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 S.1013
"Regional Jet Air Service Improvement Act"
S 1013 IS
105th CONGRESS
1st Session
To provide for the guarantee of the payment of interest on loans to
certain air carriers for the purchase of regional jet aircraft to
improve air transportation to underserved markets, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
July 14, 1997
Mr. FRIST (for himself, Mr. LOTT, Mr. BURNS, and Ms. SNOWE)
introduced the following bill; which was read twice and
referred to the Committee on Commerce, Science, and
Transportation
A BILL
To provide for the guarantee of the payment of interest on loans to
certain air carriers for the purchase of regional jet aircraft to
improve air transportation to underserved markets, and for other
purposes.
Be it enacted by the Senate and House of
Representatives of the United States of America in Congress
assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Regional Jet Air Service
Improvement Act'.
SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.
Subtitle VII of title 49, United States Code, is amended by
adding at the end thereof the following:
`PART E- REGIONAL AIR SERVICE INCENTIVE PROGRAM
`Sec.
`49201. Purpose.
`49202. Definitions.
`49203. Loan guarantees.
`49204. Conditions and limitations.
`49205. Fees.
`49206. Use of Federal facilities; assistance.
`49207. Receipts; payments.
`49208. Termination.
`Sec. 49201. Purpose
`The purpose of this chapter is to improve service by jet
aircraft to underserved markets by providing assistance, in the
form of loan guarantees, to air carriers, commuter air carriers,
and intrastate air carriers that purchase regional jet aircraft for
use in serving those markets.
Sec. 49202. Definitions
`As used in this part:
`(1) AIRCRAFT PURCHASE LOAN- The term `aircraft purchase
loan' means any loan, or commitment in connection with a loan,
made for the purchase of commercial transport aircraft,
including spare parts normally associated with the aircraft.
`(2) AIR CARRIER- The term `air carrier' means any air
carrier (as that term is defined in section 40102(2)) holding a
certificate of public convenience and necessity issued by the
Secretary under section 41102.
`(3) COMMUTER AIR CARRIER- The term `commuter air carrier'
means air carrier operating pursuant to section 40104(a)(1)(A)
who operates at least 5 round trip flights per week between 1
pair of points in accordance with published flight schedules.
`(4) INTRASTATE AIR CARRIER- The term `intrastate air
carrier' means any citizen of the United States who undertakes,
whether directly or indirectly or by a lease or any other
arrangement, to engage primarily in intrastate air
transportation (as such term is defined in section 40102(26)).
`(5) NONHUB AIRPORT- The term `nonhub airport' means an
airport that each year has less than .05 percent of the total
annual boardings in the United States.
`(6) REGIONAL JET AIRCRAFT- The term `regional jet aircraft'
means a civil aircraft (as defined in section 40102(16))--
`(A) powered by jet propulsion;
`(B) with seating for not less than 30 nor more than 70
passengers (except that the Secretary may, for good cause
shown, permit a variance of up to 5 passengers).
`(7) SMALL HUB AIRPORT- The term `small hub airport' means an
airport that each year has at least .05 percent, but less than
.25 percent, of the total annual boardings in the United States.
`(8) UNDERSERVED MARKET- The term `underserved market' means
a passenger air transportation market (as defined by the
Secretary that--
`(A) is served (as determined by the Secretary) by a
nonhub airport or a small hub airport; and
`(B) is not within a 50-mile radius of a primary airport
(as defined in section 47102(11).
`Sec. 49203. Loan guarantees
`(a) IN GENERAL- The Secretary may guarantee any lender against
loss of principal or interest on any aircraft purchase loan made by
that lender to--
`(1) any air carrier with respect to which the certificate
issued that air carrier under chapter 41 of title 49, United
States Code, authorizes--
`(A) the air carrier to provide local or feeder air
service;
`(B) scheduled passenger operations the major portion of
which is conducted within the State of Hawaii; or
`(C) operations (the major portion of which is conducted
either within Alaska or between Alaska and the 48
contiguous States), within the State of Alaska (including
service between Alaska and the 48 contiguous States, and
between Alaska and adjacent Canadian territory);
`(2) any commuter air carrier; or
`(3) any intrastate air carrier.
`(b) FORM, TERMS, AND CONDITIONS- A guarantee shall be made under
subsection (a)--
`(1) in such form, on such terms and conditions; and
`(2) pursuant to such regulations, as the Secretary considers
to be necessary and consistent with this part.
