Corporation shall provide necessary assistance in 
any enforcement action taken under this subsection. Nothing in this 
paragraph limits or changes the current power of the Administrator to 
take action under his or her own authority.
    (b) Aviation Research and Development.--The Corporation is 
authorized to undertake research and development projects as it deems 
necessary to carry out the purposes of this Act.
    (c) Meteorological Services; Aeronautical Charts.--The Corporation 
shall be responsible for the dissemination of available aviation-
related meteorological information to its air traffic services users in 
accordance with published air traffic procedures.
    (d) Non-Federal Facilities.--The Corporation is authorized to 
operate, contract for, maintain, and certify non-federal systems and 
equipment used to support air traffic control and air navigation.

SEC. 208. AUTHORITY TO INCUR INDEBTEDNESS.

    (a) General Authority.--Subject to the authority of the Secretary 
of Transportation pursuant to section 203(g) of this Act to disapprove 
the issuance of indebtedness by the Corporation, the Corporation may 
issue such notes or other obligations as the Corporation determines 
necessary to carry out the purposes of this subtitle, either to the 
Secretary of the Treasury pursuant to subsection (b) of this section or 
to private entities pursuant to subsection (c) of this section. The 
aggregate amount of any such obligations outstanding at any one time 
shall not exceed $15,000,000,000.
    (b) Treasury Borrowing.--The Corporation may issue to the Secretary 
of the Treasury notes or other obligations in such forms and 
denominations, bearing such maturities, and subject to such terms and 
conditions, as may be prescribed by the Secretary of the Treasury. Such 
notes shall bear interest at a rate determined by the Secretary of the 
Treasury, taking into consideration current market yields on 
outstanding marketable obligations of the United States of comparable 
maturities. The Secretary of the Treasury shall purchase any notes or 
other obligations issued hereunder, and for that purpose the Secretary 
is authorized to use as a public debt transaction the proceeds from the 
sale of any securities issued under chapter 31 of title 31, United 
States Code, and the purposes for which securities may be issued under 
that Act are extended to include any purchase of such notes or 
obligations acquired by him or her under this subsection. The Secretary 
of the Treasury may at any time sell any notes or other obligations 
acquired by him or her under this subsection.
    (c) Market Borrowing.--(1) If the Corporation demonstrates to the 
satisfaction of the Secretary of Treasury that borrowing from the 
private markets would be cost-effective, the Corporation is authorized 
to issue notes and other obligations to private entities consistent 
with this subsection.
    (2) The Corporation may pledge its assets and pledge and use its 
revenues and receipts for the payment of the principal or interest on 
its obligations, for the purchase or redemption thereof, and for other 
purposes incidental thereto, including creation of reserve, sinking, 
and other funds which may be similarly pledged and used, to such extent 
and in such manner as the board deems necessary or desirable. The 
Corporation is authorized to enter into binding covenants with the 
holders of such obligations, and with the trustee, if any, under any 
agreement entered into in accordance with the issuance thereof with 
respect to the establishment of reserve, sinking, and other funds, 
application and use of revenues and receipts of the Corporation, 
stipulations concerning the subsequent issuance of obligations or the 
execution of leases or lease/purchases relating to properties of the 
Corporation and such other matters as the board deems necessary or 
desirable to enhance the marketability of such obligations. However, 
the Corporation may not enter into covenants that have the effect of 
conflicting with any requirement of this Act, as determined by the 
Secretary of Transportation in approving the issuance of indebtedness 
pursuant to subsection 203(g) of this Act.
    (3) Obligations issued by the Corporation under this subsection 
shall be subject to such terms and conditions as the board determines.
    (4) Obligations issued by the Corporation under this subsection 
shall--
            (A) be negotiable or nonnegotiable and bearer or registered 
        instruments, as specified therein and in any indenture or 
        convenant relating thereto;
            (B) contain a recital that they are issued under this 
        section, and such recital shall be conclusive evidence of the 
        regularity of the issuance of sale of such obligations and of 
        their validity; and
            (C) be treated as an obligation or security of the United 
        States for purposes of the counterfeiting and forgery 
        provisions of title 18, United States Code.
    (b) Taxation of Corporation Indebtedness.--The indebtedness of the 
Corporation, in whatever form, shall be exempt both as to principal and 
interest from all taxation now or hereafter imposed by a State or local 
taxing authority except estate, inheritance, and gift taxes.

SEC. 209. FEES AND OTHER CHARGES FOR SERVICES.

    (a) Fees and Other Charges for Services.--The Corporation is 
authorized to and shall impose fees or other charges for service that 
are consistent with the requirements of this section. The imposition 
and subsequent modification of fees or other charges shall be carried 
out by means that provide the opportunity for public comment in 
writing, and for access by the public to all comments filed in a 
particular action on fees or other charges. Fees and charges by the 
Corporation may not become effective prior to January 1, 1997.
    (b) Policy for Imposition of Fees, Charges and Practices.--The 
fees, charges and related practices of the Corporation shall conform to 
the following policies:
            (1) Fees, charges and practices shall not unreasonably 
        restrain competition by, for example, being unfair, 
        unreasonable, unjustly discriminatory among current or 
        potential users of the air traffic system, or unreasonably 
        disadvantaging new entrants.
            (2) Fees and charges shall be consistent with all 
        obligations of the United States Government under an 
        international agreement.
            (3) Fees and charges shall be maintained at a level 
        sufficient to assure the satisfaction of all obligations 
        incurred by the Corporation, including those that are held by 
        the United States.
    (c) Payment to Corporation.--Fees and other charges for services 
under this Act shall be paid directly to the Corporation or its agent. 
The Corporation is authorized to levy fines, interest, and penalties 
for late payment or nonpayment of fees and other charges imposed under 
this Act.
    (d) Cost Allocation Study.--(1) The Corporation shall, as soon as 
practical after the date of transfer, undertake a study of the 
allocation of all Corporation costs to identifiable, discrete--
            (A) air-traffic-service categories, distinguishing at a 
        minimum among domestic operations, foreign air transportation 
        operations to and from the United States, and overflights of 
        the United States; and
            (B) user categories, including commercial aviation, general 
        aviation, and public-use aviation.
    (2) The Corporation shall complete the cost allocation study not 
later than 18 months after the date of transfer. The study shall 
consider all costs incurred by the Corporation, and all costs incurred 
by the Department of Defense to produce air traffic control services 
for civil aviation. The study shall be consistent with generally 
accepted accounting principles for commercial, not-for-profit entities.
    (e) Public Aircraft.--The Corporation shall not impose fees or 
other charges for air traffic services provided to public aircraft, as 
defined in subtitle VII of title 49, United States Code.
    (f) Military Aircraft.--The Corporation shall not impose fees or 
other charges for air traffic services provided to United States 
military aircraft (Department of Defense, Air National Guard and 
reserve components, Coast Guard).
    (g) General Aviation Aircraft.--The Corporation shall not impose 
fees or other charges for air traffic services provided to aircraft 
that are not used in the business of providing transportation of 
persons or property for compensation or hire by air.
    (h) Foreign Air Transportation.--The Corporation's authority to 
impose fees or other charges under this section includes the authority 
to impose fees or other charges for transportation of persons or 
property in foreign air transportation, as well as for services in the 
case of overflights of United States airspace.
    (i) Review of User Fees.--(1) The actions of the Corporation in 
exercising the authority of this section are subject to review solely 
pursuant to the provisions of this subsection.
    (2) A user may file a complaint alleging that a fee, charge or 
practice violates paragraph 209(b)(1) of this section with the 
Department of Justice and seeking review of any such fee, charge or 
practice. The Department of Justice shall review each complaint and, if 
the Attorney General concludes that as a result of such fee, charge or 
practice, competition is likely to be unreasonably restrained, the 
Attorney General shall forward the complaint to the Secretary of 
Transportation for review and action. Upon review of the complaint and 
in consultation with the Attorney General, the Secretary of 
Transportation may disapprove a fee, charge, or practice that violates 
the provisions of paragraph 209(b)(1) of this section or issue such 
other order as will remedy that violation.
    (3) Complaints alleging that a new fee or charge violates paragraph 
209(b)(2) of this section may be filed with the Department of 
Transportation, seeking review of any such new fee or charge within 60 
days after the user receives written notice of a change to the fee or 
charge. Upon review of the complaint, the Secretary of Transportation 
may disapprove any fee or charge that violates the provisions of 
paragraph 209(b)(2) of this section or issue such other order as will 
remedy that violation.
    (4) Not later than 180 days after the date of enactment of this 
section, the Department of Transportation shall establish such 
procedures, guidelines or other measures as may be necessary to carry 
out its responsibilities under this section.
    (j) Transitional User Fees.--(1) During the 2-year period following 
the date of transfer, and subject to the separate limitation specified 
in paragraph (3) of this subsection, the total amount of fees or other 
charges imposed in any period of time on an entity in the business of 
providing transportation to persons for compensation or hire by air 
shall not exceed an amount that is 8.5 percent of the total amount paid 
for such transportation during that period of time.
    (2) During the 2-year period following the date of transfer, and 
subject to the separate limitation specified in paragraph (3) of this 
subsection, the total amount of fees or other charges imposed in any 
period of time on an entity in the business of providing transportation 
of property for compensation or hire by air shall not exceed an amount 
that is 5.3 percent of the total amount paid for such transportation 
during that period of time.
    (3) During the 2-year period following the date of transfer, the 
Corporation shall not impose fees or other charges for air traffic 
services provided to a person traveling in foreign air transportation 
that exceed the amount of $5.10 per enplaned passenger departing the 
United States. The Corporation may impose fees or charges during the 2-
year period for services in the case of overflights of United States 
airspace, consistent with the requirements of this section.

