[Senate Report 104-333]
[From the U.S. Government Publishing Office]




                                                       Calendar No. 539
104th Congress                                                   Report
                                SENATE    

 2d Session                                                     104-333
_______________________________________________________________________


 
      FEDERAL AVIATION ADMINISTRATION REAUTHORIZATION ACT OF 1996

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1994



                                     

                 July 26, 1996.--Ordered to be printed


       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred fourth congress
                             second session

  LARRY PRESSLER, South Dakota, 
             Chairman
ERNEST F. HOLLINGS, South Carolina   TED STEVENS, Alaska
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
WENDELL H. FORD, Kentucky            CONRAD BURNS, Montana
J. JAMES EXON, Nebraska              SLADE GORTON, Washington
JOHN D. ROCKEFELLER IV, West VirginiaTRENT LOTT, Mississippi
JOHN F. KERRY, Massachusetts         KAY BAILEY HUTCHISON, Texas
JOHN B. BREAUX, Louisiana            OLYMPIA J. SNOWE, Maine
RICHARD H. BRYAN, Nevada             JOHN ASHCROFT, Missouri
BYRON L. DORGAN, North Dakota        BILL FRIST, Tennessee
RON WYDEN, Oregon                    SPENCER ABRAHAM, Michigan
  Patric G. Link, Chief of Staff
Kevin G. Curtin, Democratic Chief 
    Counsel and Staff Director


                                                       Calendar No. 539
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-333
_______________________________________________________________________


      FEDERAL AVIATION ADMINISTRATION REAUTHORIZATION ACT OF 1996

                                _______
                                

                 July 26, 1996.--Ordered to be printed

_______________________________________________________________________


      Mr.  Pressler, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 1994]

    The Committee on Commerce, Science, and Transportation 
reports favorably an original bill to amend title 49, United 
States Code, to reauthorize programs of the Federal Aviation 
Administration, and for other purposes, having considered the 
same, reports favorably thereon and recommends that the bill do 
pass.

                          Purpose of the Bill

  Titles I through V of the bill, as reported, authorize the 
programs of the Federal Aviation Administration (FAA), 
including its Airport Improvement Program (AIP), for fiscal 
year (FY) 1997. The titles dealing with reauthorization involve 
very few programmatic changes. However, a key provision 
regarding AIP essentially provides a modest level of funding 
protection for the nation's smallest airports, which may suffer 
disproportionate cuts in grant monies when appropriations 
levels go down. The bill is designed to ensure the FAA is able 
to keep functioning and provide for the safety, operational, 
and capital needs of the national air transportation system.
  The purpose of Title VI is to reform the Federal Aviation 
Administration (FAA) and make it a more efficient and effective 
organization by significantly improving how the FAA operates in 
the following areas: governance, funding, rulemaking, 
procurement management, and personnel management. The Committee 
believes that reform in these areas will create incentives for 
the agency to make necessary improvements in the performance of 
the nation's air traffic control (ATC) system.
  Title VII of the bill, as reported, would require an air 
carrier to request and receive certain employment and 
performance records before hiring an individual as a pilot.

                          Background and Needs

                               Titles I-V

  The FAA is responsible for ensuring the safety and 
development of civil aviation and overseeing the development of 
a national system of airports. Funding for the FAA comes 
largely from the Airport and Airway Trust Fund (Trust Fund). 
The monies in the Trust Fund are distributed among specific 
programs, including: operations; facilities and equipment 
(F&E); research, engineering and development (RE&D); and AIP. 
AIP, for example, is funded entirely by the Trust Fund.
  Until January 1, 1996, the Trust Fund was supported entirely 
by the following sources of revenue: 10 percent passenger 
ticket tax; 6.25 percent freight waybill tax; $6 international 
departure tax; 15 cents per gallon general aviation gas fuel 
tax; 17.5 cents per gallon general aviation jet fuel tax; and 
interest paid on the Treasury certificates in which the Trust 
Fund balance is invested. However, most of the taxes involved 
expired at the end of 1995 and have not been reauthorized. The 
FAA estimated the aviation excise taxes would have raised about 
$5.9 billion in FY 1996 (not including interest of about $772 
million). For each month the excise taxes are not in effect, 
the Trust Fund is failing to take in about $500 million. The 
aviation excise taxes supported about 70 percent of the FAA's 
$8.15 billion budget (FY 1996 appropriation; $9.1 billion in FY 
1996 budget authority). The remaining portion of the FAA's 
budget (approximately $2 billion in FY 1996) is appropriated 
out of the general fund.
  In addition to AIP, the Trust Fund also fully funds the FAA's 
F&E and RE&D programs. The Trust Fund partially pays for the 
FAA's operations and fully funds DOT's program to subsidize 
essential air service (EAS) to small communities. By a 
statutory provision (which expires at the end of FY 1996), the 
Trust Fund can only contribute up to 50 percent of the FAA's 
operations budget.
  At the beginning of calendar year 1996, there was an 
uncommitted surplus of about $5.1 billion in the Trust Fund. 
With the expiration of the aviation excise taxes, the surplus 
is being drawn down. The General Accounting Office (GAO) has 
estimated that the Trust Fund surplus will be completely spent 
down by about December 1996 unless the excise taxes are 
reinstated or another source of funding replaces them. If the 
Trust Fund is depleted for most of FY 1997, funding for the FAA 
will need to come from the general fund.
  For many years, total AIP spending had been trending upward 
and peaked at $1.9 billion in FY 1992. Since then, spending has 
been decreasing. For FY 1996, $2.21 billion was authorized, but 
only $1.45 billion in spending was provided in the DOT 
Appropriations Act.
  Most AIP funds are used for planning, designing, and 
constructing airport projects directly affecting aircraft 
operations, including runways, aprons, and taxiways. AIP funds 
are not available for funding airport operations.
  AIP money is distributed by statutory formulas, which were 
last changed in 1994. The money is divided into two broad 
categories--entitlement funds and discretionary funds. 
Entitlement funds are further divided into the following four 
sub-categories: primary airport grants; cargo service airport 
grants; state grants; and Alaskan airport grants.
  Discretionary money is subject to five set-asides and other 
restrictions. The five set asides are for: airport noise 
planning and projects; system planning; reliever airports; 
nonprimary commercial service airports; and the Military 
Airport Program (MAP).
  After entitlements and set-asides are funded, the remaining 
AIP funds can be spent as the FAA sees fit. Of these remaining 
discretionary funds, 75 percent must be directed toward: (1) 
preserving and enhancing capacity, safety, and security; and 
(2) carrying out noise compatibility planning and programs at 
primary and reliever airports. The last 25 percent is a true 
discretionary fund for eligible projects.
  As AIP funding has been declining over the last few years, 
the FAA has been issuing letters of intent (LOIs) to several 
airports. LOIs are FAA commitments to obligate future funds for 
important airport development projects. These commitments are 
predominantly funded from the discretionary portion of AIP. 
Because most major airport projects are multi-year exercises, 
the airport community believes the LOI program is critical to 
its ability to secure reasonable financing for significant 
projects. Because overall AIP funding has declined, a smaller 
amount of discretionary funds generated concern the FAA would 
not be able to meet its LOI commitments.
  In 1994, Congress specified that not less than $325 million 
per year remain in discretionary funds after all entitlements 
and set-asides are satisfied. If less than this amount remains, 
all entitlements and set-asides (except for the Alaska 
entitlement) are to be reduced by the same percentage so as to 
ensure $325 million is available for discretionary grants. 
Therefore, money also is ensured for funding LOIs. For FY 1996, 
entitlements were cut by about 8.5 percent to ensure the 
minimum discretionary fund level.\1\ Funding for AIP would have 
to be about $1.8 billion to avoid the reduction in 
entitlements.
---------------------------------------------------------------------------
    \1\ This cut was made to an amount of entitlement money already 
reduced by the 44 percent cap on entitlements for primary and cargo 
service airports. Thus, for FY 1996, entitlements were cut by a total 
of 23 percent to meet statutory restrictions.
---------------------------------------------------------------------------
  In 1990, Congress recognized the expanding infrastructure 
needs of the nation's airports and authorized the collection of 
Passenger Facility Charges (PFCs) to augment AIP. PFCs are 
local fees of up to $3 which the airlines collect from each 
passenger and pay directly to the airport. No passenger has to 
pay more than $12 in PFCs per roundtrip regardless of the 
number of airports through which the passenger connects. The 
FAA must approve an application from an airport before a PFC 
can be charged. PFC funds can be used for AIP-eligible projects 
and for some projects not eligible for AIP funding, such as 
debt financing.
  Large and medium hub airports which collect PFCs are required 
to return some of their entitlement monies for discretionary 
distribution to smaller hubs. An airport must return AIP 
entitlement funds in an amount equal to 50 percent of the 
projected revenues it will derive from a PFC in a fiscal year 
(but with a cap of 50 percent of its total entitlement). The 
foregone entitlements go into a special ``small airport fund.'' 
The FAA distributes the money in this fund as follows: 50 
percent to non-hub commercial airports; 25 percent to general 
aviation airports; 12.5 percent to small hub airports; and 12.5 
percent to the discretionary fund.

                                Title VI

             Assessment of Federal Aviation Administration

                             FAA's Problems

  For 38 years, the FAA has consistently assured the traveling 
public that the nation's air transportation system is safe and 
reliable. At present, the FAA is involved in every aspect of 
ensuring the safety of the system. The agency provides licenses 
to those who work in the industry, certifies what can be used 
within the system, determines the scope of airport development, 
and decides when and where aircraft can fly. In the past, the 
FAA has had significant resources to meet its primary objective 
of providing a safe and efficient air transportation system. As 
a general matter, the resources needed have been provided by 
the Congress, and, particularly during the 1980s, the FAA saw 
its budget increase significantly.
  The future, however, may be considerably different, 
particularly given the trend of a decreasing federal role in 
maintaining and developing the nation's infrastructure. 
According to testimony before the Committee, the demand for air 
transportation services will increase dramatically over the 
next several years, while available resources will not be 
adequate to meet demand. Without substantial, comprehensive 
reform of the FAA, the United States is facing the undesirable 
prospect of continued reliance upon an outdated, inefficient 
ATC system. In the continental United States, as well as in 
unique states that are highly dependent on air service, such as 
Alaska and Hawaii, the adverse effects on safety and efficiency 
could be substantial.
  Over the years, particularly following airline deregulation 
and the subsequent expansion of the air transportation system, 
the demand for a more efficient ATC system has increased. This 
demand undoubtedly will continue to increase in the future. Air 
carriers, which historically have covered most of the costs of 
this increased demand, can no longer assume the added costs of 
an inefficient system. Indeed, over the years, the commercial 
airline industry has reduced costs in every conceivable way. 
One carrier, for example, now spends only 12 cents per 
passenger on food. Today, the industry is a far different one 
than it was prior to deregulation because air carriers 
themselves have become much more efficient and operate in a 
more cost-effective way. Accordingly, the focus must now be on 
enacting legislation to make comprehensive changes in how the 
FAA conducts its business and to remedy inefficiencies within 
the organization and its ATC system.
  For many years, the U.S. ATC system, which carries more than 
50 percent of the world's air traffic, has remained the world's 
safest air transportation system. Despite maintaining an 
excellent safety record and low accident rate, the 
Administration and industry have continued to work to achieve a 
``zero accident'' standard. However, maintaining the world's 
safest system and achieving even greater safety margins may not 
be possible in the future without meaningful reform of the 
entire FAA, including significant improvements in the areas of 
funding, governance, more efficient equipment procurement, and 
staffing.
  The ATC system also has consistently been the most efficient 
in the world. The current ATC system consists of more than 
30,000 pieces of equipment, including 402 towers, 167 radar 
approach controls (TRACONs), 21 air traffic control centers, 
and 61 flight service stations. Radars, computers, and 
navigation and landing aids are placed throughout the entire 
country to provide the best system possible. As the largest ATC 
system in the world, it handles two operations every second of 
every hour of every day. In effect, the FAA, which operates the 
ATC system 365 days per year, 24 hours per day, is running the 
production line for commercial airlines and all other segments 
of the aviation system. Such a complex ATC system, however, 
tends to function much less efficiently than it should in the 
heavily bureaucratic environment of the existing FAA.
  The general inefficiencies of our nation's ATC system have 
had an enormous, detrimental economic impact. Delays in the 
system are estimated to cost $3.5 to $5 billion per year, 
according to the Air Transport Association. One air carrier, 
when testifying before the Committee, indicated its annual 
delay costs exceed $250 million. Another carrier told the 
Committee a single ATC power outage at Dallas-Fort Worth 
International Airport in 1995 was estimated to result in more 
than $730,000 in direct costs. Although approximately two-
thirds of ATC system delays may be weather-related, the 
Committee believes the ATC system itself is far from operating 
as efficiently as it should.
  The future of our nation's air transportation system is 
critical to helping our economy expand. Without a safe, 
efficient, and reliable system, many U.S. businesses and the 
U.S. travel and tourism industry will not be able to function 
or grow effectively. The Committee believes the need for reform 
of the air transportation system, which includes making 
significant changes within the FAA, requires more than simply 
modifying a particular program or programs. If reform does not 
provide the FAA with the ability to meet future demand, to make 
the ATC system more efficient, and to modernize, then the 
safety and the efficiency of the entire U.S. air transportation 
network are at risk and dependent U.S. industries will be 
detrimentally affected. This bill seeks to enable the FAA to 
implement comprehensive reform to address all of these areas.

                Future Demand and Supply of ATC Services

  The FAA faces two interrelated problems that highlight the 
urgent need to reform the FAA. First, there will be a much 
greater demand for ATC services in the coming years. Second, at 
a time in which increased demand will necessitate the system be 
adequately funded to meet this demand, the federal government's 
contribution to the FAA is very likely to decrease. Under 
current projections, funding for ATC services may not be 
adequate to meet future demand.
  Every day, the FAA provides about 600,000 ATC services to 
commercial airlines, business jets, general aviation pilots, 
and the military. Approximately 519 million people flew on 
commercial airlines in 1994, according to the Department of 
Transportation (DOT). By 2002, the number of passengers is 
expected to grow by 300 million, a 35 percent increase. Over 
the same period, the number of ATC system user operations is 
expected to rise by 18 percent. This projected growth clearly 
requires that the ATC system must be modernized and its 
capacity expanded. In turn, airport infrastructure deficiencies 
must be addressed to accommodate demand.
  As demand for ATC system services increases steadily, the FAA 
will face ever increasing belt tightening, primarily because of 
efforts to balance the federal budget. In the past, and 
particularly during the 1980s, the FAA's budget grew 
significantly. According to FAA data included in General 
Accounting Office (GAO) testimony, the FAA's budget needs have 
generally been accommodated by Congress until very recently.


                              TABLE 1.--FAA APPROPRIATIONS AND TRUST FUND REVENUES                              
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                            Trust               
                                                                                             Fund     Trust Fund
                                                            FAA      General     Trust     revenues     ending  
                      Fiscal year                         approp.      Fund       Fund    (receipts  uncommitted
                                                                     approp.    approp.      plus      balance  
                                                                                          interest)             
----------------------------------------------------------------------------------------------------------------
1986...................................................       $4.8       $2.4       $2.4       $3.6        $4.3 
1987...................................................        5.0        2.4        2.6        3.9         5.6 
1988...................................................        5.7        2.4        3.4        4.1         5.8 
1989...................................................        6.4        3.0        3.4        4.7         6.9 
1990...................................................        7.1        3.0        4.1        4.9         7.4 
1991...................................................        8.1        2.0        6.1        6.2         7.7 
1992...................................................        8.9        2.3        6.6        5.9         6.9 
1993...................................................        8.9        2.3        6.6        6.1         4.3 
1994...................................................        8.6        2.3        6.3        6.0         3.7 
1995 (est.)............................................        8.3        2.1        6.2        6.4         3.0 
----------------------------------------------------------------------------------------------------------------
Note: Totals may not add because of rounding.                                                                   
                                                                                                                
Source: FAA; included in GAO testimony.                                                                         

  Over the last few years, however, the FAA's budget has been 
cut by a total of $600 million. In addition, the FAA has 
reduced its workforce by 5,000, and eliminated many programs. 
As discussed in more detail below, FAA funding likely will 
further decrease over the next several years because of 
spending reductions in transportation programs proposed in the 
recent balanced budget resolution.


  Without meaningful and coordinated reform, particularly in 
the area of long-term FAA funding, the FAA's ability to meet 
growing demand and provide services to all segments of the 
aviation community will be compromised.
  The Committee is well aware of the need for meaningful reform 
of the FAA. Over the last 10 years, the Committee and the 
aviation community have examined many options designed to make 
the FAA a more effective organization, without imposing 
unnecessary and burdensome restrictions on its operations.

                        ATC System Modernization

  The Committee, the FAA, and the entire aviation community 
want to see the ATC system modernized quickly and efficiently. 
In fact over the last several years, the FAA has significantly 
reduced its workforce, worked directly with the system users to 
reduce delays, taken action to incorporate satellite technology 
as quickly as possible, restructured its acquisition process, 
restructured and reduced the cost of the Display System 
Replacement, and worked with the general aviation industry to 
create a more effective certification process. Despite these 
considerable efforts, however, the nation's ATC system is 
nowhere near to being as efficient as it should be. Moreover, 
it is not based, for the most part, on current technology, much 
less state-of-the-art technology.
  Given the extent of the FAA's problems, particularly with 
regard to modernization of the ATC system, the Committee and 
the aviation community strongly believe that the agency must be 
fundamentally reformed, both to improve its administrative 
efficiency and to stimulate improved performance of the ATC 
system. During several hearings in 1995 and 1996, the Committee 
heard testimony on many different proposals to reform the FAA. 
In addition to examining specific reform proposals, much of the 
discussion on reform focused on federal laws and regulations 
that inhibit timely implementation of technological 
improvements. The Committee believes the installation of new 
technology is a critical mission the FAA must fulfill. 
Unnecessary regulatory or legal hurdles must not stand in the 
way.
  Frequent turnover in FAA upper management and a lack of 
budgetary stability have been cited as causes for the FAA's 
tendency toward reactionary operations. In addition, observers 
believe that in the past, there has been little or no long-term 
managerial accountability within the organization. The 
Committee believes, however, that simply liberating the FAA 
from current restrictions in the areas of personnel and 
procurement or making it an independent agency are not 
sufficient to solve all of its problems. Moreover, the 
Committee believes that changes to procurement laws, while 
essential, must be accomplished in the context of an overall 
change in the way the FAA conducts its business.
  The FAA's procurement problems, such as modernization delays, 
are attributed in great part to the 10,500 pages of statutes 
and regulations under which the FAA and other government 
agencies acquire goods and services. These laws and 
regulations, despite well-intentioned drafting, have resulted 
in a procurement process that is too rigid, takes too long, and 
results in the inefficient use of time, people, and money. The 
Committee, however, recognizes acquisition delays are not 
solely caused by burdensome rules and regulations; the GAO and 
even the FAA have cited mismanagement as a factor that has led 
to modernization delays. Although Congress already has voted to 
allow the FAA to develop its own personnel and procurement 
systems as part of the FY 1996 DOT Appropriations bill (P.L. 
104-50), broad-based reform of the FAA must accompany 
procurement and personnel reform.
  The substantial number of federal requirements governing 
personnel also place a significant burden on FAA's ability to 
effectively manage its workforce. Prior to the effective date 
of the new personnel and procurement systems, FAA managers and 
employees had to work with 47,200 pages of federal personnel 
laws and regulations. According to the DOT, the restrictions 
contained in these laws and regulations created an environment 
lacking flexible recruiting, flexible salary setting, and 
performance-based rewards. A more flexible and innovative 
personnel program or structure will provide incentives for 
increased productivity, compensate employees based on 
performance, facilitate moving employees based on changes in 
the demand for ATC services, and improve overall management of 
the FAA's workforce.

                          Current FAA Funding

  Until January 1, 1996, nearly all FAA funding was derived 
from the users of the nation's air transportation system. Prior 
to that time, aviation system users paid taxes into the Airport 
and Airway Trust Fund (Aviation Trust Fund). These taxes 
included a 10 percent passenger ticket tax, a 6.25 percent 
cargo waybill tax, a $6 international departure tax, a 15 cents 
per gallon tax on gasoline for piston-engine aircraft, and a 
17.5 cents per gallon tax on general aviation jet fuel. These 
taxes brought in approximately $5-6 billion annually. \2\  The 
Aviation Trust Fund currently has about $8-9 billion in assets, 
comprised of U.S. Treasury certificates. Most of those assets 
are already committed for FAA expenditures, such as airport-
related projects and ATC facilities and equipment. The 
remaining balance is comprised of uncommitted funds (often 
referred to as a ``surplus'').
---------------------------------------------------------------------------
    \2\  See Table #1 from FAA.
---------------------------------------------------------------------------
  Since the aviation excise taxes lapsed at the beginning of 
calendar year 1996, the surplus in the Aviation Trust Fund has 
been drawn down at a rate of about $500 million per month. GAO 
has reported that the surplus will be completely spent down by 
about December 1996 unless the excise taxes are reinstated or 
another source of funding replaces them.
  The FAA's $8.3 billion budget for FY 1995 was comprised of 
approximately $6.2 billion in tax revenues from the Aviation 
Trust Fund. The remaining $2.1 billion was appropriated out of 
the General Fund. The General Fund contributes to the FAA's 
budget in part because of the various services the FAA provides 
to the Department of Defense (DoD), including national security 
services. In addition, the activities of the FAA and the ATC 
system provide benefits to the whole nation, not only to 
airspace users. For example, the FAA's actions affect air cargo 
and mail transportation as well as the safety of those on the 
ground.

                     Need for FAA Funding Solutions

  Although the FAA's budget grew significantly in the 1980s, 
the years of growth in federal FAA funding appear unlikely to 
continue. As previously noted, the FAA's budget has been cut by 
$600 million over the last few years. The lapse in the excise 
taxes has simply exacerbated the situation and made it of more 
immediate concern.
  Testimony before the Committee clearly confirmed that future 
funding is very likely to fall far short of what the FAA will 
need to provide even the current level of services, and that 
drastic cuts in services will probably need to be made if 
changes in how the FAA is funded are not made. The 
Administration, for example, projects an aggregate $12 billion 
shortfall in FAA funding over the time period from fiscal year 
1997 to fiscal year 2002. This projected funding shortfall 
represents the difference between FAA's stated need of $59 
billion during that period and an estimated budget cap of $47 
billion on FAA spending over those same six fiscal years. 
Aviation Trust Fund revenues, including interest, are expected 
to total about $47 billion during that same period. This 
implies that the General Fund contribution to FAA will decrease 
significantly over that period.
  The Committee agrees that a substantial FAA funding shortfall 
is looming. However, the actual amount of the shortfall is the 
source of some disagreement. Therefore, the bill as reported 
requires independent assessments to verify the accuracy of the 
FAA's projected needs over the next several years.
  The aviation community, also recognizes the dire situation 
regarding FAA's funding needs. In July 1995, the National 
Aviation Associations Coalition (NAAC), which includes 30 
organizations representing all segments of the aviation 
community, issued a consensus statement on FAA reform that 
stated, ``funding reform * * * is the most critical element of 
FAA reform.'' On October 31, 1995, the NAAC issued another 
consensus statement reiterating its belief ``that achieving 
budget and funding reform, including means for dedicating 
aviation resources, is critical.'' The Committee concurs 
adequate funding is the most critical element for meaningful 
reform of the FAA. For this reason, the bill as reported 
requires an independent assessment and establishes a task force 
to review existing and innovative funding mechanisms.
  Many in the aviation community also believe the year-to-year 
appropriations process makes it difficult for the FAA to 
operate under a long-term capital investment plan. This leads 
to reactive, near-term investment decisions by the FAA based on 
an artificially imposed federal budget process, rather than on 
the basis of need or sound business practices.
  If the projected shortfall in the FAA's budget is verified 
and not remedied in the short-term, there will be a detrimental 
impact on all segments of the aviation community. With respect 
to the impact on general aviation, the FAA has advised the 
Committee it would have to eliminate the general aviation 
safety program, which would make it more difficult for private 
pilots to get important information on aviation programs. The 
FAA's Office of Aviation Medicine would likely have to reduce 
funding for the annual processing of aviation medical 
certificates, which would create delays in processing medical 
certification for pilots' licenses. The number of FAA 
inspectors and field facilities would decrease, which would 
create delays for those in the general aviation community who 
need certification and additional ratings processed. In 
addition, the FAA may need to close many if not all flight 
service stations and Level I and Level II towers, which provide 
important weather and safety information to general aviation 
pilots. In fact, over the last few months alone, the FAA has 
closed nearly 20 control towers. Without a predictable funding 
stream, the FAA will continue to cut services.
  The funding provisions in this bill are critical because they 
provide a structure and timeframe for development of long-term 
funding reform at the FAA, which are intended to help alleviate 
the agency's projected funding problems and ensure aviation 
dollars will be dedicated for aviation purposes.

          Development of Comprehensive FAA Reform Legislation

  Throughout 1995, many different groups reviewed several 
distinct proposals to make the FAA more efficient, while 
enhancing its safety function and the performance of the 
nation's ATC system. For example, certain FAA reform proposals 
focused on either making the FAA an independent agency, 
creating a government-owned corporation to run the ATC system, 
or privatizing the agency.
  On August 2, 1995, the Aviation Subcommittee held a hearing 
on the various FAA and ATC reform proposals. The Subcommittee 
heard testimony from many distinguished witnesses on these 
proposals and current problems facing FAA. Testimony by DOT 
Secretary Federico Pena, FAA Administrator David Hinson, 
Kenneth Mead (then Director of Transportation issues at GAO), 
and others emphasized their strong belief that any feasible 
reform bill must address the future funding requirements of the 
FAA. Other testimony concentrated on the merits of making the 
FAA an independent agency.
  Until the August 2, 1995 hearing, the DOT and FAA remained 
adamant in their support for the Administration's proposal to 
create a government corporation to handle the nation's ATC 
services. Although the ATC corporation proposal lacked 
considerable Congressional support, it nonetheless contributed 
to a serious and comprehensive examination of how best to 
address the future needs of FAA and the aviation community. 
Moreover, during the August 2, 1995 hearing, Secretary Pena 
indicated that the DOT would be willing to work with Congress 
to craft a mutually acceptable proposal for meaningful FAA 
reform. Since that hearing, the Administration and members of 
the Aviation Subcommittee have met frequently to develop a 
comprehensive FAA reform proposal.

                               Title VII

  Under FAA regulations, for an individual to become an air 
transport pilot, the individual must meet a number of minimum 
qualifications. For example, the individual must be 23 years of 
age, be of good moral character, have a first-class medical 
certificate, have a high school (or equivalent) degree, and 
obtain a type rating for each aircraft type the person is 
seeking to operate. An air carrier cannot hire an individual 
who does not meet those minimum qualifications.
  In addition to the FAA minimum requirements, each air carrier 
has its own screening system to aid in hiring decisions, and 
its own set of minimum criteria. One carrier, for example, may 
conduct its own set of qualification and background checks, 
including pilot peer review boards, and a battery of tests to 
ensure that the person seeking the position is not only 
qualified, but meets the carrier-specific requirements. 
Personnel records are reviewed, flight simulator checks are 
performed, psychological tests undertaken, interview boards 
deployed, and a pilot selection board constituted to review the 
individuals' qualifications. It is an arduous process, designed 
to eliminate non-qualified applicants. The Committee is aware 
that because each carrier sets its own standards, those 
standards can change from time to time.
  As discussed below, one area that this section seeks to 
bolster is to make sure that prior to employing an individual, 
an air carrier is able to obtain records from the person's 
previous employee.
  Currently, the FAA does not specifically require potential 
employers to obtain background information on individuals who 
apply for positions as pilots from the individual's prior 
employer. While carriers carry out their own screening 
processes, and the pilot has to meet certain criteria, it is up 
to each carrier to determine its own personnel priorities. The 
Committee is aware that air carriers, as well as employers in 
all fields and industries, do not divulge information about 
current or former employees, including pilots, to prospective 
new employers, other than confirmation of positions held and 
dates of employment. There are many valid reasons for such 
policies, from the threat of lawsuits to privacy concerns.
  The Committee believes employers must be able to share 
records to ensure as much available and relevant information as 
possible is provided to the hiring air carrier, prior to a 
hiring decision. While the Committee recognizes the privacy of 
individual pilots could be compromised, the interests of 
aviation safety simply outweigh such privacy concerns. However, 
the Committee has included some protections in the legislation 
to ensure pilots are able to correct inaccuracies and, if 
records are falsified or maintained against the law, challenges 
can be made. The Committee believes air carriers should have 
full access to training, disciplinary, and proficiency records 
of applicants for pilot positions. Thus, correcting this 
unacceptable situation and requiring the exchange of relevant 
background information is now a policy imperative.
  Following six commercial airplane crashes since 1987 that 
were attributable to some extent to pilot error, the NTSB found 
that the air carriers that employed these pilots did not have 
access to information that indicated poor past performance by 
certain of these pilots. As a result, the NTSB has recommended 
to the FAA that air carriers should be required to conduct 
substantive background checks on pilot applicants, including 
verification of personal flight records and examination of 
training, performance, and disciplinary records of previous 
employers.
  The pilot records sharing provisions of the title (sections 
702 and 703 of this bill) are intended to follow through on 
some of the NTSB's recommendations, and facilitate the free 
flow of useful and relevant information about the fitness of 
applicants for commercial pilot positions. At the same time, 
these provisions respect the privacy rights of such applicants.
  This title would require an air carrier to request and 
entitle it to receive certain personnel and performance records 
of applicants for commercial pilot positions. It is intended 
that air carriers have broad access to such files, so that they 
can make hiring decisions based on all useful and relevant 
information known to the applicant's other employers. Given 
this intent, this title requires the production to prospective 
air carrier employers of not only training records maintained 
pursuant to federal aviation regulations by other air carriers 
employing the individual, but also records otherwise maintained 
by employers in the nature of training, proficiency, 
disciplinary and other personnel files. Medical records that 
are segregated by law from personnel files, however, are not 
covered.
  As noted above, this title also contains several provisions 
designed to recognize and address the legitimate concerns of 
pilot applicants that they have adequate opportunity to review 
and correct information being provided to prospective 
employers. This title would give pilots the right to review 
covered records in the possession of their current employer. 
Before covered records could be disseminated to the prospective 
employer, express written notice to and consent of the pilot 
applicant to the disclosure would be required. The applicant is 
also given an opportunity to submit written comments to 
prospective employers to facilitate correction of potential 
inaccuracies. The Committee believes these measures will 
sufficiently protect the legitimate interests of pilot 
applicants. Title VII also provides authority to the FAA 
Administrator to issue such regulations as may be needed to 
protect the privacy interests of applicants and the 
confidentiality of covered records.
  The immunity provisions of title VII would prevent lawsuits 
with respect to the furnishing or using of records against the 
prospective employing air carrier, as well as the past or 
current employer, who comply with these provisions, except in 
those unusual circumstances in which the person who furnishes 
the information knows it is false, and maintained such false 
information in violation of U.S. criminal law. The preemption 
provision in title VII is intended to ensure that no lawsuit 
may proceed on the federal or state level, and no state shall 
enact any law or regulation, that seeks to impose liability for 
the furnishing or use of covered records. The Committee 
believes these provisions are essential to deter the filing of 
frivolous lawsuits that allege ``falsity''.
  The Committee also believes that U.S. air carriers and the 
pilots they hire generally set the quality standard for the 
rest of the world. The Committee recognizes, however, that 
various air carriers use different methods of pre-employment 
screening with respect to pilot candidates. The Committee is 
also aware that pilot record sharing is only one part of the 
equation to increasing the quality of available pilots. To 
address this issue the section also would establish a task 
force to review how best to increase pilot training and 
standards.

                          Legislative History

  On May 14, 1996, the Committee held a hearing on 
reauthorization of the programs of the FAA, including AIP. 
Testimony was heard from Administrator Hinson, representatives 
of airports and airlines, and the mayor of a small city. On 
June 13, 1996, the Committee met in open executive session to 
consider the Federal Aviation Administration Reauthorization 
Act of 1996.
  Senators McCain, Ford, Pressler, Stevens, and Hollings 
offered an amendment that embodied a modified version of S. 
1239. The original version of S. 1239, the ``Air Traffic 
Management System Performance Improvement Act'', was introduced 
on September 13, 1995, by Senators McCain, Ford and Hollings.
  In addition to the August 2, 1995 hearing on various FAA 
reform proposals, the Aviation Subcommittee held the first of 
two hearings on S. 1239 on September 27, 1995. Secretary Pena, 
Administrator Hinson and Deputy Administrator Linda Hall 
Daschle testified at that time regarding the Administration's 
support of the bill. Testimony also was heard from an aviation 
expert and representatives from the aviation community, 
including FAA labor, business aircraft, and manufacturers.
  On October 12, 1995, the Subcommittee held its second hearing 
on the bill. Testimony was heard from representatives of the 
air carrier industry, including major air carriers, low-cost 
carriers, and a cargo carrier, and a representative of a flight 
attendants union. On November 9, 1995, the Committee met in 
open executive session to consider an amendment in the nature 
of a substitute to S. 1239 offered by Senators McCain and Ford. 
S. 1239, as amended, was ordered to be reported.
  With regard to the June 13, 1996 executive session, Senators 
McCain (pilot record sharing), Stevens (authority for state-
specific safety measures), Dorgan (technical clarification 
regarding unobligated expenditures going to small airports), 
and Wyden (FAA safety mission) each offered separate amendments 
to the reauthorization bill, all of which were adopted by voice 
vote. Subsequently the Federal Aviation Administration 
Reauthorization Act of 1996, as amended, was ordered to be 
reported.

                      Summary of Major Provisions

  Total budget authority for the FAA would be $9.28 billion. 
That figure includes: $5 billion for Operations; $2.28 billion 
for AIP; $1.8 billion for Facilities and Equipment (F&E); and 
$200 million for Research, Engineering, and Development(RE&D).
  The bill includes several changes to AIP. There would be 10 
State-sponsored pilot projects established on airport pavement 
maintenance. Airports would be permitted to use PFCs to pay for 
unfunded federal mandates, bringing PFC usage in line with 
permissible uses of AIP funds.
  To help smaller airports, which may suffer disproportionately 
when federal funding levels decline, funding to large and 
medium hub airports would be limited to a percentage (of total 
AIP funding), which would vary according to the appropriations 
level. The FAA would be required to fulfill LOI commitments 
from discretionary funds available to the FAA. The State Block 
Grant Program would be extended for one year. The bill also 
extends for one year the authority for expenditure of funds 
from the Aviation Trust Fund.
  The FAA would have authority to acquire housing units outside 
the contiguous U.S. if such acquisition is the most cost-
beneficial means of providing necessary accommodations. The FAA 
could require background checks of airport baggage screeners 
and their supervisors. The FAA would be given authority to 
protect from public disclosure information that is voluntarily 
provided to the FAA, if it is determined the information would 
promote safety and security and that disclosure could inhibit 
submission of such information.
  There also are provisions in the bill dealing with commercial 
space transportation. This bill would expand current licensing 
authority of the Office of Commercial Space Transportation 
(OCST) to cover reentry space vehicles and reentry sites and 
directs OCST to issue regulations to implement those 
amendments. OCST also would be prohibited from issuing licenses 
for the launch of payloads to be used for obtrusive space 
advertising.
  Title VI of the bill as reported would provide for reform of 
the entire FAA by giving the FAA more autonomy, while at the 
same time keeping it within the DOT. The title also would 
provide for direct aviation community input to FAA through a 
Management Advisory Council (MAC).
  An 11-member task force, intended to represent the views of 
all interests in aviation, also would be established to 
coordinate an independent assessment of the FAA's needs and 
develop specific recommendations for long-term FAA funding. The 
recommendations would be submitted to the DOT, which would in 
turn submit a report that includes proposed legislation to 
Congress. Title VI of the bill would change the manner in which 
the FAA handles its rulemaking and regulatory functions. The 
DOT would retain an outside entity to prepare independent, 
objective assessment of the FAA's budget needs and assumptions, 
and the allocation of FAA costs among various segments of the 
aviation community.
  Title VI also would provide the FAA with a three-year 
appropriations cycle. In addition, the Essential Air Service 
(EAS) program would receive adequate funding and be transferred 
from the DOT to FAA. The DOT also would conduct a study on 
rural air service and air fares.
  Title VII would require an air carrier to request and receive 
certain employment and performance records before hiring an 
individual as a pilot and establish a task force to review ways 
to upgrade pilot qualifications.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and Section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 16, 1996.
Hon. Larry Pressler,
Chairman, Committee on Commerce, Science, and Transportation,United 
        States Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed the Federal Aviation Reauthorization Act of 1996, as 
ordered reported by the Senate Committee on Commerce, Science, 
and Transportation on June 13, 1996. Enclosed are estimates of 
the bill's impact on the federal budget and on the private 
sector, and a preliminary estimate of its state and local 
impact (included with the federal estimate).
    Enactment of this legislation would affect direct spending 
and receipts. Therefore, pay-as-you-go procedures would apply 
to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                             James. L. Blum
                                   (For June E. O'Neill, Director).
    Enclosures.

