[Congressional Record Volume 160, Number 119 (Monday, July 28, 2014)]
[House]
[Pages H6866-H6868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TRANSPARENT AIRFARES ACT OF 2014
Mr. SHUSTER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4156) to amend title 49, United States Code, to allow
advertisements and solicitations for passenger air transportation to
state the base airfare of the transportation, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4156
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 ``Transparent Airfares Act of
2014''.
SEC. 2. ADVERTISEMENTS AND SOLICITATIONS FOR PASSENGER AIR
TRANSPORTATION.
(a) Full Fare Advertising.--Section 41712 of title 49,
United States Code, is amended by adding at the end the
following:
``(d) Full Fare Advertising.--
``(1) In general.--It shall not be an unfair or deceptive
practice under subsection (a) for a covered entity to state
in an advertisement or solicitation for passenger air
transportation the base airfare for the air transportation if
the covered entity clearly and separately discloses--
``(A) the government-imposed taxes and fees associated with
the air transportation; and
``(B) the total cost of the air transportation.
``(2) Form of disclosure.--
``(A) In general.--For purposes of paragraph (1), the
information described in paragraphs (1)(A) and (1)(B) shall
be disclosed in the advertisement or solicitation in a manner
that clearly presents the information to the consumer.
``(B) Internet advertisements and solicitations.--For
purposes of paragraph (1), with respect to an advertisement
or solicitation for passenger air transportation that appears
on an Internet Web site, the information described in
paragraphs (1)(A) and (1)(B) may be disclosed through a link
or pop-up, as such terms may be defined by the Secretary,
that displays the information in a manner that is easily
accessible and viewable by the consumer.
``(3) Definitions.--In this subsection, the following
definitions apply:
``(A) Base airfare.--The term `base airfare' means the cost
of passenger air transportation, excluding government-imposed
taxes and fees.
``(B) Covered entity.--The term `covered entity' means an
air carrier, including an indirect air carrier, foreign
carrier, ticket agent, or other person offering to sell
tickets for passenger air transportation or a tour or tour
component that must be purchased with air transportation.''.
(b) Limitation on Statutory Construction.--Nothing in the
amendment made by subsection (a) may be construed to affect
any obligation of a person that sells air transportation to
disclose the total cost of the air transportation, including
government-imposed taxes and fees, prior to purchase of the
air transportation.
(c) Regulations.--Not later than 120 days after the date of
enactment of this Act, the Secretary shall issue final
regulations to carry out the amendment made by subsection
(a).
(d) Effective Date.--This Act, and the amendments made by
this Act, shall take effect on the earlier of--
(1) the effective date of regulations issued under
subsection (c); and
(2) the date that is 180 days after the date of enactment
of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Pennsylvania (Mr. Shuster) and the gentleman from Oregon (Mr. DeFazio)
each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania.
General Leave
Mr. SHUSTER. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days in which to revise and extend their remarks and
include extraneous materials for the Record on H.R. 4156.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Pennsylvania?
There was no objection.
Mr. SHUSTER. Mr. Speaker, I yield myself such time as I may consume.
I rise today in support of H.R. 4156. Let me begin by thanking my
colleagues on the Democratic side of the aisle for their helpful
support on this bill: Congressmen DeFazio, Rahall, and Rick Larsen of
Washington. And on the Republican side, I would like to thank
Congressmen Frank LoBiondo and Tom Graves of Georgia for their help and
bipartisanship in crafting this bill.
A special thanks to Congressman Tom Graves who, in the 112th
Congress, introduced similar legislation. He reached out to us early in
the process and has been a true leader, helping us craft and move this
legislation forward to provide absolute transparency to the flying
public through H.R. 4156.
Before I explain the bill, I will enter into the Record letters of
support for H.R. 4156, which represent a broad spectrum of support from
business and labor.
A4A, AFA, IAMAW, APA,
CAPA, SWAPA,
April 1, 2014.
Dear Representative: We write to urge your support for the
Transparent Airfares Act of 2014 (H.R. 4156). This bipartisan
legislation will enhance airfare transparency for airline
customers by ensuring that they know exactly how much of
their ticket price is attributable to federal taxes and fees
while still knowing the full price of air travel before they
purchase a ticket.