SEC. 210. LIMITATION ON STATE AND LOCAL TAXATION.

    (a) In General.--The Corporation, its activities, and facilities 
shall be exempt from all taxation now or hereafter imposed by a State 
or local taxing authority, except the Corporation is not exempt from 
taxation that supports direct coverage or services provided to the 
Corporation, including unemployment compensation coverage and sewer and 
water services.
    (b) Debt of the Corporation.--The status, for purposes of taxation, 
of debt issued by the Corporation is set forth in section 208 of this 
Act.
    (c) Tax Laws Applicable to Employees.--Nothing in this Act relieves 
the employees of the Corporation from the tax laws of the United 
States, the several States, and political subdivisions of the several 
States.

SEC. 211. PREEMPTION OF AUTHORITY OVER AIR TRAFFIC SERVICES.

    (a) Definition.--In this section, ``State'' means a State, the 
District of Columbia, and a territory or possession of the United 
States.
    (b) Preemption.--(1) Except as provided in this subsection, a 
State, political subdivision of a State, or political authority of at 
last 2 States may not enact or enforce a law, regulation, or other 
provision having the force and effect of law related to air traffic 
services authorized to be provided by the Corporation pursuant to the 
authority of this Act.
    (2) This subsection does not limit a State, political subdivision 
of a State, or political authority of at least 2 States that owns or 
operates an airport served by an air carrier holding a certificate 
issued by the Secretary of Transportation from carrying out its 
proprietary powers and rights.

SEC. 212. SUITS BY AND AGAINST THE CORPORATION.

    (a) Jurisdiction for Legal Actions Generally.--The United States 
district courts shall have original jurisdiction over all actions 
brought by or against the Corporation, except as otherwise provided in 
this Act. Any action brought in a State court to which the Corporation 
is a party shall be removed to the appropriate United States district 
court under the provisions of chapter 89 of title 28, United States 
Code.
    (b) Jurisdiction for Review of Corporation Orders and Procedures.--
Notwithstanding the requirements of subsection (a) of this section, the 
United States Court of Appeals for the District of Columbia Circuit, 
and alternatively the Court of Appeals of the United States for the 
circuit in which the person seeking judicial review resides or has its 
principal place of business, have exclusive jurisdiction over petitions 
challenging final orders or procedures issued by the Corporation with 
respect to its air traffic control duties and powers designated to be 
carried out under this Act. The petition must be filed not later than 
60 days after the order is issued. When such a petition is filed, the 
clerk of the Court shall immediately send a copy of the petition to the 
Chief Executive Officer of the Corporation. A decision by a court under 
this section may be reviewed only by the Supreme Court of the United 
States.
    (c) Jurisdiction for Review of Taking and Infringement Claims.--(1) 
Any action for a taking of real property founded upon the Constitution 
or any Act of Congress or any regulation of an executive department 
shall be brought against the United States in the Court of Federal 
Claims pursuant to section 1491(a)(1) of title 28, United States Code.
    (2) Any action founded upon the infringement of any patent, 
copyright, certificate of plant variety protection, or exclusive right 
in a mask work shall be brought against the United States in the Court 
of Federal Claims pursuant to section 1498 of title 28, United States 
Code.
    (d) Federal Tort Claims Act; Applicability of Title 28 U.S.C.--(1) 
The provisions of chapter 171 and all other provisions of title 28, 
United States Code, relating to tort claims shall apply to tort claims 
arising out of activities of the Corporation.
    (2) Unless otherwise provided in this Act, the provisions of title 
28 relating to service of process, venue, and limitations of time for 
bringing action in suits in which the United States, its officers, or 
employees are parties, and the rules of procedure adopted under title 
28 for suits in which the United States, its officers, or employees are 
parties, shall apply in like manner to suits in which the Corporation, 
its officers, or employees are parties.
    (e) Conduct of Litigation.--The Department of Justice shall furnish 
the Corporation legal representation but, with the prior consent of the 
Attorney General, the Corporation may employ attorneys by contract or 
otherwise to conduct litigation brought by or against the Corporation 
or its officers or employees in matters affecting the Corporation.
    (f) The Judgment Fund.--The Judgment Fund of the United States 
shall not be available for the satisfaction of any claims against the 
Corporation.
    (g) Testimony of Corporation Employees.--Except with the consent of 
the chief legal officer of the Corporation, employees of the 
Corporation may not be called to or provide expert testimony in civil 
litigation, regardless of whether the Corporation, the United States, 
or any of its agencies is a party to such litigation. The Corporation 
is authorized to prescribe the circumstances, if any, under which 
employees may provide opinion or expert testimony.

SEC. 213. ACQUIRING INTEREST IN PROPERTY BY EMINENT DOMAIN.