               Congressional budget office cost estimate

    1. Bill number: Not yet assigned.
    2. Bill title: Federal Aviation Reauthorized Act of 1996.
    3. Bill status: As ordered reported by the Senate Committee 
on Commerce, Science, and Transportation on June 13, 1996.
    4. Bill purpose: The bill would authorize 1997 
appropriations for the following Federal Aviation 
Administration (FAA) programs: $5 billion for operations, $1.8 
billion for facilities and equipment, and $200 million for 
research, engineering, and development. In addition, the bill 
would provide contract authority of $2.3 billion in 1997 for 
the airport improvement program. The bill also would establish 
user fees for air traffic control and other services for 
aircraft that do not take off or land in the United States and 
for other services provided to foreign governments. Of the 
amounts collected from these fees, $50 million would be 
authorized for the FAA's essential air service program. In 
addition, this bill would authorize appropriations of $10 
million for aviation safety in Alaska. Other key provisions of 
the bill are summarized below.
    Title I would enable the Administrator of the FAA to 
transfer funds among the operations, facilities and equipment, 
and research, and engineering, and development accounts.
    Title II would extend the military airport program and the 
spending limit of $4 million per airport while reducing the 
number of airports in the program from 15 to 10.
    Title V would revise certain aspects of federal policy 
regarding commercial space launch activities. The bill would 
expand the scope of the Office of Commercial Space 
Transportation's (OCST's) licensing authority to include 
reentry vehicles, sites, and services. It would direct the 
office to issue rules and reports on matters related to reentry 
operations and on the allocation of excess or underutilized 
federal launch services and property. The bill also would 
codify the existing practice of requiring nonfederal entities 
to reimburse the government only for the ``additive'' costs of 
using excess of underutilized launch services or facilities. 
Finally, OCST's limited authority to charge user fees to cover 
the cost of licensing activities would be repealed.
    Title VI would enable the Administrator to accept the 
transfer of unobligated balances and unexpended funds from 
other agencies to carry out functions transferred to the FAA.
    Title VII would require air carriers to gather records on 
prospective pilots from the FAA, other air carriers, and state 
departments of motor vehicles. Reasonable charges for the cost 
of processing requests would be established. A task force would 
be appointed to conduct a study on standards for pilot 
qualifications.
    In addition, this bill would require the Secretary of 
Transportation to form advisory committees and ask task forces 
to review FAA activities, conduct multiple studies, prescribe 
regulations, publish reports, and employ experts to conduct 
evaluations.
    5. Estimated cost to the Federal Government: Enacting this 
bill would affect spending subject to appropriation and direct 
spending, and could affect revenues. Assuming appropriation of 
the authorized amounts, CBO estimates that enacting the bill 
would result in new discretionary spending of about $9.5 
billion over the 1997--2002 period. We estimate that this bill 
would establish fees yielding collections of $50 million in 
1997 and $65 million a year thereafter. Finally, CBO estimates 
that any impact on revenues from the assessment of civil 
penalties under OCST's expanded licensing activities would be 
insignificant. The following table provides CBO's estimate of 
the budgetary impact of enacting the bill.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                        1996       1997       1998       1999       2000       2001       2002  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending Under Current Law:                                                                                     
    Budget authority...............      6,704  .........  .........  .........  .........  .........  .........
    Estimated outlays..............      8,698      3,886      1,830        826        400        201  .........
Proposed Changes:                                                                                               
    Authorized level...............  .........      7,021         11         50         50         50         50
    Estimated outlays..............  .........      5,395      2,172        902        458        326        249
Spending Under the Bill:...........                                                                             
    Authorization level............      6,704      7,021         11         50         50         50         50
    Estimated outlays..............      8,698      9,281      4,002      1,728        858        527        249
                                                                                                                
                                     CHANGES IN DIRECT SPENDING AND REVENUES                                    
                                                                                                                
Airport Improvement Program:                                                                                    
    Budget authority1..............  .........      2,280  .........  .........  .........  .........  .........
Air Traffic Control Fees:                                                                                       
    Estimated budget authority.....  .........        -50        -65        -65        -65        -65        -65
    Estimated outlays..............  .........        -50        -65        -65        -65        -65        -65
Civil Penalties:                                                                                                
    Estimates revenues.............  .........          2          2          2          2          2          2
----------------------------------------------------------------------------------------------------------------
\1\ Budget authority for the airport improvement program is provided in the form of contract authority. For     
  1996, the program received $2,214 million in contract authority. Outlays from such authority are controlled by
  obligation limitations set in appropriation bills and are shown as spending subject to appropriation.         
\2\ Less than $500,000.                                                                                         

    The costs of this bill fall within budget function 400.
    6. Basis of estimate:

Spending subject to appropriation

    For purposes of this estimate, CBO assumes that 
appropriations would be provided before the start of each 
fiscal year. Outlay estimates are based on historical spending 
rates for the FAA.
    Contract Authority and Specified Authorizations. The bill 
specifies authorizations of appropriations totaling $7.0 
billion, and would provide contract authority of $2.3 billion 
for grants-in-aid to airports. To estimate outlays from the 
contract authority, we assumed that obligation limitations 
customarily established in appropriation acts would equal the 
budget authority. Because these outlays are subject to such 
limitations and to liquidating appropriations, they are 
considered discretionary and so are included in the above table 
under estimated outlays subject to appropriation. The contract 
authority is shown separately as direct spending.
    Essential Air Service. Starting in fiscal year 1997, this 
bill would authorize appropriations of $50 million annually for 
the essential air service program. The essential air service 
program is currently funded by contract authority and is 
authorized through 1998. It is unclear from the bill how the 
$50 million authorized would be incorporated into the current 
funding. In addition, the bill directs the FAA to spend on 
rural air safety any of the fees that are not obligated or 
expended at the end of the fiscal year for the essential air 
service program. It is unclear if ``fees'' refers to the $50 
million earmarked for the essential air service program or the 
remaining portion of all the fees collected. If the Department 
of Transportation adopts the latter interpretation, all of the 
fee income generated by this act would be earmarked for 
essential air service and rural air safety, but the spending of 
such income would be subject to appropriation. This estimate 
assumes that only $50 million annually would be made available 
for essential air service and rural air safety. The table 
includes an incremental authorization of $11 million under 
proposed changes for 1997 and 1998 because $39 million in 
contract authority has already been provided for those years. 
Costs of $50 million annually are shown for subsequent years.
    Other Provisions. This bill would enable the Administrator 
of the FAA to transfer funds among the operations, facilities 
and equipment, and research, engineering, and development 
accounts. Transfers would not be permitted if they would result 
in an outlay increase or if they would result in a net decrease 
of more than 5 percent or a net increase of more than 10 
percent in the budget authority available to any appropriation 
involved in the transfer. While the bill includes restrictions 
on the amount of the transfer, it is difficult to determine 
what estimate of outlays would be used a as measurement. While 
a transfer of funds from one account to another could affect 
outlays, CBO cannot estimate the potential budgetary impact--if 
any--of transfers that might occur under this provision because 
we have no way of predicting what transfers might occur.
    The cost of developing standard forms required by Title VII 
would be less than $40,000. The development of privacy 
regulations would be at the discretion of the Administrator. If 
the Administrator chooses to promulgate the regulations to 
protect privacy and confidentiality, the cost would be about 
$175,000. Based on information from the FAA, CBO estimates that 
the cost of forming a task force and conducting a study to 
develop standards and criteria for preemployment screening 
tests and pilot training facilities would be less than 
$100,000. Based on information from the FAA, CBO estimates that 
the cost of developing the regulatory standards and reports 
required by Title V would be less than $200,000.

Direct spending and revenues

    This bill would create a new user fee for air traffic 
control and other services provided to aircraft that do not 
take off or land in the United States and for other services 
provided by the FAA to foreign governments.
    Budgetary Classification of Fees. The new fees could be 
classified as either offsetting receipts or governmental 
receipts. Fees that are established as charges for business-
type services and are based on the cost or value of the service 
being provided are generally classified as offsetting receipts 
(or offsetting collections when they are credited as an offset 
to appropriations). In contrast, fees that primarily reflect 
the government's sovereign power to mandate such payment and 
that do not have a direct link to the service are generally 
classified as governmental receipts.
    The classification of fees as either offsetting receipts or 
governmental receipts depends to some degree on the link 
between the fee and the cost of service that is being provided. 
This legislation directs that the fees be reasonably related to 
the cost and value of the service. In addition, the legislation 
indicates that the fees to be established are intended to be 
offsetting receipts. Based on the bill's stated intent and 
structure of the fees, CBO assumes that these fees would be 
categorized as offsetting receipts.
    Fee Collection. The legislation sets a target amount of fee 
collections at $100 million a year, starting October 1, 1996. 
According to the FAA, the $100 million level represents full 
cost recovery for overflights and services to foreign 
governments. Depending on how the fee language is interpreted, 
enacting the bill could result in recovery of either all or a 
portion of full costs. Although it is possible that the FAA 
could collect the targeted level of $100 million a year, CBO 
estimates that the most likely level of annual collections 
would be less than $100 million. Based on information from FAA 
staff, CBO estimates that fee collections would total about $50 
million in 1997, taking into account a likely delay in the 
start of collections beyond the bill's required start date of 
October 1, 1996, and about $65 million a year in 1998 and 
thereafter.
    The provisions in Title V regarding cost reimbursement and 
user fees for commercial space activities could affect 
offsetting receipts, but we estimate that the impact would not 
be significant. The Department of Defense and National 
Aeronautics and Space Administration, the two agencies that 
make launch services or property available to nonfederal 
entities, currently base their fee structures on the 
``additive'' costs of the activity. Hence, codifying this 
practice would have no effect on projected receipts. Likewise, 
OCST has not imposed user fees since fiscal year 1993, because 
of the absence of the specific Congressional approvals needed 
for such fees to take effect.
    Revenues. Title V could affect revenues but CBO estimates 
that any additional receipts from penalties associated with 
OCST licensing activities required by this bill would be 
insignificant. DOT has never collected a penalty for a 
violation of the licensing and related requirements of the 
commercial space transportation program.
    7. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. Because this bill would 
increase offsetting receipts, resulting in a decrease in direct 
spending, and it could increase civil penalties, pay-as-you-go 
procedures would apply to this bill.
    CBO estimates that the collections of fees on air traffic 
control and other services for aircraft that do not take off or 
land in the United States and other services provided to 
foreign governments would be $50 million in 1997 and $65 
million in 1998. Provisions affecting commercial space activity 
are not expected to affect offsetting receipts significantly.
    The estimated pay-as-you-go impact of the bill is shown in 
the following table:

                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                            1996       1997       1998  
------------------------------------------------------------------------
Change in outlays \1\..................          0        -50        -65
Change in receipts.....................          0          0          0
------------------------------------------------------------------------
\1\ For purposes of this estimate, CBO assumes that the fees to be      
  assessed under this bill would be classified as offsetting receipts.  

    8. Estimated impact on state, local, and tribal 
governments: This section represents a preliminary analysis of 
the mandates contained in the bill and their potential impacts 
on the budgets of state, local, and tribal governments. CBO's 
mandate cost statement, as required by the Unfunded Mandates 
Reform Act of 1995 (Public Law 104-4), will be sent when it is 
completed.
    The bill contains one mandate on state, local, and tribal 
governments and one provision that could be a mandate on state 
governments. Depending upon the interpretation of the latter 
provision, the bill's mandate costs could exceed the $50 
million annual threshold established in the mandates law.
    Pilot Records. The bill would increase the amount of 
background information an air carrier must obtain before hiring 
an individual as a pilot. In doing so, it would impose a 
mandate on employers, including state, local, and tribal 
governments, that have employed the prospective pilot within 
the previous five years. The bill would require that employers 
provide to air carriers, upon their request and within 30 days, 
information on the work record of these individuals. Employers 
would have to obtain written consent from the individual prior 
to releasing the information as well as notify them of the 
request and of their right to receive a copy of the records.
    CBO estimates that the direct costs of this mandate on 
state, local, and tribal employers would be insignificant, 
primarily because only a fraction of prospective pilots have 
worked for these governments in the past and thus minimal 
additional work would be required by any state, local, and 
tribal governments. The bill would allow employers to charge 
air carriers and prospective pilots a fee for the cost of 
processing the requests and furnishing the records.
    State Taxing Authority. The bill contains a provision 
intended as a technical correction to the section of Title 49 
establishing the authority of states to levy certain aviation-
related taxes. When that section of the United States Code was 
recodified, it appeared to broaden the power of states to tax 
airlines. The correction is intended to return the issue of 
state taxation to the status quo as it existed before the 
recodification.
    The impact of this provision, however, is unclear. A simple 
correction would impose no new mandates. There is concern among 
some tax experts, however, that the proposed change goes beyond 
the intended fix and would impose new preemptions on states' 
taxing authority. A number of state tax officials assert that 
the proposed correction would increase the ambiguities in the 
statute and could lead to an interpretation of the law that 
would prohibit states from imposing aviation-related property, 
net income, and other taxes. Under such an interpretation, the 
provision would constitute a mandate on state governments as 
defined by Public Law 104-4, Because some states raise 
significant amounts of revenues through these types of taxes, 
it is possible that the direct costs to states could exceed the 
$50 million annual threshold established in the mandates law.
    CBO is continuing to review this issue and will include its 
analysis in the final intergovernmental mandates statement.
    9. Estimated impact on the private sector: CBO's estimate 
of the bill's impact on the private sector is provided as a 
separate enclosure.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Federal Cost Estimate: Clare 
Doherty. State and Local Government Impact: Karen McVey. 
Private-Sector Impact: Jean Wooster.
    12. Estimate approved by: Robert A. Sunshine, for Paul N. 
Van de Water, Assistant Director for Budget Analysis.

    CONGRESSIONAL BUDGET OFFICE ESTIMATE OF COSTS OF PRIVATE-SECTOR 
                                MANDATES

    1. Bill number: Not yet assigned.
    2. Bill title: Federal Aviation Reauthorization Act of 
1996.
    3. Bill status: As ordered reported by the Senate Committee 
on Commerce, Science, and Transportation on June 13, 1996.
    4. Bill purpose: The bill would provide contract authority 
and authorize 1997 appropriations for Federal Aviation 
Administration (FAA) programs. The bill would also establish 
new requirements for the hiring of pilots and passenger and 
property screeners. The bill would establish user fees for air 
traffic control and other services for aircraft that do not 
take off or land in the United States. In addition, the bill 
would direct the FAA to prescribe standards applicable to the 
emission of air pollutants from aircraft engines.
    5. Private-sector mandates contained in bill: The 
Congressional Budget Office (CBO) identified private-sector 
mandates in this bill that would impose requirements on air 
carriers and owners of a space reentry system. One mandate 
would impose requirements on all employers in the United 
States. The bill also includes a provision excluded under 
section 4, of the Unfunded Mandates Reform Act of 1995 (Public 
Law 104-4), which excludes from the application of that act 
legislative provisions that enforce the constitutional rights 
of individuals.
    6. Estimated direct cost to the private sector: CBO 
estimates that the direct costs of the private-sector mandates 
identified in this bill would not exceed the $100 million 
annual threshold established in Public Law 104-4.

Mandates on air carriers and other employers

    The bill would give the FAA authority to require that an 
employment investigation include a check for the existence of a 
criminal record for those persons responsible for screening 
passengers and property. The specific circumstances that would 
require such a check for a criminal record would be determined 
through FAA rulemaking. Based on information from the FAA and 
the airline industry, CBO estimates that the added cost to the 
air carriers would range from $50,000 to $8 million annually, 
depending on the exact rule. That estimate is based on the cost 
per person of the check for a criminal record that is currently 
required for other employees and the employment turnover rate 
for passenger and property screeners.
    Section 673 would impose fees for air traffic control and 
related services on owners of aircraft that neither take off 
from nor land in the United States. Based on information 
provided by the airline industry, CBO estimates that few 
flights by domestic air carriers would fall into that category. 
Thus the direct costs to the private sector would be 
negligible.
    Section 702 would increase the amount of background 
information that air carriers must obtain before hiring a 
pilot. This information would be requested from the FAA, the 
pilot's previous air carrier employer and other employers, and 
the National Driver Register. If requested to supply 
information, former employers would be required to furnish it. 
Although some air carriers now request such records, 
industrywide search request for records are not a routine part 
of the hiring process. To accommodate those requirements, 
additional clerical staff may be needed by air carriers to 
handle employment applications and by other employers who would 
be required to supply information. Based on information from 
the airline industry, CBO estimates that in total the costs 
associated with providing such information would be well below 
the threshold for private-sector mandates.

Mandates on space re-entry systems

    Section 501 amends the Commercial Launch Act to extend the 
current licensing authority of the Department of 
Transportation's Office of Commercial Space Transportation 
(OCST) to cover reentry space vehicles and reentry sites and 
directs OCST to issue regulations to implement this new 
authority. The direct costs related to the licensing of space 
reentry systems would be negligible.

Other

    Section 631 grants authority to the FAA to prescribe 
emission standards applicable to pollutants from aircraft 
engines. This authority is currently granted to the 
Environmental Protection Agency (EPA). The bill does not 
explicitly relieve the EPA of its existing authority, thus 
creating the potential for conflicting standards. However, 
based on information from the FAA, CBO does not expect the FAA 
to create standards that would be more stringent than those 
currently in force.
    7. Appropriations or other Federal financial assistance: 
None.
    8. Previous CBO estimate: On June 12, 1996, CBO transmitted 
a private-sector cost estimate for H.R. 3536, the Airline Pilot 
Hiring and Safety Act of 1996, as ordered reported by the House 
Committee on Transportation and Infrastructure on June 6, 1996. 
However, H.R. 3536 did not include the requirement that air 
carriers verify records with a pilot's previous employers, 
other than air carriers, and differed by requiring air carriers 
to maintain employment records for five years.
    On April 24, 1996, CBO transmitted a private-sector cost 
estimate for H.R. 2043, the National Aeronautics and Space 
Administration Authorization Act, as ordered reported by the 
House Committee on Science on July 25, 1995. On April 30, 1996, 
CBO transmitted a private-sector cost estimate for H.R. 3322, 
the Omnibus Civilian Science Authorization Act of 1996, as 
ordered reported by the House Committee on Science on April 24, 
1996. On June 25, 1996, CBO transmitted a private-sector cost 
estimate for S. 1839, the National Aeronautics and Space 
Administration Authorization Act, Fiscal Year 1997, as ordered 
reported by the Senate Committee on Commerce, Science, and 
Transportation on June 6, 1996. Those bills contained 
provisions similar to section 501 of this bill.
    9. Estimate prepared by: Jean Wooster.
    10. Estimate approved by: Jan Acton, Assistant Director.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported. Number of Persons Covered
  The authority granted FAA to require background checks on 
baggage screeners would likely lead to new regulations imposed 
on their employers as well as new obligations imposed on those 
being screened.
  Currently, individuals or businesses flying over the United 
States utilize this country's ATC services without compensating 
the United States for such services. This bill would enable the 
FAA to charge a fee for providing ATC services for those 
overflights. As a result, a new fee system would be required 
and would apply to a new group of individuals and businesses.
  The regulatory and rulemaking reforms contained in the bill 
are expected to reduce the level and nature of current FAA 
regulation of the aviation community.
  Title VII of the bill requiring the sharing of pilot records 
would have an impact on airlines, pilots, the FAA, and state 
officials handling drivers' license records, but only to the 
extent that the existing National Driver Register system is 
accessed.

                            Economic Impact

  The pavement maintenance pilot projects established by the 
bill could lead to substantial savings of federal grant funds 
and local contributions to projects if anticipated cost savings 
are realized. Preserving the life of runways, taxiways, and 
aprons should yield substantial long-term benefits over 
allowing those structures to deteriorate to the point where a 
complete replacement is necessary.
  The authority for the FAA to acquire housing units outside 
the contiguous United States should lead to cost savings for 
the federal government where it is required to provide 
accommodations for employees in particular locations.
  The authority for the FAA to require background checks on 
baggage screeners will almost certainly impose costs on the 
employers who must perform such checks.
  Unneeded or unduly burdensome regulations ultimately should 
be eliminated or refined because of the regulatory reform 
provisions contained in the bill. The economic impact of 
regulations would decrease for affected individuals or groups.
  The pilot record provisions (Title VII) will impose some 
economic costs on: air carriers to maintain new records and 
request employee records from former employers; the FAA to 
develop new standard forms and regulations to carry out the 
mandates of the bill; and pilots who request copies of their 
records when changing employers. However, there may be 
substantial safety benefits if marginally-qualified or poor 
pilots are screened out and accidents or incidents are 
subsequently avoided.

                                Privacy

  Baggage screeners and their supervisors could have their 
privacy incidentally affected to the extend that their 
backgrounds are investigated as a result of new FAA regulations 
authorized under the bill. This same scrutiny applies, however, 
to most safety-critical employees in the airline industry.
  The pilot record provisions of the bill also could affect 
personal privacy in that exchanged or requested records may 
reveal private matters. However, the FAA is required to 
promulgate regulations to protect the privacy of individuals 
and the confidentiality of any records maintained and 
exchanged.

                               Paperwork

  The acquisition of housing units outside the contiguous 
United States by the FAA would require the FAA to certify the 
acquisition is the most cost-beneficial means of providing 
necessary accommodations.
  There would be increased paperwork for employers and baggage 
screeners associated with requirements for background checks.
  If, as expected, current rules and regulations are eliminated 
or amended due to regulatory reforms contained in title VI of 
the bill, affected individuals and businesses may have 
reductions in paperwork.
  The pilot records provisions would entail a minimal amount of 
paperwork in the nature of the consent forms, liability release 
forms, and record request forms. The mandatory notice to pilots 
that their records are being requested would also lead to 
increased paperwork for the airlines.

                      Section-by-Section Analysis

Section 1. Short title; table of contents

  Section 1 cites the title of the bill as the ``Federal 
Aviation Administration Reauthorization Act of 1996''. This 
section also contains a table of contents for the bill, as 
reported.

Section 2. Amendments to title 49, United States Code

  Section 2 provides that references in the bill to sections or 
provisions in the law are considered to be sections or 
provision of title 49, United States Code.

                TITLE I--REAUTHORIZATION OF FAA PROGRAMS

Section 101. Federal Aviation Administration operations

  Section 101 authorizes the FAA operations account for FY 1997 
at $5 billion.
  This section also reinstates the FY 1993 limit on amounts 
that may be appropriated from the Trust Fund for FAA activities 
at 75 percent of the FAA's total budget. For FY 1994 through FY 
1996, monies from the Trust Fund could only comprise up to 50 
percent of the Operations budget or 70 percent of the total FAA 
budget.

Section 102. Air navigation facilities

  Section 102 authorizes the F&E account for FY 1997 at $1.8 
billion.

Section 103. Research and development

  Section 103 authorizes the RE&D account for FY 1997 at $200 
million.

Section 104. Airport Improvement Program

  Section 104 authorizes AIP for FY 1997 at $2.28 billion.

Section 105. Interaccount flexibility

  Section 105 provides the FAA with budget flexibility by 
permitting the Administrator to transfer limited amounts of 
budget authority among the Operations, F&E, and RE&D 
appropriations accounts. Transfers of budget authority could 
not be made if outlays would exceed the aggregate estimated 
outlays. A transfer also could not result in a net decrease of 
more than 5 percent, or a net increase of more than 10 percent, 
in budget authority available under any appropriation involved 
in that transfer. Any transfer would be treated as a 
reprogramming of funds and could only occur after the FAA 
submitted a report to the appropriate authorizing and 
appropriating committees of Congress. Each committee would have 
30 days to object to any transfer.

          TITLE II--AIRPORT IMPROVEMENT PROGRAM MODIFICATIONS

Section 201. Pavement maintenance program

  Section 201 permits the FAA, using funds apportioned to it 
under state entitlements, to carry out projects that would 
preserve and extend the useful life of runways, taxiways, and 
aprons (at general aviation, nonprimary commercial, and 
reliever airports). The program is a three-year pilot program 
under which not more than 10 projects may be sponsored. No 
state may have more than two such projects and at least two 
must be in states without a large or medium hub airport. In 
selecting projects, the FAA must take into account 
geographical, climatological, and soil diversity.
  This section also permits the use of PFCs for relocation of 
air traffic control towers and navigational aids when necessary 
to carry out an approved project, and conforms eligibility to 
use PFCs to meet certain unfunded federal mandates to what is 
currently authorized in the AIP program.

Section 202. Maximum percentages of amount made available for grants to 
        certain primary airports

  Section 202 establishes a sliding cap or limit scale on the 
level of total AIP funds going to large and medium hubs. The 
percentage limit would vary depending upon the level of funds 
appropriated to AIP. The percentage of total AIP funds going to 
projects at large and medium hub airports would be: 44.3 
percent at funding of $1.45-1.55 billion; 44.8 percent at 
funding of $1.35-1.45 billion; 45.4 percent at funding of 
$1.25-1.35 billion; 46 percent at funding of $1.15-1.25 
billion; and 47 percent at funding below $1.15 billion.
  According to FAA estimates, under current law (and with a 
funding level of $1.35 billion), large and medium hub airports 
would receive 48 percent of total AIP in FY 1997. The FAA 
further estimates this sliding scale provision would shift 
approximately $35 million from larger to smaller airports. This 
shift effectively would involve discretionary funds only. The 
FAA would retain ultimate discretion as to how the balance in 
AIP funding would be maintained between the larger and smaller 
airports.

Section 203. Discretionary fund

  Section 203 requires the FAA to fulfill LOI commitments under 
FAA's discretionary spending.

Section 204. Designating current and former military airports

  Section 204 extends the Military Airport Program for one year 
and changes it by lowering the number of airports that can be 
included from 15 to 10. Also extended is a discretionary fund 
spending limit of $4 million per airport for grants to 
construct, improve, or repair parking lots, fuel farms, and 
utilities.

Section 205. State Block Grant Program

  Section 205 extends the State Block Grant Pilot Program for 
one year. Participating States would be allowed to use their 
own priority system for awarding grants when not inconsistent 
with the national system.

Section 206. Access to airports by intercity buses

  Section 206 adds a new grant assurance requiring an airport 
owner or operator to permit, to the maximum extent practicable, 
intercity buses, or other modes of transportation, access to 
the airport. The section is meant to encourage airports to 
accommodate transportation of passengers by bus between 
airports and many cities or communities, particularly those 
without commercial airports. Wherever practicable, these 
communities should have convenient transportation access to 
airports in other communities. At the same time, the Committee 
recognizes there are circumstances under which such access is 
not practicable.
  Airports should encourage intercity access. This section is 
not intended to preempt or to disturb any state or local laws, 
or airport ordinances regulating intercity or other modes of 
transportation (other mass transit-types of transportation 
providing intercity travel), consistent with the obligation 
under this section to provide intercity bus access where 
practicable. This section is not intended to limit an airport's 
authority to charge fees to bus companies or other modes of 
transportation, require contractual arrangements, or impose 
obligations for access to the airport. However, airports must 
not impose prohibitive fees, which have the effect of 
inhibiting compliance with this grant assurance. Nor does it 
preclude or affect airport operation of bus service or other 
transportation services to the airport. Furthermore, this 
section is not intended to interfere with or limit an airport's 
right to manage its facilities, the transportation services 
provided, or the operation of vehicles at an airport, 
consistent with the airport's overall responsibility for safe 
and efficient operations. Airports, for example, would be able 
to limit the number of service providers, consistent with safe 
and efficient management practices.

   TITLE III--EXTENSION OF AIRPORT AND AIRWAY TRUST FUND EXPENDITURE 
                               AUTHORITY

Section 301. Expenditures from Airport and Airway Trust Fund

  Section 301 extends for one year the authority for 
expenditure of funds from the Trust Fund.

                   TITLE IV--MISCELLANEOUS PROVISIONS

Section 401. Acquisition of Housing Units

  Section 401 gives the FAA authority to acquire housing units 
outside the contiguous United States, even if there are 
continuing obligations to pay fees, such as homeowner fees. 
Such an acquisition can occur only if the FAA reports to 
Congressional authorizing committees and certifies the 
acquisition is the most cost-beneficial means of providing 
necessary accommodations for its employees. Presently, the FAA 
cannot obligate itself to pay future homeowner fees (and, thus, 
cannot buy certain types of housing) because such an obligation 
would violate the Anti-Deficiency Act. This authority was 
requested by the FAA as a means of reducing housing costs, and 
similar authority is currently provided to the Coast Guard.

Section 402. Technical correction of title 49 codification

  Section 402 corrects a mistake related to state taxation that 
was made when title 49 was recodified. As the statute currently 
reads, states arguably could tax certain aviation-related 
activities contrary to the intent of Congress.

Section 403. Protection of voluntary submission of information

  Section 403 permits the FAA to withhold voluntarily provided 
safety and security information if it is determined public 
disclosure would discourage the voluntary provision of such 
information, the information would help the FAA fulfill its 
safety and security responsibilities, and withholding the 
information would be consistent with the FAA's safety and 
security responsibilities. A person could not voluntarily 
submit information as a way of avoiding an enforcement action. 
This new authority potentially would facilitate the flow to the 
FAA of operational and safety information from the airlines and 
other aviation organizations. This authority is similar to 
existing statutory authority to protect security and research 
and development information.

Section 404. Discretionary authority for criminal history records 
        checks

  Section 404 authorizes the FAA to require employers to 
conduct background checks (including criminal history) before 
hiring baggage screeners or their supervisors.

Section 405. Application of FAA regulations

  Section 405 requires the FAA to consider, when amending 
federal aviation regulations in a manner affecting intrastate 
aviation in Alaska, the extent to which Alaska is not served by 
other modes of transportation. It would be within the 
discretion of the FAA, as it deems appropriate, to establish 
regulatory distinctions with regard to these considerations.

Section 406. Sense of the Senate regarding the funding of the Federal 
        Aviation Administration

  Section 406 is a Sense of the Senate provision stating that 
the aviation excise taxes should be reinstated for 18 months 
while long-term funding options for the FAA are developed and 
acted upon pursuant to Title VI of the bill.

Section 407. Authorization for state-specific safety measures

  Section 407 authorizes the appropriation of up to $10 million 
to the FAA in FY 1997 for use to address aviation safety 
problems identified by the National Transportation Safety Board 
(NTSB) in specific states. For example, the NTSB issued a 
report on aviation safety in Alaska in November of 1995 that 
identified specific aviation safety problems unique to the 
State of Alaska. This amendment would authorize funding for 
measures to address such problems. Any other State for which 
the NTSB identifies state-specific aviation safety problems 
would also be eligible under this section.

Section 408. Sense of the Senate regarding the air ambulance exemption 
        from certain federal excise taxes

  Section 408 is a Sense of the Senate provision stating that 
if the aviation excise taxes are reinstated, the exemption from 
these taxes (i.e., from the passenger ticket tax) for 
helicopter air ambulance transportation should be broadened to 
include transportation by fixed-wing air ambulances. This 
provision is based upon S. 358, a bill to amend the Internal 
Revenue Code to provide for an excise tax exemption for 
transportation by a fixed-wing aircraft for an emergency 
medical condition or for an appropriate transfer to a medical 
facility.

Section 409. FAA safety mission

  This section is designed to add an emphasis on safety to the 
FAA Administrator's duties of encouraging the development of 
civil aeronautics and air commerce. Whereas current law 
requires the FAA Administrator to ``encourage the development 
of civil aeronautics and air commerce in and outside the United 
States'', the bill as reported would change this mandate to 
``encourage the development of civil aeronautics and safety of 
air commerce in and outside the United States.''

                TITLE V--COMMERCIAL SPACE TRANSPORTATION

Sec. 501--Commercial Space Launch Amendments

  Section 501 amends the Commercial Space Launch Act, as 
amended, to extend the current licensing authority of the DOT 
Office of Commercial Space Transportation (OCST) to cover 
reentry space vehicles and reentry sites and directs OCST to 
issue regulations to implement such amendments. Under current 
law, OCST is authorized only to license U.S. commercial 
launches and launch facilities. Commercial reentry vehicles and 
sites were not contemplated when the current regulatory regime 
was established. This expansion of licensing authority is 
critical to the placement of these emerging commercial space 
activities within the risk allocation regime established under 
the current law limiting third party liability associated with 
commercial launches.
  This section also establishes a requirement for DOT to 
provide an annual report to Congress on the activities of OCST. 
It also prohibits OCST from issuing or transferring licenses 
for the launch of payloads to be used for obtrusive space 
advertising and asks the President to negotiate with other 
foreign space launching nations to reach an agreement that 
would prohibit the use of outer space as a medium for obtrusive 
advertising purposes. This provision is not intended to 
prohibit on-vehicle advertising such as that found on racing 
cars.

  TITLE VI--AIR TRAFFIC MANAGEMENT SYSTEM PERFORMANCE IMPROVEMENT ACT

Section 601. Short title

  Section 601 cites the short title of title VI as the ``Air 
Traffic Management System Performance Improvement Act of 
1996''.

Section 602. Definitions

  Section 602 defines the terms ``Administration'', 
``Administrator'', and ``Secretary'' for the purposes of this 
title of the bill.

Section 603. Effective date

  Section 603 establishes that the provisions of title VI will 
take effect 30 days after enactment of the legislation.

                     SUBTITLE A--GENERAL PROVISIONS

Section 621. Findings

  Section 621 sets forth a series of findings establishing the general 
        basis for enactment of the provisions contained in title VI. 
        The findings recognize, for example, the unique character of 
        the FAA's activities and the need for funding reform.

Section 622. Purposes

  Section 622 sets forth four critical purposes underpinning title VI.

Section 623. Regulation of civilian air transportation and related 
        services by the Federal Aviation Administration and Department 
        of Transportation

  Section 623 amends section 106 of title 49, United States 
Code, to provide the FAA Administrator express autonomy and 
authority with regard to the internal functioning of the 
agency. As the current law provides, the FAA Administrator 
would be appointed by the President, with the advice and 
consent of the Senate, for a fixed, 5-year term. The Committee 
believes that helping to ensure that future Administrators 
remain in their position for the duration of their terms is of 
the utmost importance, because frequent turnover in the past 
has had a detrimental effect on the agency.
  Some authority previously transferred to the DOT under the 
Department Of Transportation Act (P.L. 89-670) would be 
recommitted to the FAA under this section. The Administrator 
would be the final authority for: the promulgation of all FAA 
rules and regulations (except as otherwise specifically 
provided in the bill); and for any obligation, authority, 
function, or power addressed in the bill.
  This increased autonomy for the Administrator stems from 
concerns that the DOT, on occasion, has unnecessarily involved 
itself with the operations and activities of the FAA. In that 
regard, this section specifically preserves the Administrator's 
existing authority for exercise by the Administrator, 
reaffirming that, as envisioned in the enactment of the 
provisions of existing section 106 of title 49, Congress did 
not intend the FAA's operational, safety, and technical 
capabilities to be duplicated within or exercised by the DOT. 
This section complements and affirms these existing FAA safety 
authorities by providing the Administrator additional autonomy 
and authority to better manage activities of the agency without 
undue second-guessing or interference.
  This section enables the Administrator to delegate his or her 
functions, powers, or duties to other FAA employees. Further, 
the Administrator would not need to seek the approval or advice 
of the DOT on any matter within the authority of the 
Administrator. Nevertheless, the FAA remains within the DOT, 
which would continue to provide general oversight of the agency 
as well as cooperate with the more autonomous FAA. The FAA must 
remain accountable, especially given the enhanced authority it 
is provided in this bill. Although the DOT has some role in 
that regard, it should not interfere in the FAA's purely 
internal workings.
  This section also gives the Administrator some voice in the 
selection of the eight political appointees who serve under him 
or her. The President would consult closely with the 
Administrator when considering FAA appointments to ensure 
harmony and stability within the FAA's leadership. The 
Committee strongly believes the FAA should be a professional, 
service-oriented organization. Political appointees should be 
chosen based on their appropriate skills that will further the 
mission of the FAA, consistent with the Administration's 
policies. The leadership of the FAA should be chosen based on 
the knowledge, expertise, and experience of its members, and 
for their commitment to a safe, effective, and efficient 
national air transportation system.
  This section adds a definition of ``political appointee'' to 
the statute. This section also preserves all authority vested 
in the Administrator (by delegation or by statute) prior to 
enactment of the bill. Nothing in this bill is meant to take 
anything away from any of the current powers, duties, or 
authority resting with the FAA or its Administrator.

Section 624. Regulations

  Section 624 affirms the Administrator's authority to issue, 
rescind and revise such regulations as necessary to carry out 
the functions of the FAA. The Administrator would be required 
to act upon a petition for rulemaking within six months by 
dismissing the petition, by informing the petitioner of an 
intention to dismiss, or by issuing a notice of proposed 
rulemaking (NPRM) or advanced notice of proposed rulemaking 
(ANPRM). This provision is meant to address concerns the FAA is 
not sufficiently responsive to rulemaking petitions filed by 
interested parties.
  This section also requires the Administrator to issue a final 
regulation, or take other final action, on an NPRM within 18 
months of the date it is published in the Federal Register (or 
within 24 months in the case of an ANPRM). This section is 
intended to address criticism by some in the aviation community 
that the FAA's current rulemaking process often takes too long. 
This section also recognizes that, because very few rules will 
be submitted to the DOT under the new provisions, the FAA can 
be held more accountable for timely performance in its 
rulemaking.
  Under this section, the DOT's authority to review FAA rules 
is limited. In specified, limited circumstances, the FAA could 
not issue certain regulations without the prior approval by the 
DOT. The DOT Secretary would have 45 days to review, for 
approval or disapproval, any FAA regulation likely to result in 
an annual, aggregate cost of $50 million or more to state, 
local, and tribal governments, or to the private sector. The 
DOT Secretary would also have 45 days to review ``significant'' 
regulations, which are rules that, in the judgment of the 
Administrator (in consultation with the Secretary, as 
appropriate), are likely to: have an annual effect on the 
economy of $100 million or adversely affect in a material way 
other parts of the society; be inconsistent or otherwise 
interfere with an action taken or planned by another agency; 
materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of 
recipients thereof; or raise novel legal or policy issues 
arising out of legal mandates. The criteria for determining a 
``significant'' regulation are modeled on Executive Order 12866 
as printed in the Federal Register on October 4, 1993 (Vol. 58, 
No. 190).
  This section also provides that in an emergency, the 
Administrator may issue regulations that require DOT approval 
without obtaining such prior approval. Such regulations, 
however, are subject to DOT ratification, and would be 
rescinded within 5 business days without such ratification.
  Under this section, the Administrator also would issue non-
significant regulations or other actions that are routine, 
frequent or procedural in nature, without review or approval by 
the DOT. Examples of routine or frequent actions that are non-
significant include standard instrument approach procedure 
regulations, en route altitude regulations, most airspace 
actions, and airworthiness directives. The DOT also would not 
be authorized to review ``rules of particular applicability,'' 
such as exemptions, operations specifications, and special 
conditions, all of which apply to one individual or entity, 
unless such exemptions met the definition of significant in 
this section.
  Finally, this section requires the FAA (three years after the 
bill is enacted) to review ``unusually burdensome'' regulations 
that are at least three years old. ``Unusually burdensome'' 
regulations are defined as those that result in the annual, 
aggregate expenditure of $25 million or more by State, local, 
and tribal governments, or by the private sector. Such 
regulations are to be reviewed to determine: the accuracy of 
the original cost assumptions; the overall benefit of the 
regulations; and the need to continue such regulations in their 
present form. This section also provides that the Administrator 
may review immediately any three-year-old regulation in force 
prior to enactment of the bill, such as rules issued in 1988 
regarding certification of foreign maintenance facilities used 
to repair or maintain U.S. aircraft. The Committee expects the 
FAA to use the MAC and the Aviation Rules Advisory Committee 
(ARAC), as appropriate, in the process of any of these reviews. 
Of course, with regard to any reviewed regulations, FAA should 
eliminate those that are truly harmful or burdensome, revise or 
modify those with some overall value, and retain those that are 
truly worthwhile and promote a safe and healthy ATC system and 
aviation industry.

