[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1713 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1713
To amend title 39, United States Code, to direct the Postal Service to
adhere to an equitable tender policy in selecting air carriers of non-
priority bypass mail to certain points in the State of Alaska, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 15, 2001
Mr. Stevens introduced the following bill; which was read twice and
referred to the Committee on Governmental Affairs
_______________________________________________________________________
A BILL
To amend title 39, United States Code, to direct the Postal Service to
adhere to an equitable tender policy in selecting air carriers of non-
priority bypass mail to certain points in the State of Alaska, 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 ``Alaska Bypass Mail, Passenger and
Freight Stability Act of 2001''.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) The State of Alaska is the largest State in the Union
and has a very limited system of roads connecting communities.
(2) Alaska has more pilots per capita than any other State
in the Union.
(3) Pilots flying in Alaska are often the most skilled and
best-prepared pilots in the world.
(4) Air travel within the State of Alaska is often hampered
by severe weather conditions and treacherous terrain.
(5) The United States Federal Government owns nearly two-
thirds of Alaska's landmass, including large tracts of land
separating isolated communities within the State.
(6) Such Federal ownership has inhibited the ability of
Alaskans to build roads connecting isolated communities.
(7) Most communities and a large portion of the population
within the State can only be reached by air.
(8) The vast majority of food items and everyday
necessities destined for these isolated communities and
populations can only be transported through the air.
(9) The Intra-Alaska Bypass Mail system, created by
Congress and operated by the United States Postal Service under
section 5402 of title 39, with input from the Department of
Transportation, connecting hundreds of rural and isolated
communities within the State, is a critical piece of the Alaska
and the national transportation system. The system is like a
four-legged stool, designed to--
(A) provide the most affordable means of delivering
food and everyday necessities to these rural and
isolated communities;
(B) establish a system whereby the Postal Service
can meet its obligations to deliver mail to every house
and business in America;
(C) support affordable and reliable passenger
service; and
(D) support affordable and reliable non-mail
freight service.
(10) Without the Intra-Alaska Bypass Mail system--
(A) it would be difficult and more expensive for
the Postal Service to meets its obligation of
delivering mail to every house and business in America;
and
(B) food, medicine, freight and everyday
necessities and passenger service for these rural and
isolated communities would cost several times the
current level.
(11) Congress' attempts to support passenger and non-mail
freight service in Alaska using the Intra-Alaska Bypass Mail
system have yielded some positive results, but some carriers
have been manipulating the system by carrying few, if any,
passengers and little non-mail freight while earning most of
their revenues from the carriage of non-priority bypass mail.
(12) As long as the Federal Government continues to own
large tracts of land within the State of Alaska and forbids the
building of roads across these lands to connect isolated
communities, it is in the best interest of the Postal Service,
the residents of Alaska and the United States--
(A) to ensure the Intra-Alaska Bypass Mail system
remains strong, viable and affordable for the Postal
Service;
(B) to ensure residents of rural and isolated
communities in Alaska continue to have affordable,
reliable and safe passenger service;
(C) to ensure residents of rural and isolated
communities in Alaska continue to have affordable,
reliable and safe non-mail freight service;
(D) to encourage intra-Alaska air carriers to move
towards safer, more secure and more reliable air
transportation under the Federal Aviation
Administration's guidelines and in accordance with part
121 of title 14, Code of Federal Regulations (FAR Part
121), where such operations are supported by the needs
of the community; and
(E) that Congress make changes to the Intra-Alaska
Bypass Mail system to encourage intra-Alaska air
carriers to begin operating under FAR Part 121, where
applicable, and to ensure the Intra-Alaska Bypass Mail
system continues to be used to support substantial
passenger and non-mail freight service.
SEC. 3. SELECTION OF CARRIERS OF NON-PRIORITY BYPASS MAIL TO CERTAIN
POINTS IN ALASKA.