    (a) General Authority.--(1) To the extent financial resources are 
available, the Corporation may acquire by eminent domain under 
subsection (b) of this section interests in property necessary for 
operational control of the airspace, including airways, air traffic 
services, and navigation aids.
    (2) The Corporation may exercise the power of eminent domain only 
if it cannot--
            (A) acquire the interest in the property by contract; or
            (B) agree with the owner on the purchase price for the 
        interest.
    (b) Civil Actions.--(1) A civil action to acquire an interest in 
property by eminent domain under subsection (a) of this section must be 
brought in the district court of the United States for the judicial 
district in which the property is located or, if a single piece of 
property is located in more than one judicial district, in any judicial 
district in which any piece of the property is located. An interest is 
condemned and taken by the Corporation for its use when a declaration 
of taking is filed under this subsection and an amount of money 
estimated in the declaration to be just compensation for the interest 
is deposited in the court. The declaration may be filed with the 
complaint in the action or at any time before judgment. The declaration 
must contain or be accompanied by--
            (A) a statement of the public use for which the interest is 
        taken;
            (B) a description of the property sufficient to identify 
        it;
            (C) a statement of the interest in the property taken;
            (D) a plan showing the interest taken; and
            (E) a statement of the amount of money the Corporation 
        estimates is just compensation for the interest.
    (2) When the declaration is filed and the deposit is made under 
paragraph (1) of this subsection, title to the property vests in the 
United States; on behalf of the Corporation, in fee simple absolute or 
in the lesser interest shown in the declaration, and the right to the 
money vests in the person entitled to the money. When the declaration 
is filed, the court may decide--
            (A) the time by which, and the terms under which, 
        possession of the property is given to the Corporation; and
            (B) the disposition of outstanding charges related to the 
        property.
    (3) After a hearing, the court shall make a finding on the amount 
that is just compensation for the interest in the property and enter 
judgment awarding that amount and interest on it. The rate of interest 
shall be equivalent to current market yields on one-year obligations of 
the United States and is computed on the amount of award less the 
amount deposited in the court from the date of taking to the date of 
payment.
    (4) On application of a party, the court may order immediate 
payment of any part of the amount deposited in the court for the 
compensation to be awarded. If the award is more than the amount 
received, the court shall enter judgment against the Corporation for 
the deficiency.

SEC. 214. RELATIONSHIPS WITH FEDERAL AGENCIES.

    (a) Department of Defense.--(1) In exercising and performing its 
powers and duties under this Act, the Corporation shall maintain 
national defense responsibilities exercised by the Federal Aviation 
Administration as of the date of transfer, including air defense and 
defense readiness support.
    (2) The Department of Defense (DOD) and the Corporation shall 
continue to share current logistics and command and control systems and 
shall agree jointly on changes to existing agreements or systems, 
including changes to current agreements on flight inspections and 
similar services. The DOD, the Administration, and the Corporation 
shall establish processes at the local, regional and national levels to 
establish policy and implementing procedures and to approve jointly 
exemptions for unique military missions.
    (3) The Corporation and DOD shall develop processes for the 
assignment of military personnel within the Corporation to ensure 
national defense interests are safeguarded and to improve understanding 
and cooperation between the organizations.
    (4) The DOD shall have the same exemptions from acquisition laws as 
the Corporation when engaged in joint actions to improve or replenish 
the national air traffic control system. The Corporation retains the 
ability to acquire real property, goods and services through DOD, or 
other appropriate agencies, but will be bound by the acquisition laws 
and regulations governing those cases.
    (b) National Telecommunications and Information Administration.--
The Corporation shall obtain needed frequency assignments or licenses 
for its operations from the Federal Aviation Administration, which 
retains its role as the responsible agency for representing the 
interests of the aeronautical services before national and 
international spectrum authorities on all national and international 
spectrum policy and management issues involving the United States. Each 
assignment or license made available to the Corporation shall remain in 
effect for the life of the facility unless the National 
Telecommunications and Information Administration withdraws the 
spectrum from Federal Aviation Administration. In such cases, the 
Corporation shall be given adequate notification.
    (c) Relationship With Federal Law Enforcement Agencies Concerning 
Controlled Substance Tracking.--In order to assist in controlling the 
illegal transportation of controlled substances by aircraft in United 
States airspace, the Corporation shall offer to Federal law enforcement 
agencies, without cost and in a timely manner, all appropriate 
flightplan and tracking data related to such transportation. In this 
subsection, ``controlled substance'' has the meaning provided under 
section 102 of the Comprehensive Drug Abuse Prevention and Control Act 
of 1970 (21 U.S.C. 802).
    (d) National Weather Service.--As successor to the Federal Aviation 
Administration pursuant to this Act, the Corporation shall exercise all 
functions performed by the Federal Aviation Administration under 
agreements with the National Weather Service concerning the collection 
or dissemination of weather conditions, forecasts, warnings, and 
reports to persons engaged in civil aeronautics.

               TITLE III--PERMANENT FEDERAL REQUIREMENTS

SEC. 301. CORPORATION SUBJECT TO DIRECT FEDERAL CONTROL IN TIME OF WAR 
              OR NATIONAL EMERGENCY.

    In the event of war or a national emergency declared by the 
President or Congress, the President may by Executive order transfer to 
the Department of Defense any functions (including powers, duties, 
activities, facilities, and parts of functions) of the Corporation and, 
in connection with the transfer, the President may provide for 
appropriate transfers of records, property, and personnel. The Chief 
Executive Officer, in consultation with the Administrator and the 
Department of Defense, shall develop plans for the effective discharge 
of the responsibilities of the Corporation in the event of war or 
national emergency. The Corporation shall also comply with those 
provisions of Executive Order 11161, or a successor authority, that 
governed the activities of the Federal Aviation Administration to which 
the Corporation succeeded pursuant to this Act.

SEC. 302. COLLECTIVE BARGAINING.

    (a) In General.--Employees of the Corporation shall have the right 
to form, join, or assist labor organizations, and to bargain 
collectively through representatives of their own choosing. The 
Corporation, within three years of the date of transfer, shall 
establish bargaining agreements with recognized exclusive bargaining 
representatives of the Corporation's employees, consistent with the 
provisions of this section. In the event agreements have not been 
reached within that period, the Corporation or the exclusive bargaining 
representatives may refer the unresolved matters to the Federal 
Mediation and Conciliation Service under subsection (c) of this 
section.
    (b) Limited Applicability of the National Labor Relations Act.--The 
provisions of subchapter II of chapter 7 (title 29, United States Code) 
of the National Labor Relations Act shall govern--
            (1) the rights of Corporation employees to organize and to 
        be represented by labor organizations;
            (2) the recognition of labor organizations, including 
        representational elections; and
            (3) representation rights and duties.
    (c) Mediation.--Upon the request of either party or on its own 
motion, the Federal Mediation and Conciliation Service may offer 
mediation assistance to labor organizations representing Corporation 
employees and the Corporation prior to their submission of a 
negotiation impasse before the Labor Resolution Board under subsection 
(d).
    (d) Labor Resolution Board.--A Labor Resolution Board shall be 
established for the binding resolution of bargaining impasses, in the 
event mediation is unsuccessful. The Labor Resolution Board shall 
consist of three neutral members who are not employees of the 
Corporation. One member shall be designated by the Corporation and one 
member shall be designated by the recognized exclusive bargaining 
representatives of the Corporation's employees. The third member, 
chosen from recommendations made by both the Corporation and the 
recognized exclusive bargaining representatives of the Corporation's 
employees, shall be designated by the Director of the Federal Mediation 
and Conciliation Service. Each member of the Board shall receive such 
compensation from the Corporation as the Corporation may fix, together 
with necessary traveling and subsistence expenses while serving as a 
member.
    (e) Prohibition on Strikes, Work Stoppages, and Slowdowns.--An 
individual may not accept or hold a position with the Corporation if 
such person participates in a strike, work stoppage, or slowdown 
against the Corporation. Any labor organization representing 
Corporation employees is prohibited from calling or participating in a 
strike, work stoppage, or slowdown, or condoning any such actions by 
failing to take immediate action to prevent or stop such activity.
    (f) Labor Management Reporting and Disclosure Act.--The provisions 
of chapter 11 of title 29, United States Code, apply to labor 
organizations that have or are seeking to attain recognition under the 
authority of this section, and to the organizations' officers, agents, 
shop stewards, other representatives, and members to the extent to 
which the provisions would be applicable if the Corporation were an 
employer under section 402 of title 29.