Section 625. Personnel and services

  Section 625 provides that the Administrator may appoint and 
fix the compensation of necessary employees and officers of 
FAA. This section also provides that, in fixing the 
compensation and benefits of employees, the Administrator may 
not engage in any type of bargaining, except as provided for 
under section 653 of the bill. Further, this section provides 
that the Administrator shall not be bound by any requirement to 
establish compensation or benefits at particular levels.
  This section also provides other personnel authority to the 
Administrator, including, for example, the authority to hire 
experts and consultants and to use the services of personnel 
from any other Federal agency.
  This section represents one more element of the bill that 
defines the Administrator's authority over internal FAA 
matters. It provides the Administrator with powers and 
authority similar to those given to the head of an independent 
agency.
  This section also provides that officers and employees shall 
be appointed in accordance with civil service laws and 
compensated in accordance with title 5, United States Code, 
except as otherwise provided by law.

Section 626. Contracts

  This section provides broad, general authority for the 
Administrator to enter into contracts, leases, cooperative 
agreements, and other transactions, as necessary to carry out 
the functions of the FAA.
  The Committee encourages the use of authority granted under 
this section to contract with foreign governments for services 
the FAA can provide civil aviation authorities in other 
countries as a means of generating revenue. The FAA has 
indicated that significant revenue may be generated from such 
arrangements. The FAA should provide an annual summary of such 
revenue to the Committee. In addition, the term ``cooperative 
agreements'' is included in this section to ensure the FAA can 
receive in-kind goods or services from an individual, business, 
or government. Such goods or services may be used to offset any 
relevant or applicable fees one may be required to pay the FAA.
  The Committee also encourages the FAA to examine the 
possibility of using authority under this section to enter into 
lease arrangements for the facilities and equipment needs of 
the FAA. Leasing arrangements may lead to substantial cost 
savings and efficiency gains at the agency.

Section 627. Facilities

  This section provides the Administrator with authority to use 
or accept, with or without reimbursement, services, equipment, 
personnel, and facilities of any other Federal agency or public 
or private entity. Such acceptance would not constitute an 
augmentation of the Administration's budget. Heads of other 
Federal agencies would be asked to cooperate with the 
Administrator.

Section 628. Property

  Section 628 provides broad authority to the Administrator to 
acquire, construct, improve, repair, operate, and maintain air 
traffic control and research facilities and equipment, as well 
as other real and personal property. Further, the Administrator 
is authorized to lease such real and personal property to 
others.

Section 629. Transfers of funds from other Federal agencies

  Section 629 permits the Administrator to accept the transfer 
of unobligated balances and unexpended funds from other 
agencies to carry out functions assigned to FAA by this or 
other Acts.

Section 630. Management Advisory Council

  Section 630 establishes a 15-member Federal Aviation 
Management Advisory Council (MAC) to provide the Administrator 
with input from the aviation industry and community. The MAC 
would be comprised of one designee each of the Secretaries of 
Transportation and Defense and representatives from various 
segments of the aviation community who would be appointed by 
the President with the advice and consent of the Senate. 
Members of the MAC should be selected from among individuals 
who are experts in disciplines relevant to the aviation 
community and who are collectively able to represent a balanced 
view of the issues before the FAA. The MAC members also should 
not be selected based on political or partisan considerations.
  The Committee does not consider the MAC to be a ``paper 
tiger''. All views of each member should be taken into account 
so that even minority views can be adopted by the FAA if the 
Administrator regards such views as proper given the 
circumstances. In other words, this is an advisory council, not 
a board of directors for which a majority vote constitutes FAA 
policy. The Administrator must maintain objectivity and keep 
overriding goals and objectives, such as ensuring ATC system 
safety and efficiency, above the infighting that frequently 
occurs within the aviation community.
  The MAC also would be provided authority to review the FAA's 
regulatory cost-benefit process and the process through which 
the FAA issues advisory circulars and service bulletins.
  Two other particular areas on which the MAC should focus its 
oversight are ATC modernization and FAA acquisition management. 
The past problems of the FAA in these areas are well known. The 
Committee does not want the FAA to be free from Federal 
procurement rules so that it can simply acquire the wrong items 
more quickly. The Committee therefore believes the MAC can be a 
valuable resource in ensuring the FAA's Capital Investment 
Program emphasizes improving ATC system performance.
  The MAC also would provide advice and counsel on many issues 
to the Administrator on a regular basis. Although this section 
only provides that the MAC shall meet on a regular and periodic 
basis, or at the call of the Administrator or MAC Chair, the 
MAC should, at a minimum, meet on a quarterly basis.
  To facilitate its advisory function, the MAC must be given 
reasonable access to internal FAA documents and materials. Such 
access, however, must be given with due consideration for 
privacy and proprietary concerns. This section, therefore, 
would subject MAC members to criminal penalties for 
unauthorized disclosure of commercial or other proprietary 
information.

Section 631. Aircraft engine standards

  Section 631 vests the Administrator with new authority 
(currently under the Environmental Protection Agency (EPA)) to 
prescribe standards applicable to the emission of air 
pollutants from aircraft engines. Currently, the FAA only has 
authority over noise emission standards for aircraft engines. 
The Committee believes it is important for one agency to be 
responsible for regulating all aircraft engine emission 
standards so that there is consistency. Nevertheless, the FAA 
should work with the EPA to ensure regulations are consistent 
with national environmental policy, objectives, and efforts. In 
the past, differences between the FAA and the EPA have impeded 
a unified U.S. approach to consideration of international 
emissions standards.
  This section is not meant to alter or eliminate any existing 
federal regulations or standards regarding aircraft engine 
emissions until and unless modified or amended by the 
Administrator.

Section 632. Rural air fare study

  This section requires the DOT Secretary to conduct a study of 
rural air fares, and to provide a report to the Committee 
within 60 days after enactment of this bill. The study would 
encompass an analysis of the types of air service provided to 
rural communities as well as competitive aspects of such air 
service. The requirement to conduct this study stems from 
concerns over any detrimental effects of deregulation of the 
air carrier industry on small communities throughout the 
nation.

   SUBTITLE B--FEDERAL AVIATION ADMINISTRATION STREAMLINING PROGRAMS

Section 651. Review of acquisition management system

  Pursuant to this section, not later than April 1, 1999 the 
FAA would employ outside experts to determine whether the 
system has been streamlined without creating waste, fraud, or 
abuse. The FY 1996 DOT Appropriations bill (P.L. 104-50) gave 
the FAA authority to implement new procurement and personnel 
systems as of April 1, 1996.

Section 652. Air traffic control modernization reviews

  Section 652 establishes a safeguard, built into the 
procurement system, that would require the FAA to terminate 
facilities and equipment programs that are 50 percent or more: 
(1) over cost, (2) below performance goals, or (3) behind 
schedule. The Administrator could waive the termination 
requirement if a termination would be inconsistent with the 
safe and efficient operation of the national air transportation 
system. Also, the FAA would be required to consider terminating 
any program that is 10 percent or more: (1) over cost, (2) 
below performance goals, or (3) behind schedule. This section, 
in effect, requires the FAA to set realistic goals and 
standards for major acquisitions, which FAA has had problems 
doing in the past.

Section 653. Federal Aviation Administration personnel management 
        system

  Section 653 directs the Administrator, in developing and 
making changes to the new personnel system, to consult with FAA 
employees and negotiate with the exclusive bargaining 
representatives of employees. If the Administrator fails to 
reach agreement with such bargaining units, the parties will 
engage the services of the Federal Mediation and Conciliation 
Service. If agreement is not reached following such mediation, 
proposed changes to the personnel system shall not take effect 
until 60 days have elapsed after the Administrator has 
submitted the proposed change, any objections of the exclusive 
bargaining representatives, and the reasons for such 
objections, to the Congress. In negotiating changes to the 
personnel system, the Administrator and the exclusive 
bargaining representatives would be required to use every 
reasonable effort to find cost savings and to increase 
productivity within each of the affected bargaining units, as 
well as within the FAA as a whole. Nothing in this bill, 
therefore, prohibits the exclusive bargaining representatives 
from assisting in identifying cost savings in the procurement 
system as well as the new personnel system.
  The overriding goal of FAA reform is the enhancement of 
aviation safety. In this regard, the cost-saving efforts of the 
FAA and the exclusive bargaining representatives in the 
development of changes to the personnel system are not intended 
to, nor should they, adversely impact aviation safety. Any 
cost-saving effort that adversely affects aviation safety 
should be deemed contrary to the public interest and not 
developed or implemented. Further, in the annual meeting 
mandated by this section between the FAA and the exclusive 
bargaining representatives to identify additional cost savings 
within the agency, no such cost savings should be contrary to 
the public interest and any identified costs savings that have 
an adverse effect on aviation safety should not be acted upon 
by the FAA. Reasonable discovery and inspection of FAA 
documents pertaining to costs associated with personnel, 
procurement, and other operational budgets should be made 
available for the above cost-saving purposes.
  The recently implemented personnel system would be evaluated 
after three years by outside experts to ensure it has been 
effective. The basic rate of pay for any FAA employee is capped 
by the basic rate of pay for the Administrator, as set by 
statute.

  SUBTITLE C--SYSTEM TO FUND CERTAIN FEDERAL AVIATION ADMINISTRATION 
                               FUNCTIONS

Section 671. Findings

  Section 671 sets forth fourteen findings establishing the 
general basis for the provisions in the bill related to FAA 
funding. These findings concern the important services provided 
by the FAA in a variety of critical areas that benefit the 
users of the air transportation system.

Section 672. Purposes

  Section 672 sets forth seven critical purposes underlying the 
enactment of Title VI of the bill. Those purposes include 
providing a financial structure for the FAA that would enable 
it to support the future growth in the national aviation, ATC, 
and airport system. The third purpose, which is to ensure that 
any funding would be dedicated solely for the use of the FAA, 
is in reference to the user fees authorized under section 673.

Section 673. User fees for various Federal Aviation Administration 
        services

  Section 673 creates a new section 45301 under title 49, 
United States Code, providing authority, with certain 
limitations, for the FAA to establish a performance-based 
system for the collection of fees for certain services it 
provides. Not later than 30 days after the bill is enacted, the 
Administrator shall establish a schedule of new fees and a 
collection process for services (other than air traffic 
control) provided to a foreign government and for air traffic 
control services for flights that neither take off from, nor 
land in the United States, which could include trans-oceanic 
flights that use U.S. ATC services. Currently, international 
overflights receive what some call a ``free ride'' through the 
ATC system because they consume services, but contribute 
nothing in trust fund taxes. Furthermore, many, if not most, 
other countries charge our air carriers for overflights.
  A variety of limitations on the fee authority are prescribed. 
For example, in developing fees, the Administrator must 
consider the impact on segments of the aviation industry at 
levels that will recover $100 million in FY 1997, and are 
reasonably related to the total cost of providing the service 
rendered and/or the value of the service provided to the 
recipient.
  The FAA also must maximize its collection of existing fees.
  It is envisioned that the FAA will move as quickly as 
possible to develop and impose these fees and systems. The 
sooner funds can be drawn from the proposed fees on 
international overflights and for non-ATC services provided to 
foreign governments, the better off the FAA will be in the 
short-term. In developing user fees under this section, the 
Administrator may consult with nongovernmental experts.

Section 674. Independent assessment and task force to review existing 
        and innovative funding mechanisms

  This section requires the DOT to contract with an outside 
entity to conduct a comprehensive FAA needs and cost allocation 
assessment of the financial requirements of the FAA through 
2002. The assessment must be complete within 90 days of the 
contract being awarded. The DOT should select persons with no 
direct financial interest in the results of the assessment to 
perform the objective analysis of FAA's funding needs and 
assumptions for operations, capital spending, and airport 
infrastructure of the FAA.
  The purpose of this assessment is to determine independently 
what the financial needs of the FAA will be in the short- and 
long-term. The assessment also must include a cost allocation 
analysis detailing which segments of the aviation community are 
driving the various costs imposed on the FAA. Costs attributed 
to users should reflect the full range of FAA expenditures and 
activities associated directly or indirectly with a particular 
aviation segment, including, for example, costs of airport 
infrastructure financed in whole or in part by the FAA. This 
assessment is urgently needed by the task force, Congress, and 
the aviation community so proper evaluation of the FAA's 
financial picture can be done using a single, objective set of 
numbers and assumptions.
  According to the GAO, since the advent of the National 
Airspace System (NAS) plan in 1982, the FAA has spent more than 
$19.8 billion attempting to fulfill the NAS blueprint for the 
future. Under the more ambitious and recently revised Capital 
Improvement Plan (CIP), it is anticipated that at least another 
$17.5 billion will be spent through the early years of the next 
century. The scope, complexity, and cost of the FAA's 
requirements appear to necessitate a complete assessment, as 
called for in this title.
  The Committee believes the objective assessment must contain 
an analysis of current and future spending of the entire FAA, 
including airport capital needs. A major premise of this 
legislation is that old assumptions and old ways of doing 
business must be reevaluated and updated. This includes an 
independent assessment of the FAA's needs and the nation's 
airport capital needs to ensure that capacity is able to meet 
demand. As a result, the task force, Congress and the FAA must 
be in a position to determine which projects expand capacity 
and enhance the safety and security of the national air 
transportation system.
  The assessment should provide assistance to Congress as to 
appropriate reforms, which will allow the FAA and airports to 
more efficiently utilize and maximize Airport Improvement 
Program (AIP) dollars for necessary capacity, safety, and 
security.
  The GAO recently issued a report stating that a majority of 
PFC funds were for terminal projects, access roads, and debt 
service. The Committee is concerned this program has not been 
dedicated to the safety, capacity, and security priorities, 
which the Committee identified in 1990. In most instances, the 
carriers and airports are able to work together on funding 
airport projects, and the system works. However, the Committee 
is aware of one instance in which an airport has collected in 
excess of $150 million through PFCs, but has not spent the 
money. The right to collect PFCs should not be abused by any 
airport.
  The Committee expects the assessment to be performed 
independently of the FAA and DOT. No contractor, FAA employee, 
or other person with a financial interest in the result of such 
assessment shall be utilized to analyze, comment, or validate 
those aspects of the FAA's financial picture in which such 
person or entity has a proprietary interest.
  The requirement for independence and detachment from the 
results of the assessment is not limited to hardware and 
software providers. Consulting firms and other entities that 
deliver specifications, provide rationale, or otherwise were 
compensated by the FAA or the DOT for advice and guidance on 
any aspect of the FAA's needs, should not be put in the 
position to comment, validate, or rationalize previous 
recommendations provided by such contractor. By the same token, 
the importance of the assessments' independence is not to be 
taken to such extremes that consulting firms and other entities 
with knowledge of, expertise in, or experience with the affairs 
of the FAA would be excluded from consideration.
  The assessment must take a variety of factors into 
consideration, including: air traffic forecasts and other 
workload measures; estimated productivity gains; the need for 
specific programs; and the need to provide safety and 
operational improvements.
  This section also requires that FAA establish an independent 
11-member task force. The membership would represent a cross-
section of aviation community experience and expertise. The 
main purpose of the task force would be to develop specific 
recommendations on how best to fund the FAA in the long-term. 
The task force should elect a chair and vice chair from among 
its members.
  Using the independent assessment, the task force would hold 
public hearings, consult with appropriate Congressional 
committees, and eventually prepare a report on long-term 
funding for the FAA. The report would analyze budget 
requirements and alternative funding means and include specific 
legislative recommendations. The task force would submit a 
preliminary report to the DOT within six months of the 
completion of the independent assessment. Prior to issuance of 
a final report, there would be an opportunity for the DOT to 
comment on the task force report and for the task force to 
respond to those comments. Within one year of enactment of the 
bill, the DOT would transmit its own draft legislation of an 
FAA funding proposal(s) along with the final task force report 
and recommendations. If the DOT proposals are different from 
those of the task force, the DOT would also be required to 
explain those differences.
  If each task force and DOT deadline in the bill were taken to 
its limit, the DOT might appear to have 13 months to submit its 
report and draft legislation to Congress. However, these 
deadlines are meant to indicate the maximum time allowed for a 
specific action. The task force and DOT must try to complete 
their respective tasks as swiftly as possible. In any 
circumstance, the final DOT report to Congress must be 
submitted no later than one year after the bill is enacted.
  The recommendations of the task force may include a variety 
of possibilities, such as alternate funding proposals, user fee 
system proposals, modifications to the aviation excise tax 
system, a combination of excise taxes and user fees, and means 
of meeting airport infrastructure needs. The task force also 
shall consider a limited, innovative program for airport-
related funding mechanisms. For each recommendation, the task 
force must assess the impact on safety, administrative costs, 
the Congressional budget process, industry economics, the 
ability of the FAA to use sums collected, and the needs of the 
FAA.
  If the task force report includes a recommendation that the 
existing tax structure be modified, the report would include 
the specific tax rates proposed for each segment of the 
aviation community, a consideration of the impact on specific 
system users, and an explanation of the basis for the 
recommendations.
  If the task force recommends that a fee system be 
established, the task force is required to consider numerous 
factors, including: the impact on air fares (including low-
fare, high frequency service) and competition; the unique 
circumstances associated with inter-island air carrier service 
in Hawaii and rural air service in Alaska; the impact on 
service to small communities; and the impact on services 
provided by regional carriers. The report must also include an 
explanation of the basis for the recommendations.
  Because of their location on our nation's only island State, 
Hawaii's residents and its largest industry, tourism, depend 
almost exclusively on affordable and frequent inter-island air 
service. Hawaii lacks the traditional alternate means of 
transportation available in the contiguous States. Accordingly, 
the Committee is concerned about any fee systems recommended by 
the task force that substantially increases the financial 
burden of Hawaii's inter-island passengers or shippers, because 
of the impact it would have on the cost of inter-island service 
for Hawaii's residents and visitors. The Committee expects, to 
the maximum extent possible, that Hawaii's unique situation be 
fully considered by the task force if it recommends a fee 
system. The Committee expects the same considerations to be 
given to the State of Alaska where 75 percent of its 
communities are accessible only by air.
  The Committee expects that any fees, taxes, or other charges 
recommended by the task force must not, to the maximum extent 
possible, unreasonably restrain competition by being, for 
example, unfair, unreasonable, unjustly discriminatory among 
current or potential users of the FAA's services, or 
unreasonably disadvantageous to new entrants or entrepreneurs. 
If recommended by the task force, ATC fees should be broadly 
based, covering the full range of direct and indirect costs of 
air traffic-related services and activities, including, for 
example, costs of facilities and equipment, research and 
development, and airport infrastructure grants.
  With regard to funding mechanisms, the task force also should 
examine all existing funding options available for airport 
development. This is not limited to AIP and Passenger Facility 
Charges (PFCs), but should include airline and concession 
revenues, non-aeronautical revenues, and state and local 
funding sources. The Committee wants the task force to 
critically evaluate the role that existing non-Federal funding 
sources have played and can play in financing airport capital 
projects. In addition, the task force report should identify 
specific instances in which airports have been unable to 
accomplish capacity-enhancement, safety or security projects 
because of airline interference or ``majority-in-interest'' 
clauses, and the overall magnitude of this purported problem.
  This section also requires that, within 120 days, GAO must 
conduct an assessment of the manner in which cost for ATC 
services are allocated between the FAA and the DoD. The only 
way for the task force to get a complete understanding of the 
FAA's costs is if they consider the costs that the FAA and the 
DoD impose on each other as well as the benefits each derives 
from the other. Therefore, the GAO should be allowed access to 
the FAA's and the DoD's budget records in this area so long as 
such access does not interfere with classified, national 
security matters. The task force and Congress should be made 
aware of GAO's findings and should consider any financial 
burdens placed upon the national air transportation system.

Section 675. Procedure for consideration of certain funding proposals

  This section sets forth the expedited Congressional 
procedures for consideration of a legislative funding proposal 
submitted by the DOT pursuant to section 674. (The procedure is 
similar to the one used for consideration of line item veto 
legislation.) Once a draft proposal has been submitted to 
Congress, the legislation would be introduced within 15 days 
and referred to the appropriate committee (or committees in the 
case of joint referral). Each committee would then have 45 days 
to consider and amend the legislation before it would 
automatically be discharged and placed on the calendar. In the 
Senate, a motion to proceed to consideration would be 
nondebatable. Debate would be limited to 20 hours and only 
amendments related to aviation funding and the FAA would be in 
order. This section also contains an expedited procedure for 
consideration of any conference report.
  The expedited legislative procedures in the bill do not imply 
that any particular approach to financing is preferable. The 
purpose of establishing the task force is to objectively 
evaluate the independent assessment and to generate legislative 
recommendations to address future financing needs.

Section 676. Administrative provisions

  Section 676 creates a separate, dedicated account 
(established in the Treasury) for all new fees and other 
receipts (except for those associated with the Aviation 
Insurance Program) collected by the FAA. The receipts and 
disbursements of this account would be classified as offsetting 
collections and not be subject to budget caps, the 
appropriations process, or sequestration. Expenditure of 
amounts from the account could be used only for Congressionally 
authorized activities of the agency. This Treasury account goes 
very much to the heart of this bill by ensuring that revenues 
from the aviation community go directly to the FAA for the 
needs of the national air transportation system. Amounts 
credited to the account would not include amounts collected by 
the Administrator which, on the effective date of this bill, 
would be required pursuant to law to be credited to the General 
Fund of the Treasury. Such excluded amounts would continue to 
be credited to the General Fund by the Administrator.
  This section also requires the FAA to develop a cost 
accounting system. The existing FAA accounting system masks the 
costs of providing the various services, which in turn has 
created cross-subsidies, misallocations, and inefficiencies. A 
cost accounting system would expose (to the MAC and Congress) 
FAA costs of providing each and every service, and provide 
incentives for the FAA to improve its performance, as an agency 
in general, and the ATC system's performance. By knowing the 
cost of a particular service, there will be a basis from which 
to propose alternate ways of providing that service. Moreover, 
determining the costs of the services provided by the FAA is a 
critical initial step to reforming the FAA. The FAA will need 
this information early in the process to be able to make 
informed decisions as to how best to proceed on reform. A 
subsequent step would be to determine what FAA can charge for 
the services it provides based in part on these cost 
determinations and input from the MAC. One example of how such 
cost information can be helpful was the FAA's determination 
that pre-flight services at FAA flight service stations, which 
had cost approximately $9 per transaction, could be provided by 
private businesses for about $2 per transaction.
  This section also provides that when an air carrier is 
required by the Administrator, pursuant to this legislation, to 
collect a fee imposed on a third party by the FAA (e.g., a 
system based on a per passenger fee), the Administrator shall 
ensure that such air carrier may collect from such third party 
an additional uniform amount reflecting necessary and 
reasonable expenses (net of interest) incurred in collecting 
and handling the fee.
  This section further requires that the Administrator provide 
to the Congress, prior to the submission of any proposed user 
fee or excise tax schedule, a report justifying the need for 
the proposed user fees or taxes and including other specified 
information such as steps the Administrator has taken to reduce 
costs and improve efficiency within FAA.

Section 677. Advance appropriations for Airport and Airway Trust Fund 
        activities

  Section 677 prescribes a three-year authorization and three-
year appropriation cycle for the FAA to provide the agency with 
greater funding stability in planning its programs and 
activities.

Section 678. Rural Air Service Survival Act

  Pursuant to section 678, authority to administer and operate 
the EAS program would be transferred from the DOT Secretary to 
the Administrator. Although responsibility for administering 
the EAS program is transferred, some language in this section 
refers to the DOT Secretary rather than the Administrator so 
that these amendments remain consistent with the provisions of 
the current statute. The program would be established at a $50 
million level, with authority for the program to be funded by 
user fees collected under this legislation, including those 
specifically derived from overflights. At the end of each 
fiscal year, if less than $50 million has been obligated for 
EAS programs, the Administrator shall make those remaining 
amounts available under the Airport Improvement Program for 
grants to rural airports to improve rural air safety. This 
section also, in effect, repeals a provision in the current law 
sunsetting the EAS program.

                        TITLE VII--PILOT RECORDS

Section 701. Short title

  Section 701 cites the short title of title VII as the ``Pilot 
Records Improvement Act of 1996''.

Section 702. Employment investigations of pilot applicants

  Section 702 requires that, before hiring an individual as a 
pilot, an air carrier would be required to request and receive: 
(1) FAA records (i.e., current airman certificates (including 
airman medical certificates) and associated type ratings, and 
summaries of legal enforcement actions); (2) records from any 
carrier that has employed the individual at any time during the 
5-year period preceding the date of the employment application 
of the individual; and (3) National Driver Register (NDR) 
records from the chief driver licensing official of a State 
concerning the motor vehicle driving record of the individual.
  An air carrier making a records request must obtain a consent 
for release of the records from the prospective employee/pilot, 
and may require the pilot to execute a liability release 
regarding the exchange of those records.
  The FAA would do a periodic review and recommend changes to 
the records that the airlines, the FAA, and others are required 
to maintain pursuant to this section.
  A recent or current employer would not be permitted to 
furnish a pilot record in response to a request made by a 
prospective employing carrier without first obtaining the 
written consent of the individual whose records are being 
requested. If written consent from the individual has been 
received, the person would be required to furnish all of the 
records maintained by the person that have been requested 
within 30 days of obtaining the written consent of the 
individual.
  A current or previous employer who receives a request for 
pilot records from a prospective employing carrier would be 
required to provide written notification to the individual of 
the request for that individual's records, and a copy of such 
records, if requested by the individual. A current or previous 
employer who receives a request for a pilot's records may 
establish a reasonable charge for the cost of processing the 
request and furnishing copies of the requested records to the 
requesting carrier.
  The FAA Administrator also would promulgate standard forms 
relating to the transference of pilot records from the former 
employing carrier to the prospective employing carrier. 
Standard forms also would be issued by the Administrator for 
the use of a former employing carrier to obtain the written 
consent of the pilot/applicant, and to inform the applicant of 
the request and of his or her right to receive a copy of any 
records furnished in response to the request.
  An air carrier that receives the records of a pilot applicant 
must give that individual a reasonable opportunity to submit 
written comments to correct inaccuracies. Air carriers also 
must use any records for relevant and appropriate purposes, and 
take action to protect the personal privacy of the pilots and 
confidentiality of shared pilot records.
  The FAA Administrator may prescribe such regulations as 
necessary to protect the personal privacy of an individual 
whose records are requested and the confidentiality of those 
records, to limit the further dissemination of records received 
by the employing carrier, and to ensure prompt compliance with 
any request for records by an employing carriers.
  No action or proceeding in the nature of defamation, invasion 
of privacy, negligence, interference with contract, or 
otherwise, or under any State or Federal law with respect to 
the furnishing or use of such records, may be brought by or on 
behalf of an individual who is seeking a position with an air 
carrier as a pilot against: 1) the prospective employing air 
carrier for requesting the individual's records; 2) the current 
or past employer who has complied with such request after 
obtaining the written consent of the individual whose records 
have been requested; or 3) an agent or employee of the 
prospective employing air carrier or the current or past 
employer.
  No State or locality may enact, prescribe, issue, continue in 
effect, or enforce any law, regulation, standard, or other 
provision having the force and effect of law that prohibits, 
penalizes, or imposes liability for furnishing or using pilot 
records.
  The limitation on liability and preemption would not apply 
with respect to a person (e.g., an employer) who, in response 
to a request for records, furnishes information that the person 
knows is false and the false information was maintained in 
violation of a U.S. criminal statute.

Section 703. Study of minimum standards for pilot qualifications

  Section 703 requires the FAA Administrator to appoint a task 
force to conduct a study directed toward the development of 
standards and criteria for pre-employment screening tests and 
for pilot training facilities that would assure pilots trained 
at such facilities meet the newly developed pre-employment 
screening standards and criteria.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                     INTERNAL REVENUE CODE OF 1986

                      CHAPTER 98--TRUST FUND CODE

               Subchapter A--Establishment of Trust Funds

SEC. 9502. AIRPORT AND AIRWAY TRUST FUND.

  (a) Creation of Trust Fund.--There is established in the 
Treasury of the United States a trust fund to be known as the 
``Airport and Airway Trust Fund'', consisting of such amounts 
as may be appropriated or credited to the Airport and Airway 
Trust Fund as provided in this section or section 9602(b).
  (b) Transfer to Airport and Airway Trust Fund of Amounts 
Equivalent to Certain Taxes.--There is hereby appropriated to 
the Airport and Airway Trust Fund--
          (1) amounts equivalent to the taxes received in the 
        Treasury after August 31, 1982, and before January 1, 
        1996, under subsections (c) and (e) of section 4041 
        (taxes on aviation fuel) and under sections 4261 and 
        4271 (taxes on transportation by air);
          (2) amounts determined by the Secretary of the 
        Treasury to be equivalent to the taxes received in the 
        Treasury after August 31, 1982, and before January 1, 
        1996, under section 4081 (to the extent of 14 cents per 
        gallon), with respect to gasoline used in aircraft;
          (3) amounts determined by the Secretary to be 
        equivalent to the taxes received in the Treasury before 
        January 1, 1996, under section 4091 (to the extent 
        attributable to the Airport and Airway Trust Fund 
        financing rate); and
          (4) amounts determined by the Secretary of the 
        Treasury to be equivalent to the taxes received in the 
        Treasury after August 31, 1982, and before January 1, 
        1996, under section 4071 with respect to tires of the 
        types used on aircraft.
  (c) Appropriation of Additional Sums.--There are hereby 
authorized to be appropriated to the Airport and Airway Trust 
Fund such additional sums as may be required to make the 
expenditures referred to in subsection (d) of this section.
  (d) Expenditures From Airport and Airway Trust Fund.--
          (1) Airport and airway program.--Amounts in the 
        Airport and Airway Trust Fund shall be available, as 
        provided by appropriation Acts, for making expenditures 
        before October 1, [1996,] 1997, to meet those 
        obligations of the United States--
                  (A) incurred under title I of the Airport and 
                Airway Development Act of 1970 or of the 
                Airport and Airway Development Act Amendments 
                of 1976 or of the Aviation Safety and Noise 
                Abatement Act of 1979 or under the Fiscal Year 
                1981 Airport Development Authorization Act or 
                the provisions of the Airport and Airway 
                Improvement Act of 1982 or the Airport and 
                Airway Safety and Capacity Expansion Act of 
                1987 or the Federal Aviation Administration 
                Research, Engineering, and Development 
                Authorization Act of 1990 or the Aviation 
                Safety and Capacity Expansion Act of 1990 or 
                the Airport and Airway Safety, Capacity, Noise 
                Improvement, and Intermodal Transportation Act 
                of 1992 or the Airport Improvement Program 
                Temporary Extension Act of 1994 or the Federal 
                Aviation Administration Authorization Act of 
                1994 or the Federal Aviation Reauthorization 
                Act of 1996;
                  (B) heretofore or hereafter incurred under 
                part A of subtitle VII of title 49, United 
                States Code, which are attributable to 
                planning, research and development, 
                construction, or operation and maintenance of--
                          (i) air traffic control,
                          (ii) air navigation,
                          (iii) communications, or
                          (iv) supporting services,
                for the airway system; or
                  (C) for those portions of the administrative 
                expenses of the Department of Transportation 
                which are attributable to activities described 
                in subparagraph (A) or (B).
        Any reference in subparagraph (A) to an Act shall be 
        treated as a reference to such Act and the 
        corresponding provisions (if any) of title 49, United 
        States Code, as such Act and provisions were in effect 
        on the date of the enactment of the last Act referred 
        to in subparagraph (A).
          (2) Transfers from airport and airway trust fund on 
        account of certain refunds.--The Secretary of the 
        Treasury shall pay from time to time from the Airport 
        and Airway Trust Fund into the general fund of the 
        Treasury amounts equivalent to the amounts paid after 
        August 31, 1982, in respect of fuel used in aircraft, 
        under section 6420 (relating to amounts paid in respect 
        of gasoline used on farms, 6421 (relating to amounts 
        paid in respect of gasoline used for certain nonhighway 
        purposes), or 6427 (relating to fuels not used for 
        taxable purposes).
          (3) Transfers from the airport and airway trust fund 
        on account of certain section 34 credits.--The 
        Secretary of the Treasury shall pay from time to time 
        from the Airport and Airway Trust Fund into the general 
        fund of the Treasury amounts equivalent to the credits 
        allowed under section 34 with respect to fuel used 
        after August 31, 1982. Such amounts shall be 
        transferred on the basis of estimates by the Secretary 
        of the Treasury, and proper adjustments shall be made 
        in amounts subsequently transferred to the extent prior 
        estimates were in excess of or less than the credits 
        allowed.
          (4) Transfers for refunds and credits not to exceed 
        trust fund revenues attributable to fuel used.--The 
        amounts payable from the Airport and Airway Trust Fund 
        under paragraph (2) or (3) shall not exceed the amounts 
        required to be appropriated to such Trust Fund with 
        respect to fuel so used.
  (e) Special Rules for Transfers Into Trust Fund.--
          (1) Increases in tax revenues before 1993 to remain 
        in general fund.--In the case of taxes imposed before 
        January 1, 1993, the amounts required to be 
        appropriated under paragraphs (1), (2), and (3) of 
        subsection (b) shall be determined without regard to 
        any increase in a rate of tax enacted by the Revenue 
        Reconciliation Act of 1990.
          (2) Certain taxes on alcohol mixtures to remain in 
        general fund.--For purposes of this section, the 
        amounts which would (but for this paragraph) be 
        required to be appropriated under paragraphs (1), (2), 
        and (3) of subsection (b) shall be reduced by--
                  (A) 0.6 cent per gallon in the case of taxes 
                imposed on any mixture at least 10 percent of 
                which is alcohol (as defined in section 
                4081(c)(3)) if any portion of such alcohol is 
                ethanol, and
                  (B) 0.67 cent per gallon in the case of fuel 
                used in producing a mixture described in 
                subparagraph (A).
  (f) Definition of Airport and Airway Trust Fund Financing 
Rate.--For purposes of this section--
          (1) In general.--Except as otherwise provided in this 
        subsection, the Airport and Airway Trust Fund financing 
        rate is--
                  (A) in the case of fuel used in an aircraft 
                in noncommercial aviation (as defined in 
                section 4041(c)(4)), 17.5 cents per gallon, and
                  (B) in the case of fuel used in an aircraft 
                other than in noncommercial aviation (as so 
                defined), zero.
          (2) Alcohol fuels.--If the rate of tax on any fuel is 
        determined under section 4091(c), the Airport and 
        Airway Trust Fund financing rate is the excess (if any) 
        of the rate of tax determined under section 4091(c) 
        over 4.4 cents per gallon ( 10/9 of 4.4 cents per 
        gallon in the case of a rate of tax determined under 
        section 4091(c)(2)).
          (3) Termination.--Notwithstanding the preceding 
        provisions of this subsection, the Airport and Airway 
        Trust Fund financing rate is zero with respect to tax 
        received after December 31, 1995.