(a) Definitions.--Section 5402 of title 39, United States Code, is
amended--
(1) by striking subsection (e);
(2) by redesignating subsections (a) through (d) as
subsection (b) through (e), respectively; and
(3) by inserting before subsection (b), as redesignated,
the following:
``(a) In this section--
``(1) the term `Secretary' means the Secretary of
Transportation;
``(2) the terms `air carrier', `interstate air
transportation', and `foreign air transportation' have the
meanings given such terms in section 40102(a) of title 49;
``(3) the term `equitable tender' means the practice of the
Postal Service of equitably distributing mail on a fair and
reasonable basis between those air carriers that offer
equivalent services between two communities in accordance with
the regulations of the Postal Service;
``(4) the term `mainline carrier' means a carrier operating
aircraft in accordance with part 121 and certificated within
the payload capacity requirements of subsection (g)(1)(D)(ii)
on a given city pair route;
``(5) the term `bush carrier' means a carrier operating
aircraft certificated within the payload capacity requirements
of subsection (g)(1)(D)(i) on a city pair route;
``(6) the term `existing mainline carrier' means a mainline
carrier, as defined in this section, that was certified under
part 121, that was qualified to provide mainline non-priority
bypass mail service, and was actually engaged in the carriage
of mainline non-priority bypass mail service within the State
of Alaska as of the date of enactment of this Act;
``(7) the term `new', when referencing a carrier, means a
carrier that meets the respective requirements of subsection
(g)(1)(D) (i) or (ii), depending on the type of route being
served and the size of aircraft being used to provide service,
and began providing non-priority bypass mail service on a city
pair route within the State of Alaska after January 1, 2001;
``(8) the term `scheduled service' means:
``(A) flights are operated in common carriage
available to the general public pursuant to a published
schedule;
``(B) flight schedules are announced in advance in
systems specified by the Postal Service, in addition to
the Official Airline Guide or the air cargo equivalent
thereof;
``(C) flights depart whether full or not; and
``(D) customers contract for carriage separately on
a regular basis;
``(9) the term `part 121' means part 121 of title 14, Code
of Federal Regulations (FAR Part 121);
``(10) the term `part 135' means part 135 of title 14, Code
of Federal Regulations (FAR Part 135);
``(11) the term `121 passenger aircraft' means an aircraft
flying passengers on a city pair route that is operated in
accordance with part 121;
``(12) the term `121 passenger carrier' means a passenger
carrier that provides scheduled service under part 121;
``(13) the term `135 passenger carrier' means a passenger
carrier that provides scheduled service under part 135;
``(14) the term `bush passenger carrier' means a passenger
carrier that meets the requirements of subsection (g)(1)(D)(i)
and provides passenger service on a city pair route;
``(15) the term `city pair' means service between an origin
and destination city pair;
``(16) the term `mainline route' means a city pair in which
a mainline carrier is tendered non-priority bypass mail;
``(17) the term `bush route' means an air route in which
only a bush carrier is tendered non-priority bypass mail
between the origination point, being either an acceptance point
or a hub, as determined by the Postal Service, and the
destination city;
``(18) the term `composite rate' means a combination of
mainline and bush rates paid to a bush carrier for a direct
flight from an acceptance point to a bush destination beyond a
hub point. Such rate shall be based on the mainline rate paid
to the hub, plus the lowest bush rate paid to bush carriers in
the State of Alaska.;
``(19) the term `acceptance point' means the point at which
non-priority bypass mail originates; and
``(20) the term `base fare' is the fare paid by the
passenger to the carrier issuing the ticket which may entail
service being provided by more than one carrier.''.
(b) Requirements for Selection.--Section 5402(g)(1) of title 39,
United States Code, is amended in the matter preceding subparagraph (A)
by inserting after ``in the State of Alaska,'' the following: ``shall
adhere to an equitable tender policy within a qualified group of
carriers, in accordance with the regulations of the Postal Service,
and''.