SEC. 303. INTERNATIONAL AGREEMENTS AND ACTIVITIES.

    (a) Consistency With International Obligations and Laws of Other 
Countries.--In exercising and performing its powers and duties under 
this Act, the Corporation shall do so consistently with any obligation 
assumed by the United States in any treaty, convention, or agreement 
that may be in force between the United States and any foreign country 
or foreign countries or between the United States and an international 
organization, and shall take into consideration any applicable laws and 
requirements of foreign countries.
    (b) International Activities.--Subject to the concurrence of the 
Secretaries of State and Transportation, and provided that the 
Corporation first determines that activities under this section promote 
aviation safety or United States aviation interests, the Corporation 
shall, to the extent possible--
            (1) enter into cooperative relationships with foreign 
        entities to conduct, encourage, and promote the development, 
        modification, testing, evaluation, and provision of systems, 
        procedures, facilities, and devices necessary to meet the needs 
        for safe and efficient air navigation and air traffic control 
        of civil aviation;
            (2) train foreign nationals directly, or in conjunction 
        with any other United States Government agency, or through any 
        United States public or private agency (including any State or 
        municipal educational institution), or through any 
        international organization, in aeronautical and related 
        subjects essential to the orderly and safe operation of civil 
        aircraft; and
            (3) provide operational and technical services to foreign 
        aviation authorities.
    (c) Reimbursement for Activities.--The Corporation may accept 
reimbursement for the full cost of providing any training, operational, 
or technical services performed under this section from the foreign 
entity receiving such services or from an international organization on 
behalf of the foreign entity.

             TITLE IV--AMENDMENTS TO FEDERAL AVIATION LAWS

SEC. 401. ACCESS TO THE AIR TRAFFIC SYSTEM.

    Section 40101(c) of title 49, United States Code, is amended--
            (1) by inserting ``, including regulation of the 
        Corporation,'' after ``of this part''; and
            (2) by striking all after ``shall consider'' and inserting 
        the following: ``the requirements of national defense and 
        commercial and general aviation, and the public right of 
        freedom of transit through the navigable airspace. For purposes 
        of this subsection, the public right of freedom of transit 
        through the navigable airspace includes reasonable access to 
        airports, airways, and airway facilities without regard to 
        category and class of aircraft.''.

SEC. 402. DEFINITIONS.

    Section 40102(a) of title 49, United States Code, is amended as 
follows:
            (1) In paragraph (4), by inserting ``, including any 
        facility that is owned, leased, operated or maintained by the 
        Corporation,'' before ``used'';
            (2) by redesignating paragraphs (12) through (37) as 
        paragraphs (13) through (38), respectively, and by inserting 
        after paragraph (11) the following:
            ``(12) `Corporation' means the United States Air Traffic 
        Service Corporation created by the `United States Air Traffic 
        Service Corporation Act'.''; and
            (3) by redesignating paragraphs (38) through (41) as 
        paragraphs (40) through (43), respectively, and by adding after 
        newly redesignated paragraph (38) the following:
            ``(39) `routine airspace action' means any regulatory or 
        non-regulatory action that assigns the use of class D, E, or G 
        airspace or involves Federal airways and reporting points, as 
        these terms are defined in the Federal Aviation Regulations.''.

SEC. 403. AIRSPACE CONTROL AND AIR TRAFFIC RULES.

    Section 40103(b) of title 49, United States Code, is amended by 
striking the subsection heading and paragraphs (1) and (2) and 
inserting the following:
    ``(b) Use of Airspace.--(1) The Administrator of the Federal 
Aviation Administration shall develop safety standards and policy for 
the use of the navigable airspace and assign by regulation or order the 
safety structure for use of airspace necessary to ensure the safety of 
aircraft. Prior to the date of transfer established pursuant to the 
United States Air Traffic Service Corporation Act, the Administrator 
shall assign by regulation or order the use of the airspace necessary 
to ensure the safety of aircraft and the efficient use of airspace. 
Effective on the date of transfer established pursuant to the United 
States Air Traffic Service Corporation Act and thereafter, the 
Administrator shall oversee the assignment by the Corporation of the 
use of the airspace, within the parameters set by Administration 
regulations, orders, and directives, necessary to ensure the efficient 
use of airspace with no derogation in safety. The Administrator may 
modify or revoke an assignment of the Corporation when required in the 
public interest.
    ``(2)(A) Prior to the date of transfer established pursuant to the 
United States Air Traffic Service Corporation Act, the Administrator 
shall prescribe air traffic regulations on the flight of aircraft 
(including regulations on safe altitudes) for navigating, protecting, 
and identifying aircraft; protecting individuals and property on the 
ground; using the navigable airspace efficiently; and preventing 
collision between aircraft, between aircraft and land or water 
vehicles, and between aircraft and airborne objects.
    ``(B) Effective on the date of transfer established pursuant to the 
United States Air Traffic Service Corporation Act and thereafter, the 
Administrator shall set safety parameters for and regulate the 
Corporation, and have safety oversight of the Corporation's 
prescription of air traffic orders, procedures or other directives on 
the flight of aircraft (including procedures on safe altitudes) for 
navigating, protecting, and identifying aircraft; protecting 
individuals and property on the ground; using the navigable airspace 
efficiently, preventing collision between aircraft and land or water 
vehicles, and between aircraft and airborne objects.

SEC. 404. EMERGENCY POWERS.

    Section 40106 of title 49, United States Code, is amended--
            (1) In subsection (a), by inserting ``or by the 
        Corporation'' following ``section 40103(b) (1) and (2) of this 
        title'';
            (2) In subsection (a)(1), by inserting ``and the 
        Corporation'' after ``Administration''; and
            (3) In subsection (a)(2), by inserting ``and the 
        Corporation'' after ``Administrator''.

SEC. 405. PRESIDENTIAL TRANSFERS IN TIME OF WAR.

    Section 40107(b) of title 49, United States Code, is amended to 
read as follows:
    ``(b) During War.--If war occurs, the President by Executive order 
may transfer to the Secretary of Defense a duty, power, activity, or 
facility of the Administrator or the Corporation. In making the 
transfer, the President may transfer records, property, officers, and 
employees of the Administration or the Corporation to the Department of 
Defense. The Corporation shall develop, in consultation with the 
Administrator and the Department of Defense and other affected 
Government agencies, plans for the effective discharge of the 
responsibilities of the Administration and the Corporation in the event 
of war.''.

SEC. 406. PREEMPTION OF PRICES, ROUTES AND SERVICE REGULATION.