                        TITLE 49--TRANSPORTATION

                Subtitle I--Department of Transportation

                        CHAPTER 1--ORGANIZATION

Sec. 106. Federal Aviation Administration

  (a) The Federal Aviation Administration is an administration 
in the Department of Transportation.
  (b) The head of the Administration is the Administrator. The 
Administration has a Deputy Administrator. They are appointed 
by the President, by and with the advice and consent of the 
Senate. When making an appointment, the President shall 
consider the fitness of the individual to carry out efficiently 
the duties and powers of the office. [The Administrator] Except 
as provided in subsection (f) of this section or in other 
provisions of law, the Administrator reports directly to the 
Secretary of Transportation. The term of office for any 
individual appointed as Administrator after the date of the 
enactment of this sentence shall be 5 years.
  (c) The Administrator must--
          (1) be a citizen of the United States;
          (2) be a civilian; and
          (3) have experience in a field directly related to 
        aviation.
  (d)(1) The Deputy Administrator must be a citizen of the 
United States and have experience in a field directly related 
to aviation. An officer on active duty in an armed force may be 
appointed as Deputy Administrator. However, if the 
Administrator is a former regular officer of an armed force, 
the Deputy Administrator may not be an officer on active duty 
in an armed force, a retired regular officer of an armed force, 
or a former regular officer of an armed force.
  (2) An officer on active duty or a retired officer serving as 
Deputy Administrator is entitled to hold a rank and grade not 
lower than that held when appointed as Deputy Administrator. 
The Deputy Administrator may elect to receive (A) the pay 
provided by law for the Deputy Administrator, or (B) the pay 
and allowances or the retired pay of the military grade held. 
If the Deputy Administrator elects to receive the military pay 
and allowances or retired pay,the Administration shall 
reimburse the appropriate military department from funds 
available for the expenses of the Administration.
  (3) The appointment and service of a member of the armed 
forces as a Deputy Administrator does not affect the status, 
office, rank, or grade held by that member, or a right or 
benefit arising from the status, office, rank, or grade.The 
Secretary of a military department does not control the member 
when the member is carrying out duties and powers of the Deputy 
Administrator.
  (e) The Administrator and the Deputy Administrator may not 
have a pecuniary interest in, or own stock in or bonds of, an 
aeronautical enterprise, or engage in another business, 
vocation, or employment.
  [(f) The Secretary of Transportation shall carry out the 
duties and powers,and controls the personnel and activities, of 
the Administration. The Secretary may not submit decisions for 
the approval of, nor be bound by the decisions or 
recommendations of, a committee, board, or organization 
established by executive order.]
  (f) Authority of the Secretary and the Administrator.--
          (1) Authority of the secretary.--Except as provided 
        in paragraph (2), the Secretary of Transportation shall 
        carry out the duties and powers of the Administration.
          (2) Authority of the administrator.--The 
        Administrator--
                  (A) is the final authority for carrying out 
                all functions, powers, and duties of the 
                Administration relating to--
                          (i) except as otherwise provided in 
                        paragraph (3), the promulgation of 
                        regulations, rules, orders, circulars, 
                        bulletins, and other official 
                        publications of the Administration; and
                          (ii) any obligation imposed on the 
                        Administrator, or power conferred on 
                        the Administrator, by the Air Traffic 
                        Management System Performance 
                        Improvement Act of 1996 (or any 
                        amendment made by that Act);
                  (B) shall offer advice and counsel to the 
                President with respect to the appointment and 
                qualifications of any officer or employee of 
                the Administration to be appointed by the 
                President or as a political appointee;
                  (C) may delegate, and authorize successive 
                redelegations of, to an officer or employee of 
                the Administration any function, power, or duty 
                conferred upon the Administrator, unless such 
                delegation is prohibited by law; and
                  (D) except as otherwise provided for in this 
                title, and notwithstanding any other provision 
                of law to the contrary, shall not be required 
                to coordinate, submit for approval or 
                concurrence, or seek the advice or views of the 
                Secretary or any other officer or employee of 
                the Department of Transportation on any matter 
                with respect to which the Administrator is the 
                final authority.
          (3) Regulations.--
                  (A) In general.--In the performance of the 
                functions of the Administrator and the 
                Administration, the Administrator is authorized 
                to issue, rescind, and revise such regulations 
                as are necessary to carry out those functions. 
                The issuance of such regulations shall be 
                governed by the provisions of chapter 5 of 
                title 5. The Administrator shall act upon all 
                petitions for rulemaking no later than 6 months 
                after the date such petitions are filed by 
                dismissing such petitions, by informing the 
                petitioner of an intention to dismiss, or by 
                issuing a notice of proposed rulemaking or 
                advanced notice of proposed rulemaking. The 
                Administrator shall issue a final regulation, 
                or take other final action, not later than 18 
                months after the date of publication in the 
                Federal Register of a notice of proposed 
                rulemaking or, in the case of an advanced 
                notice of proposed rulemaking, if issued, not 
                later than 24 months after that date.
                  (B) Approval of secretary of 
                transportation.--
                          (i) The Administrator may not issue a 
                        proposed regulation or final regulation 
                        that is likely to result in the 
                        expenditure by State, local, and tribal 
                        governments in the aggregate, or by the 
                        private sector, of $50,000,000 or more 
                        (adjusted annually for inflation 
                        beginning with the year following the 
                        date of enactment of the Air Traffic 
                        Management System Performance 
                        Improvement Act of 1996) in any 1 year, 
                        or any regulation which is significant, 
                        unless the Secretary of Transportation 
                        approves the issuance of the regulation 
                        in advance. For purposes of this 
                        paragraph, a regulation is significant 
                        if it is likely to--
                                  (I) have an annual effect on 
                                the economy of $100 million or 
                                more or adversely affect in a 
                                material way the economy, a 
                                sector of the economy, 
                                productivity, competition, 
                                jobs, the environment, public 
                                health or safety, or State, 
                                local, or tribal governments or 
                                communities;
                                  (II) create a serious 
                                inconsistency or otherwise 
                                interfere with an action taken 
                                or planned by another agency;
                                  (III) materially alter the 
                                budgetary impact of 
                                entitlements, grants, user 
                                fees, or loan programs or the 
                                rights and obligations of 
                                recipients thereof; or
                                  (IV) raise novel legal or 
                                policy issues arising out of 
                                legal mandates.
                          (ii) In an emergency, the 
                        Administrator may issue a regulation 
                        described in clause (i) without prior 
                        approval by the Secretary, but any such 
                        emergency regulation is subject to 
                        ratification by the Secretary after it 
                        is issued and shall be rescinded by the 
                        Administrator within 5 days (excluding 
                        Saturdays, Sundays, and legal public 
                        holidays) after issuance if the 
                        Secretary fails to ratify its issuance.
                          (iii) Any regulation that does not 
                        meet the criteria of clause (i), and 
                        any regulation or other action that is 
                        a routine or frequent action or a 
                        procedural action, may be issued by the 
                        Administrator without review or 
                        approval by the Secretary.
                          (iv) The Administrator shall submit a 
                        copy of any regulation requiring 
                        approval by the Secretary under clause 
                        (i) to the Secretary, who shall either 
                        approve it or return it to the 
                        Administrator with comments within 45 
                        days after receiving it.
                  (C) Periodic review.--(i) Beginning on the 
                date which is 3 years after the date of 
                enactment of the Air Traffic Management System 
                Performance Improvement Act of 1996, the 
                Administrator shall review any unusually 
                burdensome regulation issued by the 
                Administrator after the date of enactment of 
                the Air Traffic Management System Performance 
                Improvement Act of 1996 beginning not later 
                than 3 years after the effective date of the 
                regulation to determine if the cost assumptions 
                were accurate, the benefit of the regulations, 
                and the need to continue such regulations in 
                force in their present form.
                  (ii) The Administrator may identify for 
                review under the criteria set forth in clause 
                (i) unusually burdensome regulations that were 
                issued before the date of enactment of the Air 
                Traffic Management System Performance 
                Improvement Act of 1996 and that have been in 
                force for more than 3 years.
                  (iii) For purposes of this subparagraph, the 
                term ``unusually burdensome regulation'' means 
                any regulation that results in the annual 
                expenditure by State, local, and tribal 
                governments in the aggregate, or by the private 
                sector, of $25,000,000 or more (adjusted 
                annually for inflation beginning with the year 
                following the date of enactment of the Air 
                Traffic Management System Performance Act of 
                1996) in any year.
                  (iv) The periodic review of regulations may 
                be performed by advisory committees and the 
                Management Advisory Council established under 
                subsection (p).
          (4) Definition of political appointee.--For purposes 
        of this subsection, the term ``political appointee'' 
        means any individual who--
                  (A) is employed in a position on the 
                Executive Schedule under sections 5312 through 
                5316 of title 5;
                  (B) is a limited term appointee, limited 
                emergency appointee, or noncareer appointee in 
                the Senior Executive Service as defined under 
                section 3132(a) (5), (6), and (7) of title 5, 
                respectively; or
                  (C) is employed in a position in the 
                executive branch of the Government of a 
                confidential or policy-determining character 
                under Schedule C of subpart C of part 213 of 
                title 5 of the Code of Federal Regulations.
  (g) Duties and Powers of Administrator.--
          (1) Except as provided in paragraph (2) of this 
        subsection, the Administrator shall carry out--
                  (A) duties and powers of the Secretary of 
                Transportation under subsection (f) of this 
                section related to aviation safety (except 
                those related to transportation, packaging, 
                marking, or description of hazardous material) 
                and stated in sections 308(b), 1132 (c) and 
                (d), 40101(c), 40103(b), 40106(a), 40108, 
                40109(b), 40113 (a), (c), and (d), 40114(a), 
                40119, 44501 (a) and (c), 44502 (a)(1), (b), 
                and (c), 44504, 44505, 44507, 44508, 44511-
                44513, 44701-44716, 44718(c), 44721(a), 44901, 
                44902, 44903 (a)-(c) and (e), 44906, 44912, 
                44935-44937, and 44938 (a) and (b), chapter 451 
                [49 U.S.C. 45101 et seq.], sections 45302, 
                45303, 46104, 46301 (d) and (h)(2), 46303(c), 
                46304-46308, 46310, 46311, and 46313-46316, 
                chapter 465 [49 U.S.C. 46501 et seq.], and 
                sections 47504(b) (related to flight 
                procedures), 47508(a), and 48107 of this title; 
                and
                  (B) additional duties and powers prescribed 
                by the Secretary of Transportation.
          (2) In carrying out sections 40119, 44901, 44903 (a)-
        (c) and (e), 44906, 44912, 44935-44937, 44938 (a) and 
        (b), and 48107 of this title, paragraph (1)(A) of this 
        subsection does not apply to duties and powers vested 
        in the Director of Intelligence and Security by section 
        44931 of this title.
  (h) Section 40101(d) of this title applies to duties and 
powers specified in subsection (g)(1) of this section. Any of 
those duties and powers may be transferred to another part of 
the Department only when specifically provided by law or a 
reorganization plan submitted under chapter 9 of title 5 [5 
U.S.C. 901 et seq.]. A decision of the Administrator in 
carrying out those duties or powers is administratively final.
  (i) The Deputy Administrator shall carry out duties and 
powers prescribed by the Administrator. The Deputy 
Administrator acts for the Administrator when the Administrator 
is absent or unable to serve, or when the office of the 
Administrator is vacant.
  (j) There is established within the Federal Aviation 
Administration an institute to conduct civil aeromedical 
research under section 44507 of this title. Such institute 
shall be known as the ``Civil Aeromedical Institute''. Research 
conducted by the institute should take appropriate advantage of 
capabilities of other government agencies, universities, or the 
private sector.
  (k) Authorization of Appropriations for Operations.--There is 
authorized to be appropriated to the Secretary of 
Transportation for operations of the Administration 
$4,088,000,000 for fiscal year 1991, $4,412,600,000 for fiscal 
year 1992, $4,716,500,000 for fiscal year 1993, $4,576,000,000 
for fiscal year 1994, $4,674,000,000 for fiscal year 1995, 
[and] $4,810,000,000 for fiscal year [1996.] 1996, and 
$5,000,000,000 for fiscal year 1997.
  (l) Interaccount Flexibility.--
          (1) Except as provided in paragraph (2), the 
        Administrator may transfer budget authority derived 
        from trust funds among appropriations authorized by 
        subsection (k) and sections 48101 and 48102, if the 
        aggregate estimated outlays in such accounts in the 
        fiscal year in which the transfers are made will not be 
        increased as a result of such transfer.
          (2) The transfer of budget authority under paragraph 
        (1) may be made only to the extent that outlays do not 
        exceed the aggregate estimated outlays.
          (3) A transfer of budget authority under paragraph 
        (1) may not result in a net decrease of more than 5 
        percent, or a net increase of more than 10 percent, in 
        the budget authority available under any appropriation 
        involved in that transfer.
          (4) Any action taken pursuant to this section shall 
        be treated as a reprogramming of funds that is subject 
        to review by the appropriate committees of the 
        Congress.
          (5) The Administrator may transfer budget authority 
        pursuant to this section only after--
                  (A) submitting a written explanation of the 
                proposed transfer to the Committees on 
                Transportation and Infrastructure and 
                Appropriations of the House of Representatives 
                and the Committees on Commerce, Science, and 
                Transportation and Appropriations of the 
                Senate; and
                  (B) 30 days have passed after the explanation 
                is submitted and none of the Committees 
                notifies the Administrator in writing that it 
                objects to the proposed transfer within the 30 
                day period.
          (6) Contracts.--The Administrator is authorized to 
        enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as may be 
        necessary to carry out the functions of the 
        Administrator and the Administration. The Administrator 
        may enter into such contracts, leases, cooperative 
        agreements, and other transactions with any Federal 
        agency (as such term is defined in section 551(1) of 
        title 5) or any instrumentality of the United States, 
        any State, territory, or possession, or political 
        subdivision thereof, any other governmental entity, or 
        any person, firm, association, corporation, or 
        educational institution, on such terms and conditions 
        as the Administrator may consider appropriate.
  (m) Personnel and Services.--
          (1) Officers and employees.--Upon development of a 
        personnel management system under section 40121(c) of 
        this title and section 347 of Public Law 104-50, the 
        Administrator is authorized, in the performance of the 
        functions of the Administrator, to appoint, transfer, 
        and fix the compensation of such officers and 
        employees, including attorneys, as may be necessary to 
        carry out the functions of the Administrator and the 
        Administration. Except as otherwise provided by law, 
        such officers and employees shall be appointed in 
        accordance with the civil service laws and compensated 
        in accordance with title 5. In fixing compensation and 
        benefits of officers and employees, the Administrator 
        shall not engage in any type of bargaining, except to 
        the extent provided for in section 40121c), nor shall 
        the Administrator be bound by any requirement to 
        establish such compensation or benefits at particular 
        levels.
          (2) Experts and consultants.--The Administrator is 
        authorized to obtain the services of experts and 
        consultants in accordance with section 3109 of title 5.
          (3) Transportation and per diem expenses.--The 
        Administrator is authorized to pay transportation 
        expenses, and per diem in lieu of subsistence expenses, 
        in accordance with chapter 57 of title 5.
          (4) Use of personnel from other agencies.--The 
        Administrator is authorized to utilize the services of 
        personnel of any other Federal agency (as such term is 
        defined under section 551(1) of title 5).
          (5) Voluntary services.--
                  (A) In general.--(i) In exercising the 
                authority to accept gifts and voluntary 
                services under section 326 of this title, and 
                without regard to section 1342 of title 31, the 
                Administrator may not accept voluntary and 
                uncompensated services if such services are 
                used to displace Federal employees employed on 
                a full-time, part-time, or seasonal basis.
                  (ii) The Administrator is authorized to 
                provide for incidental expenses, including 
                transportation, lodging, and subsistence for 
                volunteers who provide voluntary services under 
                this subsection.
                  (iii) An individual who provides voluntary 
                services under this subsection shall not be 
                considered a Federal employee for any purpose 
                other than for purposes of chapter 81 of title 
                5, relating to compensation for work injuries, 
                and chapter 171 of title 28, relating to tort 
                claims.
          (6) Contracts.--The Administrator is authorized to 
        enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as may be 
        necessary to carry out the functions of the 
        Administrator and the Administration. The Administrator 
        may enter into such contracts, leases, cooperative 
        agreements, and other transactions with any Federal 
        agency (as such term is defined in section 551(1) of 
        title 5) or any instrumentality of the United States, 
        any State, territory, or possession, or political 
        subdivision thereof, any other governmental entity, or 
        any person, firm, association, corporation, or 
        educational institution, on such terms and conditions 
        as the Administrator may consider appropriate.
  (n) Cooperation by Administrator.--With the consent of 
appropriate officials, the Administrator may, with or without 
reimbursement, use or accept the services, equipment, 
personnel, and facilities of any other Federal agency (as such 
term is defined in section 551(1) of title 5) and any other 
public or private entity. The Administrator may also cooperate 
with appropriate officials of other public and private agencies 
and instrumentalities concerning the use of services, 
equipment, personnel, and facilities. The head of each Federal 
agency shall cooperate with the Administrator in making the 
services, equipment, personnel, and facilities of the Federal 
agency available to the Administrator. The head of a Federal 
agency is authorized, notwithstanding any other provision of 
law, to transfer to or to receive from the Administration, 
without reimbursement, supplies and equipment other than 
administrative supplies or equipment.
  (o) Acquisition.--
          (1) In general.--The Administrator is authorized--
                  (A) to acquire (by purchase, lease, 
                condemnation, or otherwise), construct, 
                improve, repair, operate, and maintain--
                          (i) air traffic control facilities 
                        and equipment;
                          (ii) research and testing sites and 
                        facilities; and
                          (iii) such other real and personal 
                        property (including office space and 
                        patents), or any interest therein, 
                        within and outside the continental 
                        United States as the Administrator 
                        considers necessary;
                  (B) to lease to others such real and personal 
                property; and
                  (C) to provide by contract or otherwise for 
                eating facilities and other necessary 
                facilities for the welfare of employees of the 
                Administration at the installations of the 
                Administration, and to acquire, operate, and 
                maintain equipment for these facilities.
          (2) Title.--Title to any property or interest therein 
        acquired pursuant to this subsection shall be held by 
        the Government of the United States.
  (p) Transfers of Funds.--The Administrator is authorized to 
accept transfers of unobligated balances and unexpended 
balances of funds appropriated to other Federal agencies (as 
such term is defined in section 551(1) of title 5) to carry out 
functions transferred by this Act to the Administrator or 
functions transferred pursuant to law to the Administrator on 
or after the date of the enactment of the Air Traffic 
Management System Performance Improvement Act of 1996.
  (q) Management Advisory Council.--
          (1) Establishment.--Within 3 months after the date of 
        enactment of the Air Traffic Management System 
        Performance Improvement Act of 1996, the Administrator 
        shall establish an advisory council which shall be 
        known as the Federal Aviation Management Advisory 
        Council (in this subsection referred to as the 
        ``Council''). With respect to Federal Aviation 
        Administration management, policy, spending, user fees, 
        and regulatory matters affecting the aviation industry, 
        the Council may submit comments, recommended 
        modifications, and dissenting views to the 
        Administrator. The Administrator shall include in any 
        submission to Congress, the Secretary, or the general 
        public, and in any submission for publication in the 
        Federal Register, a description of the comments, 
        recommended modifications, and dissenting views 
        received from the Council, together with the reasons 
        for any differences between the views of the Council 
        and the views or actions of the Administrator.
          (2) Membership.--The Council shall consist of 15 
        members, who shall consist of--
                  (A) a designee of the Secretary of 
                Transportation;
                  (B) a designee of the Secretary of Defense; 
                and
                  (C) 13 members representing aviation 
                interests, appointed by the President by and 
                with the advice and consent of the Senate.
          (3) Qualifications.--No member appointed under 
        paragraph (2)(C) may serve as an officer or employee of 
        the United States Government while serving as a member 
        of the Council.
          (4) Functions.--
                  (A) In general.--(i) The Council shall 
                provide advice and counsel to the Administrator 
                on issues which affect or are affected by the 
                operations of the Administrator. The Council 
                shall function as an oversight resource for 
                management, policy, spending, and regulatory 
                matters under the jurisdiction of the 
                Administration.
                  (ii) The Council shall review the rulemaking 
                cost-benefit analysis process and develop 
                recommendations to improve the analysis and 
                ensure that the public interest is fully 
                protected.
                  (iii) The Council shall review the process 
                through which the Administration determines to 
                use advisory circulars and service bulletins.
                  (B) Panels and working groups.--The chairman 
                of the Council shall establish a panel or 
                working group, from among the members of the 
                Council, on the development of all fees under 
                sections 45301 and 45302, and may establish 
                such additional panels and working groups, 
                consisting of members of the Council, as may be 
                necessary to carry out the functions of the 
                Council.
                  (C) Meetings.--The Council shall meet on a 
                regular and periodic basis or at the call of 
                the chairman or of the Administrator.
                  (D) Access to documents and staff.--The 
                Administration may give the Council appropriate 
                access to relevant documents and personnel of 
                the Administration, and the Administrator shall 
                make available, consistent with the authority 
                to withhold commercial and other proprietary 
                information under section 552 of title 5 
                (commonly known as the ``Freedom of Information 
                Act''), cost data associated with the 
                acquisition and operation of air traffic 
                service systems. Any member of the Council who 
                receives commercial or other proprietary data 
                from the Administrator shall be subject to the 
                provisions of section 1905 of title 18, 
                pertaining to unauthorized disclosure of such 
                information.
          (5) Federal advisory committee act not to apply.--The 
        Federal Advisory Committee Act (5 U.S.C. App.) does not 
        apply to the Council or such aviation rulemaking 
        committees as the Administrator shall designate.
          (6) Administrative matters.--
                  (A) Terms of members.--(i) Except as provided 
                in subparagraph (B), members of the Council 
                appointed by the President under paragraph 
                (2)(C) shall be appointed for a term of 3 
                years.
                  (ii) Of the members first appointed by the 
                President--
                          (I) 4 shall be appointed for terms of 
                        1 year;
                          (II) 5 shall be appointed for terms 
                        of 2 years; and
                          (III) 4 shall be appointed for terms 
                        of 3 years.
                  (iii) An individual chosen to fill a vacancy 
                shall be appointed for the unexpired term of 
                the member replaced.
                  (iv) A member whose term expires shall 
                continue to serve until the date on which the 
                member's successor takes office.
                  (B) Chairman; vice chairman.--The Council 
                shall elect a chair and a vice chair from among 
                the members appointed under paragraph (2)(C), 
                each of whom shall serve for a term of 1 year. 
                The vice chair shall perform the duties of the 
                chairman in the absence of the chairman.
                  (C) Travel and per diem.--Each member of the 
                Council shall be paid actual travel expenses, 
                and per diem in lieu of subsistence expenses 
                when away from his or her usual place of 
                residence, in accordance with section 5703 of 
                title 5.
                  (D) Detail of personnel from the 
                administration.--The Administrator shall make 
                available to the Council such staff, 
                information, and administrative services and 
                assistance as may reasonably be required to 
                enable the Council to carry out its 
                responsibilities under this subsection.

             Subtitle VI--Motor Vehicle and Driver Programs

                            PART A--GENERAL

                 CHAPTER 303--NATIONAL DRIVER REGISTER

Sec. 30305. Access to Register Information

  (a) Referrals of Information Requests.--
          (1) To carry out duties related to driver licensing, 
        driver improvement, or transportation safety, the chief 
        driver licensing official of a participating State may 
        request the Secretary of Transportation to refer, 
        electronically or by United States mail, a request for 
        information about the motor vehicle driving record of 
        an individual to the chief driver licensing official of 
        a State of record.
          (2) The Secretary of Transportation shall relay, 
        electronically or by United States mail, information 
        received from the chief driver licensing official of a 
        State of record in response to a request under 
        paragraph (1) of this subsection to the chief driver 
        licensing official of the participating State 
        requesting the information. However, the Secretary may 
        refuse to relay information to the chief driver 
        licensing official of a participating State that does 
        not comply with section 30304 of this title.
  (b) Requests To Obtain Information.--
          (1) The Chairman of the National Transportation 
        Safety Board and the Administrator of the Federal 
        Highway Administration may request the chief driver 
        licensing official of a State to obtain information 
        under subsection (a) of this section about an 
        individual who is the subject of an accident 
        investigation conducted by the Board or the 
        Administrator. The Chairman and the Administrator may 
        receive the information.
          (2) An individual who is employed, or is seeking 
        employment, as a driver of a motor vehicle may request 
        the chief driver licensing official of the State in 
        which the individual is employed or seeks employment to 
        provide information about the individual under 
        subsection (a) of this section to the individual's 
        employer or prospective employer. An employer or 
        prospective employer may receive the information and 
        shall make the information available to the individual. 
        Information may not be obtained from the National 
        Driver Register under this paragraph if the information 
        was entered in the Register more than 3 years before 
        the request.
          (3) An individual who has received, or is applying 
        for, an airman's certificate may request the chief 
        driver licensing official of a State to provide 
        information about the individual under subsection (a) 
        of this section to the Administrator of the Federal 
        Aviation Administration. The Administrator may receive 
        the information and shall make the information 
        available to the individual for review and written 
        comment. The Administrator may use the information to 
        verify information required to be reported to the 
        Administrator by an airman applying for an airman 
        medical certificate and to evaluate whether the airman 
        meets the minimum standards prescribed by the 
        Administrator to be issued an airman medical 
        certificate. The Administrator may not otherwise 
        divulge or use the information. Information may not be 
        obtained from the Register under this paragraph if the 
        information was entered in the Register more than 3 
        years before the request, unless the information is 
        about a revocation or suspension still in effect on the 
        date of the request.
          (4) An individual who is employed, or is seeking 
        employment, by a rail carrier as an operator of a 
        locomotive may request the chief driver licensing 
        official of a State to provide information about the 
        individual under subsection (a) of this section to the 
        individual's employer or prospective employer or to the 
        Secretary of Transportation. Information may not be 
        obtained from the Register under this paragraph if the 
        information was entered in the Register more than 3 
        years before the request, unless the information is 
        about a revocation or suspension still in effect on the 
        date of the request.
          (5) An individual who holds, or is applying for, a 
        license or certificate of registry under section 7101 
        of title 46, or a merchant mariner's document under 
        section 7302 of title 46, may request the chief driver 
        licensing official of a State to provide information 
        about the individual under subsection (a) of this 
        section to the Secretary of the department in which the 
        Coast Guard is operating. The Secretary may receive the 
        information and shall make the information available to 
        the individual for review and written comment before 
        denying, suspending, or revoking the license, 
        certificate, or document of the individual based on the 
        information and before using the information in an 
        action taken under chapter 77 of title 46 [46 U.S.C. 
        7701 et seq.]. The Secretary may not otherwise divulge 
        or use the information, except for purposes of section 
        7101, 7302, or 7703 of title 46. Information may not be 
        obtained from the Register under this paragraph if the 
        information was entered in the Register more than 3 
        years before the request, unless the information is 
        about a revocation or suspension still in effect on the 
        date of the request.
          (6) An individual may request the chief driver 
        licensing official of a State to obtain information 
        about the individual under subsection (a) of this 
        section--
                  (A) to learn whether information about the 
                individual is being provided;
                  (B) to verify the accuracy of the 
                information; or
                  (C) to obtain a certified copy of the 
                information.
          (7) An individual who is seeking employment by an air 
        carrier as a pilot may request the chief driver 
        licensing official of a State to provide information 
        about the individual under paragraph (2) to the 
        prospective employer of the individual or to the 
        Secretary of Transportation. Information may not be 
        obtained from the National Driver Register under this 
        subsection if the information was entered in the 
        Register more than 5 years before the request unless 
        the information is about a revocation or suspension 
        still in effect on the date of the request.
          [(7)] (8) A request under this subsection shall be 
        made in the form and way the Secretary of 
        Transportation prescribes by regulation.
  (c) Relationship to Other Laws.--A request for, or receipt 
of, information from the Register is subject to sections 552 
and 552a of title 5, and other applicable laws of the United 
States or a State, except that--
          (1) the Secretary of Transportation may not relay or 
        otherwise provide information specified in section 
        30304(b)(1)(A) or (C) of this title to a person not 
        authorized by this section to receive the information;
          (2) a request for, or receipt of, information by a 
        chief driver licensing official, or by a person 
        authorized by subsection (b) of this section to request 
        and receive the information, is deemed to be a routine 
        use under section 552a(b) of title 5; and
          (3) receipt of information by a person authorized by 
        this section to receive the information is deemed to be 
        a disclosure under section 552a(c) of title 5, except 
        that the Secretary of Transportation is not required to 
        retain the accounting made under section 552a(c)(1) for 
        more than 7 years after the disclosure.
  (d) Availability of Information Provided Under Prior Law.--
Information provided by a State under the Act of July 14, 1960 
(Public Law 86-660, 74 Stat. 526) [23 U.S.C. 313 note], as 
restated by section 401 of the National Traffic and Motor 
Vehicle Safety Act of 1966 (Public Law 89-563, 80 Stat. 730) 
[23 U.S.C. 313 note], and under this chapter [49 U.S.C. 30301 
et seq.], shall be available under this section during the 
transition from the register maintained under that Act to the 
Register maintained under this chapter [49 U.S.C. 30301 et 
seq.].

                    PART A--AIR COMMERCE AND SAFETY

                           Subpart I--General

                    CHAPTER 401--GENERAL PROVISIONS

           * * * * * * *

Sec. 40104. Promotion of civil aeronautics and safety of air commerce

  (a) Developing Civil Aeronautics and Safety of Air 
Commerce.--The Administrator of the Federal Aviation 
Administration shall encourage the development of civil 
aeronautics and safety of air commerce in and outside the 
United States. In carrying out this subsection, the 
Administrator shall take action that the Administrator 
considers necessary to establish, within available resources, a 
program to distribute civil aviation information in each region 
served by the Administration. The program shall provide, on 
request, informational material and expertise on civil aviation 
to State and local school administrators, college and 
university officials, and officers of other interested 
organizations.
  (b) Developing and Constructing Civil Supersonic Aircraft.--
The Secretary of Transportation may develop and construct a 
civil supersonic aircraft.
          * * * * * * *

Sec. 40110. General procurement authority

  (a) General.--In carrying out this part [49 U.S.C. 40101 et 
seq.], the Administrator of the Federal Aviation 
Administration--
          (1) to the extent that amounts are available for 
        obligation, may acquire services or, by condemnation or 
        otherwise, an interest in property, including an 
        interest in airspace immediately adjacent to and needed 
        for airports and other air navigation facilities owned 
        by the United States Government and operated by the 
        Administrator;
          (2) may dispose of an interest in property for 
        adequate compensation; and
          (3) may construct and improve laboratories and other 
        test facilities.
  (b) Acquisition of Housing Units.--
          (1) Authority.--In carrying out this part, the 
        Administrator may acquire interests in housing units 
        outside the contiguous United States.
          (2) Continuing obligations.--Notwithstanding section 
        1341 of title 31, United States Code, the Administrator 
        may acquire an interest in a housing unit under 
        paragraph (1) even if there is an obligation thereafter 
        to pay necessary and reasonable fees duly assessed upon 
        such unit, including fees related to operation, 
        maintenance, taxes, and insurance.
          (3) Certification to congress.--The Administrator may 
        acquire an interest in a housing unit under paragraph 
        (1) only if the Administrator transmits to the 
        Committee on Transportation and Infrastructure of the 
        House of Representatives and the Committee on Commerce, 
        Science, and Transportation of the Senate at least 30 
        days before completing the acquisition a report 
        containing--
                  (A) a description of the housing unit and its 
                price; and
                  (B) a certification that acquiring the 
                housing unit is the most cost-beneficial means 
                of providing necessary accommodations in 
                carrying out this part.
          (4) Payment of fees.--The Administrator may pay, when 
        due, fees resulting from the acquisition of an interest 
        in a housing unit under this subsection from any 
        amounts made available to the Administrator.
  [(b)] (c) Duties and Powers.--When carrying out subsection 
(a) of this section, the Administrator of the Federal Aviation 
Administration--
          (1) is the senior procurement executive referred to 
        in section 16(3) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 414(3)) for approving the 
        justification for using procedures other than 
        competitive procedures, as required under section 
        303(f)(1)(B)(iii) of the Federal Property and 
        Administrative Services Act of 1949 (41 U.S.C. 
        253(f)(1)(B)(iii)); and
          (2) may--
                  (A) notwithstanding section 1341(a)(1) of 
                title 31, lease an interest in property for not 
                more than 20 years;
                  (B) consider the reasonable probable future 
                use of the underlying land in making an award 
                for a condemnation of an interest in airspace;
                  (C) construct, or acquire an interest in, a 
                public building (as defined in section 13 of 
                the Public Buildings Act of 1959 (40 U.S.C. 
                612)) only under a delegation of authority from 
                the Administrator of General Services;
                  (D) use procedures other than competitive 
                procedures, as provided under section 303(c) of 
                the Federal Property and Administrative 
                Services Act of 1949 (41 U.S.C. 253(c));
                  (E) use procedures other than competitive 
                procedures only when the property or services 
                needed by the Administrator of the Federal 
                Aviation Administration are available from only 
                one responsible source or only from a limited 
                number of responsible sources and no other type 
                of property or services will satisfy the needs 
                of the Administrator; and
                  (F) dispose of property under subsection 
                (a)(2) of this section, except for airport and 
                airway property and technical equipment used 
                for the special purposes of the Administration, 
                only under title II of the Federal Property and 
                Administrative Services Act of 1949 (40 U.S.C. 
                481 et seq.).

Sec. 40116. State taxation

  (a) Definition.--In this section, ``State'' includes the 
District of Columbia, a territory or possession of the United 
States, and a political authority of at least 2 States.
  (b) Prohibitions.--Except as provided in [subsection (c) of 
this section and] section 40117 of this title, a State or 
political subdivision of a State may not levy or collect a tax, 
fee, head charge, or other charge on--
          (1) an individual traveling in air commerce;
          (2) the transportation of an individual traveling in 
        air commerce;
          (3) the sale of air transportation; or
          (4) the gross receipts from that air commerce or 
        transportation.
  (c) Aircraft Taking Off or Landing in State.--A State or 
political subdivision of a State may levy or collect a tax on 
or related to a flight of a commercial aircraft or an activity 
or service on the aircraft only if the aircraft takes off or 
lands in the State or political subdivision as part of the 
flight.
  (d) Unreasonable Burdens and Discrimination Against 
Interstate Commerce.--
          (1) In this subsection--
                  (A) ``air carrier transportation property'' 
                means property (as defined by the Secretary of 
                Transportation) that an air carrier providing 
                air transportation owns or uses.
                  (B) ``assessment'' means valuation for a 
                property tax levied by a taxing district.
                  (C) ``assessment jurisdiction'' means a 
                geographical area in a State used in 
                determining the assessed value of property for 
                ad valorem taxation.
                  (D) ``commercial and industrial property'' 
                means property (except transportation property 
                and land used primarily for agriculture or 
                timber growing) devoted to a commercial or 
                industrial use and subject to a property tax 
                levy.
          (2)(A) A State, political subdivision of a State, or 
        authority acting for a State or political subdivision 
        may not do any of the following acts because those acts 
        unreasonably burden and discriminate against interstate 
        commerce:
                  (i) assess air carrier transportation 
                property at a value that has a higher ratio to 
                the true market value of the property than the 
                ratio that the assessed value of other 
                commercial and industrial property of the same 
                type in the same assessment jurisdiction has to 
                the true market value of the other commercial 
                and industrial property.
                  (ii) levy or collect a tax on an assessment 
                that may not be made under clause (i) of this 
                subparagraph.
                  (iii) levy or collect an ad valorem property 
                tax on air carrier transportation property at a 
                tax rate greater than the tax rate applicable 
                to commercial and industrial property in the 
                same assessment jurisdiction.
                  (iv) Levy or collect a tax, fee, or charge, 
                first taking effect after the date of the 
                enactment of this clause, exclusively upon any 
                business located at a commercial service 
                airport or operating as a permittee of such an 
                airport other than a tax, fee, or charge wholly 
                utilized for airport or aeronautical purposes.
          (B) Subparagraph (A) of this paragraph does not apply 
        to an in lieu tax completely used for airport and 
        aeronautical purposes.
  (e) Other Allowable Taxes and Charges.--Except as provided in 
subsection (d) of this section, a State or political 
subdivision of a State may levy or collect--
          (1) taxes (except those taxes enumerated in 
        subsection (b) of this section), including property 
        taxes, net income taxes, franchise taxes, and sales or 
        use taxes on the sale of goods or services; and
          (2) reasonable rental charges, landing fees, and 
        other service charges from aircraft operators for using 
        airport facilities of an airport owned or operated by 
        that State or subdivision.
  (f) Pay of Air Carrier Employees.--
          (1) In this subsection--
                  (A) ``pay'' means money received by an 
                employee for services.
                  (B) ``State'' means a State of the United 
                States, the District of Columbia, and a 
                territory or possession of the United States.
                  (C) an employee is deemed to have earned 50 
                percent of the employee's pay in a State or 
                political subdivision of a State in which the 
                scheduled flight time of the employee in the 
                State or subdivision is more than 50 percent of 
                the total scheduled flight time of the employee 
                when employed during the calendar year.
          (2) The pay of an employee of an air carrier having 
        regularly assigned duties on aircraft in at least 2 
        States is subject to the income tax laws of only the 
        following:
                  (A) the State or political subdivision of the 
                State that is the residence of the employee.
                  (B) the State or political subdivision of the 
                State in which the employee earns more than 50 
                percent of the pay received by the employee 
                from the carrier.
          (3) Compensation paid by an air carrier to an 
        employee described in subsection (a) in connection with 
        such employee's authorized leave or other authorized 
        absence from regular duties on the carrier's aircraft 
        in order to perform services on behalf of the 
        employee's airline union shall be subject to the income 
        tax laws of only the following:
                  (A) The State or political subdivision of the 
                State that is the residence of the employee.
                  (B) The State or political subdivision of the 
                State in which the employee's scheduled flight 
                time would have been more than 50 percent of 
                the employee's total scheduled flight time for 
                the calendar year had the employee been engaged 
                full time in the performance of regularly 
                assigned duties on the carrier's aircraft.