(c) Application of Rates.--Section 5402 (g)(2) of title 39, United
States Code, is amended--
(1) by striking ``and'' at the end of subparagraph (A);
(2) by striking the period at the end of subparagraph (B)
and inserting a semicolon; and
(3) by adding at the end the following:
``(C) shall offer a bush passenger carrier
providing service on a route between an acceptance
point and a hub not served by a mainline carrier the
opportunity to receive equitable tender of non-priority
bypass mail at mainline service rates when a mainline
carrier begins serving that route if the bush passenger
carrier:
``(i) meets the requirements of subsection
(g)(1);
``(ii) provided at least 20 percent of the
passenger service (as calculated in subsection
(h)(6)) between such city pair for the 6 months
immediately preceding the date on which the
bush carrier seeks such tender; and
``(iii) continues to provide not less than
20 percent of the passenger service on the city
pair while seeking such tender;
``(D) shall offer bush passenger carriers and non-
mail freight carriers the opportunity to receive
equitable tender of non-priority bypass mail at
mainline service rates from a hub point to a
destination city if the city pair is also being served
by a mainline carrier and:
``(i) (I) the passenger carrier meets the
requirements of subsection (g)(1);
``(II) the passenger carrier provided at
least 20 percent of the passenger service (as
calculated in subsection (h)(6)) on the city
pair route for the 6 months immediately
preceding the date on which the carrier seeks
such tender; and
``(III) the passenger carrier continues to
provide not less than 20 percent of the
passenger service on the route; or
``(ii) (I) the non-mail freight carrier
meets the requirements of subsection (g)(1);
and
``(II) the non-mail freight carrier
provided at least 25 percent of the non-mail
freight service (as calculated in subsection
(i)(7)) on the city pair route for the 6 months
immediately preceding the date on which the
carrier seeks such tender.
``(E)(i), shall not offer equitable tender of non-
priority mainline bypass mail at mainline rates to a
bush carrier operating from an acceptance point to a
hub point, except as described in paragraph (C); and
``(ii) the Postal Service may tender non-priority
bypass mail at bush rates to a bush carrier if the
Postal Service determines:
``(I) that the bush carrier meets the
requirements of subsection (g)(1);
``(II) that the service to be provided on
such route by the bush carrier is not otherwise
available via direct mainline service; and
``(III) that tender of mail to such bush
carrier will not decrease the efficiency of
non-priority bypass mail service (in terms of
payments to all carriers providing service on
the city pair route and timely delivery) for
the route;
``(F) may offer tender of non-priority bypass mail
to a passenger carrier from an acceptance point to a
destination city beyond a hub point at a composite rate
if the Postal Service determines:
``(i) the carrier provides passenger
service in accordance with the requirements of
subsection (h)(2);
``(ii) the carrier qualifies under
subsection (h) to be tendered non-priority
bypass mail out of the hub point being
bypassed;
``(iii) the tender of such mail will not
decrease efficiency of delivery of non-priority
bypass mail service in to or out of the hub
point being bypassed; and
``(iv) such tender will result in reduced
payments to the carrier by the Postal Service
over flying the entire route; and
``(G) notwithstanding subparagraph (F), the Postal
Service shall offer equitable tender of non-priority
bypass mail to a bush carrier from an acceptance point
to a bush destination at a composite rate if:
``(i) (I) the passenger carrier receiving
the composite rate provided 20 percent of the
passenger service on the city pair route for
the 12 months immediately preceding the date on
which the carrier seeks tender of such mail; or
``(II) the non-mail freight carrier
receiving the composite rate provided at least
25 percent of the non-mail freight service for
the 12 months immediately preceding the date on
which the carrier seeks tender of such mail;
and
``(ii) (I) non-priority bypass mail was
being tendered to a passenger carrier or a non-
mail freight carrier at a composite rate on a
city pair route on January 1, 2000; or
``(II) the hub being bypassed was not
served by a mainline carrier on January 1,
2000.
The tender of non-priority bypass mail under subsection
(G) shall be on an equitable basis between the
qualified carriers that provide the direct service on
the city pair route, based on the volume of non-
priority bypass mail on such route.''.
(d) Selection of Carriers to Hub Points.--Section 5402(g) of title
39, United States Code, is amended by adding at the end the following:
``(4)(A) Except as provided in subparagraph (B) and
paragraph (5), the Postal Service shall select only existing
mainline carriers to provide non-priority bypass mail service
between an acceptance point and a hub point in the State of
Alaska.