    Section 41713(b)(1) of title 49, United States Code, is amended by 
adding the following new sentence at the end thereof: ``The Corporation 
is also prohibited from undertaking actions that would have the same 
effects as the actions specified in this paragraph.''.

SEC. 407. AIRWAY CAPITAL INVESTMENT PLAN; RESEARCH AND DEVELOPMENT 
              PLANNING.

    Section 44501 of title 49, United States Code, is amended as 
follows:
            (1) In subsection (b), insert at the end of the first 
        sentence ``that does not follow the date of transfer 
        established under the United States Air Traffic Service 
        Corporation Act''.
            (2) In subsection (c)(1), insert at the end the following 
        sentence: ``In carrying out their respective duties and 
        responsibilities under this chapter and under subtitle XI of 
        this title, the Administrator and the Corporation shall consult 
        and cooperate concerning research and development activities 
        related to the use of navigable airspace, air traffic control, 
        and air navigation, in order to avoid unnecessary duplication 
        of their research and development efforts.''.

SEC. 408. AVIATION FACILITIES.

    Sections 44502(a)(1) and 44502(f) of title 49, United States Code, 
are amended by inserting ``Prior to the date of transfer established 
under the United States Air Traffic Service Corporation Act,'' at the 
beginning of each paragraph.

SEC. 409. REGULATION OF THE UNITED STATES AIR TRAFFIC SERVICE 
              CORPORATION.

    Title 49, United States Code, is amended by inserting after section 
44723 the following:
``Sec. 44724. Oversight of the United States Air Traffic Service 
              Corporation
    ``(a) Oversight of the United States Air Traffic Service 
Corporation.--The Administrator of the Federal Aviation Administration 
is authorized and directed to prescribe by regulation or otherwise, 
minimum standards and necessary requirements to assure the highest 
level of aviation safety in the public interest, and to insure that 
national defense needs are met, in actions taken by the Corporation. 
The Administration shall continue to prescribe long-range policy and 
planning and set safety standards that regulate the Corporation. The 
Corporation shall act within the parameters of the regulations 
prescribed by the Federal Aviation Administration and the authority of 
this Act to meet its mission to control air traffic in a safe and 
efficient manner.
    ``(b) Coordination.--To the greatest extent possible, the 
Administrator shall encourage cooperation and coordination between the 
Administration and the Corporation. The Administrator shall take 
appropriate action promptly on recommendations made by the Corporation.
    ``(c) Administrator Action.--The Administrator, pursuant to 
authorities under this subtitle, may direct the Corporation to cease 
any action that the Administrator determines may compromise aviation 
safety or security or the national defense, or to undertake any action 
to assure aviation safety or security or the national defense. Where 
the Corporation has authority to prescribe orders, directives, actions, 
or assignments, the Administrator may direct the Corporation to 
withdraw or revise an order, procedure, directive, action, or 
assignment for reasons of safety, security or the national defense. The 
Administrator may only modify or revoke an action of the Corporation 
when required by the safety, security, or national defense interest or 
interest of the public. The Administrator's authority under this 
subsection shall not be delegated.
    ``(d) Enforcement of Corporation Rules, Regulations, Orders and 
Other Directives.--The Corporation shall refer for action by the 
Administration, pursuant to subpart IV of this part, complaints against 
any person for violations of orders, procedures, and other directives 
issued by the Corporation or by the Administration pursuant to the 
authority of this chapter. The Administrator shall take appropriate 
action promptly on complaints referred by the Corporation. The 
Corporation shall provide necessary assistance in any enforcement 
action taken under this subsection. This subsection shall not be 
construed to limit the authority of the Administrator to undertake 
enforcement actions under this part upon the Administrator's 
initiative.''.

                   TITLE V--OTHER APPLICABLE STATUTES

SEC. 501. EMPLOYEE MANAGEMENT AND EXEMPTIONS FROM TITLE 5, UNITED 
              STATES CODE.

    (a) Establishment of Employee Management System.--The Corporation 
shall establish a comprehensive system for the management, 
compensation, and advancement of Corporation employees that best serves 
the needs of airspace management in the United States.
    (b) Exclusive Authority To Set Employment Levels and Pay.--The 
Chief Executive Officer has the exclusive authority, subject to the 
provisions of this section and section 302, to fix total compensation, 
including incentives and benefits, for all employees of the Corporation 
other than the Chief Executive Officer. The Chief Executive Officer 
shall determine the appropriate level of staffing and appoint such 
numbers of officers and employees as needed to conduct the business of 
the corporation without regard to limits imposed by Federal bodies. The 
Chief Executive Officer has the exclusive authority to take all 
personnel actions, including but not limited to, appointments, 
assignments, reassignments, promotions, demotions, and terminations. 
Personnel actions shall be consistent with the principles of fairness 
and due process. The Corporation shall fulfill the obligations of 
statutes governing use of military personnel to ensure the corporation 
is properly advised on requirements of the armed forces and that 
national defense interests are safeguarded properly. The Corporation is 
authorized to conduct background investigations, including accessing 
records of the Federal Bureau of Investigation and other law 
enforcement agencies, to determine suitability for employment. 
Executive Order 10450 shall govern the granting of access to National 
Security information.
    (c) Limited Applicability of Title 5, United States Code.--(1) 
Title 5, United States Code, applies to the Corporation and its 
employees and activities only to the extent set forth in this section 
and section 601. Except as otherwise provided in this Act, employees of 
the Corporation qualify as officers and employees of the United States.
    (2)(A) During the three-year period that follows the date of 
transfer, chapters 87 and 89 (Health and Life Insurance) of title 5, 
United States Code, apply to the Corporation. An employee of the 
Corporation, including any employee hired during the three-year period, 
shall be covered under the provisions of chapters 87 and 89 of title 5, 
but only during this period. The Corporation shall make such payments 
as are required under these chapters during this period.
    (B) During the three-year period that follows the date of transfer, 
the Corporation shall negotiate replacement health and life insurance 
systems that apply to its employees subsequently and that, as a 
minimum, provide not less than one life insurance and three health 
insurance programs that are comparable with respect to employee premium 
cost and coverage to the Federal health and life insurance programs 
available to employees during the three-year period.
    (3) Any Federal employee who transfers to the Corporation under 
section 601 and who on the day before the date of transfer is subject 
to subchapter III of chapter 83 of title 5 (Retirement), United States 
Code, or chapter 84 (Federal Employees' Retirement System) of such 
title shall, so long as continually employed by the Corporation without 
a break in service, continue to be subject to such subchapter or 
chapter, as the case may be. Employment by the Corporation without a 
break in continuity of service shall be considered to be employment by 
the United States Government for purposes of such subchapter and 
chapter. The Corporation shall be the employing agency for purposes of 
section 602 and shall contribute to the Civil Service Retirement and 
Disability Fund such sums as are required by section 602.
    (4) As rapidly as practical following the date of transfer, the 
Corporation shall negotiate a retirement benefits system that applies 
to employees hired following the date of transfer. Employees employed 
by the Corporation as of that date may elect, within six months of the 
establishment of such new systems, to retain coverage under title 5 or 
transfer to the new systems.
    (5) Chapter 81 of title 5 (Compensation for Work Injury) applies to 
the Corporation. An employee of the Corporation, including any employee 
hired after the date of transfer, shall be covered under the provisions 
of chapter 81.
    (6) An employee, as defined in section 2105 of title 5, United 
States Code, who transfers to the Corporation other than under section 
601 of this Act and without a break in service is entitled to retain 
coverage, rights, and benefits under chapters 81, 83, 84, 87, and 89 of 
title 5, United States Code (to the extent otherwise provided by this 
subsection), if necessary deductions and Corporation contributions are 
deposited in the systems' funds in accordance with section 602, as 
applicable, and if such employee so elects within six months of 
transfer to the Corporation.
    (7) Sections 7342, 7353, and 7351 of title 5, United States Code, 
and Appendices 4 (Executive Personnel Financial Disclosure 
Requirements) and 6 (Financial Disclosure Requirements of Federal 
Personnel) of title 5, United States Code, apply to officers and 
employees of the Corporation.
    (8) The Veterans Preference Act of 1944, as amended (5 U.S.C. 3308-
3320), applies to the Corporation.
    (d) Civil Rights Protections in Employment.--The provisions of 
section 2000e-16 of title 42, United States Code (Employment by Federal 
Government) apply to the employees of the Corporation.
    (e) Collective Bargaining.--The provisions of the Federal Service 
Labor-Management Relations Statute, chapter 71 of title 5, United 
States Code, shall not apply except as provided in section 601 of this 
Act.