                    CHAPTER 401--GENERAL PROVISIONS

Sec. 40117. Passenger facility fees

  (a) Definitions.--In this section--
          (1) ``airport'', ``commercial service airport'', and 
        ``public agency'' have the same meanings given those 
        terms in section 47102 of this title.
          (2) ``eligible agency'' means a public agency that 
        controls a commercial service airport.
          (3) ``eligible airport-related project'' means a 
        project--
                  (A) for airport development or airport 
                planning under subchapter I of chapter 471 of 
                this title [49 U.S.C. 47101 et seq.];
                  (B) for terminal development described in 
                section 47110(d) of this title;
                  (C) for airport noise capability planning 
                under section 47505 of this title;
                  (D) to carry out noise compatibility measures 
                eligible for assistance under section 47504 of 
                this title, whether or not a program for those 
                measures has been approved under section 47504; 
                and
                  (E) for constructing gates and related areas 
                at which passengers board or exit [aircraft; 
                and] aircraft.
                  [(F) in addition to projects eligible under 
                subparagraph (A), the construction, 
                reconstruction, repair, or improvement of areas 
                of an airport used for the operation of 
                aircraft or actions to mitigate the 
                environmental effects of such construction, 
                reconstruction, repair, or improvement when the 
                construction, reconstruction, repair, 
                improvement, or action is necessary for 
                compliance with the responsibilities of the 
                operator or owner of the airport under the 
                Americans with Disabilities Act of 1990, the 
                Clean Air Act [42 U.S.C. 7401 et seq.], or the 
                Federal Water Pollution Control Act [33 U.S.C. 
                1251 et seq.] with respect to the airport.]
          (4) ``passenger facility fee'' means a fee imposed 
        under this section.
          (5) ``passenger facility revenue'' means revenue 
        derived from a passenger facility fee.
  (b) General Authority.--
          (1) The Secretary of Transportation may authorize 
        under this section an eligible agency to impose a 
        passenger facility fee of $1, $2, or $3 on each paying 
        passenger of an air carrier or foreign air carrier 
        boarding an aircraft at an airport the agency controls 
        to finance an eligible airport-related project, 
        including making payments for debt service on 
        indebtedness incurred to carry out the project, to be 
        carried out in connection with the airport or any other 
        airport the agency controls.
          (2) A State, political subdivision of a State, or 
        authority of a State or political subdivision that is 
        not the eligible agency may not regulate or prohibit 
        the imposition or collection of a passenger facility 
        fee or the use of the passenger facility revenue.
          (3) A passenger facility fee may be imposed on a 
        passenger of an air carrier or foreign air carrier 
        originating or connecting at the commercial service 
        airport that the agency controls.
  (c) Applications.--
          (1) An eligible agency must submit to the Secretary 
        an application for authority to impose a passenger 
        facility fee. The application shall contain information 
        and be in the form that the Secretary may require by 
        regulation.
          (2) Before submitting an application, the eligible 
        agency must provide reasonable notice to, and an 
        opportunity for consultation with, air carriers and 
        foreign air carriers operating at the airport. The 
        Secretary shall prescribe regulations that define 
        reasonable notice and contain at least the following 
        requirements:
                  (A) The agency must provide written notice of 
                individual projects being considered for 
                financing by a passenger facility fee and the 
                date and location of a meeting to present the 
                projects to air carriers and foreign air 
                carriers operating at the airport.
                  (B) Not later than 30 days after written 
                notice is provided under subparagraph (A) of 
                this paragraph, each air carrier and foreign 
                air carrier operating at the airport must 
                provide to the agency written notice of receipt 
                of the notice. Failure of a carrier to provide 
                the notice may be deemed certification of 
                agreement with the project by the carrier under 
                subparagraph (D) of this paragraph.
                  (C) Not later than 45 days after written 
                notice is provided under subparagraph (A) of 
                this paragraph, the agency must conduct a 
                meeting to provide air carriers and foreign air 
                carriers with descriptions of projects and 
                justifications and a detailed financial plan 
                for projects.
                  (D) Not later than 30 days after the meeting, 
                each air carrier and foreign air carrier must 
                provide to the agency certification of 
                agreement or disagreement with projects (or 
                total plan for the projects). Failure to 
                provide the certification is deemed 
                certification of agreement with the project by 
                the carrier. A certification of disagreement is 
                void if it does not contain the reasons for the 
                disagreement.
          (3) After receiving an application, the Secretary 
        shall provide notice and an opportunity to air 
        carriers, foreign air carriers, and other interested 
        persons to comment on the application. The Secretary 
        shall make a final decision on the application not 
        later than 120 days after receiving it.
  (d) Limitations on Approving Applications.--The Secretary may 
approve an application that an eligible agency has submitted 
under subsection (c) of this section to finance a specific 
project only if the Secretary finds, based on the application, 
that--
          (1) the amount and duration of the proposed passenger 
        facility fee will result in revenue (including interest 
        and other returns on the revenue) that is not more than 
        the amount necessary to finance the specific project;
          (2) each project is an eligible airport-related 
        project that will--
                  (A) preserve or enhance capacity, safety, or 
                security of the national air transportation 
                system;
                  (B) reduce noise resulting from an airport 
                that is part of the system; or
                  (C) provide an opportunity for enhanced 
                competition between or among air carriers and 
                foreign air carriers; and
          (3) the application includes adequate justification 
        for each of the specific projects.
  (e) Limitations on Imposing Fees.--
          (1) An eligible agency may impose a passenger 
        facility fee only--
                  (A) if the Secretary approves an application 
                that the agency has submitted under subsection 
                (c) of this section; and
                  (B) subject to terms the Secretary may 
                prescribe to carry out the objectives of this 
                section.
          (2) A passenger facility fee may not be collected 
        from a passenger--
                  (A) for more than 2 boardings on a one-way 
                trip or a trip in each direction of a round 
                trip;
                  (B) for the boarding to an eligible place 
                under subchapter II of chapter 417 of this 
                title [49 U.S.C. 41731 et seq.] for which 
                essential air service compensation is paid 
                under subchapter II [49 U.S.C. 41731 et seq.];
                  (C) for a project the Secretary does not 
                approve under this section before October 1, 
                1993, if, during the fiscal year ending 
                September 30, 1993, the amount available for 
                obligation under subchapter II of chapter 417 
                of this title [49 U.S.C. 41731 et seq.] is less 
                than $38,600,000, except that this clause--
                          (i) does not apply if the amount 
                        available for obligation under 
                        subchapter II of chapter 417 of this 
                        title [49 U.S.C. 41731 et seq.] is less 
                        than $38,600,000 because of 
                        sequestration or other general 
                        appropriations reductions applied 
                        proportionately to appropriations 
                        accounts throughout an appropriation 
                        law; and
                          (ii) does not affect the authority of 
                        the Secretary to approve the imposition 
                        of a fee or the use of revenues, 
                        derived from a fee imposed under an 
                        approval made under this section, by a 
                        public agency that has received an 
                        approval to impose a fee under this 
                        section before September 30, 1993, 
                        regardless of whether the fee is being 
                        imposed on September 30, 1993; and
                  (D) enplaning at an airport if the passenger 
                did not pay for the air transportation which 
                resulted in such enplanement, including any 
                case in which the passenger obtained the ticket 
                for the air transportation with a frequent 
                flier award coupon without monetary payment.
  (f) Limitations on Contracts, Leases, and Use Agreements.--
          (1) A contract between an air carrier or foreign air 
        carrier and an eligible agency made at any time may not 
        impair the authority of the agency to impose a 
        passenger facility fee or to use the passenger facility 
        revenue as provided in this section.
          (2) A project financed with a passenger facility fee 
        may not be subject to an exclusive long-term lease or 
        use agreement of an air carrier or foreign air carrier, 
        as defined by regulations of the Secretary.
          (3) A lease or use agreement of an air carrier or 
        foreign air carrier related to a project whose 
        construction or expansion was financed with a passenger 
        facility fee may not restrict the eligible agency from 
        financing, developing, or assigning new capacity at the 
        airport with passenger facility revenue.
  (g) Treatment of Revenue.--
          (1) Passenger facility revenue is not airport revenue 
        for purposes of establishing a price under a contract 
        between an eligible agency and an air carrier or 
        foreign air carrier.
          (2) An eligible agency may not include in its price 
        base the part of the capital costs of a project paid 
        for by using passenger facility revenue to establish a 
        price under a contract between the agency and an air 
        carrier or foreign air carrier.
          (3) For a project for terminal development, gates and 
        related areas, or a facility occupied or used by at 
        least one air carrier or foreign air carrier on an 
        exclusive or preferential basis, a price payable by an 
        air carrier or foreign air carrier using the facilities 
        must at least equal the price paid by an air carrier or 
        foreign air carrier using a similar facility at the 
        airport that was not financed with passenger facility 
        revenue.
  (h) Compliance.--
          (1) As necessary to ensure compliance with this 
        section, the Secretary shall prescribe regulations 
        requiring recordkeeping and auditing of accounts 
        maintained by an air carrier or foreign air carrier and 
        its agent collecting a passenger facility fee and by 
        the eligible agency imposing the fee.
          (2) The Secretary periodically shall audit and review 
        the use by an eligible agency of passenger facility 
        revenue. After review and a public hearing, the 
        Secretary may end any part of the authority of the 
        agency to impose a passenger facility fee to the extent 
        the Secretary decides that the revenue is not being 
        used as provided in this section.
          (3) The Secretary may set off amounts necessary to 
        ensure compliance with this section against amounts 
        otherwise payable to an eligible agency under 
        subchapter I of chapter 471 of this title [49 U.S.C. 
        47101 et seq.] if the Secretary decides a passenger 
        facility fee is excessive or that passenger facility 
        revenue is not being used as provided in this section.
  (i) Regulations.--The Secretary shall prescribe regulations 
necessary to carry out this section. The regulations--
          (1) may prescribe the time and form by which a 
        passenger facility fee takes effect; and
          (2) shall--
                  (A) require an air carrier or foreign air 
                carrier and its agent to collect a passenger 
                facility fee that an eligible agency imposes 
                under this section;
                  (B) establish procedures for handling and 
                remitting money collected;
                  (C) ensure that the money, less a uniform 
                amount the Secretary determines reflects the 
                average necessary and reasonable expenses (net 
                of interest accruing to the carrier and agent 
                after collection and before remittance) 
                incurred in collecting and handling the fee, is 
                paid promptly to the eligible agency for which 
                they are collected; and
                  (D) require that the amount collected for any 
                air transportation be noted on the ticket for 
                that air transportation.

Sec. 40120. Protection of voluntarily submitted information

  (a) In General.--Notwithstanding any other provision of law, 
neither the Administrator of the Federal Aviation 
Administration, nor any agency receiving information from the 
Administrator, shall disclose voluntarily-provided safety or 
security related information if the Administrator finds that--
          (1) the disclosure of the information would inhibit 
        the voluntary provision of that type of information and 
        that the receipt of that type of information aids in 
        fulfilling the Administrator's safety and security 
        responsibilities; and
          (2) withholding such information from disclosure 
        would be consistent with the Administrator's safety and 
        security responsibilities.
  (b) Regulations.--The Administrator shall issue regulations 
to carry out this section. S6603

Sec. 40121. Air traffic control modernization reviews

  (a) Required Terminations of Acquisitions.--The Administrator 
of the Federal Aviation Administration (hereafter referred to 
in this section as the ``Administrator'') shall terminate any 
program initiated after the date of enactment of the Air 
Traffic Management System Performance Improvement Act of 1996 
and funded under the Facilities and Equipment account that--
          (1) is more than 50 percent over the cost goal 
        established for the program;
          (2) fails to achieve at least 50 percent of the 
        performance goals established for the program; or
          (3) is more than 50 percent behind schedule as 
        determined in accordance with the schedule goal 
        established for the program.
  (b) Authorized Terminations of Acquisitions.--The 
Administrator shall consider terminating, under the authority 
of subsection (a), any substantial acquisition that--
          (1) is more than 10 percent over the cost goal 
        established for the program;
          (2) fails to achieve at least 90 percent of the 
        performance goals established for the program; or
          (3) is more than 10 percent behind schedule as 
        determined in accordance with the schedule goal 
        established for the program.
  (c) Exceptions and Report.--
          (1) Continuance of program, etc.--Notwithstanding 
        subsection (a), the Administrator may continue an 
        acquisitions program required to be terminated under 
        subsection (a) if the Administrator determines that 
        termination would be inconsistent with the development 
        or operation of the national air transportation system 
        in a safe and efficient manner.
          (2) Department of Defense.--The Department of Defense 
        shall have the same exemptions from acquisition laws as 
        are waived by the Administrator under section 348(b) of 
        Public Law 104-50 when engaged in joint actions to 
        improve or replenish the national air traffic control 
        system. The Administration may acquire real property, 
        goods, and services through the Department of Defense 
        or other appropriate agencies, but is bound by the 
        acquisition laws and regulations governing those cases.
          (3) Report.--If the Administrator makes a 
        determination under paragraph (1), the Administrator 
        shall transmit a copy of the determination, together 
        with a statement of the basis for the determination, to 
        the Committees on Appropriations of the Senate and the 
        House of Representatives, the Committee on Commerce, 
        Science, and Transportation of the Senate, and the 
        Committee on Transportation and Infrastructure of the 
        House of Representatives.

Sec. 40122. Federal Aviation Administration personnel management system

  (a) In General.--
          (1) Consultation and negotiation.--In developing and 
        making changes to the personnel management system 
        initially implemented by the Administrator on April 1, 
        1996, the Administrator shall negotiate with the 
        exclusive bargaining representatives of employees of 
        the Administration certified under section 7111 of 
        title 5 and consult with other employees of the 
        Administration.
          (2) Mediation.--If the Administrator does not reach 
        an agreement under paragraph (1) with the exclusive 
        bargaining representatives, the services of the Federal 
        Mediation and Conciliation Service shall be used to 
        attempt to reach such agreement. If the services of the 
        Federal Mediation and Conciliation Service do not lead 
        to an agreement, the Administrator's proposed change to 
        the personnel management system shall not take effect 
        until 60 days have elapsed after the Administrator has 
        transmitted the proposed change, along with the 
        objections of the exclusive bargaining representatives 
        to the change, and the reasons for such objections, to 
        the Congress.
          (3) Cost savings and productivity goals.--The 
        Administration and the exclusive bargaining 
        representatives of the employees shall use every 
        reasonable effort to find cost savings and to increase 
        productivity within each of the affected bargaining 
        units.
          (4) Annual budget discussions.--The Administration 
        and the exclusive bargaining representatives of the 
        employees shall meet annually for the purpose of 
        finding additional cost savings within the 
        Administration's annual budget as it applies to each of 
        the affected bargaining units and throughout the 
        agency.
  (b) Expert Evaluation.--On the date which is 3 years after 
the personnel management system is implemented, the 
Administration shall employ outside experts to provide an 
independent evaluation of the effectiveness of the system 
within 3 months after such date. For this purpose, the 
Administrator may utilize the services of experts and 
consultants under section 3109 of title 5 without regard to the 
limitation imposed by the last sentence of section 3109(b) of 
such title, and may contract on a sole source basis, 
notwithstanding any other provision of law to the contrary.
  (c) Pay Restriction.--No officer or employee of the 
Administration may receive an annual rate of basic pay in 
excess of the annual rate of basic pay payable to the 
Administrator.
  (d) Ethics.--The Administration shall be subject to Executive 
Order 12674 and regulations and opinions promulgated by the 
Office of Government Ethics, including those set forth in 
section 2635 of title 5 of the Code of Federal Regulations.
  (e) Employee Protections.--Until July 1, 1999, basic wages 
(including locality pay) and operational differential pay 
provided employees of the Administration shall not be 
involuntarily adversely affected by reason of the enactment of 
this section, except for unacceptable performance or by reason 
of a reduction in force or reorganization or by agreement 
between the Administration and the affected employees' 
exclusive bargaining representative.
  (f) Labor-Management Agreements.--Except as otherwise 
provided by this title, all labor-management agreements 
covering employees of the Administration that are in effect on 
the effective date of the Air Traffic Management System 
Performance Improvement Act of 1996 shall remain in effect 
until their normal expiration date, unless the Administrator 
and the exclusive bargaining representative agree to the 
contrary.

Sec. [40120.] 40123 Relationship to other laws

  (a) Nonapplication.--Except as provided in the International 
Navigational Rules Act of 1977 (33 U.S.C. 1601 et seq.), the 
navigation and shipping laws of the United States and the rules 
for the prevention of collisions do not apply to aircraft or to 
the navigation of vessels related to those aircraft.
          * * * * * * *

                    Subpart II--Economic Regulation

                  CHAPTER 417--OPERATIONS OF CARRIERS

               Subchapter II--Small Community Air Service

Sec. 41737. Compensation guidelines, limitations, and claims

  (a) Compensation Guidelines.--
          (1) The Secretary of Transportation shall prescribe 
        guidelines governing the rate of compensation payable 
        under this subchapter [49 U.S.C. 41731 et seq.]. The 
        guidelines shall be used to determine the reasonable 
        amount of compensation required to ensure the 
        continuation of air service or air transportation under 
        this subchapter [49 U.S.C. 41731 et seq.]. The 
        guidelines shall--
                  (A) provide for a reduction in compensation 
                when an air carrier does not provide service or 
                transportation agreed to be provided;
                  (B) consider amounts needed by an air carrier 
                to promote public use of the service or 
                transportation for which compensation is being 
                paid; and
                  (C) include expense elements based on 
                representative costs of air carriers providing 
                scheduled air transportation of passengers, 
                property, and mail on aircraft of the type the 
                Secretary decides is appropriate for providing 
                the service or transportation for which 
                compensation is being provided.
          (2) Promotional amounts described in paragraph (1)(B) 
        of this subsection shall be a special, segregated 
        element of the compensation provided to a carrier under 
        this subchapter [49 U.S.C. 41731 et seq.].
  (b) Required Finding.--The Secretary may pay compensation to 
an air carrier for providing air service or air transportation 
under this subchapter [49 U.S.C. 41731 et seq.] only if the 
Secretary finds the carrier is able to provide the service or 
transportation in a reliable way.
  (c) Claims.--Not later than 15 days after receiving a written 
claim from an air carrier for compensation under this 
subchapter [49 U.S.C. 41731 et seq.], the Secretary shall--
          (1) pay or deny the United States Government's share 
        of a claim; and
          (2) if denying the claim, notify the carrier of the 
        denial and the reasons for the denial.
  (d) Authority to Make Agreements and Incur Obligations.--
          (1) The Secretary may make agreements and incur 
        obligations from the Airport and Airway Trust Fund 
        established under section 9502 of the Internal Revenue 
        Code of 1986 (26 U.S.C. 9502) to pay compensation under 
        this subchapter [49 U.S.C. 41731 et seq.]. An agreement 
        by the Secretary under this subsection is a contractual 
        obligation of the Government to pay the Government's 
        share of the compensation.
          (2) Not more than $38,600,000 is available to the 
        Secretary out of the Fund for each of the fiscal years 
        ending September 30, 1993-1998, to incur obligations 
        under this section. Amounts made available under this 
        section remain available until expended.
  (e) Matching Funds.--No earlier than 2 years after the 
effective date of section 679 of the Air Traffic Management 
System Performance Improvement Act of 1996, the Secretary may 
require an eligible agency, as defined in section 40117(a)(2) 
of this title, to provide matching funds of up to 10 percent 
for any payments it receives under this subchapter.

[Sec. 41742. Ending effective date

  [This subchapter [49 U.S.C. 41731 et seq.] is not effective 
after September 30, 1998.]

Sec. 41742. Essential air service authorization

  (a) In General.--Out of the amounts received by the 
Administration and credited to the account established under 
section 45303(a)(3) or otherwise provided to the 
Administration, the sum of $50,000,000 is authorized and shall 
be made available immediately for obligation and expenditure to 
carry out the essential air service program under this 
subchapter for each fiscal year.
  (b) Funding for Small Community Air Service.--Notwithstanding 
any other provision of law, monies credited to the account 
established under section 45303(a)(3), including funds derived 
from fees imposed under the authority contained in section 
45301(a), shall be used to carry out the essential air service 
program under this subchapter. Notwithstanding section 47114(g) 
of this title, any amounts from those fees that are not 
obligated or expended at the end of the fiscal year for the 
purpose of funding the essential air service program under this 
subchapter shall be made available to the Administration for 
use in improving rural air safety under subchapter I of chapter 
471 of this title and shall be used exclusively for projects at 
rural airports under this subchapter.

                          Subpart III--Safety

                     CHAPTER 447--SAFETY REGULATION

Sec. 44715. Controlling aircraft noise and sonic boom

  (a) Standards and Regulations.--
          [(1) To relieve and protect the public health and 
        welfare from aircraft noise and sonic boom, the 
        Administrator of the Federal Aviation Administration 
        shall prescribe--
                  [(A) standards to measure aircraft noise and 
                sonic boom; and
                  [(B) regulations to control and abate 
                aircraft noise and sonic boom.]
          (1) To relieve and protect the public health and 
        welfare from aircraft noise, sonic boom, and aircraft 
        engine emissions, the Administrator of the Federal 
        Aviation Administration, as he deems necessary, shall 
        prescribe--
          (A) standards to measure aircraft noise and sonic 
        boom;
          (B) regulations to control and abate aircraft noise 
        and sonic boom; and
          (C) emission standards applicable to the emission of 
        any air pollutant from any class or classes of aircraft 
        engines which, in the judgment of the Administrator, 
        causes, or contributes to, air pollution which may 
        reasonably be anticipated to endanger public health or 
        welfare.
          (2) The Administrator of the Federal Aviation 
        Administration may prescribe standards and regulations 
        under this subsection only after consulting with the 
        Administrator of the Environmental Protection Agency.--
        The standards and regulations shall be applied when 
        issuing, amending, modifying, suspending, or revoking a 
        certificate authorized under this chapter [49 U.S.C. 
        44701 et seq.].
          (3) An original type certificate may be issued under 
        section 44704(a) of this title for an aircraft for 
        which substantial noise abatement can be achieved only 
        after the Administrator of the Federal Aviation 
        Administration prescribes standards and regulations 
        under this section that apply to that aircraft.
  (b) Considerations and Consultation.--When prescribing a 
standard or regulation under this section, the Administrator of 
the Federal Aviation Administration shall--
          (1) consider relevant information related to aircraft 
        noise and sonic boom;
          (2) consult with appropriate departments, agencies, 
        and instrumentalities of the United States Government 
        and State and interstate authorities;
          (3) consider whether the standard or regulation is 
        consistent with the highest degree of safety in air 
        transportation or air commerce in the public interest;
          (4) consider whether the standard or regulation is 
        economically reasonable, technologically practicable, 
        and appropriate for the applicable aircraft, aircraft 
        engine, appliance, or certificate; and
          (5) consider the extent to which the standard or 
        regulation will carry out the purposes of this section.
  (c) Proposed Regulations of Administrator of Environmental 
Protection Agency.--The Administrator of the Environmental 
Protection Agency shall submit to the Administrator of the 
Federal Aviation Administration proposed regulations to control 
and abate aircraft noise and sonic boom (including control and 
abatement through the use of the authority of the Administrator 
of the Federal Aviation Administration) that the Administrator 
of the Environmental Protection Agency considers necessary to 
protect the public health and welfare. The Administrator of the 
Federal Aviation Administration shall consider those proposed 
regulations and shall publish them in a notice of proposed 
regulations not later than 30 days after they are received. Not 
later than 60 days after publication, the Administrator of the 
Federal Aviation Administration shall begin a hearing at which 
interested persons are given an opportunity for oral and 
written presentations. Not later than 90 days after the hearing 
is completed and after consulting with the Administrator of the 
Environmental Protection Agency, the Administrator of the 
Federal Aviation Administration shall--
          (1) prescribe regulations as provided by this 
        section--
                  (A) substantially the same as the proposed 
                regulations submitted by the Administrator of 
                the Environmental Protection Agency; or
                  (B) that amend the proposed regulations; or
          (2) publish in the Federal Register--
                  (A) a notice that no regulation is being 
                prescribed in response to the proposed 
                regulations of the Administrator of the 
                Environmental Protection Agency;
                  (B) a detailed analysis of, and response to, 
                all information the Administrator of the 
                Environmental Protection Agency submitted with 
                the proposed regulations; and
                  (C) a detailed explanation of why no 
                regulation is being prescribed.
  (d) Consultation and Reports.--
          (1) If the Administrator of the Environmental 
        Protection Agency believes that the action of the 
        Administrator of the Federal Aviation Administration 
        under subsection (c)(1)(B) or (2) of this section does 
        not protect the public health and welfare from aircraft 
        noise or sonic boom, consistent with the considerations 
        in subsection (b) of this section, the Administrator of 
        the Environmental Protection Agency shall consult with 
        the Administrator of the Federal Aviation 
        Administration and may request a report on the 
        advisability of prescribing the regulation as 
        originally proposed. The request, including a detailed 
        statement of the information on which the request is 
        based, shall be published in the Federal Register.
          (2) The Administrator of the Federal Aviation 
        Administration shall report to the Administrator of the 
        Environmental Protection Agency within the time, if 
        any, specified in the request. However, the time 
        specified must be at least 90 days after the date of 
        the request. The report shall--
                  (A) be accompanied by a detailed statement of 
                the findings of the Administrator of the 
                Federal Aviation Administration and the reasons 
                for the findings;
                  (B) identify any statement related to an 
                action under subsection (c) of this section 
                filed under section 102(2)(C) of the National 
                Environmental Policy Act of 1969 (42 U.S.C. 
                4332(2)(C));
                  (C) specify whether and where that statement 
                is available for public inspection; and
                  (D) be published in the Federal Register 
                unless the request proposes specific action by 
                the Administrator of the Federal Aviation 
                Administration and the report indicates that 
                action will be taken.
  (e) Supplemental Reports.--The Administrator of the 
Environmental Protection Agency may request the Administrator 
of the Federal Aviation Administration to file a supplemental 
report if the report under subsection (d) of this section 
indicates that the proposed regulations under subsection (c) of 
this section, for which a statement under section 102(2)(C) of 
the Act (42 U.S.C. 4332(2)(C)) is not required, should not be 
prescribed. The supplemental report shall be published in the 
Federal Register within the time the Administrator of the 
Environmental Protection Agency specifies. However, the time 
specified must be at least 90 days after the date of the 
request. The supplemental report shall contain a comparison of 
the environmental effects, including those that cannot be 
avoided, of the action of the Administrator of the Federal 
Aviation Administration and the proposed regulations of the 
Administrator of the Environmental Protection Agency.
  (f) Exemptions.--An exemption from a standard or regulation 
prescribed under this section may be granted only if, before 
granting the exemption, the Administrator of the Federal 
Aviation Administration consults with the Administrator of the 
Environmental Protection Agency. However, if the Administrator 
of the Federal Aviation Administration finds that safety in air 
transportation or air commerce requires an exemption before the 
Administrator of the Environmental Protection Agency can be 
consulted, the exemption may be granted. The Administrator of 
the Federal Aviation Administration shall consult with the 
Administrator of the Environmental Protection Agency as soon as 
practicable after the exemption is granted.

                          Subpart III--Safety

                         CHAPTER 449--SECURITY

              Subchapter II--Administration and Personnel

Sec. 44932. Assistant Administrator for Civil Aviation Security

  (a) Organization.--There is an Assistant Administrator for 
Civil Aviation Security.--The Assistant Administrator reports 
directly to the Administrator of the Federal Aviation 
Administration and is subject to the authority of the 
Administrator.
  (b) Duties and Powers.--The Assistant Administrator shall--
          (1) on a day-to-day basis, manage and provide 
        operational guidance to the field security resources of 
        the Administration, including Federal Security Managers 
        as provided by section 44933 of this title;
          (2) enforce security-related requirements;
          (3) identify the research and development 
        requirements of security-related activities;
          (4) inspect security systems;
          (5) report information to the Director of 
        Intelligence and Security that may be necessary to 
        allow the Director to carry out assigned duties and 
        powers;
          (6) assess threats to civil aviation; and
          (7) carry out other duties and powers the 
        Administrator considers appropriate.
  (c) Review and Development of Ways to Strengthen Security.--
The Assistant Administrator shall review and, as necessary, 
develop ways to strengthen air transportation security, 
including ways--
          (1) to strengthen controls over checked baggage in 
        air transportation, including ways to ensure baggage 
        reconciliation and inspection of items in passenger 
        baggage that could potentially contain explosive 
        devices;
          (2) to strengthen control over individuals having 
        access to aircraft;
          (3) to improve testing of security systems;
          (4) to ensure the use of the best available x-ray 
        equipment for air transportation security purposes; and
          (5) to strengthen preflight screening of passengers.

                         CHAPTER 449--SECURITY

              Subchapter II--Administration and Personnel

Sec. 44936. Employment investigations and restrictions

  (a) Employment Investigation Requirement.--
          [(1)] (1)(A) The Administrator of the Federal 
        Aviation Administration shall require by regulation 
        that an employment investigation, including a criminal 
        history record check, shall be conducted, as the 
        Administrator decides is necessary to ensure air 
        transportation security, of each individual employed 
        in, or applying for, a position in which the individual 
        has unescorted access, or may permit other individuals 
        to have unescorted access, to--
                  [(A)] (i) aircraft of an air carrier or 
                foreign air carrier; or
                  [(B)] (ii)a secured area of an airport in the 
                United States the Administrator designates that 
                serves an air carrier or foreign air carrier.
          (B) The Administrator may require by regulation that 
        an employment investigation, (including a criminal 
        history record check in cases in which the employment 
        investigation reveals a gap in employment of 12 months 
        or more that the individual does not satisfactorily 
        account for or the individual is unable to support 
        statements made or there are significant 
        inconsistencies between information provided on an 
        application) be conducted for individuals who will be 
        responsible for screening passengers or property under 
        chapter 449 of this title and their supervisors.
          (2) An air carrier, foreign air carrier, or airport 
        operator that employs, or authorizes or makes a 
        contract for the services of, an individual in a 
        position described in paragraph (1) of this subsection 
        shall ensure that the investigation the Administrator 
        requires is conducted.
  (b) Prohibited Employment.--
          (1) Except as provided in paragraph (3) of this 
        subsection, an air carrier, foreign air carrier, or 
        airport operator may not employ, or authorize or make a 
        contract for the services of, an individual in a 
        position described in subsection (a)(1) of this section 
        if--
                  (A) the investigation of the individual 
                required under this section has not been 
                conducted; or
                  (B) the results of that investigation 
                establish that, in the 10-year period ending on 
                the date of the investigation, the individual 
                was convicted of--
                          (i) a crime referred to in section 
                        46306, 46308, 46312, 46314, or 46315 or 
                        chapter 465 of this title [49 U.S.C. 
                        46501 et seq.] or section 32 of title 
                        18;
                          (ii) murder;
                          (iii) assault with intent to murder;
                          (iv) espionage;
                          (v) sedition;
                          (vi) treason;
                          (vii) rape;
                          (viii) kidnapping;
                          (ix) unlawful possession, sale, 
                        distribution, or manufacture of an 
                        explosive or weapon;
                          (x) extortion;
                          (xi) armed robbery;
                          (xii) distribution of, or intent to 
                        distribute, a controlled substance; or
                          (xiii) conspiracy to commit any of 
                        the acts referred to in clauses (i)-
                        (xii) of this paragraph.
          (2) The Administrator may specify other factors that 
        are sufficient to prohibit the employment of an 
        individual in a position described in subsection (a)(1) 
        of this section.
          (3) An air carrier, foreign air carrier, or airport 
        operator may employ, or authorize or contract for the 
        services of, an individual in a position described in 
        subsection (a)(1) of this section without carrying out 
        the investigation required under this section, if the 
        Administrator approves a plan to employ the individual 
        that provides alternate security arrangements.
  (c) Fingerprinting and Record Check Information.--
          (1) If the Administrator requires an identification 
        and criminal history record check, to be conducted by 
        the Attorney General, as part of an investigation under 
        this section, the Administrator shall designate an 
        individual to obtain fingerprints and submit those 
        fingerprints to the Attorney General. The Attorney 
        General may make the results of a check available to an 
        individual the Administrator designates. Before 
        designating an individual to obtain and submit 
        fingerprints or receive results of a check, the 
        Administrator shall consult with the Attorney General.
          (2) The Administrator shall prescribe regulations 
        on--
                  (A) procedures for taking fingerprints; and
                  (B) requirements for using information 
                received from the Attorney General under 
                paragraph (1) of this subsection--
                          (i) to limit the dissemination of the 
                        information; and
                          (ii) to ensure that the information 
                        is used only to carry out this section.
          (3) If an identification and criminal history record 
        check is conducted as part of an investigation of an 
        individual under this section, the individual--
                  (A) shall receive a copy of any record 
                received from the Attorney General; and
                  (B) may complete and correct the information 
                contained in the check before a final 
                employment decision is made based on the check.
  (d) Fees and Charges.--The Administrator and the Attorney 
General shall establish reasonable fees and charges to pay 
expenses incurred in carrying out this section. The employer of 
the individual being investigated shall pay the costs of a 
record check of the individual. Money collected under this 
section shall be credited to the account in the Treasury from 
which the expenses were incurred and are available to the 
Administrator and the Attorney General for those expenses.
  (e) When Investigation or Record Check Not Required.--This 
section does not require an investigation or record check when 
the investigation or record check is prohibited by a law of a 
foreign country.
  (f) Records of Employment of Pilot Applicants.--
          (1) In general.--Before hiring an individual as a 
        pilot, an air carrier shall request and receive the 
        following information:
                  (A) FAA records.--From the Administrator of 
                the Federal Aviation Administration (hereafter 
                in this subsection referred to as the 
                ``Administrator''), records pertaining to the 
                individual that are maintained by the 
                Administrator concerning--
                          (i) current airman certificates 
                        (including airman medical certificates) 
                        and associated type ratings, including 
                        any limitations to those certificates 
                        and ratings; and
                          (ii) summaries of legal enforcement 
                        actions resulting in a finding by the 
                        Administrator of a violation of this 
                        title or a regulation prescribed or 
                        order issued under this title that was 
                        not subsequently overturned.
                  (B) Air carrier and other records.--From any 
                air carrier or other person that has employed 
                the individual at any time during the 5-year 
                period preceding the date of the employment 
                application of the individual, or from the 
                trustee in bankruptcy for such air carrier or 
                person--
                          (i) records pertaining to the 
                        individual that are maintained by an 
                        air carrier under regulations set forth 
                        in--
                                  (I) section 121.683 of title 
                                14, Code of Federal 
                                Regulations;
                                  (II) paragraph (A) of section 
                                VI, appendix I, part 121 of 
                                such title;
                                  (III) paragraph (A) of 
                                section IV, appendix J, part 
                                121 of such title;
                                  (IV) section 125.401 of such 
                                title; and
                                  (V) section 135.63(a)(4) of 
                                such title; and
                          (ii) other records pertaining to the 
                        individual that are maintained by the 
                        air carrier or person concerning--
                                  (I) the training, 
                                qualifications, proficiency, or 
                                professional competence of the 
                                individual, including comments 
                                and evaluations made by a check 
                                airman designated in accordance 
                                with section 121.411, 125.295, 
                                or 135.337 of such title;
                                  (II) any disciplinary action 
                                taken with respect to the 
                                individual that was not 
                                subsequently overturned; and
                                  (III) any release from 
                                employment or resignation, 
                                termination, or 
                                disqualification with respect 
                                to employment.
                  (C) National driver register records.--In 
                accordance with section 30305(b)(7), from the 
                chief driver licensing official of a State, 
                information concerning the motor vehicle 
                driving record of the individual.
          (2) Written consent; release from liability.--An air 
        carrier making a request for records under paragraph 
        (1)--
                  (A) shall be required to obtain written 
                consent to the release of those records from 
                the individual that is the subject of the 
                records requested; and
                  (B) may, notwithstanding any other provision 
                of law or agreement to the contrary, require 
                the individual who is the subject of the 
                records request to execute a release from 
                liability for any claim arising from the 
                furnishing of such records to or the use of 
                such records by such air carrier (other than a 
                claim arising from furnishing information known 
                to be false and maintained in violation of a 
                criminal statute).
          (3) 5-year reporting period.--A person shall not 
        furnish a record in response to a request made under 
        paragraph (1) if the record was entered more than 5 
        years before the date of the request, unless the 
        information concerns a revocation or suspension of an 
        airman certificate or motor vehicle license that is in 
        effect on the date of the request.
          (4) Requirement to maintain records.--The 
        Administrator shall maintain pilot records described in 
        paragraph (1)(A) for a period of at least 5 years.
          (5) Receipt of consent; provision of information.--A 
        person shall not furnish a record in response to a 
        request made under paragraph (1) without first 
        obtaining a copy of the written consent of the 
        individual who is the subject of the records requested. 
        A person who receives a request for records under this 
        paragraph shall furnish a copy of all of such requested 
        records maintained by the person not later than 30 days 
        after receiving the request.
          (6) Right to receive notice and copy of any record 
        furnished.--A person who receives a request for records 
        under paragraph (1) shall provide to the individual who 
        is the subject of the records--
                  (A) written notice of the request and of the 
                right of that individual to receive a copy of 
                such records; and
                  (B) a copy of such records, if requested by 
                the individual.
          (7) Reasonable charges for processing requests and 
        furnishing copies.--A person who receives a request 
        under paragraph (1) or (6) may establish a reasonable 
        charge for the cost of processing the request and 
        furnishing copies of the requested records.
          (8) Standard forms.--The Administrator shall 
        promulgate--
                  (A) standard forms that may be used by an air 
                carrier to request records under paragraph (1); 
                and
                  (B) standard forms that may be used by an air 
                carrier to--
                          (i) obtain the written consent of the 
                        individual who is the subject of a 
                        request under paragraph (1); and
                          (ii) inform the individual of--
                                  (I) the request; and
                                  (II) the individual right of 
                                that individual to receive a 
                                copy of any records furnished 
                                in response to the request.
          (9) Right to correct inaccuracies.--An air carrier 
        that maintains or requests and receives the records of 
        an individual under paragraph (1) shall provide the 
        individual with a reasonable opportunity to submit 
        written comments to correct any inaccuracies contained 
        in the records before making a final hiring decision 
        with respect to the individual.
          (10)  Right of pilot to review certain records.--
        Notwithstanding any other provision of law or 
        agreement, an air carrier shall, upon written request 
        from a pilot employed by such carrier, make available, 
        within a reasonable time of the request, to the pilot 
        for review, any and all employment records referred to 
        in paragraph (1)(B)(i) or (ii) pertaining to the 
        employment of the pilot.
          (11) Privacy protections.--An air carrier that 
        receives the records of an individual under paragraph 
        (1) may use such records only to assess the 
        qualifications of the individual in deciding whether or 
        not to hire the individual as a pilot. The air carrier 
        shall take such actions as may be necessary to protect 
        the privacy of the pilot and the confidentiality of the 
        records, including ensuring that information contained 
        in the records is not divulged to any individual that 
        is not directly involved in the hiring decision.
          (12) Periodic review.--Not later than 18 months after 
        the date of enactment of the Pilot Records Improvement 
        Act of 1996, and at least once every 3 years 
        thereafter, the Administrator shall transmit to the 
        Congress a statement that contains, taking into account 
        recent developments in the aviation industry--
                  (A) recommendations by the Administrator 
                concerning proposed changes to Federal Aviation 
                Administration records, air carrier records, 
                and other records required to be furnished 
                under subparagraphs (A) and (B) of paragraph 
                (1); or
                  (B) reasons why the Administrator does not 
                recommend any proposed changes to the records 
                referred to in subparagraph (A).
          (13) Regulations.--The Administrator may prescribe 
        such regulations as may be necessary--
                  (A) to protect--
                          (i) the personal privacy of any 
                        individual whose records are requested 
                        under paragraph (1); and
                          (ii) the confidentiality of those 
                        records;
                  (B) to preclude the further dissemination of 
                records received under paragraph (1) by the 
                person who requested those records; and
                  (C) to ensure prompt compliance with any 
                request made under paragraph (1).
  (g) Limitation on Liability; Preemption of State Law.--
          (1) Limitation on liability.--No action or proceeding 
        may be brought by or on behalf of an individual who has 
        applied for or is seeking a position with an air 
        carrier as a pilot and who has signed a release from 
        liability, as provided for under paragraph (2), 
        against--
                  (A) the air carrier requesting the records of 
                that individual under subsection (a)(1);
                  (B) a person who has complied with such 
                request; or
                  (C) an agent or employee of a person 
                described in subparagraph (A) or (B);
        in the nature of an action for defamation, invasion of 
        privacy, negligence, interference with contract, or 
        otherwise, or under any Federal or State law with 
        respect to the furnishing or use of such records in 
        accordance with subsection (a).
          (2) Preemption.--No State or political subdivision 
        thereof may enact, prescribe, issue, continue in 
        effect, or enforce any law (including any regulation, 
        standard, or other provision having the force and 
        effect of law) that prohibits, penalizes, or imposes 
        liability for furnishing or using records in accordance 
        with subsection (a).
          (3) Provision of knowingly false information.--
        Paragraphs (1) and (2) shall not apply with respect to 
        a person who furnishes information, in response to a 
        request made under subsection (f)(1), that--
                  (A) the person knows is false; and
                  (B) was maintained in violation of a criminal 
                statute of the United States.

                          Subpart III--Safety

                           CHAPTER 453--FEES

[Sec. 45301. Authority to impose fees

  [(a) General Authority.--The Secretary of Transportation may 
impose a fee for an approval, test, authorization, certificate, 
permit, registration, transfer, or rating related to aviation 
that has not been approved by Congress only when the fee--
          [(1) (A) was in effect on January 1, 1973; and
          [(B) is not more than the fee in effect on January 1, 
        1973, adjusted in proportion to changes in the Consumer 
        Price Index of All Urban Consumers published by the 
        Secretary of Labor between January 1, 1973, and the 
        date the fee is imposed; or
          [(2) is imposed under section 45302 of this title.
  [(b) Nonapplication.--Subsection (a) does not apply to a fee 
for a test, authorization, certificate, permit, or rating 
related to an airman or repair station administered or issued 
outside the United States.
  [(c) Recovery of Cost of Foreign Aviation Services.--
          [(1) Establishment of fees.--The Administrator may 
        establish and collect fees for providing or carrying 
        out the following aviation services outside the United 
        States: any test, authorization, certificate, permit, 
        rating, evaluation, approval, inspection, review.
          [(2) Foreign repair station certification and 
        inspection fees.--The Administrator must establish and 
        collect under this subsection fees for certification 
        and inspection of repair stations outside of the United 
        States.
          [(3) Level of fees.--Fees shall be established under 
        this subsection as necessary to recover the additional 
        cost of providing or carrying out such services outside 
        the United States, as compared to the cost of providing 
        or carrying out such services within the United States; 
        except that the Administrator may for such services as 
        the Administrator designates (and shall for 
        certification and inspection of repair stations outside 
        the United States) establish fees at a level necessary 
        to recover the full cost of providing such services.
          [(4) Effect on other authority.--The provisions of 
        this subsection do not limit the Administrator's 
        authority to establish and collect fees under 
        subsection (a).
          [(5) Crediting of pre-established fees.--Fees 
        described in paragraph (1) that were not established 
        before the date of the enactment of this subsection may 
        be credited in accordance with section 45302(d).]