In January 2012, the U.S. Department of Transportation
(DOT) fundamentally changed U.S. airline industry advertising
practices by implementing a Full Fare Advertising (FFA) rule,
which reduced airfare transparency by requiring airlines to
include government-imposed taxes and fees in the base price
of an advertised fare. DOT's previous advertising rules had
been in effect for 25 years--through Democratic and
Republican administrations. Under the previous rules,
airlines and travel agents were allowed listed government-
imposed taxes and fees separately from the base price of a
ticket in advertisements--as all other U.S. consumer
products, with the exception of gasoline, are sold.
Our industry is critical to the U.S. economy. The U.S.
commercial aviation sector drives more than $1 trillion in
annual economic activity--approximately 5 percent of U.S.
Gross Domestic Product--and 10 million U.S. jobs. The
industry's long-term viability and global competitiveness is
threatened by a rising federal aviation tax burden that has
increased 30-fold over the last three decades. On a typical
$300 one-stop domestic round-trip ticket, airline customers
pay $62 in federal taxes and fees, or 21 percent of the
ticket price. The federal tax bite will increase to $63 in
July when the Transportation Security Administration
passenger security fee will more than double from $2.50 per
flight segment to $5.60 per one-way trip. Consequently, air
travel is currently taxed at a higher federal rate than
alcohol and tobacco, which are subject to so-called ``sin
taxes'' intended to discourage their use.
Requiring airlines to include rising taxes and fees in
advertisements and offers from airline and travel agent
websites can dampen demand for travel and ultimately cost
even more jobs in an industry that has lost nearly one-third
of its work force since 2001, typically resulting in reduced
service to small and rural communities. Since air travel is
often an optional choice for individual consumers and
businesses, even the smallest increase--or perceived
increase--in airline tickets costs has a negative impact on
travel decisions. In fact, in 2012, the U.S. Government
Accountability Office found that a one percent increase in
the cost of an airline ticket, including taxes and fees,
would result in a one percent reduction in the quantity of
tickets sold.
Your support of H.R. 4156 will help enhance airfare
transparency for consumers, protect U.S. airline jobs and
preserve air service to small and rural communities. We
appreciate your consideration of this important legislation
and hope that Congress will pass the bill on a strong,
bipartisan basis as soon as possible.
Sincerely,
Airlines for America,
Association of Flight Attendants--CWA,
International Association of Machinists & Aerospace Workers,
Allied Pilots Association,
Coalition of Airline Pilots Association,
[[Page H6867]]
Southwest Airlines Pilots' Association.
____
Air Line Pilots Association
International
Washington, DC, March 13, 2014.
Dear Representative: On behalf of the nearly 50,000
professional airline pilots represented by the Air Line
Pilots Association, International (ALPA), I write in support
of H.R. 4156, the Transparent Airfares Act of 2014.
The Transparent Airfares Act of 2014 seeks to restore the
transparency of airline ticket advertisement. In January
2012, the Department of Transportation (DOT) introduced a
regulation that prohibits airfare advertisements from
highlighting the base cost of an airline ticket. The
regulation instead mandated that the total cost of airfare,
including government-imposed taxes and fees, be presented as
a single price shown to the consumer. This misguided policy
effectively hides the magnitude of government imposed taxes
and fees from consumers, which typically constitute 21
percent of the total ticket cost.
The Transparent Airfares Act will restore transparency to
air travel advertising by allowing airlines to separately
declare the base airfare and additional government-imposed
taxes and fees. In addition to providing consumers with
greater information, the bill will remove the often misplaced
blame airlines receive with regard to airfare increases. The
legislation has been introduced by Transportation and
Infrastructure Committee leaders Chairman Bill Shuster (R-
PA), Ranking Member Nick J. Rahall, (D-WV), Aviation
Subcommittee Chairman Frank LoBiondo (R-NJ), Aviation
Subcommittee Ranking Member Rick Larsen (D-WA), and Senior
Committee Members Peter DeFazio (D-OR) and Tom Graves (R-GA).
The Air Line Pilots Association, International strongly
supports this move towards greater transparency in airline
ticket advertisement. We urge you to add your name as a
cosponsor of H.R. 4156.
Sincerely,
Lee Moak,
President.
____
International Brotherhood
of Teamsters,
Washington, DC, March 20, 2014.