SEC. 502. APPLICABILITY OF GOVERNMENT CORPORATION CONTROL ACT.

    (a) Section 9101(3) of title 31, United States Code, is amended by 
adding after subparagraph (N) the following new subparagraph:
                    ``(O) the United States Air Traffic Service 
                Corporation.''.
    (b) Notwithstanding subsection (a), the following provisions of 
chapter 91 of title 31, United States Code, shall not apply to the 
Corporation:
            (1) Section 9102 (relating to establishing and acquiring 
        corporations), except that any subsidiaries or affiliates of 
        the Corporation shall be subject to the debt limitation 
        contained in section 208 of this Act.
            (2) Section 9103(c) (relating to budgets of wholly owned 
        Government corporations), except that the budget submitted by 
        the Corporation in accordance with section 9103(a) shall be 
        submitted by the President without change as part of the budget 
        submitted to Congress under section 1105 of title 31, United 
        States Code.
            (3) Sections 9105-9106 (relating to audits), except that 
        the Corporation shall prepare an annual financial statements 
        audit pursuant to section 9105.
            (4) Section 9107 (relating to accounts).
            (5) Section 9108 (relating to obligations); except that the 
        Secretary of the Treasury shall prescribe the timing of 
        issuance of obligations to the public.
            (6) Section 9109 (relating to exclusion of a wholly owned 
        Government Corporation from the Act).
            (7) Section 9110 (relating to standards for depository 
        institutions holding securities of a Government-sponsored 
        corporation for customers).

SEC. 503. EXTENSION AND AMENDMENT OF AVIATION-RELATED TAXES AND TRUST 
              FUND SPENDING AUTHORITY.

    (a) Aviation Fuel Used in Non-Commercial Aviation.--Section 
4091(b)(3)(A) of the Internal Revenue Code of 1986 (26 U.S.C. 
4091(b)(3)(A)) is amended by striking ``January 1, 1996'' and inserting 
in lieu thereof ``January 1, 1999''.
    (b) Gasoline Used in Non-Commercial Aviation.--Section 4041(c)(5) 
of the Internal Revenue Code of 1986 (26 U.S.C. 4041(c)(5)) is amended 
by striking ``December 31, 1995'' and inserting in lieu thereof 
``December 31, 1998''.
    (c) Transportation of Passengers by Air.--(1) Section 4261 of the 
Internal Revenue Code of 1986 is amended by striking ``a tax equal to 
10 percent of the amount so paid'' each place it appears and inserting 
in lieu thereof ``a tax equal to 1.5 percent of the amount so paid, 
except that the tax imposed for transportation beginning before January 
1, 1997, shall be equal to 10 percent of the amount so paid''.
    (2) Section 4261(c) of the Internal Revenue Code of 1986 is amended 
by striking ``a tax of $6'' and inserting in lieu thereof ``a tax of 
$.90, except that the tax imposed for transportation beginning before 
January 1, 1997, shall be a tax of $6,''.
    (3) Section 4261(g) of the Internal Revenue Code of 1986 is amended 
by striking ``January 1, 1996'' and inserting in lieu thereof ``January 
1, 1999''.
    (d) Transportation of Property by Air.--(1) Section 4271 of the 
Internal Revenue Code of 1986 is amended by striking ``a tax equal to 
6.25 percent of the amount so paid'' and inserting in lieu thereof ``a 
tax equal to .95 percent of the amount so paid, except that the tax 
imposed for transportation beginning before January 1, 1997, shall be 
equal to 6.25 percent of the amount so paid''.
    (2) Section 4271(d) of the Internal Revenue Code of 1986 is amended 
by striking ``January 1, 1996'' and inserting in lieu thereof ``January 
1, 1999''.
    (e) Section 9502(b) of the Trust Fund Code of 1981 is amended--
            (1) by striking ``January 1, 1996'' each place it appears 
        and inserting in lieu thereof ``January 1, 1999'';
            (2) by inserting the word ``and'' after the semicolon at 
        the end of paragraph (2);
            (3) by striking ``; and'' at the end of paragraph (3) and 
        substituting a period in lieu thereof; and
            (4) by deleting paragraph (4).
    (f) Section 9502(d)(1) of the Trust Fund Code of 1981 is amended by 
striking the phrase ``October 1, 1995'' and inserting in lieu thereof 
``October 1, 1999''.
    (g) Section 9502(d)(1)(A) of the Trust Fund Code of 1981 is amended 
by striking ``or the Federal Aviation Administration Authorization Act 
of 1994'' and inserting ``or the Federal Aviation Administration 
Authorization Act of 1994 or the United States Air Traffic Service 
Corporation Act''.
    (h) Section 9502(f)(3) of the Trust Fund Code of 1981 is amended by 
striking ``December 31, 1995'' and inserting in lieu thereof ``December 
31, 1998''.

SEC. 504. TRANSFERS FROM THE AIRPORT AND AIRWAY TRUST FUND.