Sec. 45301. General provisions

  (a) Schedule of Fees.--The Administrator shall establish a 
schedule of new fees, and a collection process for such fees, 
for the following services provided by the Administration:
          (1) Air traffic control and related services provided 
        to aircraft (other than foreign government aircraft) 
        that neither take off from nor land in the United 
        States.
          (2) Services (other than air traffic control 
        services) provided to a foreign government.
  (b) Limitations.--
          (1) Authorization and impact considerations.--In 
        establishing fees under subsection (a), the 
        Administrator--
                  (A) is authorized to recover in fiscal year 
                1997; and
                  (B) shall ensure that each of the fees 
                required by subsection (a) is reasonably 
                related to--
                          (i) the Administration's total cost 
                        of providing the service rendered; or
                          (ii) the value of the service 
                        provided to the recipient, including in 
                        the case of air traffic control and 
                        related services described in 
                        subsection (a)(1), distance traveled, 
                        aircraft weight or size, and the nature 
                        of the operation conducted.
          (2) Publication; comment.--The Administrator shall 
        publish in the Federal Register an initial fee schedule 
        and associated collection process as an interim final 
        rule, pursuant to which public comment will be sought 
        and a final rule issued.
  (c) Use of Experts and Consultants.--In developing the 
system, the Administrator may consult with such nongovernmental 
experts as the Administrator may employ and the Administrator 
may utilize the services of experts and consultants under 
section 3109 of title 5 without regard to the limitation 
imposed by the last sentence of section 3109(b) of such title, 
and may contract on a sole source basis, notwithstanding any 
other provision of law to the contrary. Notwithstanding any 
other provision of law to the contrary, the Administrator may 
retain such experts under a contract awarded on a basis other 
than a competitive basis and without regard to any such 
provisions requiring competitive bidding or precluding sole 
source contract authority.

Sec. 45303. Administrative provisions

  (a) In General.--
          (1) Fees payable to administrator.--All fees imposed 
        and amounts collected under this chapter for services 
        performed, or materials furnished, by the Federal 
        Aviation Administration (hereafter in this section 
        referred to as the ``Administration'') are payable to 
        the Administrator.
          (2) Refunds.--The Administrator may refund any fee 
        paid by mistake or any amount paid in excess of that 
        required.
          (3) Receipts credited to account.--Notwithstanding 
        section 3302 of title 31 all fees and amounts collected 
        by the Administration, except insurance premiums and 
        other fees charged for the provision of insurance and 
        deposited in the Aviation Insurance Revolving Fund and 
        interest earned on investments of such Fund, and except 
        amounts which on the date of enactment of the Air 
        Traffic Management System Performance Improvement Act 
        of 1996 are required to be credited to the General Fund 
        of the Treasury, (whether imposed under this section or 
        not)--
                  (A) shall be credited to a separate account 
                established in the Treasury and made available 
                for Administration activities as offsetting 
                collections;
                  (B) shall be available immediately for 
                expenditure but only for Congressionally 
                authorized and intended purposes; and
                  (C) shall remain available until expended.
          (4) Annual budget report by administrator.--The 
        Administrator shall, on the same day each year as the 
        President submits the annual budget to the Congress, 
        provide to the Committee on Commerce, Science, and 
        Transportation of the Senate and the Committee on 
        Transportation and Infrastructure of the House of 
        Representatives--
                  (A) a list of fee collections by the 
                Administration during the preceding fiscal 
                year;
                  (B) a list of activities by the 
                Administration during the preceding fiscal year 
                that were supported by fee expenditures and 
                appropriations;
                  (C) budget plans for significant programs, 
                projects, and activities of the Administration, 
                including out-year funding estimates;
                  (D) any proposed disposition of surplus fees 
                by the Administration; and
                  (E) such other information as those 
                committees consider necessary.
          (5) Development of cost accounting system.--The 
        Administration shall develop a cost accounting system 
        that adequately and accurately reflects the 
        investments, operating and overhead costs, revenues, 
        and other financial measurement and reporting aspects 
        of its operations.
          (6) Compensation to carriers for acting as collection 
        agents.--The Administration shall prescribe regulations 
        to ensure that any air carrier required, pursuant to 
        the Air Traffic Management System Performance 
        Improvement Act of 1996 or any amendments made by that 
        Act, to collect a fee imposed on another party by the 
        Administrator may collect from such other party an 
        additional uniform amount that the Administrator 
        determines reflects the necessary and reasonable 
        expenses (net of interest accruing to the carrier after 
        collection and before remittance) incurred in 
        collecting and handling the fee.
          (7) Cost reduction and efficiency report.--Prior to 
        the submission of any proposal for establishment, 
        implementation, or expansion of any fees or taxes 
        imposed on the aviation industry, the Administrator 
        shall prepare a report for submission to the Congress 
        which includes--
                  (A) a justification of the need for the 
                proposed fees or taxes;
                  (B) a statement of steps taken by the 
                Administrator to reduce costs and improve 
                efficiency within the Administration;
                  (C) an analysis of the impact of any fee or 
                tax increase on each sector of the aviation 
                transportation industry; and
                  (D) a comparative analysis of any decrease in 
                taxes amounts equal to the receipts from which 
                are credited to the Airport and Airway Trust 
                Fund established under section 9502 of the 
                Internal Revenue Code of 1986.

Sec. [45303.] 45304. Maximum fees for private person services

  The Administrator of the Federal Aviation Administration may 
establish maximum fees that private persons may charge for 
services performed under a delegation to the person under 
section 44702(d) of this title.

                    Subtitle VII--Aviation Programs

                     PART B--DEVELOPMENT AND NOISE

                    CHAPTER 471--AIRPORT DEVELOPMENT

                   Subchapter I--Airport Improvement

          * * * * * * *

Sec. 47102. Definitions

  In this subchapter [49 U.S.C. 47101 et seq.]--
          (1) ``air carrier airport'' means a public airport 
        regularly served by--
                  (A) an air carrier certificated by the 
                Secretary of Transportation under section 41102 
                of this title (except a charter air carrier); 
                or
                  (B) at least one air carrier--
                          (i) operating under an exemption from 
                        section 41101(a)(1) of this title that 
                        the Secretary grants; and
                          (ii) having at least 2,500 passenger 
                        boardings at the airport during the 
                        prior calendar year.
          (2) ``airport''--
                  (A) means--
                          (i) an area of land or water used or 
                        intended to be used for the landing and 
                        taking off of aircraft;
                          (ii) an appurtenant area used or 
                        intended to be used for airport 
                        buildings or other airport facilities 
                        or rights of way; and
                          (iii) airport buildings and 
                        facilities located in any of those 
                        areas; and
                  (B) includes a heliport.
          (3) ``airport development'' means the following 
        activities, if undertaken by the sponsor, owner, or 
        operator of a public-use airport:
                  (A) constructing, repairing, or improving a 
                public-use airport, including--
                          (i) removing, lowering, relocating, 
                        marking, and lighting an airport 
                        hazard;and
                          (ii) preparing a plan or 
                        specification, including carrying out a 
                        field investigation.
                  (B) acquiring for, or installing at, a 
                public-use airport--
                          (i) a navigation aid or another aid 
                        (including a precision approach 
                        system)used by aircraft for landing at 
                        or taking off from the airport, 
                        including preparing the site as 
                        required by the acquisition or 
                        installation;
                          (ii) safety or security equipment, 
                        including explosive detection devices 
                        and universal access systems, the 
                        Secretary requires by regulation for, 
                        or approves as contributing 
                        significantly to, the safety or 
                        security of individuals and property at 
                        the airport;
                          (iii) equipment to remove snow, to 
                        measure runway surface friction, or for 
                        aviation-related weather reporting;
                          (iv) firefighting and rescue 
                        equipment at an airport that serves 
                        scheduled passenger operations of air 
                        carrier aircraft designed for more than 
                        20 passenger seats;
                          (v) aircraft deicing equipment and 
                        structures (except aircraft deicing 
                        fluids and storage facilities for the 
                        equipment and fluids); and
                          (vi) interactive training systems.
                  (C) acquiring an interest in land or 
                airspace, including land for future airport 
                development, that is needed--
                          (i) to carry out airport development 
                        described in subclause (A) or (B) of 
                        this clause; or
                          (ii) to remove or mitigate an 
                        existing airport hazard or prevent or 
                        limit the creation of a new airport 
                        hazard.
                  (D) acquiring land for, or constructing, a 
                burn area training structure on or off the 
                airport to provide live fire drill training for 
                aircraft rescue and firefighting personnel 
                required to receive the training under 
                regulations the Secretary prescribes, including 
                basic equipment and minimum structures to 
                support the training under standards the 
                Administrator of the Federal Aviation 
                Administration prescribes.
                  (E) relocating after December 31, 1991, an 
                air traffic control tower and any navigational 
                aid (including radar) if the relocation is 
                necessary to carry out a project approved by 
                the Secretary under this subchapter [49 U.S.C. 
                47101 et seq.] or section 40117.
                  (F) constructing, reconstructing, repairing, 
                or improving an airport, or purchasing capital 
                equipment for an airport, if [paid for by a 
                grant under this subchapter [49 U.S.C. 47101 et 
                seq.] and] necessary for compliance with the 
                responsibilities of the operator or owner of 
                the airport under the Americans with 
                Disabilities Act of 1990 (42 U.S.C. 12101 et 
                seq.), the Clean Air Act (42 U.S.C. 7401 et 
                seq.), and the Federal Water Pollution Control 
                Act (33 U.S.C.1251 et seq.), except 
                constructing or purchasing capital equipment 
                that would benefit primarily a revenue-
                producing area of the airport used by a 
                nonaeronautical business.(G) acquiring land 
                for, or work necessary to construct, a pad 
                suitable for deicing aircraft before takeoff at 
                a commercial service airport, including 
                constructing or reconstructing paved areas, 
                drainage collection structures, treatment and 
                discharge systems, appropriate lighting, paved 
                access for deicing vehicles and aircraft, but 
                not including acquiring aircraft deicing fluids 
                or constructing or reconstructing storage 
                facilities for aircraft deicing equipment or 
                fluids.
          (4) ``airport hazard'' means a structure or object of 
        natural growth located on or near a public-use airport, 
        or a use of land near the airport, that obstructs or 
        otherwise is hazardous to the landing or taking off of 
        aircraft at or from the airport.
          (5) ``airport planning'' means planning as defined by 
        regulations the Secretary prescribes and includes 
        integrated airport system planning.
          (6) ``amount made available under section 48103 of 
        this title'' means the amount authorized for grants 
        under section 48103 of this title as reduced by any law 
        enacted after September 3, 1982.
          (7) ``commercial service airport'' means a public 
        airport in a State that the Secretary determines has at 
        least 2,500 passenger boardings each year and is 
        receiving scheduled passenger aircraft service.
          (8) ``integrated airport system planning'' means 
        developing for planning purposes information and 
        guidance to decide the extent, kind, location, and 
        timing of airport development needed in a specific area 
        to establish a viable,balanced, and integrated system 
        of public-use airports, including--
                  (A) identifying system needs;
                  (B) developing an estimate of systemwide 
                development costs;
                  (C) conducting studies, surveys, and other 
                planning actions, including those related to 
                airport access, needed to decide which 
                aeronautical needs should be met by a system of 
                airports; and
                  (D) standards prescribed by a State, except 
                standards for safety of approaches, for airport 
                development at nonprimary public-use airports.
          (9) ``landed weight'' means the weight of aircraft 
        transporting only cargo in intrastate, interstate, and 
        foreign air transportation, as the Secretary determines 
        under regulations the Secretary prescribes.
          (10) ``passenger boardings''--
                  (A) means revenue passenger boardings on an 
                aircraft in service in air commerce as the 
                Secretary determines under regulations the 
                Secretary prescribes;and
                  (B) includes passengers who continue on an 
                aircraft in international flight that stops at 
                an airport in the 48 contiguous States, Alaska, 
                or Hawaii for a nontraffic purpose.
          (11) ``primary airport'' means a commercial service 
        airport the Secretary determines to have more than 
        10,000 passenger boardings each year.
          (12) ``project'' means a project, separate projects 
        included in one project grant application, or all 
        projects to be undertaken at an airport in a fiscal 
        year, to achieve airport development or airport 
        planning.
          (13) ``project cost'' means a cost involved in 
        carrying out a project.
          (14) ``project grant'' means a grant of money the 
        Secretary makes to a sponsor to carry out at least one 
        project.
          (15) ``public agency'' means--
                  (A) a State or political subdivision of a 
                State;
                  (B) a tax-supported organization; or
                  (C) an Indian tribe or pueblo.
          (16) ``public airport'' means an airport used or 
        intended to be used for public purposes--
                  (A) that is under the control of a public 
                agency; and
                  (B) of which the area used or intended to be 
                used for the landing, taking off, or surface 
                maneuvering of aircraft is publicly owned.
          (17) ``public-use airport'' means--
                  (A) a public airport; or
                  (B) a privately-owned airport used or 
                intended to be used for public purposes that 
                is--
                          (i) a reliever airport; or
                          (ii) determined by the Secretary to 
                        have at least 2,500 passenger boardings 
                        each year and to receive scheduled 
                        passenger aircraft service.
          (18) ``reliever airport'' means an airport the 
        Secretary designates to relieve congestion at a 
        commercial service airport and to provide more general 
        aviation access to the overall community.
          (19) ``sponsor'' means--
                  (A) a public agency that submits to the 
                Secretary under this subchapter [49U.S.C. 47101 
                et seq.] an application for financial 
                assistance; and
                  (B) a private owner of a public-use airport 
                that submits to the Secretary under this 
                subchapter [49 U.S.C. 47101 et seq.] an 
                application for financial assistance for the 
                airport.
          (20) ``State'' means a State of the United States, 
        the District of Columbia, Puerto Rico, the Virgin 
        Islands, American Samoa, the Northern Mariana Islands, 
        the Trust Territory of the Pacific Islands, and Guam.

Sec. 47104. Project grant authority

  (a) General Authority.--To maintain a safe and efficient 
nationwide system of public-use airports that meets the present 
and future needs of civil aeronautics, the Secretary of 
Transportation may make project grants under this subchapter 
[49 U.S.C. 47101 et seq.] from the Airport and Airway Trust 
Fund.
  (b) Incurring Obligations.--The Secretary may incur 
obligations to make grants from amounts made available under 
section 48103 of this title as soon as the amounts are 
apportioned under section 47114(c) and (d)(2) of this title.
  (c) Expiration of Authority.--After September 30, [1996,] 
1997, the Secretary may not incur obligations under subsection 
(b) of this section, except for obligations of amounts--
          (1) remaining available after that date under section 
        47117(b) of this title; or
          (2) recovered by the United States Government from 
        grants made under this chapter [49 U.S.C. 47101 et 
        seq.] if the amounts are obligated only for increases 
        under section 47108(b)(2) and (3) of this title in the 
        maximum amount of obligations of the Government for any 
        other grant made under this title.

Sec. 47107. Project grant application approval conditioned on 
                    assurances about airport operations

  (a) General Written Assurances.--The Secretary of 
Transportation may approve a project grant application under 
this subchapter [49 U.S.C. 47101 et seq.] for an airport 
development project only if the Secretary receives written 
assurances, satisfactory to the Secretary, that--
          (1) the airport will be available for public use on 
        reasonable conditions and without unjust 
        discrimination;
          (2) air carriers making similar use of the airport 
        will be subject to substantially comparable charges--
                  (A) for facilities directly and substantially 
                related to providing air transportation; and
                  (B) regulations and conditions, except for 
                differences based on reasonable 
                classifications, such as between--
                          (i) tenants and nontenants; and
                          (ii) signatory and nonsignatory 
                        carriers;
          (3) the airport operator will not withhold 
        unreasonably the classification or status of tenant or 
        signatory from an air carrier that assumes obligations 
        substantially similar to those already imposed on air 
        carriers of that classification or status;
          (4) a person providing, or intending to provide, 
        aeronautical services to the public will not be given 
        an exclusive right to use the airport, with a right 
        given to only one fixed-base operator to provide 
        services at an airport deemed not to be an exclusive 
        right if--
                  (A) the right would be unreasonably costly, 
                burdensome, or impractical for more than one 
                fixed-base operator to provide the services; 
                and
                  (B) allowing more than one fixed-base 
                operator to provide the services would require 
                reducing the space leased under an existing 
                agreement between the one fixed-base operator 
                and the airport owner or operator;
          (5) fixed-base operators similarly using the airport 
        will be subject to the same charges;
          (6) an air carrier using the airport may service 
        itself or use any fixed-base operator allowed by the 
        airport operator to service any carrier at the airport;
          (7) the airport and facilities on or connected with 
        the airport will be operated and maintained suitably, 
        with consideration given to climatic and flood 
        conditions;
          (8) a proposal to close the airport temporarily for a 
        nonaeronautical purpose must first be approved by the 
        Secretary;
          (9) appropriate action will be taken to ensure that 
        terminal airspace required to protect instrument and 
        visual operations to the airport (including operations 
        at established minimum flight altitudes) will be 
        cleared and protected by mitigating existing, and 
        preventing future, airport hazards;
          (10) appropriate action, including the adoption of 
        zoning laws, has been or will be taken to the extent 
        reasonable to restrict the use of land next to or near 
        the airport to uses that are compatible with normal 
        airport operations;
          (11) each of the airport's facilities developed with 
        financial assistance from the United States Government 
        and each of the airport's facilities usable for the 
        landing and taking off of aircraft always will be 
        available without charge for use by Government aircraft 
        in common with other aircraft, except that if the use 
        is substantial, the Government may be charged a 
        reasonable share, proportionate to the use, of the cost 
        of operating and maintaining the facility used;
          (12) the airport owner or operator will provide, 
        without charge to the Government, property interests of 
        the sponsor in land or water areas or buildings that 
        the Secretary decides are desirable for, and that will 
        be used for, constructing at Government expense, 
        facilities for carrying out activities related to air 
        traffic control or navigation;
          (13) the airport owner or operator will maintain a 
        schedule of charges for use of facilities and services 
        at the airport--
                  (A) that will make the airport as self-
                sustaining as possible under the circumstances 
                existing at the airport, including volume of 
                traffic and economy of collection; and
                  (B) without including in the rate base used 
                for the charges the Government's share of costs 
                for any project for which a grant is made under 
                this subchapter [49 U.S.C. 47101 et seq.] or 
                was made under the Federal Airport Act or the 
                Airport and Airway Development Act of 1970;
          (14) the project accounts and records will be kept 
        using a standard system of accounting that the 
        Secretary, after consulting with appropriate public 
        agencies, prescribes;
          (15) the airport owner or operator will submit any 
        annual or special airport financial and operations 
        reports to the Secretary that the Secretary reasonably 
        requests and make such reports available to the public;
          (16) the airport owner or operator will maintain a 
        current layout plan of the airport that meets the 
        following requirements:
                  (A) the plan will be in a form the Secretary 
                prescribes;
                  (B) the Secretary will approve the plan and 
                any revision or modification before the plan, 
                revision, or modification takes effect;
                  (C) the owner or operator will not make or 
                allow any alteration in the airport or any of 
                its facilities if the alteration does not 
                comply with the plan the Secretary approves, 
                and the Secretary is of the opinion that the 
                alteration may affect adversely the safety, 
                utility, or efficiency of the airport; and
                  (D) when an alteration in the airport or its 
                facility is made that does not conform to the 
                approved plan and that the Secretary decides 
                adversely affects the safety, utility, or 
                efficiency of any property on or off the 
                airport that is owned, leased, or financed by 
                the Government, the owner or operator, if 
                requested by the Secretary, will--
                          (i) eliminate the adverse effect in a 
                        way the Secretary approves; or
                          (ii) bear all cost of relocating the 
                        property or its replacement to a site 
                        acceptable to the Secretary and of 
                        restoring the property or its 
                        replacement to the level of safety, 
                        utility, efficiency, and cost of 
                        operation that existed before the 
                        alteration was made;
          (17) each contract and subcontract for program 
        management, construction management, planning studies, 
        feasibility studies, architectural services, 
        preliminary engineering, design, engineering, 
        surveying, mapping, and related services will be 
        awarded in the same way that a contract for 
        architectural and engineering services is negotiated 
        under title IX of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 541 et 
        seq.) or an equivalent qualifications-based requirement 
        prescribed for or by the sponsor;
          (18) the airport and each airport record will be 
        available for inspection by the Secretary on reasonable 
        request, and a report of the airport budget will be 
        available to the public at reasonable times and places; 
        [and]
          (19) the airport owner or operator will submit to the 
        Secretary and make available to the public an annual 
        report listing in detail--
                  (A) all amounts paid by the airport to any 
                other unit of government and the purposes for 
                which each such payment was made; and
                  (B) all services and property provided to 
                other units of government and the amount of 
                compensation received for provision of each 
                such service and [property.] property; and
          (20) the airport owner or operator will permit, to 
        the maximum extent practicable, intercity buses or 
        other modes of transportation to have access to the 
        airport, but the sponsor does not have any obligation 
        under this paragraph, or because of it, to fund special 
        facilities for intercity bus service or for other modes 
        of transportation.
  (b) Written Assurances on Use of Revenue.--
          (1) The Secretary of Transportation may approve a 
        project grant application under this subchapter [49 
        U.S.C. 47101 et seq.] for an airport development 
        project only if the Secretary receives written 
        assurances, satisfactory to the Secretary, that local 
        taxes on aviation fuel (except taxes in effect on 
        December 30, 1987) and the revenues generated by a 
        public airport will be expended for the capital or 
        operating costs of--
                  (A) the airport;
                  (B) the local airport system; or
                  (C) other local facilities owned or operated 
                by the airport owner or operator and directly 
                and substantially related to the air 
                transportation of passengers or property.
          (2) Paragraph (1) of this subsection does not apply 
        if a provision enacted not later than September 2, 
        1982, in a law controlling financing by the airport 
        owner or operator, or a covenant or assurance in a debt 
        obligation issued not later than September 2, 1982, by 
        the owner or operator, provides that the revenues, 
        including local taxes on aviation fuel at public 
        airports, from any of the facilities of the owner or 
        operator, including the airport, be used to support not 
        only the airport but also the general debt obligations 
        or other facilities of the owner or operator.
          (3) This subsection does not prevent the use of a 
        State tax on aviation fuel to support a State aviation 
        program or the use of airport revenue on or off the 
        airport for a noise mitigation purpose.
  (c) Written Assurances on Acquiring Land.--
          (1) In this subsection, land is needed for an airport 
        purpose (except a noise compatibility purpose) if--
                  (A)(i) the land may be needed for an 
                aeronautical purpose (including runway 
                protection zone) or serves as noise buffer 
                land; and
                  (ii) revenue from interim uses of the land 
                contributes to the financial self-sufficiency 
                of the airport; and
                  (B) for land purchased with a grant the owner 
                or operator received not later than December 
                30, 1987, the Secretary of Transportation or 
                the department, agency, or instrumentality of 
                the Government that made the grant was notified 
                by the owner or operator of the use of the land 
                and did not object to the use and the land is 
                still being used for that purpose.
          (2) The Secretary of Transportation may approve an 
        application under this subchapter [49 U.S.C. 47101 et 
        seq.] for an airport development project grant only if 
        the Secretary receives written assurances, satisfactory 
        to the Secretary, that if an airport owner or operator 
        has received or will receive a grant for acquiring land 
        and--
                  (A) if the land was or will be acquired for a 
                noise compatibility purpose--
                          (i) the owner or operator will 
                        dispose of the land at fair market 
                        value at the earliest practicable time 
                        after the land no longer is needed for 
                        a noise compatibility purpose;
                          (ii) the disposition will be subject 
                        to retaining or reserving an interest 
                        in the land necessary to ensure that 
                        the land will be used in a way that is 
                        compatible with noise levels associated 
                        with operating the airport; and
                          (iii) the part of the proceeds from 
                        disposing of the land that is 
                        proportional to the Government's share 
                        of the cost of acquiring the land will 
                        be paid to the Secretary for deposit in 
                        the Airport and Airway Trust Fund 
                        established under section 9502 of the 
                        Internal Revenue Code of 1986 (26 
                        U.S.C. 9502) or, as the Secretary 
                        prescribes, reinvested in an approved 
                        noise compatibility project; or
                  (B) if the land was or will be acquired for 
                an airport purpose (except a noise 
                compatibility purpose)--
                          (i) the owner or operator, when the 
                        land no longer is needed for an airport 
                        purpose, will dispose of the land at 
                        fair market value or make available to 
                        the Secretary an amount equal to the 
                        Government's proportional share of the 
                        fair market value;
                          (ii) the disposition will be subject 
                        to retaining or reserving an interest 
                        in the land necessary to ensure that 
                        the land will be used in a way that is 
                        compatible with noise levels associated 
                        with operating the airport; and
                          (iii) the part of the proceeds from 
                        disposing of the land that is 
                        proportional to the Government's share 
                        of the cost of acquiring the land will 
                        be reinvested, on application to the 
                        Secretary, in another eligible airport 
                        development project the Secretary 
                        approves under this subchapter [49 
                        U.S.C. 47101 et seq.] or paid to the 
                        Secretary for deposit in the Fund if 
                        another eligible project does not 
                        exist.
          (3) Proceeds referred to in paragraph (2)(A)(iii) and 
        (B)(iii) of this subsection and deposited in the 
        Airport and Airway Trust Fund are available as provided 
        in subsection (f) of this section.
  (d) Assurances of Continuation as Public-use Airport.--The 
Secretary of Transportation may approve an application under 
this subchapter [49 U.S.C. 47101 et seq.] for an airport 
development project grant for a privately owned public-use 
airport only if the Secretary receives appropriate assurances 
that the airport will continue to function as a public-use 
airport during the economic life (that must be at least 10 
years) of any facility at the airport that was developed with 
Government financial assistance under this subchapter [49 
U.S.C. 47101 et seq.].
  (e) Written Assurances of Opportunities for Small Business 
Concerns.--
          (1) The Secretary of Transportation may approve a 
        project grant application under this subchapter [49 
        U.S.C. 47101 et seq.] for an airport development 
        project only if the Secretary receives written 
        assurances, satisfactory to the Secretary, that the 
        airport owner or operator will take necessary action to 
        ensure, to the maximum extent practicable, that at 
        least 10 percent of all businesses at the airport 
        selling consumer products or providing consumer 
        services to the public are small business concerns (as 
        defined by regulations of the Secretary) owned and 
        controlled by a socially and economically disadvantaged 
        individual (as defined in section 47113(a) of this 
        title).
          (2) An airport owner or operator may meet the 
        percentage goal of paragraph (1) of this subsection by 
        including any business operated through a management 
        contract or subcontract. The dollar amount of a 
        management contract or subcontract with a disadvantaged 
        business enterprise shall be added to the total 
        participation by disadvantaged business enterprises in 
        airport concessions and to the base from which the 
        airport's percentage goal is calculated. The dollar 
        amount of a management contract or subcontract with a 
        non-disadvantaged business enterprise and the gross 
        revenue of business activities to which the management 
        contract or subcontract pertains may not be added to 
        this base.
          (3) Except as provided in paragraph (4) of this 
        subsection, an airport owner or operator may meet the 
        percentage goal of paragraph (1) of this subsection by 
        including the purchase from disadvantaged business 
        enterprises of goods and services used in businesses 
        conducted at the airport, but the owner or operator and 
        the businesses conducted at the airport shall make good 
        faith efforts to explore all available options to 
        achieve, to the maximum extent practicable, compliance 
        with the goal through direct ownership arrangements, 
        including joint ventures and franchises.
          (4) (A) In complying with paragraph (1) of this 
        subsection, an airport owner or operator shall include 
        the revenues of car rental firms at the airport in the 
        base from which the percentage goal in paragraph (1) is 
        calculated.
          (B) An airport owner or operator may require a car 
        rental firm to meet a requirement under paragraph (1) 
        of this subsection by purchasing or leasing goods or 
        services from a disadvantaged business enterprise. If 
        an owner or operator requires such a purchase or lease, 
        a car rental firm shall be permitted to meet the 
        requirement by including purchases or leases of 
        vehicles from any vendor that qualifies as a small 
        business concern owned and controlled by a socially and 
        economically disadvantaged individual.
          (C) This subsection does not require a car rental 
        firm to change its corporate structure to provide for 
        direct ownership arrangements to meet the requirements 
        of this subsection.
          (5) This subsection does not preempt--
                  (A) a State or local law, regulation, or 
                policy enacted by the governing body of an 
                airport owner or operator; or
                  (B) the authority of a State or local 
                government or airport owner or operator to 
                adopt or enforce a law, regulation, or policy 
                related to disadvantaged business enterprises.
          (6) An airport owner or operator may provide 
        opportunities for a small business concern owned and 
        controlled by a socially and economically disadvantaged 
        individual to participate through direct contractual 
        agreement with that concern.
          (7) An air carrier that provides passenger or 
        property-carrying services or another business that 
        conducts aeronautical activities at an airport may not 
        be included in the percentage goal of paragraph (1) of 
        this subsection for participation of small business 
        concerns at the airport.
          (8) Not later than April 29, 1993, the Secretary of 
        Transportation shall prescribe regulations to carry out 
        this subsection.
  (f) Availability of Amounts.--An amount deposited in the 
Airport and Airway Trust Fund under--
          (1) subsection (c)(2)(A)(iii) of this section is 
        available to the Secretary of Transportation to make a 
        grant for airport development or airport planning under 
        section 47104 of this title;
          (2) subsection (c)(2)(B)(iii) of this section is 
        available to the Secretary--
                  (A) to make a grant for a purpose described 
                in section 47115(b) of this title; and
                  (B) for use under section 47114(d)(2) of this 
                title at another airport in the State in which 
                the land was disposed of under subsection 
                (c)(2)(B)(ii) of this section; and
          (3) subsection (c)(2)(B)(iii) of this section is in 
        addition to an amount made available to the Secretary 
        under section 48103 of this title and not subject to 
        apportionment under section 47114 of this title.
  (g) Ensuring Compliance.--
          (1) To ensure compliance with this section, the 
        Secretary of Transportation--
                  (A) shall prescribe requirements for sponsors 
                that the Secretary considers necessary; and
                  (B) may make a contract with a public agency.
          (2) The Secretary of Transportation may approve an 
        application for a project grant only if the Secretary 
        is satisfied that the requirements prescribed under 
        paragraph (1)(A) of this subsection have been or will 
        be met.
  (h) Modifying Assurances and Requiring Compliance with 
Additional Assurances.--Before modifying an assurance required 
of a person receiving a grant under this subchapter [49 U.S.C. 
47101 et seq.] and in effect after December 29, 1987, or to 
require compliance with an additional assurance from the 
person, the Secretary of Transportation must--
          (1) publish notice of the proposed modification in 
        the Federal Register; and
          (2) provide an opportunity for comment on the 
        proposal.
  (i) Relief from Obligation to Provide Free Space.--When a 
sponsor provides a property interest in a land or water area or 
a building that the Secretary of Transportation uses to 
construct a facility at Government expense, the Secretary may 
relieve the sponsor from an obligation in a contract made under 
this chapter [49 U.S.C. 47101 et seq.], the Airport and Airway 
Development Act of 1970, or the Federal Airport Act to provide 
free space to the Government in an airport building, to the 
extent the Secretary finds that the free space no longer is 
needed to carry out activities related to air traffic control 
or navigation.
  (j) Use of Revenue in Hawaii.--
          (1) In this subsection--
                  (A) ``duty-free merchandise'' and ``duty-free 
                sales enterprise'' have the same meanings given 
                those terms in section 555(b)(8) of the Tariff 
                Act of 1930 (19 U.S.C. 1555(b)(8)).
                  (B) ``highway'' and ``Federal-aid system'' 
                have the same meanings given those terms in 
                section 101(a) of title 23.
          (2) Notwithstanding subsection (b)(1) of this 
        section, Hawaii may use, for a project for construction 
        or reconstruction of a highway on a Federal-aid system 
        that is not more than 10 miles by road from an airport 
        and that will facilitate access to the airport, revenue 
        from the sales at off-airport locations in Hawaii of 
        duty-free merchandise under a contract between Hawaii 
        and a duty-free sales enterprise. However, the revenue 
        resulting during a Hawaiian fiscal year may be used 
        only if the amount of the revenue, plus amounts Hawaii 
        receives in the fiscal year from all other sources for 
        costs Hawaii incurs for operating all airports it 
        operates and for debt service related to capital 
        projects for the airports (including interest and 
        amortization of principal costs), is more than 150 
        percent of the projected costs for the fiscal year.
          (3)(A) Revenue from sales referred to in paragraph 
        (2) of this subsection in a Hawaiian fiscal year that 
        Hawaii may use may not be more than the amount that is 
        greater than 150 percent as determined under paragraph 
        (2).
          (B) The maximum amount of revenue Hawaii may use 
        under paragraph (2) of this subsection is $250,000,000.
          (4) If a fee imposed or collected for rent, landing, 
        or service from an aircraft operator by an airport 
        operated by Hawaii is increased during the period from 
        May 4, 1990, through December 31, 1994, by more than 
        the percentage change in the Consumer Price Index of 
        All Urban Consumers for Honolulu, Hawaii, that the 
        Secretary of Labor publishes during that period and if 
        revenue derived from the fee increases because the fee 
        increased, the amount under paragraph (3)(B) of this 
        subsection shall be reduced by the amount of the 
        projected revenue increase in the period less the part 
        of the increase attributable to changes in the Index in 
        the period.
          (5) Hawaii shall determine costs, revenue, and 
        projected revenue increases referred to in this 
        subsection and shall submit the determinations to the 
        Secretary of Transportation. A determination is 
        approved unless the Secretary disapproves it not later 
        than 30 days after it is submitted.
          (6) Hawaii is not eligible for a grant under section 
        47115 of this title in a fiscal year in which Hawaii 
        uses under paragraph (2) of this subsection revenue 
        from sales referred to in paragraph (2). Hawaii shall 
        repay amounts it receives in a fiscal year under a 
        grant it is not eligible to receive because of this 
        paragraph to the Secretary of Transportation for 
        deposit in the discretionary fund established under 
        section 47115.
          (7)(A) This subsection applies only to revenue from 
        sales referred to in paragraph (2) of this subsection 
        from May 5, 1990, through December 30, 1994, and to 
        amounts in the Airport Revenue Fund of Hawaii that are 
        attributable to revenue before May 4, 1990, on sales 
        referred to in paragraph (2).
          (B) Revenue from sales referred to in paragraph (2) 
        of this subsection from May 5, 1990, through December 
        30, 1994, may be used under paragraph (2) in any 
        Hawaiian fiscal year, including a Hawaiian fiscal year 
        beginning after December 31, 1994.
  (k) Annual Summaries of Financial Reports.--The Secretary 
shall provide to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Public Works 
and Transportation of the House of Representatives an annual 
summary of the reports submitted to the Secretary under 
subsection (a)(19) of this section and under section 111(b) of 
the Federal Aviation Administration Authorization Act of 1994.
  (l) Policies and Procedures to Ensure Enforcement Against 
Illegal Diversion of Airport Revenue.--
          (1) In general.--Not later than 90 days after the 
        date of the enactment of this subsection, the Secretary 
        of Transportation shall establish policies and 
        procedures that will assure the prompt and effective 
        enforcement of subsections (a)(13) and (b) of this 
        section and grant assurances made under such 
        subsections. Such policies and procedures shall 
        recognize the exemption provision in subsection (b)(2) 
        of this section and shall respond to the information 
        contained in the reports of the Inspector General of 
        the Department of Transportation on airport revenue 
        diversion and such other relevant information as the 
        Secretary may by law consider.
          (2) Revenue diversion.--Policies and procedures to be 
        established pursuant to paragraph (1) of this 
        subsection shall prohibit, at a minimum, the diversion 
        of airport revenues (except as authorized under 
        subsection (b) of this section) through--
                  (A) direct payments or indirect payments, 
                other than payments reflecting the value of 
                services and facilities provided to the 
                airport;
                  (B) use of airport revenues for general 
                economic development, marketing, and 
                promotional activities unrelated to airports or 
                airport systems;
                  (C) payments in lieu of taxes or other 
                assessments that exceed the value of services 
                provided; or
                  (D) payments to compensate nonsponsoring 
                governmental bodies for lost tax revenues 
                exceeding stated tax rates.
          (3) Efforts to be self-sustaining.--With respect to 
        subsection (a)(13) of this section, policies and 
        procedures to be established pursuant to paragraph (1) 
        of this subsection shall take into account, at a 
        minimum, whether owners and operators of airports, when 
        entering into new or revised agreements or otherwise 
        establishing rates, charges, and fees, have undertaken 
        reasonable efforts to make their particular airports as 
        self-sustaining as possible under the circumstances 
        existing at such airports.
          (4) Administrative safeguards.--Policies and 
        procedures to be established pursuant to paragraph (1) 
        shall mandate internal controls, auditing requirements, 
        and increased levels of Department of Transportation 
        personnel sufficient to respond fully and promptly to 
        complaints received regarding possible violations of 
        subsections (a)(13) and (b) of this section and grant 
        assurances made under such subsections and to alert the 
        Secretary to such possible violations.