Hon. Bill Shuster,
House Committee on Transportation and Infrastructure,
Washington, DC.
Dear Chairman Shuster: On behalf of the 1.4 million members
of the International Brotherhood of Teamsters, I am writing
to state our support for H.R. 4156, the Transparent Airfares
Act of 2014.
H.R. 4156 reverses the Department of Transportation's Full
Fare Advertising Rule, which requires airlines to include
taxes and fees in the price quotes they give to customers
when they shop online for flights. This requirement
negatively impacts consumers in two ways. First, it
effectively shields consumers from knowing what portion of
their ticket price is the base fare and which portion is
imposed taxes, which makes it nearly impossible to compare
base fares. Second, the consumer is misled into thinking that
airline ticket prices are higher than they actually are. This
has a chilling effect on the demand for air travel by making
the advertised price of an airline ticket artificially
higher.
Consumers have a right to see the full breakdown of their
ticket price, especially when taxes and fees imposed on air
travel are on the rise. While the Department of
Transportation had good intentions, in practice this
regulation has actually reduced transparency. H.R. 4156 is
practical legislation that will bring air travel in line with
virtually all other consumer products which are sold at base
price, with taxes added on at the point of purchase.
The International Brotherhood of Teamsters is pleased to
offer our support for H.R. 4156. We thank you for taking the
lead on this important issue and look forward to working with
you to ensure the bill's swift enactment.
Sincerely,
James P. Hoffa,
General President.
Mr. SHUSTER. Mr. Speaker, H.R. 4156, the Transparent Airfares Act of
2014, is a commonsense, fair, bipartisan bill that provides airfare
transparency to the flying public.
In January of 2012, a Department of Transportation rule went into
effect that requires the airlines and travel agents to bury government-
imposed taxes and fees in the advertised price of a ticket. This rule
effectively masks and, I would argue, hides the current government-
imposed taxes and fees on consumers.
H.R. 4156 clarifies that it is not an unfair or deceptive practice to
display, in an advertisement or solicitation, the base fare for the air
transportation as long as the taxes, fees, and total costs are clearly
and separately disclosed--again, let me repeat that: clearly and
separately disclosed--in the advertisement or solicitation.
This bill will allow the airlines and travel agents to display the
actual cost of air travel in a clear and transparent way, enabling
travelers to see the base airfare and government-imposed taxes and
fees. For instance, right now, the DOT requires airlines and travel
agents to advertise a $237 plane ticket as costing $300, hiding the $63
of government taxes and fees from consumers. It is only fair that
consumers know what they are paying for. So I urge all of my colleagues
to support this bipartisan bill, with 50 cosponsors.
With that, I reserve the balance of my time.
Mr. DeFAZIO. Mr. Speaker, I yield myself such time as I may consume.
The so-called Bipartisan Budget Act of 2013, which I opposed for many
reasons, but buried deep within it--you know, they were sitting down,
crunching numbers. They had the Ryan-Murray budget deal, and they had
to meet certain targets. They were short. You can't raise taxes around
here. Well, yes, maybe you kind of can, things that are taxes that
don't look like taxes.
So the deal that was cut was a 125 percent increase in the TSA
passenger security fee. Now, many Americans probably wouldn't object
too much to a passenger security fee increase if they thought it was
going to enhance passenger security, especially with better throughput
for the long lines at the airports. But no, that is not where the money
is going. It is just going somewhere in the Federal Treasury. Maybe it
will help reduce the deficit. Maybe it will be spent on something else.
No one knows. But airline passengers will pay it.
{time} 1415
A one-stop flight from Eugene to San Francisco used to be $2.50. The
tax will now be $5.60. That is a pretty steep increase, and that is
what really drove me to support this legislation.
I am happy to talk about increased taxes and have an upfront debate
about it, where it is needed and where it needs to be reformed, but
these invisible things like this, where some backroom deal between a
senior House Republican and a Democrat in the Senate, where they just
stick it on to airline passengers, that shouldn't happen.
It can happen, in part, because nobody knows. They weren't watching
the debate, it was buried in the bill, and they don't see it in the
required full-fare advertising. There is just one big number.
Well, where does all that money go? Well, guess what, a lot of it
goes to the government, and as of this week, on a one-way flight to San
Francisco, another $3.10 will go to the government. So I think if we
had good disclosure of the tax part, then it wouldn't be as easy for
some of my colleagues to sneak that stuff through.