    Section 9502(d) of the Trust Fund Code of 1981 (Expenditures from 
Airport and Airway Trust Fund) is amended by the addition of new 
paragraphs (5), (6) and (7) as follows:
            ``(5) Transfers from the Airport and Airway Trust Fund to 
        cover certain air traffic transition costs. The Secretary of 
        the Treasury shall pay from the Airport and Airway Trust Fund 
        to the United States Air Traffic Service Corporation amounts 
        equivalent to the obligated but unexpended balance of 
        appropriations available on October 1, 1996, for operation and 
        maintenance of air traffic control, air navigation, 
        communications, or supporting services for the airway system by 
        the Federal Aviation Administration. Such amounts shall be 
        transferred on the date of transfer under the United States Air 
        Traffic Service Corporation Act and on the basis of estimates 
        by the Secretary of Transportation. Such balances received by 
        the Corporation will be used only for the purposes and in such 
        amounts as they were obligated, when held in the Trust Fund.
            ``(6) Transfers from the Airport and Airway Trust Fund to 
        cover certain air traffic facility costs. The Secretary of the 
        Treasury shall pay from the Airport and Airway Trust Fund to 
        the United States Air Traffic Service Corporation amounts 
        equivalent to outlays required to meet obligations for 
        development or construction of air traffic control, air 
        navigation, or communications facilities for the air traffic 
        system entered into by the United States prior to October 1, 
        1996. Such amounts shall be transferred in the quarter 
        immediately following the quarter in which the outlays are made 
        by the Corporation, and on the basis of estimates by the 
        Secretary of the Transportation, and proper adjustments shall 
        be made in amounts subsequently transferred to the extent prior 
        estimates were in excess of or less than the credits allowed. 
        Amounts received by the Corporation will be used only for the 
        purposes and in such amounts as they were obligated, when held 
        in the Trust Fund.
            ``(7) Transfers from the Airport and Airway Trust Fund to 
        cover the commencement of Corporation services. Amounts in the 
        Airport and Airway Trust Fund shall be available, as provided 
        by Appropriations Acts, for payment by the Secretary of the 
        Treasury to the United States Air Traffic Service Corporation, 
        which amounts are equivalent to the maximum percentages allowed 
        in section 209(j) of this Act, applied to the air 
        transportation covered by that subsection which occurred on or 
        after October 1, 1996, and before January 1, 1997. Such amounts 
        shall be transferred on the basis of estimates by the Secretary 
        of the Treasury, and proper adjustments shall be made in 
        amounts subsequently transferred under this subsection to the 
        extent prior estimates were in excess of or less than the 
        amount allowed.''.

SEC. 505. EXCLUSION OF THE CORPORATION FROM THE BUDGET AND BUDGET 
              ENFORCEMENT.

    (a) Any increases in direct spending or reduction in receipts 
authorized by this Act shall be exempt from the requirements of section 
252 of the Balanced Budget and Emergency Deficit Control Act of 1985.
    (b) Any transfer under section 9502(d)(7) of the Trust Fund code of 
1981, as amended by section 504 of this Act, shall be exempt from the 
requirements of section 251 of the Balanced Budget and Emergency 
Deficit Control Act of 1985.
    (c) Section 255(g)(1)(A) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by inserting after ``Tennessee 
Valley Authority, except non-power programs and activities (64-4110-0-
3-999);'' the following: ``United States Air Traffic Service 
Corporation;''.
    (d) Notwithstanding any other provision of law, the receipts and 
disbursements of the Corporation shall not be counted as new budget 
authority, outlays, receipts, or deficit or surplus for purposes of--
            (1) the budget of the United States Government as submitted 
        by the President;
            (2) the congressional budget; or
            (3) the Balanced Budget and Emergency Deficit Control Act 
        of 1985.

SEC. 506. DISCRETIONARY SPENDING LIMITS.

    (a) Upon enactment of this Act, the discretionary spending limits 
set forth in section 601(a)(2) of the Congressional Budget Act of 1974 
(2 U.S.C. 665(a)(2)) (as adjusted in conformance with section 251 of 
the Balanced Budget and Emergency Deficit Control Act of 1985) for 
fiscal years 1997 through 2000 are reduced by the following amounts:
            (1) For fiscal year 1997, for the discretionary category: 
        $6,405,000,000 in new budget authority and $4,190,000,000 in 
        outlays.
            (2) For fiscal year 1998; for the discretionary category: 
        $6,870,000,000 in new budget authority and $5,586,000,000 in 
        outlays.
    (b) For fiscal year 1999, the comparable amount for budgetary 
purposes shall be deemed to be $7,449,000,000 in new budget authority 
and $6,542,000,000 in outlays. For fiscal year 2000, the comparable 
amount for budgetary purposes shall be deemed to be $7,828,000,000 in 
new budget authority and $7,148,000,000 in outlays.

                       VI--TRANSITION PROVISIONS

SEC. 601. TRANSFER OF FEDERAL PERSONNEL TO THE CORPORATION.

    (a) Transfer of Employees to the Corporation.--Jointly, the 
Administrator and the Chief Executive Officer shall determine which 
functions and which employees are transferred to the Corporation.
    (b) Continuation of Personnel Systems.--Compensation, benefits, and 
other terms and conditions of employment that exist for employees and 
officers of the Federal Aviation Administration on the date of transfer 
shall continue to apply to officers and employees of the Corporation 
unless and until changed in accordance with section 501 of this Act.
    (c) Employee Protections.--Employment rights, wages, and benefits 
of employees transferred to the Corporation shall not be adversely 
affected, except for cause, during the three-year period commencing on 
the date of transfer. Thereafter, employee rights, wages and benefits 
will be governed by the provisions of section 501 of this Act.
    (d) Labor Agreements.--(1) In the interest of effective labor-
management relationships, the Corporation shall adopt all labor 
agreements that are in effect on the date of transfer and shall accord 
full recognition to labor organizations representing Corporation 
employees to the extent that those labor organizations had been 
accorded exclusive representative status for those employees under 
sections 7111 and 7112 of title 5, United States Code, prior to the 
date of transfer. Such labor agreements shall remain in effect for 
three years from the date of transfer, unless the agreements provide 
for a shorter duration or the Corporation and the exclusive 
representative agree to the contrary before the expiration of that 
three-year period. For the period such labor agreements are in effect, 
the parties will be governed by the terms and conditions of those 
agreements and by the applicable provisions of chapter 71 of title 5, 
United States Code, and will file any unfair labor practice charges, 
negotiability appeals, exceptions to arbitration awards and requests 
for assistance to solve impasses that do not arise from the negotiation 
of a new agreement with the appropriate component of the Federal Labor 
Relations Authority.
    (2) Disputes arising from the negotiation of a new agreement will 
be resolved by the National Labor Relations Board or the Labor 
Resolution Board, as appropriate under section 302 of this Act.
    (3) As of the date of transfer, determinations concerning the 
appropriateness of bargaining units, or the bargaining unit status of 
Corporation employees, or the exclusive representation status of labor 
organizations representing Corporation employees will be resolved by 
the National Labor Relations Board under section 302 of this Act.
    (4) Any proceedings under section 7117, 7118, or 7122 of title 5, 
United States Code, pending before any component of the Federal Labor 
Relations Authority when the parties cease to be governed by the 
applicable provisions of chapter 71 of title 5 will be decided and, if 
necessary, defended and enforced by the Federal Labor Relations 
Authority. Any other matters involving the Corporation that are pending 
before any component of the Federal Labor Relations Authority when the 
parties cease to be governed by the applicable provisions of chapter 71 
of title 5 will be transferred by the appropriate component of the 
Authority to the National Labor Relations Board or the Labor Resolution 
Board, as appropriate under section 302 of this Act.

SEC. 602. PAYMENTS FOR EMPLOYEE BENEFITS.

    (a) The Corporation shall make payments as are required by section 
8147 of title 5, United States Code.
    (b) The Corporation shall pay to the Civil Service Retirement and 
Disability Fund--
            (1) such employee deductions and agency contributions as 
        are required by sections 8334, 8422, and 8423 of title 5, 
        United States Code; and
            (2) such additional agency contributions as are determined 
        necessary by the Office of Personnel Management to pay, in 
        combination with the sums under paragraph (1), the normal cost 
        (determined using dynamic assumptions) of retirement benefits 
        for the employee of the Corporation who are subject to 
        subchapter III of chapter 83 of title 5, United States Code.
    (c) The Corporation shall pay to the Thrift Savings Fund such 
employee and agency contributions as are required by section 8432 of 
title 5, United States Code.

SEC. 603. TRANSFER OF FACILITIES TO THE CORPORATION.

