[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1013 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1013

  To provide for the guarantee of the payment of interest on loans to 
   certain air carriers for the purchase of regional jet aircraft to 
   improve air transportation to underserved markets, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 14, 1997

Mr. Frist (for himself, Mr. Lott, Mr. Burns, and Ms. Snowe) introduced 
the following bill; which was read twice and referred to the Committee 
                on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
  To provide for the guarantee of the payment of interest on loans to 
   certain air carriers for the purchase of regional jet aircraft to 
   improve air transportation to underserved markets, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Regional Jet Air Service Improvement 
Act''.

SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.

    Subtitle VII of title 49, United States Code, is amended by adding 
at the end thereof the following:

           ``Part E.--Regional Air Service Incentive Program

``Sec.
``49201. Purpose.
``49202. Definitions.
``49203. Loan guarantees.
``49204. Conditions and limitations.
``49205. Fees.
``49206. Use of Federal facilities; assistance.
``49207. Receipts; payments.
``49208. Termination.
``Sec. 49201. Purpose
    ``The purpose of this chapter is to improve service by jet aircraft 
to underserved markets by providing assistance, in the form of loan 
guarantees, to air carriers, commuter air carriers, and intrastate air 
carriers that purchase regional jet aircraft for use in serving those 
markets.
Sec. 49202. Definitions
    ``As used in this part:
            ``(1) Aircraft purchase loan.--The term `aircraft purchase 
        loan' means any loan, or commitment in connection with a loan, 
        made for the purchase of commercial transport aircraft, 
        including spare parts normally associated with the aircraft.
            ``(2) Air carrier.--The term `air carrier' means any air 
        carrier (as that term is defined in section 40102(2)) holding a 
        certificate of public convenience and necessity issued by the 
        Secretary under section 41102.
            ``(3) Commuter air carrier.--The term `commuter air 
        carrier' means air carrier operating pursuant to section 
        40104(a)(1)(A) who operates at least 5 round trip flights per 
        week between 1 pair of points in accordance with published 
        flight schedules.
            ``(4) Intrastate air carrier.--The term `intrastate air 
        carrier' means any citizen of the United States who undertakes, 
        whether directly or indirectly or by a lease or any other 
        arrangement, to engage primarily in intrastate air 
        transportation (as such term is defined in section 40102(26)).
            ``(5) Nonhub airport.--The term `nonhub airport' means an 
        airport that each year has less than .05 percent of the total 
        annual boardings in the United States.
            ``(6) Regional jet aircraft.--The term `regional jet 
        aircraft' means a civil aircraft (as defined in section 
        40102(16))--
                    ``(A) powered by jet propulsion;
                    ``(B) with seating for not less than 30 nor more 
                than 70 passengers (except that the Secretary may, for 
                good cause shown, permit a variance of up to 5 
                passengers).
            ``(7) Small hub airport.--The term `small hub airport' 
        means an airport that each year has at least .05 percent, but 
        less than .25 percent, of the total annual boardings in the 
        United States.
            ``(8) Underserved market.--The term `underserved market' 
        means a passenger air transportation market (as defined by the 
        Secretary that--
                    ``(A) is served (as determined by the Secretary) by 
                a nonhub airport or a small hub airport; and
                    ``(B) is not within a 50-mile radius of a primary 
                airport (as defined in section 47102(11).
``Sec. 49203. Loan guarantees
    ``(a) In General.--The Secretary may guarantee any lender against 
loss of principal or interest on any aircraft purchase loan made by 
that lender to--
            ``(1) any air carrier with respect to which the certificate 
        issued that air carrier under chapter 41 of title 49, United 
        States Code, authorizes--
                    ``(A) the air carrier to provide local or feeder 
                air service;
                    ``(B) scheduled passenger operations the major 
                portion of which is conducted within the State of 
                Hawaii; or
                    ``(C) operations (the major portion of which is 
                conducted either within Alaska or between Alaska and 
                the 48 contiguous States), within the State of Alaska 
                (including service between Alaska and the 48 contiguous 
                States, and between Alaska and adjacent Canadian 
                territory);
            ``(2) any commuter air carrier; or
            ``(3) any intrastate air carrier.
    ``(b) Form, Terms, and Conditions.--A guarantee shall be made under 
subsection (a)--
            ``(1) in such form, on such terms and conditions; and
            ``(2) pursuant to such regulations, as the Secretary 
        considers to be necessary and consistent with this part.
``Sec. 49204. Conditions and limitations
    ``(a) Limitations on Funds.--
            ``(1) In general.--Subject to subsection (d), no loan 
        guarantee shall be made under this part--
            ``(1) extending to more than the unpaid interest and 90 
        percent of the unpaid principal of any loan;
            ``(2) on any loan or combination of loans for more than 90 
        percent of the purchase price of the aircraft, including spare 
        parts, to be purchased with the loan;
            ``(3) on any loan with respect to which terms permit full 
