[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.
                                 <all>