``(B) The Postal Service may select a carrier other than an
existing mainline carrier to provide non-priority bypass mail
service on a mainline route in the State of Alaska if--
``(i) the Postal Service determines (in accordance
with criteria established in advance by the Postal
Service concerning schedule completion, schedule
adherence and complaints related to mail shipment
damage, delay or loss, and any other criteria dealing
with the quality of service being provided by existing
carriers) the mail service between the acceptance point
and the hub point is deficient and provides written
notice of the determination to existing mainline
carriers to the hub point; and
``(ii) after the 30-day period following issuance
of notice under clause (i), the Postal Service
determines that deficiencies in service to the hub
point have not been eliminated.
``(5)(A) The Postal Service shall offer equitable tender of
non-priority bypass mail to a new 121 mainline passenger
carrier entering a mainline route in the State of Alaska, if
that carrier--
``(i) meets the requirements of paragraph
(g)(1)(D)(ii); and
``(ii) has provided at least the same number of
insured passenger seats as the number of available
passenger seats being provided by the mainline
passenger carrier providing the greatest number of
available passenger seats on that route for the 6
months immediately preceding the date on which such
carrier seeks tender.
``(B) A new 121 mainline passenger carrier that is tendered
non-priority mainline bypass mail under subparagraph (A)--
``(i) shall be eligible for equitable tender of
such mail only on city pair routes where the carrier
meets the conditions of subparagraph (A); and
``(ii) such service may not be counted towards the
carrier meeting the minimum requirements of any other
part of this section.
``(C) Notwithstanding subparagraphs (g)(1)(B) and (5)(A), a
new 121 mainline passenger carrier, otherwise qualified under
this subsection, may immediately be tendered non-priority
mainline bypass mail to a hub point if it meets the
requirements of (g)(1)(A), (C) and (D) and (h)(2)(B); and
``(i) all qualified 121 mainline passenger
carrier(s) discontinue service on that city pair route;
or
``(ii) no 121 mainline passenger carrier serves
that city pair route.
``(D) A carrier operating under a code share agreement as
of the date of enactment of this Act that received tender of
non-priority mainline bypass mail on a city pair route may
count the passenger service provided under the entire code
share arrangement on such route if the code-share agreement
terminates, provided that the carrier must continue to provide
at least 20 percent of the passenger service (as determined
under subsection (h)(6)) between the city pair on a 121
mainline aircraft while seeking such tender.
``(6) Bush and mainline carriers providing Essential Air
Service pursuant to a Department of Transportation order issued
under subchapter II of chapter 417 of title 49, United States
Code and meeting the requirements of subsection (g)(2)(B) shall
be tendered all priority and non-priority mail, in addition to
non-priority bypass mail, by the Postal Service to destination
cities served by the Essential Air Service flights consistent
with that order,
``(A) unless the Postal Services finds that the
Essential Air Service carrier's service does not meet
the needs of the Postal Service; and
``(B) the Department of Transportation finds that
the tender of such mail to another carrier would not
substantially increase its Essential Air Service
payments to the Essential Air Service carrier.
``Service provided under this paragraph, including service
provided to points served in conjunction with service being
subsidized under the Essential Air Service contract, may not be
applied toward any of the minimum eligibility requirements of
this section.''.
(e) Selection of Carriers to Bush Points.--Section 5402(g) of title
39, United States Code, is amended by adding at the end the following:
``(h)(1) Except as provided in paragraph (8), in a given city pair
route, the Postal Service shall offer equitable tender of 70 percent of
the non-priority bypass mail on that route to all carriers providing
scheduled passenger service in accordance with FAR Parts 121 or 135
that:
``(A) meet the requirements of subsection (g)(1);
``(B) provided 20 percent or more of the passenger service
(as calculated in paragraph (7)(A) of this subsection) between
the city pair for the 12 months preceding the date on which the
121 passenger aircraft or the 135 passenger carrier seek tender
of non-priority bypass mail; and
``(C) meet the requirements of paragraph (2).
``(2) To remain eligible for equitable tender under this
subsection, the carrier or aircraft shall--
``(A) continue to provide not less than 20 percent of the
passenger service on the city pair route for which the carrier
is seeking the tender of such non-priority bypass mail;
``(B) (i) have the ability to have at least 9 seats
available on the 121 passenger aircraft actually carrying the
non-priority bypass mail;
``(ii) have the ability to have at least 5 seats available
on the passenger aircraft operated under part 135 actually
carrying the non-priority bypass mail; or
``(iii) have the ability to have at least 3 seats available
on the passenger aircraft operated under part 135 actually
carrying the non-priority bypass mail for bush destinations
where only a water landing is available;
``(C) insure all available passenger seats on the city pair
route on which the carrier seeks tender of such mail; and
``(D) operate flights pursuant to its published schedule.