        repayment more than 15 years after the date the loan is made;
            ``(4) in any case in which the total face amount of the 
        loan, and any other loans to the same air carrier, commuter air 
        carrier, or intrastate air carrier or corporate predecessor of 
        that air carrier, commuter air carrier, or intrastate air 
        carrier that are guaranteed and outstanding under the terms of 
        this part exceed $100,000,000.
    ``(b) Conditions for Making Loans.--Subject to subsection (c), the 
Secretary may only make a loan guarantee under this part if the 
Secretary finds that--
            ``(1) the aircraft to be purchased with the loan is a 
        regional jet aircraft needed to improve the service and 
        efficiency of operation of the air carrier, commuter air 
        carrier, or intrastate air carrier;
            ``(2) the air carrier, commuter air carrier, or intrastate 
        air carrier agrees to use the aircraft to provide service to 
        underserved markets; and
            ``(3) the prospective earning power--
                    ``(A) of the applicant air carrier, together with 
                the character and value of the security pledged, 
                furnish--
                            ``(i) reasonable assurances of the ability 
                        of the applicant to repay the loan within the 
                        term for the loan; and
                            ``(ii) reasonable protection to the United 
                        States; and
                    ``(B) of the applicant commuter air carrier or 
                intrastate air carrier, together with the character and 
                value of the security pledged, furnish--
                            ``(i) reasonable assurances of the 
                        applicant's ability and intention to repay the 
                        loan within the term of the loan--
                                    ``(I) to continue its operations as 
                                a commuter air carrier or intrastate 
                                air carrier; and
                                    ``(II) to the extent that the 
                                Secretary determines to be necessary, 
                                to continue its operations as a 
                                commuter air carrier or intrastate air 
                                carrier between the same route or 
                                routes being operated by the applicant 
                                at the time of the loan guarantee; and
                            ``(ii) reasonable protection to the United 
                        States.
    ``(c) Requirement.--Subject to subsection (d), no loan guarantee 
may be made under this part on any loan or combination of loans for the 
purchase of any new turbo-jet-powered aircraft that does not comply 
with the noise standards prescribed for new subsonic aircraft in 
regulations issued by the Secretary, acting through the Administrator 
of the Federal Aviation Administration, contained in 14 CFR part 36, as 
those regulations were in effect on January 1, 1977.
    ``(d) Other Limitations.--
            ``(1) In general.--No loan guarantee shall be made by the 
        Secretary under this part on any loan for the purchase of a 
        regional jet aircraft unless the air carrier, commuter air 
        carrier, or intrastate air carrier agrees that it will provide 
        service to the underserved market for which the aircraft is 
        purchased for a period of not less than 12 consecutive months 
        after the aircraft is placed in service and the air carrier, 
        commuter air carrier, or intrastate air carrier is authorized 
        to provide service to that market.
``Sec. 49205. Fees
    ``The Secretary shall prescribe and collect from a lending 
institution a reasonable guaranty fee in connection with each loan 
guaranteed under this part.
``Sec. 49206. Use of Federal facilities; assistance
    ``(a) Use of Federal Facilities.--To permit the Secretary to make 
use of such expert advice and services as the Secretary may require in 
carrying out this part, the Secretary may use available services and 
facilities of other agencies and instrumentalities of the Federal 
Government--
            ``(1) with the consent of the appropriate Federal 
        officials; and
            ``(2) on a reimbursable basis.
    ``(b) Assistance.--The head of each appropriate department or 
agency of the Federal Government shall exercise the duties and 
functions of that head in such manner as to assist in carrying out the 
policy specified in section 49201.
    ``(c) Oversight.--The Secretary shall make available to the 
Comptroller General of the United States such information with respect 
to the loan guarantee program conducted under this part as the 
Comptroller General may require to carry out the duties of the 
Comptroller General under chapter 7 of title 31, United States Code.
``Sec. 49207. Receipts; payments
    ``(a) Miscellaneous.--Amounts received by the Secretary pursuant to 
this part shall be credited to miscellaneous receipts of the Treasury.
    ``(b) Payments.--Payments to lenders required as a consequence of 
any loan guarantee made under this part may be made from funds 
appropriated pursuant to the authorization under section 3 of the 
Regional Jet Air Service Improvement Act.
    ``(c) Administrative Expenses.--In carrying out this part, the 
Secretary shall use funds made available by appropriations to the 
Department of Transportation for the purpose of administration to cover 
administrative expenses of the loan guarantee program under this part.
``Sec. 49208. Termination
    ``The authority of the Secretary under section 49203 shall 
terminate on the date that is 5 years after the date of enactment of 
the Regional Jet Air Service Improvement Act.''.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out part E of subtile VII of title 49, United States 
Code.
                                 <all>