Sec. 47114. Apportionments

  (a) Definition.--In this section, ``amount subject to 
apportionment'' means the amount newly made available under 
section 48103 of this title for a fiscal year.
  (b) Apportionment Date.--On the first day of each fiscal 
year, the Secretary of Transportation shall apportion the 
amount subject to apportionment for that fiscal year as 
provided in this section.
  (c) Amounts Apportioned to Sponsors.--
          (1)(A) The Secretary shall apportion to the sponsor 
        of each primary airport for each fiscal year an amount 
        equal to--
                  (i) $7.80 for each of the first 50,000 
                passenger boardings at the airport during the 
                prior calendar year;
                  (ii) $5.20 for each of the next 50,000 
                passenger boardings at the airport during the 
                prior calendar year;
                  (iii) $2.60 for each of the next 400,000 
                passenger boardings at the airport during the 
                prior calendar year; and
                  (iv) $.65 for each additional passenger 
                boarding at the airport during the prior 
                calendar year.
          (B) Not less than $500,000 nor more than $22,000,000 
        may be apportioned under subparagraph (A) of this 
        paragraph to an airport sponsor for a primary airport 
        for each fiscal year.--
          (2)(A) The Secretary shall apportion to the sponsors 
        of airports served by aircraft providing air 
        transportation of only cargo with a total annual landed 
        weight of more than 100,000,000 pounds for each fiscal 
        year an amount equal to 3.5 percent of the amount 
        subject to apportionment each year, allocated among 
        those airports in the proportion that the total annual 
        landed weight of those aircraft landing at each of 
        those airports bears to the total annual landed weight 
        of those aircraft landing at all those airports. 
        However, not more than 8 percent of the amount 
        apportioned under this paragraph may be apportioned for 
        any one airport.
          (B) Landed weight under subparagraph (A) of this 
        paragraph is the landed weight of aircraft landing at 
        each of those airports and all those airports during 
        the prior calendar year.
          (3)(A) Except as provided in subparagraph (B) of this 
        paragraph, the total of all amounts apportioned under 
        paragraphs (1) and (2) of this subsection may not be 
        more than 49.5 percent of the amount subject to 
        apportionment for a fiscal year. If this subparagraph 
        requires reduction of an amount that otherwise would be 
        apportioned under this subsection, the Secretary shall 
        reduce proportionately the amount apportioned to each 
        sponsor of an airport under paragraphs (1) and (2) 
        until the 49.5 percent limit is achieved.
          (B) If a law limits the amount subject to 
        apportionment to less than $1,900,000,000 for a fiscal 
        year, the total of all amounts apportioned under 
        paragraphs (1) and (2) of this subsection may not be 
        more than 44 percent of the amount subject to 
        apportionment for that fiscal year. If this 
        subparagraph requires reduction of an amount that 
        otherwise would be apportioned under this subsection, 
        the Secretary shall reduce proportionately the amount 
        apportioned to each sponsor of an airport under 
        paragraphs (1) and (2) until the 44 percent limit is 
        achieved.
  (d) Amounts Apportioned to States.--
          (1) In this subsection--
                  (A) ``area'' includes land and water.
                  (B) ``population'' means the population 
                stated in the latest decennial census of the 
                United States.
          (2) The Secretary shall apportion to the States 12 
        percent of the amount subject to apportionment for each 
        fiscal year as follows:
                  (A) one percent of the apportioned amount to 
                Guam, American Samoa, the Northern Mariana 
                Islands, the Trust Territory of the Pacific 
                Islands, and the Virgin Islands.
                  (B) except as provided in paragraph (3) of 
                this subsection, 49.5 percent of the 
                apportioned amount for airports, except primary 
                airports and airports described in section 
                47117(e)(1)(C) of this title, in States not 
                named in clause (A) of this paragraph in the 
                proportion that the population of each of those 
                States bears to the total population of all of 
                those States.
                  (C) except as provided in paragraph (3) of 
                this subsection, 49.5 percent of the 
                apportioned amount for airports, except primary 
                airports and airports described in section 
                47117(e)(1)(C) of this title, in States not 
                named in clause (A) of this paragraph in the 
                proportion that the area of each of those 
                States bears to the total area of all of those 
                States.
          (3) An amount apportioned under paragraph (2) of this 
        subsection for an airport in--
                  (A) Alaska may be made available by the 
                Secretary for a public airport described in 
                section 47117(e)(1)(C)(ii) of this title to 
                which section 15(a)(3)(A)(II) of the Airport 
                and Airway Development Act of 1970 applied 
                during the fiscal year that ended September 30, 
                1981; and
                  (B) Puerto Rico may be made available by the 
                Secretary for a primary airport and an airport 
                described in section 47117(e)(1)(C) of this 
                title.
  (e) Alternative Apportionment for Alaska.--
          (1) Instead of apportioning amounts for airports in 
        Alaska under subsections (c) and (d) of this section, 
        the Secretary may apportion amounts for those airports 
        in the way in which amounts were apportioned in the 
        fiscal year ending September 30, 1980, under section 
        15(a) of the Act. However, in apportioning amounts for 
        a fiscal year under this subsection, the Secretary 
        shall apportion--
                  (A) for each primary airport at least as much 
                as would be apportioned for the airport under 
                subsection (c)(1) of this section; and
                  (B) a total amount at least equal to the 
                minimum amount required to be apportioned to 
                airports in Alaska in the fiscal year ending 
                September 30, 1980, under section 15(a)(3)(A) 
                of the Act.
          (2) This subsection does not prohibit the Secretary 
        from making project grants for airports in Alaska from 
        the discretionary fund under section 47115 of this 
        title.
          (3) Airports referred to in this subsection include 
        those public airports that received scheduled service 
        as of September 3, 1982, but were not apportioned 
        amounts in the fiscal year ending September 30, 1980, 
        under section 15(a) of the Act because the airports 
        were not under the control of a State or local public 
        agency.
  (f) Reducing Apportionments.--An amount that would be 
apportioned under this section (except subsection (c)(2)) in a 
fiscal year to the sponsor of an airport having at least .25 
percent of the total number of boardings each year in the 
United States and for which a fee is imposed in the fiscal year 
under section 40117 of this title shall be reduced by an amount 
equal to 50 percent of the projected revenues from the fee in 
the fiscal year but not by more than 50 percent of the amount 
that otherwise would be apportioned under this section.
  (g) Sliding Scale.--
          (1) Notwithstanding any other provision of this 
        title, of the amount newly made available under section 
        48103 of this title for fiscal year 1997 to make 
        grants, not more than the percentage of such amount 
        newly made available that is specified in paragraph (2) 
        shall be distributed in total in such fiscal year for 
        grants described in paragraph (3).
          (2) If the amount newly made available is--
                  (A) not more than $1,150,000,000, then the 
                percentage is 47.0;
                  (B) more than $1,150,000,000 but not more 
                than $1,250,000,000, then the percentage is 
                46.0;
                  (C) more than $1,250,000,000 but not more 
                than $1,350,000,000, then the percentage is 
                45.4;
                  (D) more than $1,350,000,000 but not more 
                than $1,450,000,000, then the percentage is 
                44.8; or
                  (E) more than $1,450,000,000 but not more 
                than $1,550,000,000, then the percentage is 
                44.3.
          (3) This section applies to the aggregate amount of 
        grants in a fiscal year for projects at those primary 
        airports that each have not less than 0.25 per centum 
        of the total passenger boardings in the United States 
        in the preceding calendar year.

Sec. 47115. Discretionary fund

  (a) Existence and Amounts in Fund.--The Secretary of 
Transportation has a discretionary fund. The fund consists of--
          (1) amounts subject to apportionment for a fiscal 
        year that are not apportioned under section 47114(c)-
        (e) of this title; and
          (2) 25 percent of amounts not apportioned under 
        section 47114 of this title because of section 
        47114(f).
  (b) Availability of Amounts.--Subject to subsection (c) of 
this section and section 47117(e) of this title, the fund is 
available for making grants for any purpose for which amounts 
are made available under section 48103 of this title that the 
Secretary considers most appropriate to carry out this 
subchapter [49 U.S.C. 47101 et seq.]. However, 50 percent of 
amounts not apportioned under section 47114 of this title 
because of section 47114(f) and added to the fund is available 
for making grants for projects at small hub airports (as 
defined in section 41731 of this title).
  (c) Minimum Percentage for Primary and Reliever Airports.--At 
least 75 percent of the amount in the fund and distributed by 
the Secretary in a fiscal year shall be used for making 
grants--
          (1) to preserve and enhance capacity, safety, and 
        security at primary and reliever airports; and
          (2) to carry out airport noise compatibility planning 
        and programs at primary and reliever airports.
  (d) Considerations.--In selecting a project for a grant to 
preserve and enhance capacity as described in subsection (c)(1) 
of this section, the Secretary shall consider--
          (1) the effect the project will have on the overall 
        national air transportation system capacity;
          (2) the project benefit and cost; and
          (3) the financial commitment from non-United States 
        Government sources to preserve or enhance airport 
        capacity.
  (e) Waiving Percentage Requirement.--If the Secretary decides 
the Secretary cannot comply with the percentage requirement of 
subsection (c) of this section in a fiscal year because there 
are insufficient qualified grant applications to meet that 
percentage, the amount the Secretary determines will not be 
distributed as required by subsection (c) is available for 
obligation during the fiscal year without regard to the 
requirement.
  (f) Consideration of Diversion of Revenues in Awarding 
Discretionary Grants.--
          (1) General rule.--Subject to paragraph (2), in 
        deciding whether or not to distribute funds to an 
        airport from the discretionary funds established by 
        subsection (a) of this section and section 47116 of 
        this title, the Secretary shall consider as a factor 
        militating against the distribution of such funds to 
        the airport the fact that the airport is using revenues 
        generated by the airport or by local taxes on aviation 
        fuel for purposes other than capital or operating costs 
        of the airport or the local airports system or other 
        local facilities which are owned or operated by the 
        owner or operator of the airport and directly and 
        substantially related to the actual air transportation 
        of passengers or property.
          (2) Required finding.--Paragraph (1) shall apply only 
        when the Secretary finds that the amount of revenues 
        used by the airport for purposes other than capital or 
        operating costs in the airport's fiscal year preceding 
        the date of the application for discretionary funds 
        exceeds the amount of such revenues in the airport's 
        first fiscal year ending after the date of the 
        enactment of this subsection, adjusted by the Secretary 
        for changes in the Consumer Price Index of All Urban 
        Con sumers published by the Bureau of Labor Statistics 
        of the Department of Labor.
  [(f)] (g) Minimum Amount to be Credited.--
          (1) In a fiscal year, at least $325,000,000 of the 
        amount made available under section 48103 of this title 
        shall be credited to the fund. The amount credited is 
        exclusive of amounts that have been apportioned in a 
        prior fiscal year under section 47114 of this title and 
        that remain available for obligation.
          (2) In a fiscal year in which the amount credited 
        under subsection (a) of this section is less than 
        $325,000,000, the total amount calculated under 
        paragraph (3) of this subsection shall be reduced by an 
        amount that, when credited to the fund, together with 
        the amount credited under subsection (a), equals 
        $325,000,000.
          (3) For a fiscal year, the total amount available to 
        reduce to carry out paragraph (2) of this subsection is 
        the total of the amounts determined under sections 
        47114(c)(1)(A) and (2) and (d) and 47117(e) of this 
        title. Each amount shall be reduced by an equal 
        percentage to achieve the reduction.
  (h) Priority for Letters of Intent.--In making grants in a 
fiscal year with funds made available under this section, the 
Secretary shall fulfill intentions to obligate under section 
47110(e).

Sec. 47117. Use of apportioned amounts

  (a) Grant Purpose.--Except as provided in this section, an 
amount apportioned under section 47114(c)(1) or (d)(2) of this 
title is available for making grants for any purpose for which 
amounts are made available under section 48103 of this title.
  (b) Period of Availability.--An amount apportioned under 
section 47114 of this title is available to be obligated for 
grants under the apportionment only during the fiscal year for 
which the amount was apportioned and the 2 fiscal years 
immediately after that year. If the amount is not obligated 
under the apportionment within that time, it shall be added to 
the discretionary fund.
  (c) Primary Airports.--
          (1) An amount apportioned to a sponsor of a primary 
        airport under section 47114(c)(1) of this title is 
        available for grants for any public-use airport of the 
        sponsor included in the national plan of integrated 
        airport systems.
          (2) A sponsor of a primary airport may make an 
        agreement with the Secretary of Transportation waiving 
        any part of the amount apportioned for the airport 
        under section 47114(c)(1) of this title if the 
        Secretary makes the waived amount available for a grant 
        for another public-use airport in the same State or 
        geographical area as the primary airport.
  (d) State Use.--An amount apportioned to a State under--
          (1) section 47114(d)(2)(A) of this title is available 
        for grants for airports located in the State; and
          (2) section 47114(d)(2)(B) or (C) of this title is 
        available for grants for airports described in section 
        47114(d)(2)(B) or (C) and located in the State.
  (e) Special Apportionment Categories.--
          (1) The Secretary shall use amounts made available 
        under section 48103 of this title for each fiscal year 
        as follows:
                  (A) at least 5 percent for grants for 
                reliever airports.
                  (B) at least 12.5 percent for grants for 
                airport noise compatibility planning under 
                section 47505(a)(2) of this title and for 
                carrying out noise compatibility programs under 
                section 47504(c)(1) of this title.
                  (C) at least 1.5 percent for grants for--
                          (i) nonprimary commercial service 
                        airports; and
                          (ii) public airports (except 
                        commercial service airports) that were 
                        eligible for United States Government 
                        assistance from amounts apportioned 
                        under section 15(a)(3) of the Airport 
                        and Airway Development Act of 1970, and 
                        to which section 15(a)(3)(A)(I) or (II) 
                        of the Act applied during the fiscal 
                        year that ended September 30, 1981.
                  (D) at least .75 percent for integrated 
                airport system planning grants to planning 
                agencies designated by the Secretary and 
                authorized by the laws of a State or political 
                subdivision of a State to do planning for an 
                area of the State or subdivision in which a 
                grant under this chapter [49 U.S.C. 47101 et 
                seq.] is to be used.
                  (E) at least 2.25 percent for the fiscal year 
                ending September 30, 1993, and at least 2.5 
                percent for each of the fiscal years ending 
                September 30, 1994, 1995, [and 1996,] 1996, and 
                1997,] to sponsors of current or former 
                military airports designated by the Secretary 
                under section 47118(a) of this title for grants 
                for developing current and former military 
                airports to improve the capacity of the 
                national air transportation system.
          (2) A grant from the amount apportioned under section 
        47114(e) of this title may not be included as part of 
        the 1.5 percent required to be used for grants under 
        paragraph (1)(C) of this subsection.
          (3) If the Secretary decides that an amount required 
        to be used for grants under paragraph (1) of this 
        subsection cannot be used for a fiscal year because 
        there are insufficient qualified grant applications, 
        the amount the Secretary determines cannot be used is 
        available during the fiscal year for grants for other 
        airports or for other purposes for which amounts are 
        authorized for grants under section 48103 of this 
        title.
  (f) Limitation for Commercial Service Airport in Alaska.--The 
Secretary may not make a grant for a commercial service airport 
in Alaska of more than 110 percent of the amount apportioned 
for the airport for a fiscal year under section 47114(e) of 
this title.
  (g) Discretionary use of Apportionments.--
          (1) Subject to paragraph (2) of this subsection, if 
        the Secretary finds, based on the notices the Secretary 
        receives under section 47105(e) of this title or 
        otherwise, that an amount apportioned under section 
        47114 of this title will not be used for grants during 
        a fiscal year, the Secretary may use an equal amount 
        for grants during that fiscal year for any of the 
        purposes for which amounts are authorized for grants 
        under section 48103 of this title.
          (2) The Secretary may make a grant under paragraph 
        (1) of this subsection only if the Secretary decides 
        that--
                  (A) the total amount used for grants for the 
                fiscal year under section 48103 of this title 
                will not be more than the amount made available 
                under section 48103 for that fiscal year; and
                  (B) the amounts authorized for grants under 
                section 48103 of this title for later fiscal 
                years are sufficient for grants of the 
                apportioned amounts that were not used for 
                grants under the apportionment during the 
                fiscal year and that remain available under 
                subsection (b) of this section.
  (h) Limiting Authority of Secretary.--The authority of the 
Secretary to make grants during a fiscal year from amounts that 
were apportioned for a prior fiscal year and remain available 
for approved airport development project grants under 
subsection (b) of this section may be impaired only by a law 
enacted after September 3, 1982, that expressly limits that 
authority.

Sec. 47118. Designating current and former military airports

  (a) General Requirements.--The Secretary of Transportation 
shall designate [not more than 15] current or former military 
airports for which grants may be made under section 
47117(e)(1)(E) of this title. The maximum number of airports 
which may be designated by the Secretary under this section at 
any time is 10. The Secretary may only designate an airport for 
such grants (other than an airport designated for such grants 
on or before the date of the enactment of this sentence if the 
Secretary finds that grants under such section for projects at 
such airport would reduce delays at an airport with more than 
20,000 hours of annual delays in commercial passenger aircraft 
takeoffs and landings.
  (b) Survey.--Not later than September 30, 1991, the Secretary 
shall complete a survey of current and former military airports 
to identify which airports have the greatest potential to 
improve the capacity of the national air transportation system. 
The survey shall identify the capital development needs of 
those airports to make them part of the system and which of 
those qualify for grants under section 47104 of this title.
  (c) Considerations.--In carrying out this section, the 
Secretary shall consider only current or former military 
airports that, when at least partly converted to civilian 
commercial or reliever airports as part of the national air 
transportation system, will enhance airport and air traffic 
control system capacity in major metropolitan areas and reduce 
current and projected flight delays.
  (d) Grants.--Grants under section 47117(e)(1)(E) of this 
title may be made for an airport designated under subsection 
(a) of this section for the 5 fiscal years following the 
designation.
  (e) Terminal Building Facilities.--Notwithstanding section 
47109(c) of this title, not more than $5,000,000 for each 
airport from amounts the Secretary distributes under section 
47115 of this title for a fiscal year is available to the 
sponsor of a current or former military airport the Secretary 
designates under this section to construct, improve, or repair 
a terminal building facility, including terminal gates used for 
revenue passengers getting on or off aircraft. A gate 
constructed, improved, or repaired under this subsection--
          (1) may not be leased for more than 10 years; and
          (2) is not subject to majority in interest clauses.
  (f) Parking Lots, Fuel Farms, and Utilities.--Not more than a 
total of $4,000,000 for each airport from amounts the Secretary 
distributes under section 47115 of this title for [the fiscal 
years ending September 30, 1993-1996,] for fiscal years 
beginning after September 30, 1992, is available to the sponsor 
of a current or former military airport the Secretary 
designates under this section to construct, improve, or repair 
airport surface parking lots, fuel farms, and utilities.
          * * * * * * *

Sec. 47128. State block grant pilot program

  (a) General Requirements.--The Secretary of Transportation 
shall prescribe regulations to carry out a State block grant 
pilot program. The regulations shall provide that the Secretary 
may designate not more than 7 qualified States to assume 
administrative responsibility for all airport grant amounts 
available under this subchapter [49 U.S.C. 47101 et seq.], 
except for amounts designated for use at primary airports.
  (b) Applications and Selection.--
          [(1)] A State wishing to participate in the program 
        must submit an application to the Secretary. The 
        Secretary shall select a State on the basis of its 
        application only after--
                  [(A)] (1) deciding the State has an 
                organization capable of effectively 
                administering a block grant made under this 
                section;
                  [(B)] (2) deciding the State uses a 
                satisfactory airport system planning process;
                  [(C)] (3) deciding the State uses a 
                programming process acceptable to the 
                Secretary;
                  [(D)] (4) finding that the State has agreed 
                to comply with United States Government 
                standard requirements for administering the 
                block grant; and
                  [(E)] (5) finding that the State has agreed 
                to provide the Secretary with program 
                information the Secretary requires.
          [(2) For the fiscal years ending September 30, 1993-
        1996, the States selected shall include Illinois, 
        Missouri, and North Carolina.]
  (c) Safety and Security Needs and Needs of System.--Before 
deciding whether a planning process is satisfactory or a 
programming process is acceptable under subsection (b)(1)(B) or 
(C) of this section, the Secretary shall ensure that the 
process provides for meeting critical safety and security needs 
and that the programming process ensures that the needs of the 
national airport system will be addressed in deciding which 
projects will receive money from the Government. In carrying 
out this subsection, the Secretary shall permit a State to use 
the priority system of the State if such system is not 
inconsistent with the national priority system.
  (d) Ending Effective Date and Report.--This section is 
effective only through September 30, [1996.] 1997.
          * * * * * * *

Sec. 47132. Pavement maintenance

  (a) In General.--The Administrator of the Federal Aviation 
Administration shall prescribe regulations to carry out a 
pavement maintenance pilot project to preserve and extend the 
useful life of runways, taxiways, and aprons at airports for 
which apportionments are made under section 47114(d). The 
regulations shall provide that the Administrator may designate 
not more than 10 projects. The regulations shall provide 
criteria for the Administrator to use in choosing the projects. 
At least 2 such projects must be in States without a primary 
airport that had 0.25 percent or more of the total boardings in 
the United States in the preceding calendar year. In 
designating projects, the Administrator shall take into 
consideration geographical, climatological, and soil diversity.
  (b) Effective Date.--This section shall be effective 
beginning on the date of enactment of the Federal Aviation 
Reauthorization Act of 1996 and ending on September 30, 1999.

                           PART C--FINANCING

       CHAPTER 481--AIRPORT AND AIRWAY TRUST FUND AUTHORIZATIONS

Sec. 48101. Air navigation facilities

  (a) General Authorization of Appropriations.--Not more than a 
total of the following amounts may be appropriated to the 
Secretary of Transportation out of the Airport and Airway Trust 
Fund established under section 9502 of the Internal Revenue 
Code of 1986 (26 U.S.C.--9502) to acquire, establish, and 
improve air navigation facilities under section 44502(a)(1)(A) 
of this title:
          (1) For the fiscal years ending September 30, 1991-
        1993, $8,200,000,000.
          (2) For the fiscal years ending September 30, 1991-
        1994, $10,724,000,000.
          (3) For the fiscal years ending September 30, 1991-
        1995, $13,394,000,000.
          (4) For the fiscal years ending September 30, 1991-
        1996, $16,129,000,000.
          (5) For the fiscal years ending September 30, 1991-
        1997, $17,929,000,000.
  (b) Major Airway Capital Investment Plan Changes.--If the 
Secretary decides that it is necessary to augment or 
substantially modify elements of the Airway Capital Investment 
Plan referred to in section 44501(b) of this title (including a 
decision that it is necessary to establish more than 23 area 
control facilities), not more than $100,000,000 may be 
appropriated to the Secretary out of the Fund for the fiscal 
year ending September 30, 1994, to carry out the augmentation 
or modification.
  (c) Availability of Amounts.--Amounts appropriated under this 
section remain available until expended.

Sec. 48102. Research and development

  (a) Authorization of Appropriations.--Not more than the 
following amounts may be appropriated to the Secretary of 
Transportation out of the Airport and Airway Trust Fund 
established under section 9502 of the Internal Revenue Code of 
1986 (26 U.S.C. 9502) to carry out sections 44504, 44505, 
44507, 44509, and 44511-44513 of this [title:
          [(1) for fiscal year 1995--
                  [(A) $7,673,000 for management and analysis 
                projects and activities;
                  [(B) $80,901,000 for capacity and air traffic 
                management technology projects and activities;
                  [(C) $39,242,000 for communications, 
                navigation, and surveillance projects and 
                activities;
                  [(D) $2,909,000 for weather projects and 
                activities;
                  [(E) $8,660,000 for airport technology 
                projects and activities;
                  [(F) $51,004,000 for aircraft safety 
                technology projects and activities;
                  [(G) $36,604,000 for system security 
                technology projects and activities;
                  [(H) $26,484,000 for human factors and 
                aviation medicine projects and activities;
                  [(I) $8,124,000 for environment and energy 
                projects and activities; and
                  [(J) $5,199,000 for innovative/cooperative 
                research projects and activities; and
          [(2) for fiscal year 1996--
                  [(A) $8,056,000 for management and analysis 
                projects and activities;
                  [(B) $84,946,000 for capacity and air traffic 
                management technology projects and activities;
                  [(C) $41,204,000 for communications, 
                navigation, and surveillance projects and 
                activities;
                  [(D) $3,054,000 for weather projects and 
                activities;
                  [(E) $9,093,000 for airport technology 
                projects and activities;
                  [(F) $53,554,000 for aircraft safety 
                technology projects and activities;
                  [(G) $38,434,000 for system security 
                technology projects and activities;
                  [(H) $27,808,000 for human factors and 
                aviation medicine projects and activities;
                  [(I) $8,532,000 for environment and energy 
                projects and activities; and
                  [(J) $5,459,000 for innovative/cooperative 
                research projects and activities.] title, 
                $200,000,000 for fiscal year 1997.
  (b) Availability for Research.--
          (1) At least 15 percent of the amount appropriated 
        under subsection (a) of this section shall be for long-
        term research projects.
          (2) At least 3 percent of the amount appropriated 
        under subsection (a) of this section shall be available 
        to the Administrator of the Federal Aviation 
        Administration to make grants under section 44511 of 
        this title.
  (c) Transfers Between Categories.--
          (1) Not more than 10 percent of the net amount 
        authorized for a category of projects and activities in 
        a fiscal year under subsection (a) of this section may 
        be transferred to or from that category in that fiscal 
        year.
          (2) The Secretary may transfer more than 10 percent 
        of an authorized amount to or from a category only 
        after--
                  (A) submitting a written explanation of the 
                proposed transfer to the Committees on Science, 
                Space, and Technology and Appropriations of the 
                House of Representatives and the Committees on 
                Commerce, Science, and Transportation and 
                Appropriations of the Senate; and
                  (B) 30 days have passed after the explanation 
                is submitted or each Committee notifies the 
                Secretary in writing that it does not object to 
                the proposed transfer.
  (d) Airport Capacity Research and Development.--
          (1) Of the amounts made available under subsection 
        (a) of this section, at least $25,000,000 may be 
        appropriated each fiscal year for research and 
        development under section 44505(a) and (c) of this 
        title on preserving and enhancing airport capacity, 
        including research and development on improvements to 
        airport design standards, maintenance, safety, 
        operations, and environmental concerns.
          (2) The Administrator shall submit to the Committees 
        on Science, Space, and Technology and Public Works and 
        Transportation of the House of Representatives and the 
        Committee on Commerce, Science, and Transportation of 
        the Senate a report on expenditures made under 
        paragraph (1) of this subsection for each fiscal year. 
        The report shall be submitted not later than 60 days 
        after the end of the fiscal year.
  (e) Air Traffic Controller Performance Research.--Necessary 
amounts may be appropriated to the Secretary out of amounts in 
the Fund available for research and development to conduct 
research under section 44506(a) and (b) of this title.
  (f) Availability of Amounts.--Amounts appropriated under 
subsection (a) of this section remain available until expended.

Sec. 48103. Airport planning and development and noise compatibility 
                    planning and programs

  The total amounts which shall be available after September 
30, 1981, to the Secretary of Transportation out of the Airport 
and Airway Trust Fund established under section 9502 of the 
Internal Revenue Code of 1986 (26 U.S.C. 9502) to make grants 
for airport planning and airport development under section 
47104 of this title, airport noise compatibility planning under 
section 47505(a)(2) of this title, and carrying out noise 
compatibility programs under section 47504(c) of this title 
shall be $17,583,500,000 for fiscal years ending before October 
1, 1994, $19,744,500,000 for fiscal years ending before October 
1, 1995, [and $21,958,500,000] $19,200,500,000 for fiscal years 
ending before October 1, [1996.] 1996, and $21,480,500,000 for 
fiscal years ending before October 1, 1997.

Sec. 48104. Certain direct costs and joint air navigation services

  (a) Authorization of Appropriations.--Except as provided in 
this section, the balance of the money available in the Airport 
and Airway Trust Fund established under section 9502 of the 
Internal Revenue Code of 1986 (26 U.S.C. 9502) may be 
appropriated to the Secretary of Transportation out of the Fund 
for--
          (1) direct costs the Secretary incurs to flight 
        check, operate, and maintain air navigation facilities 
        referred to in section 44502(a)(1)(A) of this title 
        safely and efficiently; and
          (2) the costs of services provided under 
        international agreements related to the joint financing 
        of air navigation services assessed against the United 
        States Government.
  (b) Limitation [for Fiscal Years 1993].--The amount that may 
be appropriated out of the Fund [for fiscal year 1993] may not 
be more than an amount equal to--
          (1) 75 percent of the amount made available under 
        sections 106(k) and 48101-48103 of this title for that 
        fiscal year; less
          (2) the amount made available under sections 48101-
        48103 of this title for that fiscal year.
  [(c) Limitation for Fiscal Years 1994-1996.--The amount 
appropriated from the Trust Fund for the purposes of paragraphs 
(1) and (2) of subsection (a) for each of fiscal years 1994, 
1995, and 1996 may not exceed the lesser of--
          [(1) 50 percent of the amount of funds made available 
        under sections 48101-48103 of this title for such 
        fiscal year; or
          [(2) (A) 70 percent of the amount of funds made 
        available under sections 106(k) and 48101-48103 of this 
        title for such fiscal year; less
          [(B) the amount of funds made available under 
        sections 48101-48103 of this title for such fiscal 
        year.]

Sec. 48108. Availability and uses of amounts

  (a) Availability of Amounts.--Amounts equal to the amounts 
authorized under sections 48101-48105 of this title remain in 
the Airport and Airway Trust Fund established under section 
9502 of the Internal Revenue Code of 1986 (26 U.S.C. 9502) 
until appropriated for the purposes of sections 48101-48105.
  (b) Limitations on Uses.--
          (1) Amounts in the Fund may be appropriated only to 
        carry out a program or activity referred to in this 
        chapter [49 U.S.C. 48101 et seq.].
          (2) Amounts in the Fund may be appropriated for 
        administrative expenses of the Department of 
        Transportation or a component of the Department only to 
        the extent authorized by section 48104 of this title.
  (c) Limitation on Obligating or Expending Amounts.--In a 
fiscal year beginning after September 30, 1996, the Secretary 
of Transportation may obligate or expend an amount appropriated 
out of the Fund under section 48104 of this title only if a law 
expressly amends section 48104.

Sec. 48111. Funding Proposals

  (a) Introduction and Referral.--Within 15 days (not counting 
any day on which either House is not in session) after a 
funding proposal is submitted to the House of Representatives 
and the Senate by the Secretary of Transportation under section 
674(c) of the Air Traffic Management System Performance 
Improvement Act of 1996, an implementing bill with respect to 
such funding proposal shall be introduced in the House by the 
majority leader of the House, for himself and the minority 
leader of the House, or by Members of the House designated by 
the majority leader and minority leader of the House; and shall 
be introduced in the Senate by the majority leader of the 
Senate, for himself and the minority leader of the Senate, or 
by Members of the Senate designated by the majority leader and 
minority leader of the Senate. The implementing bill shall be 
referred by the Presiding Officers of the respective Houses to 
the appropriate committee, or, in the case of a bill containing 
provisions within the jurisdiction of two or more committees, 
jointly to such committees for consideration of those 
provisions within their respective jurisdictions.
  (b) Consideration in the House of Representatives.--
          (1) Referral and reporting.--Any committee of the 
        House of Representatives to which an implementing bill 
        is referred shall report it, with or without 
        recommendation, not later than the 45th calendar day of 
        session after the date of its introduction. If any 
        committee fails to report the bill within that period, 
        it is in order to move that the House discharge the 
        committee from further consideration of the bill. A 
        motion to discharge may be made only by a Member 
        favoring the bill (but only at a time or place 
        designated by the Speaker in the legislative schedule 
        of the day after the calendar day on which the Member 
        offering the motion announces to the House his 
        intention to do so and the form of the motion), the 
        motion is highly privileged. Debate thereon shall be 
        limited to not more than one hour, the time to be 
        divided in the House equally between a proponent and an 
        opponent. The previous question shall be considered as 
        ordered on the motion to its adoption without 
        intervening motion. A motion to reconsider the vote by 
        which the motion is agreed to or disagreed to shall not 
        be in order.
          (2) Consideration of implementing bill.--After an 
        implementing bill is reported or a committee has been 
        discharged from further consideration, it is in order 
        to move that the House resolve into the Committee of 
        the Whole House on the State of the Union for 
        consideration of the bill. If reported and the report 
        has been available for at least one calendar day, all 
        points of order against the bill and against 
        consideration of the bill are waived. If discharged, 
        all points of order against the bill and against 
        consideration of the bill are waived. The motion is 
        highly privileged. A motion to reconsider the vote by 
        which the motion is agreed to or disagreed to shall not 
        be in order. During consideration of the bill in the 
        committee of the Whole, the first reading of the bill 
        shall be dispensed with. General debate shall proceed, 
        shall be confined to the bill, and shall not exceed one 
        hour equally divided and controlled by a proponent and 
        an opponent of the bill. The bill shall be considered 
        as read for amendment under the five-minute rule. Only 
        one motion to rise shall be in order, except if offered 
        by the manager. No amendment to the bill is in order 
        except an amendment that is relevant to aviation 
        funding and the Federal Aviation Administration. 
        Consideration of the bill for amendment shall not 
        exceed one hour excluding time for recorded votes and 
        quorum calls. No amendment shall be subject to further 
        amendment, except pro forma amendments for the purposes 
        of debate only. At the conclusion of the consideration 
        of the bill for amendment, the Committee shall rise and 
        report the bill to the House with such amendments as 
        may have been adopted. The previous question shall be 
        considered as ordered on the bill and amendments 
        thereto to final passage without intervening motion. A 
        motion to reconsider the vote on passage of the bill 
        shall not be in order.
          (3) Appeals of rulings.--Appeals from decision of the 
        Chair regarding application of the rules of the House 
        of Representatives to the procedure relating to an 
        implementing bill shall be decided without debate.
          (4) Consideration of more than one implementing 
        bill.--It shall not be in order to consider under this 
        subsection more than one implementing bill under this 
        section, except for consideration of a similar Senate 
        bill (unless the House has already rejected an 
        implementing bill) or more than one motion to discharge 
        described in paragraph (1) with respect to an 
        implementing bill.
  (c) Consideration in the Senate.--
          (1) Referral and reporting.--An implementing bill 
        introduced in the Senate shall be referred to the 
        appropriate committee or committees. A committee to 
        which an implementing bill has been referred shall 
        report the bill not later than the 45th day of session 
        following the date of introduction of that bill. If any 
        committee fails to report the bill within that period, 
        that committee shall be automatically discharged from 
        further consideration of the bill and the bill shall be 
        placed on the Calendar.
          (2) Implementing bill from House.--When the Senate 
        receives from the House of Representatives an 
        implementing bill, the bill shall not be referred to 
        committee and shall be placed on the Calendar.
          (3) Consideration of single implementing bill.--After 
        the Senate has proceeded to the consideration of an 
        implementing bill under this subsection, then no other 
        implementing bill originating in that same House shall 
        be subject to the procedures set forth in this 
        subsection.
          (4) Amendments.--No amendment to the bill is in order 
        except an amendment that is relevant to aviation 
        funding and the Federal Aviation Administration. 
        Consideration of the bill for amendment shall not 
        exceed one hour excluding time for recorded votes and 
        quorum calls. No amendment shall be subject to further 
        amendment, except for perfecting amendments.
          (5) Motion nondebatable.--A motion to proceed to 
        consideration of an implementing bill under this 
        subsection shall not be debatable. It shall not be in 
        order to move to reconsider the vote by which the 
        motion to proceed was adopted or rejected, although 
        subsequent motions to proceed may be made under this 
        paragraph.
          (6) Limit on consideration.--
                  (A) After no more than 20 hours of 
                consideration of an implementing bill, the 
                Senate shall proceed, without intervening 
                action or debate (except as permitted under 
                paragraph (9)), to vote on the final 
                disposition thereof to the exclusion of all 
                amendments not then pending and to the 
                exclusion of all motions, except a motion to 
                reconsider or table.
                  (B) The time for debate on the implementing 
                bill shall be equally divided between the 
                Majority Leader and the Minority Leader or 
                their designees.
          (7) Debate of amendments.--Debate on any amendment to 
        an implementing bill shall be limited to one hour, 
        equally divided and controlled by the Senator proposing 
        the amendment and the majority manager, unless the 
        majority manager is in favor of the amendment, in which 
        case the minority manager shall be in control of the 
        time in opposition.
          (8) No motion to recommit.--A motion to recommit an 
        implementing bill shall not be in order.
          (9) Disposition of senate bill.--If the Senate has 
        read for the third time an implementing bill that 
        originated in the Senate, then it shall be in order at 
        any time thereafter to move to proceed to the 
        consideration of an implementing bill for the same 
        special message received from the House of 
        Representatives and placed on the Calendar pursuant to 
        paragraph (2), strike all after the enacting clause, 
        substitute the text of the Senate implementing bill, 
        agree to the Senate amendment, and vote on final 
        disposition of the House implementing bill, all without 
        any intervening action or debate.
          (10) Consideration of house message.--Consideration 
        in the Senate of all motions, amendments, or appeals 
        necessary to dispose of a message from the House of 
        Representatives on an implementing bill shall be 
        limited to not more than 4 hours. Debate on each motion 
        or amendment shall be limited to 30 minutes. Debate on 
        any appeal or point of order that is submitted in 
        connection with the disposition of the House message 
        shall be limited to 20 minutes. Any time for debate 
        shall be equally divided and controlled by the 
        proponent and the majority manager, unless the majority 
        manager is a proponent of the motion, amendment, 
        appeal, or point of order, in which case the minority 
        manager shall be in control of the time in opposition.
  (d) Consideration in Conference.--
          (1) Convening of conference.--In the case of 
        disagreement between the 2 Houses of Congress with 
        respect to an implementing bill passed by both Houses, 
        conferees should be promptly appointed and a conference 
        promptly convened, if necessary.
          (2) House consideration.--Notwithstanding any other 
        rule of the House of Representatives, it shall be in 
        order to consider the report of a committee of 
        conference relating to an implementing bill if such 
        report has been available for one calendar day 
        (excluding Saturdays, Sundays, and legal holidays, 
        unless the House is in session on such a day) and the 
        accompanying statement shall have been filed in the 
        House.
          (3) Senate consideration.--Consideration in the 
        Senate of the conference report and any amendments in 
        disagreement on an implementing bill shall be limited 
        to not more than 4 hours equally divided and controlled 
        by the Majority Leader and the Minority Leader or their 
        designees. A motion to recommit the conference report 
        is not in order.
  (e) Definitions.--For purposes of this section--
          (1) Implementing bill.--The term ``implementing 
        bill'' means only a bill of either House of Congress 
        which is introduced as provided in subsection (a) with 
        respect to one or more Federal Aviation Administration 
        funding proposals which contains changes in existing 
        laws or new statutory authority required to implement 
        such funding proposal or proposals.
          (2) Funding proposal.--The term ``funding proposal'' 
        means a proposal to provide interim or permanent 
        funding for operations of the Federal Aviation 
        Administration.
  (f) Rules of House of Representatives and Senate.--This 
section is enacted by the Congress--
          (1) as an exercise of the rulemaking power of the 
        House of Representatives and the Senate, respectively, 
        and as such they are deemed a part of the rules of each 
        House, respectively, but applicable only with respect 
        to the procedure to be followed in that House in the 
        case of implementing bills described in subsection (d); 
        and they supersede other rules only to the extent that 
        they are inconsistent therewith; and
          (2) with full recognition of the constitutional right 
        of either House to change the rules (so far as relating 
        to the procedure of that House) at any time, in the 
        same manner and to the same extent as in the case of 
        any other rule of that House.

   CHAPTER 482--ADVANCE APPROPRIATIONS FOR AIRPORT AND AIRWAY TRUST 
                               FACILITIES

Sec.
48201. Advance appropriations.

Sec. 48201. Advance appropriations

  (a) Multiyear Authorizations.--Beginning with fiscal year 
1998, any authorization of appropriations for an activity for 
which amounts are to be appropriated from the Airport and 
Airway Trust Fund established under section 9502 of the 
Internal Revenue Code of 1986 shall provide funds for a period 
of not less than 3 fiscal years unless the activity for which 
appropriations are authorized is to be concluded before the end 
of that period.
  (b) Multiyear Appropriations.--Beginning with fiscal year 
1998, amounts appropriated from the Airport and Airway Trust 
Fund shall be appropriated for periods of 3 fiscal years rather 
than annually.