``(3) Notwithstanding the minimum requirements of paragraphs (1)
and (2) of this subsection, a 121 passenger carrier shall immediately
qualify for equitable tender of the non-priority bypass mail described
in paragraph (1) on a given city pair route in which the carrier
provided at least 20 percent of the passenger service for any
consecutive 12 month period during the 24 month period immediately
preceding the effective date of this Act. Upon receiving such tender of
non-priority bypass mail for 12 months, such 121 passenger carrier
shall demonstrate it then meets the requirements of paragraph (2) to
continue being eligible for the tender of such mail on the given city
pair route. For purposes of this paragraph only, the term `percent of
passenger service' shall be calculated using the 121 passenger
carrier's passenger data for the 24 months preceding the effective
date of this Act on the city pair route in which the 121 passenger
carrier is seeking tender of non-priority bypass mail.''.
``(4)(A) If a 135 passenger carrier serves a city pair route and
meets the requirements of paragraph (h)(1) when a 121 passenger carrier
begins serving such route with a 121 passenger aircraft in accordance
with paragraphs (1) and (2) of this subsection, the qualifying 135
passenger carriers on that route shall convert to a 121 passenger
aircraft within 5 years of the 121 passenger aircraft commencing
service on that route in order to remain eligible for equitable tender
under paragraph (1). The 135 carrier must:
``(i) begin the process of conversion not later than 2
years after the 121 passenger aircraft begins offering service
on that route; and
``(ii) submit a Part 121 compliance statement not later
than 4 years after the 121 passenger aircraft begins offering
service on that route.
``(B) Completion of conversion under subparagraph (A) shall not be
required if all 121 passenger carriers discontinue scheduled service
with 121 passenger aircraft on the city pair route.
``(C) Any qualified carrier operating in the State of Alaska under
this section may request a waiver from paragraph (A). Such a request,
at the discretion of the Secretary, may be granted for good cause
shown. The requesting party shall state the basis for such a waiver.
The Secretary may allow carriers performing the activities described in
paragraph (A) to contract for internal management services and shared
personnel responsibilities with carriers already certified under part
121 if the certified 121 passenger carrier also qualifies for tender of
non-priority bypass mail (as described in subsection (h)) in the hub in
which the 135 carrier operates.''
``(D) The Secretary may charge only nominal fees associated with a
carrier performing the activities described in paragraph (A). The
Federal Aviation Administration shall reimburse any carrier for fees
paid to the Administrator to perform the activities described in
paragraph (A) between January 1, 1997, and the effective date of this
Act.
``(E) Five years after the effective date of this Act, if a 135
passenger carrier is providing service on a city pair route and a 121
passenger aircraft begins providing passenger service on said route,
such 135 passenger carrier shall convert to operations under part 121
within 12 months of the 121 passenger carrier being tendered non-
priority bypass mail. The Postal Service shall not continue the tender
of non-priority bypass mail to a 135 passenger carrier that fails to
convert to part 121 operations within 12 months of being tendered such
mail under this paragraph.''.
``(F) Notwithstanding the requirements of this subsection, if only
one passenger carrier or aircraft is qualified to be tendered non-
priority bypass mail as a passenger carrier or aircraft on a city pair
route, as described in this subsection, the Postal Service shall tender
20 percent of the non-priority bypass mail described in paragraph (1)
to the passenger carrier or aircraft providing the next highest level
of passenger service on such route.
``(5) Qualification for the tender of mail under this subsection
shall not be counted toward the minimum qualifications necessary to be
tendered non-priority bypass mail on any other route.
``(6) No less than every two years, in conjunction with annual
updates, the Secretary shall review the need for a bush mail rate
investigation. The Secretary shall use show cause procedures to
speedily and more accurately determine the cost of providing bush mail
service. In order to assure sufficient, reliable, and timely traffic
data to meet the requirements of this law, the Secretary shall require
the monthly submission of the bush carrier's data on T-100 diskettes,
or any other suitable form of data collection, as determined by the
Secretary. In addition, the Secretary shall require the carriers to
retain all books, records, and other source and summary documentation
to support their reports and to preserve and maintain such
documentation in a manner that readily permits the audit and
examination by representatives of the Secretary or the Postal Service.