Now, secondly, we are kind of looking at the nanny state here. Do you
know what the current rule is? Well, the airlines can advertise the
taxes after the full fare, the aggregate fare, but it has to be in
smaller print. It has to be in smaller print. Talk about the nanny
state. Give me a break.
What do you think, Americans are idiots? Besides that, I have trouble
with small print, and a lot of other people do too. So they are
probably going to be really squinting, trying to read the small print
part, where the big numbers stand out.
Third, why airlines? Why did they go after the aviation industry?
Whoa--were there a lot of complaints? No, there weren't. In May 2011,
there were four complaints about fare advertising out of 1,062
complaints. If they really wanted the FAA to focus on things, they
would look at customer service, baggage, 143, 120, boarding problems,
116, refunds, et cetera, et cetera, et cetera.
So the FAA somehow went out in search of a problem that didn't exist;
but guess what? Did they fix the problem that didn't exist? Did we go
from four complaints to zero? Oops--no. Actually, May 2014, with the
new full-fare advertising rule with the tiny print for government and
big print for the total cost, they had 12 complaints. Complaints are up
300 percent.
Now, I wonder what that is about, so I would say that this was a
nanny state rule in search of a problem that didn't exist that may have
created a problem that does exist. There is a whole host of issues that
go to price sensitivity, many studies about that, and other things.
So it is detrimental to the industry; it is, I think, confusing; and
I think it
[[Page H6868]]
is deceptive. In March, I was going to hike the Grand Canyon. I was
going to rent a car that was going to sit for 7 days. I didn't want to
pay a lot for a rental car to sit for 7 days. So I went on Priceline,
and I bid. I got a car for $19 a day--pretty good, but I know that the
next page is going to tell me what I am really going to pay.
Now, any informed consumer knows that. It is prominent because you
have to get finally to click and agree to the end, so you are going to
see the whole thing. It is the same thing with airline tickets under
this bill. You will see first what the airline is charging you. Next,
you will see what the government is charging you, and then, finally,
you will see what you will pay.
That is just like I paid for this rental car, just like a hotel room,
just like for cruises and everything else.
Now, I don't want to give anybody down at DOT any ideas--or whatever
other agencies have jurisdiction in those areas--because I don't want
them to start thinking, well, wait a minute, maybe we need a nanny
state rule too because we don't have one for rental cars and we don't
have one for cruises. No, that is not my point.
My point is consumers are pretty smart. We are not concealing
anything here. Give us full and meaningful information, and help me
prevent people sticking fees on to airline passengers that have nothing
to do with aviation in secret budget deals in the future.
With that, I reserve the balance of my time.
Mr. SHUSTER. Mr. Speaker, I thank the gentleman from Oregon for
enlightening us to some of those facts that I was not aware of.
Complaints going up 300 percent in the new law is quite shocking, but I
do agree with the gentleman completely on his argument that there needs
to be transparency.
It is not fair and it is not right that the government can hide those
fees when there are other industries and other modes of transportation
that have to put them out there in full, plain view of the traveling
public.
The gentleman is correct that the traveling public and the consumers
understand. They can look, they can read, and they can add and
subtract. So, again, I think this is a fair and prudent piece of
legislation that is going to make sure it is transparent for the
traveling public.
Once again, I want to thank the gentleman from Oregon for being a big
supporter on this, as well as the ranking member of the Subcommittee on
Aviation, Mr. Larsen; as well as the full committee ranking member, Mr.
Rahall; and, of course, Mr. LoBiondo, the chairman of the subcommittee.
Again, a special thanks to Tom Graves, who has been so effective in
working this issue and working with us to put forth this bill that is
bipartisan today.
Does the gentleman have any other speakers?
Mr. DeFAZIO. No, I have no requests for time. Apparently, we have
done something unusual around here, created something that doesn't seem
to be controversial, except among a few talking heads out there
somewhere.
Mr. Speaker, having no requests for time, I am happy to yield back
the balance of my time.
Mr. SHUSTER. Mr. Speaker, I thank the gentleman for working with me,
and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Pennsylvania (Mr. Shuster) that the House suspend the
rules and pass the bill, H.R. 4156.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________