    (a) In General.--(1) The Administrator is authorized and directed 
to transfer, on the date of transfer or as soon as practical 
thereafter, to the Corporation without charge all right, title, and 
interest in, and the use, possession, and control of, real and personal 
property under Federal Aviation Administration jurisdiction, including 
frequency licenses, patents, and software rights, of the United States 
that are necessary and appropriate for the functions being transferred 
to the Corporation. However, the Administrator shall not transfer the 
Atlantic City Technical Center. The Corporation shall contract for 
services provided at this facility on the date of transfer that are 
associated with transferring functions, at a minimum for a period of 
one year following transfer at not less than the level of activity on 
the date of transfer, unless that level for a particular activity is 
unjustified.
    (2) The Secretary of Defense is authorized and directed to transfer 
to the Corporation without charge all right, title, and interest in, 
and the use, possession, and control of, real and personal property of 
the Department of Defense located at a military installation being 
closed or realigned if that real and personal property is used 
immediately before the closure or realignment decision as a functional 
part of the air traffic system being transferred to the Corporation by 
this Act.
    (b) Air Traffic Control or Navigation Facilities Placed at 
Airports.--The authority of the Administrator pursuant to section 
47107(12) of title 49, United States Code, to locate existing and 
future air traffic control or navigation facilities at airports without 
cost shall continue to be available to be exercised as a condition of 
federal financial assistance on behalf of the Corporation.

SEC. 604. SAVINGS PROVISION.

    (a) Continued Effectiveness of Directives.--All orders, 
determinations, rules, regulations, permits, contracts, leases, 
certificates, licenses, agreements for real and personal property, and 
privileges that--
            (1) have been issued, made, granted, or allowed to become 
        effective by the President of the United States, the Secretary, 
        the Administrator, any Federal agency or official thereof, or 
        by a court of competent jurisdiction, in the performance of 
        functions which are transferred by this Act; and
            (2) are in effect on the date of transfer, shall continue 
        in effect according to their terms until modified, terminated, 
        superseded, set aside, or revoked in accordance with law by the 
        President of the United States, the Administrator, the 
        Corporation, a court of competent jurisdiction, or by operation 
        of law.
    (b) Continued Effectiveness of Pending Actions.--(1) The provisions 
of this Act shall not affect any proceedings, including notices of 
proposed rulemaking, or any application for any license, permit, 
certificate, or financial assistance pending on the date of transfer 
before the Department of Transportation or the Federal Aviation 
Administration, or any officer thereof with respect to functions 
transferred by this Act; but such proceedings or applications, to the 
extent that they relate to functions transferred, shall be continued in 
accord with transition regulations promulgated by the Corporation under 
the authority of this section. Orders issued in any such proceedings 
shall continue in effect until modified, terminated, superseded, or 
revoked by the Corporation, by a court of competent jurisdiction, or by 
operation of law. Nothing in this subsection prohibits the 
discontinuance or modification of any such proceeding under the same 
terms and conditions and to the same extent that such proceeding could 
have been discontinued or modified if this Act had not been enacted.
    (2) The Secretary, the Administrator, and the Corporation are 
authorized to issue transition regulations providing for the orderly 
transfer of proceedings and otherwise to accomplish the orderly 
transfer of functions, personnel and property under this Act.
    (c) Continued Effectiveness of Administrative and Judicial 
Actions.--No cause of action by or against the Department of 
Transportation or the Federal Aviation Administration with respect to 
functions transferred by this Act, or by or against any officer thereof 
in the official's capacity, shall abate by reason of the enactment of 
this Act. Causes of action and actions with respect to a function or 
office transferred by this Act, or other proceedings may be asserted by 
or against the United States or an official of the Corporation, as may 
be appropriate, and, in an action pending when this Act takes effect, 
the court may at any time, on its own motion or that of any party, 
enter an order which will give effect to the provisions of this 
subsection.
    (d) Substitution or Addition of Parties to Judicial Actions.--If, 
on the date of transfer, the Department of Transportation or the 
Federal Aviation Administration, or any officer thereof in the 
official's capacity, is a party to an action and, under this Act, 
specific functional responsibility for that action of the Department, 
Administration, or officer is transferred to the Corporation, then such 
action shall be continued with the Chief Executive Officer of the 
Corporation substituted or added as a party.
    (e) Continued Jurisdiction Over Actions Transferred.--Orders and 
actions of the Corporation in the exercise of functions transferred by 
this Act shall be subject to judicial review to the same extent and in 
the same manner as if such orders and actions had been by the 
Department of Transportation or the Federal Aviation Administration, or 
any office or officer thereof, in the exercise of such functions 
immediately preceding their transfer.
    (f) Air Traffic Service Liabilities and Obligations.--The 
Corporation shall assume all obligations (tangible and incorporeal, 
present and executory) associated with the functions transferred under 
this Act on the date of transfer, including leases, permits, licenses, 
contracts, agreements, claims, tariffs, accounts receivable, and 
accounts payable. All claims and actions arising in tort pending on the 
date of transfer and arising out of the alleged acts and omissions of 
employees who transfer to the Corporation shall remain liabilities of 
the United States. The Secretary shall assure that, before the date of 
transfer, the Corporation has agreed to allow representatives of the 
Secretary and the Attorney General such access as they may require to 
employees and records for all purposes relating to the handling of such 
claims.
    (g) Department of Defense Agreements.--All national, regional, and 
facility level agreements, understandings, and contracts between the 
Department of Defense and that portion of Federal Aviation 
Administration transferring to the Corporation will remain in effect 
after the date of transfer.

SEC. 605. ADMINISTRATIVE AND BUDGETARY TRANSITION.

    (a) Use of Resources for Transition.--For the purpose of 
facilitating the transfers mandated by this Act, the Secretary of 
Transportation, the Administrator of the Federal Aviation 
Administration and the Chief Executive Officer of Corporation are 
authorized to utilize funds previously appropriated to the Department 
of Transportation or the Federal Aviation Administration for the 
conduct of the functions being transferred by this Act, subject to 
accounting.
    (b) Assistance of the Office of Management and Budget.--In order to 
facilitate the transfers made by this Act, the Director of the Office 
of Management and Budget is authorized and directed to make such 
determinations as may be necessary to resolve disputes between the 
Secretary of Transportation, the Administrator of the Federal Aviation 
Administration, and the Corporation regarding the division of 
personnel, assets, liabilities, contracts, property, records, and 
unexpended balances of appropriations, authorizations, allocations, and 
other funds held, used, arising from, available to or to be made 
available in connection with the transfer.
    (c) Termination of Transition Authority.--The authorization under 
this section shall terminate upon completion of the transfer.

SEC. 606. REFERENCE.

    With respect to any functions transferred by this Act and exercised 
after the date of transfer, reference in any other Federal law or 
executive order to the Secretary or the Administrator or to the 
Department of Transportation or the Federal Aviation Administration or 
any officer or office thereof, shall be considered to refer to the 
Corporation or the Chief Executive Officer of the Corporation, as 
appropriate.

SEC. 607. SEPARABILITY.

    If a provision of this Act or its application to any person or 
circumstance is held invalid, neither the remainder of this Act nor the 
application of the provision to other persons or circumstances shall be 
affected.

SEC. 608. EFFECTIVE DATE.

    Except as otherwise specified, this Act takes effect on the date of 
enactment.
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