Such documentation shall be retained for seven years or until the
Secretary indicates that the records may be destroyed. Copies of flight
logs for aircraft sold or disposed of must be retained. Carriers
qualified to be tendered non-priority bypass mail must submit to the
Secretary the number and type of aircraft in the carrier's fleet, the
level of passenger insurance covering its fleet and the name of the
insurance company providing such coverage. Carriers qualified to be
tendered non-priority bypass mail must submit additional traffic or
financial reports as requested by the Postal Service or the State of
Alaska's Department of Transportation and Public Facilities unless the
Secretary finds such reports to be unduly burdensome.
``(7)(A) In this section, excluding paragraph (3), the `percent of
the passenger service' shall be calculated using the data provided as
described in paragraph (6) and the lesser of
``(i) the value of the passenger excise tax paid by or on
behalf of a carrier, as determined by reviewing the collected
amount of base fares for passengers actually flown by a carrier
from the origination point to the destination point, divided by
the value of the total passenger excise taxes, as determined by
reviewing the collected amount of base fares paid by or on
behalf of all passenger carriers providing service from the hub
point to the bush destination point; and
``(ii) the value of half of the passenger excise tax paid
by or on behalf of a carrier, as determined by reviewing the
collected amount of base fares for passengers actually flown by
a carrier on the city pair route, divided by the value of the
total passenger excise taxes, as determined by reviewing the
collected amount of base fares paid by or on behalf of all
passenger carriers providing service between the origination
point and the destination point.
``(B) Not later than 30 days after the last day of each calendar
month, carriers shall report to the Postal Service the excise taxes
paid by city pair to the Department of the Treasury. Final compiled
data shall be made available to carriers providing service in the hub.
``(8) The percentage rate in paragraph (1) shall be 75 percent 5
years after the date of enactment of the Alaska Bypass Mail, Passenger
and Freight Stability Act of 2001.''.
``(i)(1) Except as provided in paragraph (i)(7), on a given city
pair route, the Postal Service shall offer equitable tender of 20
percent of the non-priority bypass mail on such route to those carriers
transporting 25 percent or more of the total non-mail freight (in
revenue), for the 12 months immediately preceding the date on which the
freight carrier seeks tender of non-priority bypass mail.
``(2) To remain eligible for equitable tender under this
subsection, a freight carrier shall continue to provide not less than
25 percent of the non-mail freight service on the city pair route for
which the carrier is seeking tender of such mail.
``(3) If a new freight carrier enters a market, that freight
carrier shall meet the minimum requirements of subsection (g)(1) and
shall operate for 12 months on a given city pair route before being
eligible for equitable tender of non-priority bypass mail on that
route.
``(4) If no carrier qualifies for tender of non-priority bypass
mail under this subsection, such mail to be divided under this
subsection, as described in subparagraph (1), shall be tendered to the
non-mail freight carrier providing the highest percentage of non-mail
freight service (in terms of revenue, as calculated in paragraph
(i)(7)) on the city pair route. In the event no non-mail freight
carrier is qualified to receive tender of non-priority bypass mail
under this paragraph, the non-priority bypass mail to be divided under
this subsection, as described in subparagraph (1) shall be divided
equitably among carriers qualified under subsection (h).
``(5) Qualification for the tender of mail under this subsection
shall not be counted toward the minimum qualifications necessary to be
tendered non-priority bypass mail on any other route.
``(6) No less than every two years, in conjunction with annual
updates, the Secretary shall review the need for a bush mail rate
investigation. The Secretary shall use show cause procedures to
speedily and more accurately determine the cost of providing bush mail
service. In order to assure sufficient, reliable, and timely traffic
data to meet the requirements of this law, the Secretary shall require
the monthly submission of the bush carrier's data on T-100 diskettes,
or any other suitable form of data collection, as determined by the
Secretary. In addition, the Secretary shall require the carriers to
retain all books, records, and other source and summary documentation
to support their reports and to preserve and maintain such
documentation in a manner that readily permits the audit and
examination by representatives of the Secretary or the Postal Service.