            CHAPTER 701--COMMERCIAL SPACE LAUNCH ACTIVITIES

Sec. 70101. Findings and purposes

  (a) Findings.--Congress finds that--
          (1) the peaceful uses of outer space continue to be 
        of great value and to offer benefits to all mankind;
          (2) private applications of space technology have 
        achieved a significant level of commercial and economic 
        activity and offer the potential for growth in the 
        future, particularly in the United States;
          (3) new and innovative equipment and services are 
        being sought, produced, and offered by entrepreneurs in 
        telecommunications, information services, microgravity 
        research, and remote sensing technologies;
          (4) the private sector in the United States has the 
        capability of developing and providing commercial space 
        transportation services, including in-space 
        transportation activities and private satellite 
        launching and associated services that would complement 
        the launching and associated services now available 
        from the United States Government;
          (5) the development of [commercial launch vehicles] 
        commercial space transportation including commercial 
        launch vehicles, in-space transportation activities, 
        reentry vehicles, and associated services would enable 
        the United States to retain its competitive position 
        internationally, contributing to the national interest 
        and economic well-being of the United States;
          (6) providing [launch] launch, in-space 
        transportation, and reentry services by the private 
        sector is consistent with the national security and 
        foreign policy interests of the United States and would 
        be facilitated by stable, minimal, and appropriate 
        regulatory guidelines that are fairly and expeditiously 
        applied;
          (7) the United States should encourage private sector 
        [launches] launches, in-space transportation 
        activities, reentries and associated services and, only 
        to the extent necessary, regulate those [launches] 
        launches, in-space transportation activities, reentries 
        and services to ensure compliance with international 
        obligations of the United States and to protect the 
        public health and safety, safety of property, and 
        national security and foreign policy interests of the 
        United States;
          (8) space transportation, including the establishment 
        and operation of launch [sites and complementary 
        facilities, the providing of launch] sites, in-space 
        transportation control sites, reentry sites, and 
        complementary facilities, the providing of launch, in-
        space transportation, and reentry services, the 
        establishment of support facilities, and the providing 
        of support services, is an important element of the 
        transportation system of the United States, and in 
        connection with the commerce of the United States there 
        is a need to develop a strong space transportation 
        infrastructure with significant private sector 
        involvement; and
          (9) the participation of State governments in 
        encouraging and facilitating private sector involvement 
        in space-related activity, particularly through the 
        establishment of a space transportation-related 
        infrastructure, including launch sites, in-space 
        transportation control sites, reentry sites, 
        complementary facilities, and launch site support 
        facilities, is in the national interest and is of 
        significant public benefit.
  (b) Purposes.--The purposes of this chapter are--
          (1) to promote economic growth and entrepreneurial 
        activity through use of the space environment for 
        peaceful purposes;
          (2) to encourage the United States private sector to 
        provide [launch vehicles] commercial space 
        transportation services, including launch vehicles, in-
        space transportation activities, reentry vehicles, and 
        associated services by--
                  (A) simplifying and expediting the issuance 
                and transfer of commercial launch licenses; and
                  (B) facilitating and encouraging the use of 
                Government-developed space technology;
          (3) to provide that the Secretary of Transportation 
        is to oversee and coordinate the conduct of commercial 
        [launch] launch, in-space transportation vehicle, and 
        reentry operations, issue and transfer [commercial 
        launch] licenses authorizing those operations, and 
        protect the public health and safety, safety of 
        property, and national security and foreign policy 
        interests of the United States; and
          (4) to facilitate the strengthening and expansion of 
        the United States space transportation infrastructure, 
        including the enhancement of United States launch sites 
        and launch-site support facilities, in-space 
        transportation vehicle control facilities, and 
        development of reentry sites with Government, State, 
        and private sector involvement, to support the full 
        range of United States space-related activities.

Sec. 70102. Definitions

  In this chapter--
          (1) ``citizen of the United States'' means--
                  (A) an individual who is a citizen of the 
                United States;
                  (B) an entity organized or existing under the 
                laws of the United States or a State; or
                  (C) an entity organized or existing under the 
                laws of a foreign country if the controlling 
                interest (as defined by the Secretary of 
                Transportation) is held by an individual or 
                entity described in subclause (A) or (B) of 
                this clause.
          (2) ``executive agency'' has the same meaning given 
        that term in section 105 of title 5.
          (3) ``launch'' means to place or try to place a 
        launch vehicle and any payload from Earth, including a 
        reentry vehicle and its payload, if any--
                  (A) in a suborbital trajectory;
                  (B) in Earth orbit in outer space; or
                  (C) otherwise in outer space.
          (4) ``launch property'' means an item built for, or 
        used in, the launch preparation or launch of a launch 
        vehicle.
          (5) ``launch services'' means--
                  (A) activities involved in the preparation of 
                a launch vehicle and payload for launch; and
                  (B) the conduct of a launch.
          (6) ``launch site'' means the location on Earth from 
        which a launch takes place (as defined in a license the 
        Secretary issues or transfers under this chapter) and 
        necessary facilities.
          (7) ``launch vehicle'' means--
                  (A) a vehicle built to operate in, or place a 
                payload in, outer space; and
                  (B) a suborbital rocket.
          (8) ``payload'' means an [object] object, including a 
        reentry vehicle and its payload, if any, that a person 
        undertakes to place in outer space by means of a launch 
        vehicle, including components of the vehicle 
        specifically designed or adapted for that object.
          (9) ``in-space transportation vehicle'' means any 
        vehicle designed to operate in space and designed to 
        transport any payload or object substantially intact 
        from one orbit to another orbit.
          (10) ``in-space transportation services'' means--
                  (A) those activities involved in the direct 
                transportation or attempted transportation of a 
                payload or object from one orbit to another;
                  (B) the procedures, actions, and activities 
                necessary for conduct of those transportation 
                services; and
                  (C) the conduct of transportation services.
          (11) ``in-space transportation control site'' means a 
        location from which an in-space transportation vehicle 
        is controlled or operated (as such terms may be defined 
        in any license the Secretary issues or transfers under 
        this chapter).
          (12) ``obtrusive space advertising'' means 
        advertising in outer space that is capable of being 
        recognized by a human being on the surface of the earth 
        without the aid of a telescope or other technological 
        device.
          (13) ``reenter'' and ``reentry'' mean to return 
        purposefully, or attempt to return, a reentry vehicle 
        and payload, if any, from Earth orbit or outer space to 
        Earth.
          (14) ``reentry services'' means--
                  (A) activities involved in the preparation of 
                a reentry vehicle and its payload, if any, for 
                reentry; and
                  (B) the conduct of a reentry.
                  (15) ``reentry site'' means the location on 
                Earth to which a reentry vehicle is intended to 
                return (as defined in a license the Secretary 
                issues or transfers under this chapter).
          (16) ``reentry vehicle'' means any vehicle designed 
        to return substantially intact from Earth orbit or 
        outer space to Earth.'';
          [(9)] (17) ``person'' means an individual and an 
        entity organized or existing under the laws of a State 
        or country.
          [(10)] (18) ``State'' means a State of the United 
        States, the District of Columbia, and a territory or 
        possession of the United States.
          [(11)] (19) ``third party'' means a person except--
                  (A) the United States Government or the 
                Government's contractors or subcontractors 
                involved in launch [services] services, in-
                space transportation activities, or reentry 
                services;
                  (B) a licensee or transferee under this 
                chapter;
                  (C) a licensee's or transferee's contractors, 
                subcontractors, or customers involved in launch 
                [services] services, in-space transportation 
                activities, or reentry services; or
                  (D) the customer's contractors or 
                subcontractors involved in launch [services] 
                services, in-space transportation activities, 
                or reentry services.
          [(12)] (20) ``United States'' means the States of the 
        United States, the District of Columbia, and the 
        territories and possessions of the United States.

Sec. 70103. General authority

  (a) General.--The Secretary of Transportation shall carry out 
this chapter.
  (b) Facilitating Commercial [Launches] Space Activities.--In 
carrying out this chapter, the Secretary shall--
          (1) encourage, facilitate, and promote [commercial 
        space launches] commercial space transportation 
        services by the private sector; and
          (2) take actions to facilitate private sector 
        involvement in commercial space transportation 
        activity, and to promote public-private partnerships 
        involving the United States Government, State 
        governments, and the private sector to build, expand, 
        modernize, or operate [a space launch] space 
        transportation infrastructure.
  (c) Executive Agency Assistance.--When necessary, the head of 
an executive agency shall assist the Secretary in carrying out 
this chapter.

Sec. 70104. [Restrictions on launches and operations] Restrictions on 
                    launches, in-space transportation activities, 
                    operations, and reentries

  (a) License Requirement.--A license issued or transferred 
under this chapter is required for the following:
          (1) for a person to launch a launch vehicle or to 
        operate a launch [site] site, an in-space 
        transportation operations site, reentry site, or 
        reenter a reentry vehicle, in the United States.
          (2) for a citizen of the United States (as defined in 
        section 70102(1)(A) or (B) of this title) to launch a 
        launch vehicle or to operate a launch [site] site, an 
        in-space transportation operations site, reentry site, 
        or reenter a reentry vehicle, outside the United 
        States.
          (3) for a citizen of the United States (as defined in 
        section 70102(1)(C) of this title) to launch a launch 
        vehicle or to operate a launch [site] site, an in-space 
        transportation operations site, reentry site, or 
        reenter a reentry vehicle, outside the United States 
        and outside the territory of a foreign country unless 
        there is an agreement between the United States 
        Government and the government of the foreign country 
        providing that the government of the foreign country 
        has jurisdiction over the [launch or operation.] 
        launch, in-space transportation activity, or reentry 
        operation.
          (4) for a citizen of the United States (as defined in 
        section 70102(1)(C) of this title) to launch a launch 
        vehicle or to operate a launch [site] site, an in-space 
        transportation operations site, reentry site, or 
        reenter a reentry vehicle, in the territory of a 
        foreign country if there is an agreement between the 
        United States Government and the government of the 
        foreign country providing that the United States 
        Government has jurisdiction over the [launch or 
        operation.] launch, in-space transportation activity, 
        or reentry operation.
  [(b) Compliance With Payload Requirements.--The holder of a 
launch license under this chapter may launch a payload only if 
the payload complies with all requirements of the laws of the 
United States related to launching a payload.]
  (b) Compliance With Payload Requirements._The holder of a 
license under this chapter may launch a payload, operate an in-
space transportation vehicle, or reenter a payload only if the 
payload or vehicle complies with all requirements of the laws 
of the United States related to launching a payload, operating 
an in-space transportation vehicle, or reentering a payload.
  (c) [Preventing Launches.--]  Preventing Launches, In-space 
Transportation Activities, or Re-entries._The Secretary of 
Transportation shall establish whether all required licenses, 
authorizations, and permits required for a payload have been 
obtained. If no license, authorization, or permit is required, 
the Secretary may prevent the [launch] launch, in-space 
transportation activity, or reentry if the Secretary decides 
the [launch] launch, in-space transportation activity, or 
reentry would jeopardize the public health and safety, safety 
of property, or national security or foreign policy interest of 
the United States.

Sec. 70105. License applications and requirements

  (a) Applications.--A person may apply to the Secretary of 
Transportation for a license or transfer of a license under 
this chapter in the form and way the Secretary prescribes. 
Consistent with the public health and safety, safety of 
property, and national security and foreign policy interests of 
the United States, the Secretary, not later than 180 days after 
receiving an application, shall issue or transfer a license if 
the Secretary decides in writing that the applicant complies, 
and will continue to comply, with this chapter and regulations 
prescribed under this chapter. The Secretary shall inform the 
applicant of any pending issue and action required to resolve 
the issue if the Secretary has not made a decision not later 
than 120 days after receiving an application.
  (b) Requirements.--
          (1) Except as provided in this subsection, all 
        requirements of the laws of the United States 
        applicable to the launch of a launch vehicle or the 
        operation of a launch [site] site, an in-space 
        transportation control site, or a reentry site or the 
        reentry of a reentry vehicle, are requirements for a 
        license under this chapter.
          (2) The Secretary may prescribe--
                  (A) any term necessary to ensure compliance 
                with this chapter, including on-site 
                verification that a [launch or operation] 
                launch, in-space transportation activity, 
                operation, or reentry complies with 
                representations stated in the application;
                  (B) an additional requirement necessary to 
                protect the public health and safety, safety of 
                property, national security interests, and 
                foreign policy interests of the United States; 
                and
                  (C) by regulation that a requirement of a law 
                of the United States not be a requirement for a 
                license if the Secretary, after consulting with 
                the head of the appropriate executive agency, 
                decides that the requirement is not necessary 
                to protect the public health and safety, safety 
                of property, and national security and foreign 
                policy interests of the United States.
          (3) The Secretary may waive a requirement for an 
        individual applicant if the Secretary decides that the 
        waiver is in the public interest and will not 
        jeopardize the public health and safety, safety of 
        property, and national security and foreign policy 
        interests of the United States.
  (c) Procedures and Timetables.--The Secretary shall establish 
procedures and timetables that expedite review of a license 
application and reduce the regulatory burden for an applicant.

Sec. 70106. Monitoring activities

  (a) General Requirements.--A licensee under this chapter must 
allow the Secretary of Transportation to place an officer or 
employee of the United States Government or another individual 
as an observer at a launch [site] site, in-space transportation 
control site, or reentry site the licensee uses, at a 
production facility or assembly site a contractor of the 
licensee uses to produce or assemble a launch [vehicle,] 
vehicle, in-space transportation vehicle, or reentry vehicle or 
at a site at which a payload is integrated with a launch 
[vehicle.] vehicle, in-space transportation vehicle, or reentry 
vehicle. The observer will monitor the activity of the licensee 
or contractor at the time and to the extent the Secretary 
considers reasonable to ensure compliance with the license or 
to carry out the duties of the Secretary under section 70104(c) 
of this title. A licensee must cooperate with an observer 
carrying out this subsection.
  (b) Contracts.--To the extent provided in advance in an 
appropriation law, the Secretary may make a contract with a 
person to carry out subsection (a) of this section.

Sec. 70108. [Prohibition, suspension, and end of launches and operation 
                    of launch sites] Prohibition, suspension, and end 
                    of launches, in-space transportation activities, 
                    reentries, or operation of launch sites, in-space 
                    transportation control sites, or reentry sites

  (a) General Authority.--The Secretary of Transportation may 
prohibit, suspend, or end immediately the launch of a launch 
vehicle or the operation of a launch [site] site, in-space 
transportation control site, in-space transportation activity, 
or reentry site, or reentry of a reentry vehicle, licensed 
under this chapter if the Secretary decides the [launch or 
operation] launch, in-space transportation activity, operation, 
or reentry is detrimental to the public health and safety, the 
safety of property, or a national security or foreign policy 
interest of the United States.
  (b) Effective Periods of Orders.--An order under this section 
takes effect immediately and remains in effect during a review 
under section 70110 of this title.

Sec. 70109. [Preemption of scheduled launches] Preemption of scheduled 
                    launches, in-space transportation activities, or 
                    reentries

  (a) General.--With the cooperation of the Secretary of 
Defense and the Administrator of the National Aeronautics and 
Space Administration, the Secretary of Transportation shall act 
to ensure that a launch or reentry of a payload is not 
preempted from access to a United States Government launch 
[site] site, reentry site, or launch property, nor shall an in-
space transportation activity or operation be preempted, except 
for imperative national need, when a launch date commitment or 
reentry date commitment from the Government has been obtained 
for a launch or reentry licensed under this chapter. A licensee 
or transferee preempted from access to a launch [site] site, 
reentry site, or launch property does not have to pay the 
Government any amount for launch [services] services, or 
services related to a reentry, attributable only to the 
scheduled launch or reentry prevented by the preemption. A 
licensee or transferee preempted from access to a reentry site 
does not have to pay the Government agency responsible for the 
preemption any amount for reentry services attributable only to 
the scheduled reentry prevented by the preemption.
  (b) Imperative National Need Decisions.--In consultation with 
the Secretary of Transportation, the Secretary of Defense or 
the Administrator shall decide when an imperative national need 
requires preemption under subsection (a) of this section. That 
decision may not be delegated.
  (c) Reports.--In cooperation with the Secretary of 
Transportation, the Secretary of Defense or the Administrator, 
as appropriate, shall submit to Congress not later than 7 days 
after a decision to preempt under subsection (a) of this 
section, a report that includes an explanation of the 
circumstances justifying the decision and a schedule for 
ensuring the prompt launching or reentry of a preempted 
payload.

Sec. 70109a. Space advertising

  (a) Licensing._Notwithstanding the provisions of this chapter 
or any other provision of law, the Secretary shall not--
          (1) issue or transfer a license under this chapter; 
        or
          (2) waive the license requirements of this chapter;
for the launch of a payload containing any material to be used 
for the purposes of obtrusive space advertising.
  (b) Launching._No holder of a license under this chapter may 
launch a payload containing any material to be used for 
purposes of obtrusive space advertising on or after the date of 
enactment of the National Aeronautics and Space Administration 
Authorization Act, Fiscal Year 1996.
  (c) Commercial Space Advertising._Nothing in this section 
shall apply to nonobtrusive commercial space advertising, 
including advertising on commercial space transportation 
vehicles, space infrastructure, payloads, space launch 
facilities, and launch support facilities.

Sec. 70110. Administrative hearings and judicial review

  (a) Administrative Hearings.--The Secretary of Transportation 
shall provide an opportunity for a hearing on the record to--
          (1) an applicant under this chapter, for a decision 
        of the Secretary under section 70105(a) of this title 
        to issue or transfer a license with terms or deny the 
        issuance or transfer of a license;
          (2) an owner or operator of a payload under this 
        chapter, for a decision of the Secretary under section 
        70104(c) of this title to prevent the [launch] launch, 
        in-space transportation activity, or reentry of the 
        payload; and
          (3) a licensee under this chapter, for a decision of 
        the Secretary under--
                  (A) section 70107 (b) or (c) of this title to 
                modify, suspend, or revoke a license; or
                  (B) section 70108(a) of this title to 
                prohibit, suspend, or end a launch or operation 
                of a launch [site] site, in-space 
                transportation control site, in-space 
                transportation activity, reentry site, or 
                reentry of a reentry vehicle, licensed by the 
                Secretary.
  (b) Judicial Review.--A final action of the Secretary under 
this chapter is subject to judicial review as provided in 
chapter 7 of title 5.

Sec. 70111. Acquiring United States Government property and services

  (a) General Requirements and Considerations.--
          (1) The Secretary of Transportation shall facilitate 
        and encourage the acquisition by the private sector and 
        State governments of--
                  (A) launch or reentry property of the United 
                States Government that is excess or otherwise 
                is not needed for public use; and
                  (B) launch services, in-space transportation 
                activities, or reentry services, including 
                utilities, of the Government otherwise not 
                needed for public use.
          (2) In acting under paragraph (1) of this subsection, 
        the Secretary shall consider the commercial 
        availability on reasonable terms of substantially 
        equivalent launch or reentry  property or launch 
        [services] services, in-space transportation 
        activities, or reentry services, from a domestic 
        source.
  (b) Price.--
          (1) In this subsection, ``direct costs'' means the 
        actual costs that--
                  (A) can be associated unambiguously with a 
                commercial [launch] launch, in-space 
                transportation activity, or reentry effort; and
                  (B) the Government would not incur if there 
                were no commercial [launch] launch, in-space 
                transportation activity, or reentry effort.
          (2) In consultation with the Secretary, the head of 
        the executive agency providing the property or service 
        under subsection (a) of this section shall establish 
        the price for the property or service. The price for--
                  (A) acquiring launch property by sale or 
                transaction instead of sale is the fair market 
                value;
                  (B) acquiring launch property (except by sale 
                or transaction instead of sale) is an amount 
                equal to the direct costs, including specific 
                wear and tear and property damage, the 
                Government incurred because of acquisition of 
                the property; and
                  (C) launch [services] services, in-space 
                transportation activities or services, or 
                reentry services is an amount equal to the 
                direct costs, including the basic pay of 
                Government civilian and contractor personnel, 
                the Government incurred because of acquisition 
                of the services.
  (c) Collection by Secretary.--The Secretary may collect a 
payment under this section with the consent of the head of the 
executive agency establishing the price. Amounts collected 
under this subsection shall be deposited in the Treasury. 
Amounts (except for excess launch property) shall be credited 
to the appropriation from which the cost of providing the 
property or services was paid.
  [(d) Collection by Other Governmental Heads.--The head of a 
department, agency, or instrumentality of the Government may 
collect a payment for an activity involved in producing a 
launch vehicle or its payload for launch if the activity was 
agreed to by the owner or manufacturer of the launch vehicle or 
payload.]
  (d) Collection by Other Governmental Heads._The head of a 
department, agency, or instrumentality of the Government may 
collect a payment for any activity involved in producing a 
launch vehicle, in-space transportation vehicle, or reentry 
vehicle or its payload for launch, in-space transportation 
activity, or reentry if the activity was agreed to by the owner 
or manufacturer of the launch vehicle, in-space transportation 
vehicle, reentry vehicle, or payload.

Sec. 70112. Liability insurance and financial responsibility 
                    requirements

  (a) General Requirements.--
          (1) When a license is issued or transferred under 
        this chapter, the licensee or transferee shall obtain 
        liability insurance or demonstrate financial 
        responsibility in amounts to compensate for the maximum 
        probable loss from claims by--
                  (A) a third party for death, bodily injury, 
                or property damage or loss resulting from an 
                activity carried out under the license; and
                  (B) the United States Government against a 
                person for damage or loss to Government 
                property resulting from an activity carried out 
                under the license.
          (2) The Secretary of Transportation shall determine 
        the amounts required under paragraph (1)(A) and (B) of 
        this subsection, after consulting with the 
        Administrator of the National Aeronautics and Space 
        Administration, the Secretary of the Air Force, and the 
        heads of other appropriate executive agencies.
          (3) For the total claims related to one [launch,] 
        launch or reentry, or to the operations of each in-
        space transportation vehicle, a licensee or transferee 
        is not required to obtain insurance or demonstrate 
        financial responsibility of more than--
                  (A)(i) $500,000,000 under paragraph (1)(A) of 
                this subsection; or
                  (ii) $100,000,000 under paragraph (1)(B) of 
                this subsection; or
                  (B) the maximum liability insurance available 
                on the world market at reasonable cost if the 
                amount is less than the applicable amount in 
                clause (A) of this paragraph.
          (4) An insurance policy or demonstration of financial 
        responsibility under this subsection shall protect the 
        following, to the extent of their potential liability 
        for involvement in launch [services,] services, in-
        space transportation activities, or reentry services at 
        no cost to the Government:
                  (A) the Government.
                  (B) executive agencies and personnel, 
                contractors, and subcontractors of the 
                Government.
                  (C) contractors, subcontractors, and 
                customers of the licensee or transferee.
                  (D) contractors and subcontractors of the 
                customer.
  (b) Reciprocal Waiver of Claims.--
          (1) A license issued or transferred under this 
        chapter shall contain a provision requiring the 
        licensee or transferee to make a reciprocal waiver of 
        claims with its contractors, subcontractors, and 
        customers, and contractors and subcontractors of the 
        customers, involved in launch [services] services, in-
        space transportation activities, or reentry services 
        under which each party to the waiver agrees to be 
        responsible for property damage or loss it sustains, or 
        for personal injury to, death of, or property damage or 
        loss sustained by its own employees resulting from an 
        activity carried out under the applicable license.
          (2) The Secretary of Transportation shall make, for 
        the Government, executive agencies of the Government 
        involved in launch [services,] services, in-space 
        transportation activities, or reentry services and 
        contractors and subcontractors involved in launch 
        [services,] services, in-space transportation 
        activities, or reentry services a reciprocal waiver of 
        claims with the licensee or transferee, contractors, 
        subcontractors, and customers of the licensee or 
        transferee, and contractors and subcontractors of the 
        customers, involved in launch [services] services, in-
        space transportation activities, or reentry services 
        under which each party to the waiver agrees to be 
        responsible for property damage or loss it sustains, or 
        for personal injury to, death of, or property damage or 
        loss sustained by its own employees resulting from an 
        activity carried out under the applicable license. The 
        waiver applies only to the extent that claims are more 
        than the amount of insurance or demonstration of 
        financial responsibility required under subsection 
        (a)(1)(B) of this section. After consulting with the 
        Administrator and the Secretary of the Air Force, the 
        Secretary of Transportation may waive, for the 
        Government and a department, agency, and 
        instrumentality of the Government, the right to recover 
        damages for damage or loss to Government property to 
        the extent insurance is not available because of a 
        policy exclusion the Secretary of Transportation 
        decides is usual for the type of insurance involved.
  (c) Determination of Maximum Probable Losses.--The Secretary 
of Transportation shall determine the maximum probable losses 
under subsection (a)(1)(A) and (B) of this section associated 
with an activity under a license not later than 90 days after a 
licensee or transferee requires a determination and submits all 
information the Secretary requires. The Secretary shall amend 
the determination as warranted by new information.
  (d) Annual Report.--
          (1) Not later than November 15 of each year, the 
        Secretary of Transportation shall submit to the 
        Committee on Commerce, Science, and Transportation of 
        the Senate and the Committee on [Science, Space, and 
        Technology] Science of the House of Representatives a 
        report on current determinations made under subsection 
        (c) of this section related to all issued licenses and 
        the reasons for the determinations.
          (2) Not later than May 15 of each year, the Secretary 
        of Transportation shall review the amounts specified in 
        subsection (a)(3)(A) of this section and submit a 
        report to Congress that contains proposed adjustments 
        in the amounts to conform with changed liability 
        expectations and availability of insurance on the world 
        market. The proposed adjustment takes effect 30 days 
        after a report is submitted.
  (e) [Launches] Launches, In-space Transportation Activities, 
or Reentries Involving Government Facilities and Personnel.--
The Secretary of Transportation shall establish requirements 
consistent with this chapter for proof of financial 
responsibility and other assurances necessary to protect the 
Government and its executive agencies and personnel from 
liability, death, bodily injury, or property damage or loss as 
a result of a launch or operation of a launch [site] site, in-
space transportation control site, or control or an in-space 
transportation vehicle or activity, or reentry site or a 
reentry involving a facility or personnel of the Government. 
The Secretary may not relieve the Government of liability under 
this subsection for death, bodily injury, or property damage or 
loss resulting from the willful misconduct of the Government or 
its agents.
  (f) Collection and Crediting Payments.--The head of a 
department, agency, or instrumentality of the Government shall 
collect a payment owed for damage or loss to Government 
property under its jurisdiction or control resulting from an 
activity carried out under a license issued or transferred 
under this chapter. The payment shall be credited to the 
current applicable appropriation, fund, or account of the 
department, agency, or instrumentality.

Sec. 70113. Paying claims exceeding liability insurance and financial 
                    responsibility requirements

  (a) General Requirements.--
          (1) To the extent provided in advance in an 
        appropriation law or to the extent additional 
        legislative authority is enacted providing for paying 
        claims in a compensation plan submitted under 
        subsection (d) of this section, the Secretary of 
        Transportation shall provide for the payment by the 
        United States Government of a successful claim 
        (including reasonable litigation or settlement 
        expenses) of a third party against a licensee or 
        transferee under this chapter, a contractor, 
        subcontractor, or customer of the licensee or 
        transferee, or a contractor or subcontractor of a 
        customer, resulting from an activity carried out under 
        the license issued or transferred under this chapter 
        for death, bodily injury, or property damage or loss 
        resulting from an activity carried out under the 
        license. However, claims may be paid under this section 
        only to the extent the total amount of successful 
        claims related to one [launch--] launch, operation of 
        one in-space transportation vehicle, or one reentry--
                  (A) is more than the amount of insurance or 
                demonstration of financial responsibility 
                required under section 70112(a)(1)(A) of this 
                title; and
                  (B) is not more than $ 1,500,000,000 (plus 
                additional amounts necessary to reflect 
                inflation occurring after January 1, 1989) 
                above that insurance or financial 
                responsibility amount.
          (2) The Secretary may not provide for paying a part 
        of a claim for which death, bodily injury, or property 
        damage or loss results from willful misconduct by the 
        licensee or transferee. To the extent insurance 
        required under section 70112(a)(1)(A) of this title is 
        not available to cover a successful third party 
        liability claim because of an insurance policy 
        exclusion the Secretary decides is usual for the type 
        of insurance involved, the Secretary may provide for 
        paying the excluded claims without regard to the 
        limitation contained in section 70112(a)(1).
  (b) Notice, Participation, and Approval.--Before a payment 
under subsection (a) of this section is made--
          (1) notice must be given to the Government of a 
        claim, or a civil action related to the claim, against 
        a party described in subsection (a)(1) of this section 
        for death, bodily injury, or property damage or loss;
          (2) the Government must be given an opportunity to 
        participate or assist in the defense of the claim or 
        action; and
          (3) the Secretary must approve any part of a 
        settlement to be paid out of appropriations of the 
        Government.
  (c) Withholding Payments.--The Secretary may withhold a 
payment under subsection (a) of this section if the Secretary 
certifies that the amount is not reasonable. However, the 
Secretary shall deem to be reasonable the amount of a claim 
finally decided by a court of competent jurisdiction.
  (d) Surveys, Reports, and Compensation Plans.--
          (1) If as a result of an activity carried out under a 
        license issued or transferred under this chapter the 
        total of claims related to one launch is likely to be 
        more than the amount of required insurance or 
        demonstration of financial responsibility, the 
        Secretary shall--
                  (A) survey the causes and extent of damage; 
                and
                  (B) submit expeditiously to Congress a report 
                on the results of the survey.
          (2) Not later than 90 days after a court 
        determination indicates that the liability for the 
        total of claims related to one launch may be more than 
        the required amount of insurance or demonstration of 
        financial responsibility, the President, on the 
        recommendation of the Secretary, shall submit to 
        Congress a compensation plan that--
                  (A) outlines the total dollar value of the 
                claims;
                  (B) recommends sources of amounts to pay for 
                the claims;
                  (C) includes legislative language required to 
                carry out the plan if additional legislative 
                authority is required; and
                  (D) for a single event or incident, may not 
                be for more than $ 1,500,000,000.
          (3) A compensation plan submitted to Congress under 
        paragraph (2) of this subsection shall--
                  (A) have an identification number; and
                  (B) be submitted to the Senate and the House 
                of Representatives on the same day and when the 
                Senate and House are in session.
  (e) Congressional Resolutions.--
          (1) In this subsection, ``resolution''--
                  (A) means a joint resolution of Congress the 
                matter after the resolving clause of which is 
                as follows: ``That the Congress approves the 
                compensation plan numbered ________ submitted 
                to the Congress on ________, 19________.'', 
                with the blank spaces being filled 
                appropriately; but
                  (B) does not include a resolution that 
                includes more than one compensation plan.
          (2) The Senate shall consider under this subsection a 
        compensation plan requiring additional appropriations 
        or legislative authority not later than 60 calendar 
        days of continuous session of Congress after the date 
        on which the plan is submitted to Congress.
          (3) A resolution introduced in the Senate shall be 
        referred immediately to a committee by the President of 
        the Senate. All resolutions related to the same plan 
        shall be referred to the same committee.
          (4)(A) If the committee of the Senate to which a 
        resolution has been referred does not report the 
        resolution within 20 calendar days after it is 
        referred, a motion is in order to discharge the 
        committee from further consideration of the resolution 
        or to discharge the committee from further 
        consideration of the plan.
          (B) A motion to discharge may be made only by an 
        individual favoring the resolution and is highly 
        privileged (except that the motion may not be made 
        after the committee has reported a resolution on the 
        plan). Debate on the motion is limited to one hour, to 
        be divided equally between those favoring and those 
        opposing the resolution. An amendment to the motion is 
        not in order. A motion to reconsider the vote by which 
        the motion is agreed to or disagreed to is not in 
        order.
          (C) If the motion to discharge is agreed to or 
        disagreed to, the motion may not be renewed and another 
        motion to discharge the committee from another 
        resolution on the same plan may not be made.
          (5)(A) After a committee of the Senate reports, or is 
        discharged from further consideration of, a resolution, 
        a motion to proceed to the consideration of the 
        resolution is in order at any time, even though a 
        similar previous motion has been disagreed to. The 
        motion is highly privileged and is not debatable. An 
        amendment to the motion is not in order. A motion to 
        reconsider the vote by which the motion is agreed to or 
        disagreed to is not in order.
          (B) Debate on the resolution referred to in 
        subparagraph (A) of this paragraph is limited to not 
        more than 10 hours, to be divided equally between those 
        favoring and those opposing the resolution. A motion 
        further to limit debate is not debatable. An amendment 
        to, or motion to recommit, the resolution is not in 
        order. A motion to reconsider the vote by which the 
        resolution is agreed to or disagreed to is not in 
        order.
          (6) The following shall be decided in the Senate 
        without debate:
                  (A) a motion to postpone related to the 
                discharge from committee.
                  (B) a motion to postpone consideration of a 
                resolution.
                  (C) a motion to proceed to the consideration 
                of other business.
                  (D) an appeal from a decision of the chair 
                related to the application of the rules of the 
                Senate to the procedures related to resolution.
  (f) Application.--This section applies to a license issued or 
transferred under this chapter for which the Secretary receives 
a complete and valid application not later than December 31, 
1999.

Sec. 70115. Enforcement and penalty

  (a) Prohibitions.--A person may not violate this chapter, a 
regulation prescribed under this chapter, or any term of a 
license issued or transferred under this chapter.
  (b) General Authority.--
          (1) In carrying out this chapter, the Secretary of 
        Transportation may--
                  (A) conduct investigations and inquiries;
                  (B) administer oaths;
                  (C) take affidavits; and
                  (D) under lawful process--
                          (i) enter at a reasonable time a 
                        launch site, in-space transportation 
                        control site, or reentry site, 
                        production facility, assembly site of a 
                        launch [vehicle,] vehicle, in-space 
                        transportation vehicle, or reentry 
                        vehicle or site at which a payload is 
                        integrated with a launch [vehicle] 
                        vehicle, in-space transportation 
                        vehicle, or reentry vehicle to inspect 
                        an object to which this chapter applies 
                        or a record or report the Secretary 
                        requires be made or kept under this 
                        chapter; and
                          (ii) seize the object, record, or 
                        report when there is probable cause to 
                        believe the object, record, or report 
                        was used, is being used, or likely will 
                        be used in violation of this chapter.
          (2) The Secretary may delegate a duty or power under 
        this chapter related to enforcement to an officer or 
        employee of another executive agency with the consent 
        of the head of the agency.
  (c) Civil Penalty.--
          (1) After notice and an opportunity for a hearing on 
        the record, a person the Secretary finds to have 
        violated subsection (a) of this section is liable to 
        the United States Government for a civil penalty of not 
        more than $ 100,000. A separate violation occurs for 
        each day the violation continues.
          (2) In conducting a hearing under paragraph (1) of 
        this subsection, the Secretary may--
                  (A) subpoena witnesses and records; and
                  (B) enforce a subpoena in an appropriate 
                district court of the United States.
          (3) The Secretary shall impose the civil penalty by 
        written notice. The Secretary may compromise or remit a 
        penalty imposed, or that may be imposed, under this 
        section.
          (4) The Secretary shall recover a civil penalty not 
        paid after the penalty is final or after a court enters 
        a final judgment for the Secretary.

Sec. 70117. Relationship to other executive agencies, laws, and 
                    international obligations

  (a) Executive Agencies.--Except as provided in this chapter, 
a person is not required to obtain from an executive agency a 
license, approval, waiver, or exemption to launch a launch 
vehicle or operate a launch [site.] site, perform in-space 
transportation activities or operate an in-space transportation 
control site or reentry site, or reenter a reentry vehicle.
  (b) Federal Communications Commission and Secretary of 
Commerce.--This chapter does not affect the authority of--
          (1) the Federal Communications Commission under the 
        Communications Act of 1934 (47 U.S.C. 151 et seq.); or
          (2) the Secretary of Commerce under the Land Remote-
        Sensing Commercialization Act of 1984 (15 U.S.C. 4201 
        et seq.).
  (c) States and Political Subdivisions.--A State or political 
subdivision of a State--
          (1) may not adopt or have in effect a law, 
        regulation, standard, or order inconsistent with this 
        chapter; but
          (2) may adopt or have in effect a law, regulation, 
        standard, or order consistent with this chapter that is 
        in addition to or more stringent than a requirement of, 
        or regulation prescribed under, this chapter.
  (d) Consultation.--The Secretary of Transportation is 
encouraged to consult with a State to simplify and expedite the 
approval of a space [launch] launch, perform an in-space 
transportation activity, or reentry activity.
  (e) Foreign Countries.--The Secretary of Transportation 
shall--
          (1) carry out this chapter consistent with an 
        obligation the United States Government assumes in a 
        treaty, convention, or agreement in force between the 
        Government and the government of a foreign country; and
          (2) consider applicable laws and requirements of a 
        foreign country when carrying out this chapter.
  [(f) Launch Not an Export.--A launch vehicle or payload that 
is launched is not, because of the launch, an export for 
purposes of a law controlling exports.
  [(g) Nonapplication.--This chapter does not apply to--
          [(1) a launch, operation of a launch vehicle or 
        launch site, or other space activity the Government 
        carries out for the Government; or
          [(2) planning or policies related to the launch, 
        operation, or activity.]
  (f) Launch Not an Export or Import._A launch vehicle, reentry 
vehicle, or payload that is launched or reentered is not, 
because of the launch or reentry, an export or import for 
purposes of a law controlling exports or imports.
  (g) Nonapplication._This chapter does not apply to--
          (1) a launch, in-space transportation activity, 
        reentry, operation of a launch vehicle, in-space 
        transportation vehicle, or reentry vehicle, or of a 
        launch site, in-space transportation control site, or 
        reentry site, or other space activity the Government 
        carries out for the Government; or
          (2) planning or policies related to the launch, in-
        space transportation activity, reentry, or operation.

[Sec. 70118. User fees

  [The Secretary of Transportation may collect a user fee for a 
regulatory or other service conducted under this chapter [49 
U.S.C. 70101 et seq.] only if specifically authorized by this 
chapter [49 U.S.C. 70101 et seq.].]

Sec. 70120. Report to Congress

  The Secretary of Transportation shall submit to Congress an 
annual report to accompany the President's budget request 
that--
          (1) describes all activities undertaken under this 
        chapter, including a description of the process for the 
        application for and approval of licenses under this 
        chapter and recommendations for legislation that may 
        further commercial launches and reentries; and
          (2) reviews the performance of the regulatory 
        activities and the effectiveness of the Office of 
        Commercial Space Transportation.

                                 
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