Such documentation shall be retained for seven years or until the
Secretary indicates that the records may be destroyed. Copies of flight
logs for aircraft sold or disposed of must be retained. Carriers
qualified to be tendered non-priority bypass mail must submit to the
Secretary the number and type of aircraft in the carrier's fleet, the
level of passenger insurance covering its fleet and the name of the
insurance company providing such coverage. Carriers qualified to be
tendered non-priority bypass mail must submit additional traffic or
financial reports as requested by the Postal Service or the State of
Alaska's Department of Transportation and Public Facilities unless the
Secretary finds such reports to be unduly burdensome.
``(7)(A) In this subsection the `percent of non-mail freight' is
calculated by dividing the revenue earned by a carrier from the
transport of non-mail freight from an origination point to a
destination point divided by the total amount of revenue earned by all
carriers from the transport of non-mail freight from the origination
point to the destination point and the lesser of:
``(i) the value of the freight excise tax paid by or on
behalf of a carrier, as determined by reviewing the collected
amount of base fares for non-mail freight actually flown by a
carrier from the origination point to the destination point,
divided by the value of the total non-mail freight excise
taxes, as determined by reviewing the collected amount of base
fares paid by or on behalf of all non-mail freight carriers
providing service from the origination point to the destination point;
and
``(ii) the value of half of the non-mail freight excise tax
paid by or on behalf of a carrier, as determined by reviewing
the collected amount of base fares for non-mail freight
actually flown by a carrier on the city pair route, divided by
the value of the total non-mail freight excise taxes, as
determined by reviewing the collected amount of base fares paid
by or on behalf of all non-mail freight carriers providing
service on the city pair route.
``(B) Not later than 30 days after the last day of each calendar
month, carriers shall report to the Postal Service the revenue earned
from the transport of non-mail freight. Final compiled data shall be
made available to carriers providing service in the hub.
``(8) The percentage rate in paragraph (1) shall be 25 percent 5
years after the date of enactment of the Alaska Bypass Mail, Passenger
and Freight Stability Act of 2001.
``(j)(1) Except as provided in paragraph (j)(3), there shall be
equitable tender of 10 percent of the non-priority bypass mail to all
carriers on the city pair route meeting the requirements of subsection
(g)(1) that do not otherwise qualify for tender under subsections (h)
or (i).
``(2) If no carrier qualifies under this subsection, the 10 percent
of non-priority bypass mail allocated in subsection (j)(1) shall be
divided evenly between the pools described in subsections (h) and (i)
to be equitably tendered among qualified carriers under such
subsections, such that the amount of non-priority bypass mail available
for tender among qualified carries under subsection (h) shall be 75
percent and the amount of non-priority bypass mail available for tender
among qualified carries under subsection (i) shall be 25 percent.
``(3) The percentage rate in paragraph (1) shall be 0 percent 5
years after the date of enactment of the Alaska Bypass Mail, Passenger
and Freight Stability Act of 2001.
``(k) No qualified carrier may be tendered non-priority bypass mail
under subsections (h) and (i) simultaneously on a route unless no other
carrier qualifies or elects to be tendered mail under either
subsection.
``(l) Carriers qualifying under subsections (h) and (i)
simultaneously may not change the pool from which they elect to be
tendered mail on a city pair route more than once per quarter.
``(m) If--
``(1)(i) 2 or more mainline passenger carriers operating
under part 121 merge; or
``(ii) 2 or more bush passenger or bush non-mail freight
carriers merge; or
``(2)(i) if a mainline passenger carrier operating under
part 121 purchases the operating certificate of another
mainline passenger carrier operating under part 121; or
``(ii) if a bush passenger or non-mail freight carrier
purchases the operating certificate of another bush passenger
or non-mail carrier, the resulting carrier operation shall have
the passenger and non-mail freight of all such merged or
acquired carriers on that route counted towards meeting the
resulting carrier's minimum requirements to receive equitable
tender of non-priority bypass mail on such route for the
following 6 months. After this 6 month period the carrier must
demonstrate that they meet the minimum passenger or non-mail
freight carriage requirements of this section to continue
receiving tender of such mail. An operating certificate
transferred to a carrier receiving tender of non-priority
bypass mail under this section shall retain the status of the
certificate as of the date of transfer.--
``(n) In addition to any penalties applied to a carrier by the
Federal Aviation Administration or the Secretary, any carrier that
significantly mis-states passenger or non-mail freight data required to
be reported under this section on any route, in an attempt to qualify
for tender of non-priority bypass mail, shall receive--
``(1) a 1-month suspension of tender of non-priority bypass
mail on the route where the data was mis-stated for the first
offense;
``(2) a 6-month suspension of tender of non-priority bypass
mail on the route where the data was mis-stated for the second
offense;
``(3) a 1-year suspension of tender of all non-priority
bypass mail in the entire State of Alaska for the third offense
in the State; and
``(4) a permanent suspension of tender of all non-priority
bypass mail in the entire State of Alaska for the fourth
offense in the State.''.
``(o)(1) The Postal Service or the Secretary, in carrying out or
enforcing the intent and provisions of subsections (g)(2), (h) or (i),
may deny equitable tender to an otherwise technically qualified carrier
who does not operate within the system in good faith and the intent of
this Act.
``(2) The Secretary and the Postal Service are authorized to issue
waivers for a carrier operating in the State of Alaska not technically
meeting the requirements of this section, except the requirements of
subsection (g)(1), if the carrier fulfills the intent of providing
passenger and non-mail freight service to rural communities. The
assumption of fulfilling the intent of this Act shall lie against the
carrier.
``(3) Consistent with the intent of supporting improved passenger
and non-mail freight service to destination communities, in granting
waivers for or denying tender to carriers under this paragraph, the
Postal Service and the Secretary shall consider:
``(A) the passenger needs of the destination to be served;
``(B) the non-mail freight needs of the destination to be
served;
``(C) the mail needs of the destination to be served;
``(D) the amount of passenger service already available to
the destination;
``(E) the amount of non-mail freight service already
available to the destination; and
``(F) the amount of non-priority bypass mail service
already available to the destination.
``(p) The Secretary shall make a regular review of carriers
receiving equitable tender of non-priority bypass mail. If the
Secretary finds a carrier is operating in an unsafe manner, including
evidence that the carrier is repeatedly flying in unsafe conditions to
the detriment of itself, its passengers or the general public, in order
to be qualified to receive equitable tender under this section, the
Secretary shall notify the Postal Service. Upon such notification, the
Postal Service shall cease tender of mail to such carrier until the
Secretary certifies the carrier is operating in a safe manner. Upon
such receipt the carrier must demonstrate that it otherwise meets the
minimum carriage requirements of this section before being tendered
mail under this section.
``(q) The United States Postal Service shall have the authority to
tender non-priority bypass mail to any carrier that meets the
requirements of subsection (g)(1) on any route on an emergency basis.
Such emergency tender shall cease when a carrier qualifies for tender
on such route under the terms of this section.''.
(f) Technical and Conforming Amendments.--
(1) Title 39.--Sections 5402 (b)(3) and (c) of title 39,
United States Code, are amended by replacing the term
``Secretary of Transportation'' with the word ``Secretary'';
(2) Title 39.--Section 5402(f) of title 39, United States
Code, is amended--
(A) by striking ``subsections (a), (b), and (c)''
and inserting ``subsection (b), (c), and (d)''; and
(B) by striking ``subsection (d)'' and inserting
``subsection (e)''.
(3) Title 49.--Section 41901 of title 49, United States
Code, is amended in subsection (a) by striking ``5402(d)'' and
inserting ``5402(e)''.
(g) Effective Dates.--Subsections (a) through (d) and (f) shall be
effective upon the date of enactment of this Act. All remaining
subsections shall be effective upon an implementation date within 12
months of the date of enactment of this Act established by the Postal
Service and announced by publication in the Federal Register not less
than 60 days before the implementation date.
(h) The Postal Service and the Secretary shall report to the House
Committee on Government Reform and the Senate Committee on Governmental
Affairs on the progress of implementing this Act no later than 12
months after the date of enactment.
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