`Sec. 49204. Conditions and limitations
`(a) Limitations on Funds-
`(1) IN GENERAL- Subject to subsection (d), no loan guarantee
shall be made under this part--
`(1) extending to more than the unpaid interest and 90
percent of the unpaid principal of any loan;
`(2) on any loan or combination of loans for more than 90
percent of the purchase price of the aircraft, including spare
parts, to be purchased with the loan;
`(3) on any loan with respect to which terms permit full
repayment more than 15 years after the date the loan is made;
`(4) in any case in which the total face amount of the loan,
and any other loans to the same air carrier, commuter air
carrier, or intrastate air carrier or corporate predecessor of
that air carrier, commuter air carrier, or intrastate air
carrier that are guaranteed and outstanding under the terms of
this part exceed $100,000,000.
`(b) CONDITIONS FOR MAKING LOANS- Subject to subsection (c), the
Secretary may only make a loan guarantee under this part if the
Secretary finds that--
`(1) the aircraft to be purchased with the loan is a regional
jet aircraft needed to improve the service and efficiency of
operation of the air carrier, commuter air carrier, or
intrastate air carrier;
`(2) the air carrier, commuter air carrier, or intrastate air
carrier agrees to use the aircraft to provide service to
underserved markets; and
`(3) the prospective earning power--
`(A) of the applicant air carrier, together with the
character and value of the security pledged, furnish--
`(i) reasonable assurances of the ability of the
applicant to repay the loan within the term for the
loan; and
`(ii) reasonable protection to the United States; and
`(B) of the applicant commuter air carrier or intrastate
air carrier, together with the character and value of the
security pledged, furnish--
`(i) reasonable assurances of the applicant's ability
and intention to repay the loan within the term of the
loan--
`(I) to continue its operations as a commuter air carrier or
intrastate air carrier; and
`(II) to the extent that the Secretary determines to be
necessary, to continue its operations as a commuter air carrier or
intrastate air carrier between the same route or routes being
operated by the applicant at the time of the loan guarantee; and
`(ii) reasonable protection to the United States.
`(c) REQUIREMENT- Subject to subsection (d), no loan guarantee
may be made under this part on any loan or combination of loans for
the purchase of any new turbo-jet-powered aircraft that does not
comply with the noise standards prescribed for new subsonic
aircraft in regulations issued by the Secretary, acting through the
Administrator of the Federal Aviation Administration, contained in
14 CFR part 36, as those regulations were in effect on January 1,
1977.
`(d) Other Limitations-
`(1) IN GENERAL- No loan guarantee shall be made by the
Secretary under this part on any loan for the purchase of a
regional jet aircraft unless the air carrier, commuter air
carrier, or intrastate air carrier agrees that it will provide
service to the underserved market for which the aircraft is
purchased for a period of not less than 12 consecutive months
after the aircraft is placed in service and the air carrier,
commuter air carrier, or intrastate air carrier is authorized
to provide service to that market.
`Sec. 49205. Fees
`The Secretary shall prescribe and collect from a lending
institution a reasonable guaranty fee in connection with each loan
guaranteed under this part.
`Sec. 49206. Use of Federal facilities; assistance
`(a) USE OF FEDERAL FACILITIES- To permit the Secretary to make
use of such expert advice and services as the Secretary may require
in carrying out this part, the Secretary may use available services
and facilities of other agencies and instrumentalities of the
Federal Government--
`(1) with the consent of the appropriate Federal officials; and
`(2) on a reimbursable basis.
`(b) ASSISTANCE- The head of each appropriate department or
agency of the Federal Government shall exercise the duties and
functions of that head in such manner as to assist in carrying out
the policy specified in section 49201.
`(c) OVERSIGHT- The Secretary shall make available to the
Comptroller General of the United States such information with
respect to the loan guarantee program conducted under this part as
the Comptroller General may require to carry out the duties of the
Comptroller General under chapter 7 of title 31, United States Code.
`Sec. 49207. Receipts; payments
`(a) MISCELLANEOUS- Amounts received by the Secretary pursuant to
this part shall be credited to miscellaneous receipts of the
Treasury.
`(b) PAYMENTS- Payments to lenders required as a consequence of
any loan guarantee made under this part may be made from funds
appropriated pursuant to the authorization under section 3 of the
Regional Jet Air Service Improvement Act.
`(c) ADMINISTRATIVE EXPENSES- In carrying out this part, the
Secretary shall use funds made available by appropriations to the
Department of Transportation for the purpose of administration to
cover administrative expenses of the loan guarantee program under
this part.
`Sec. 49208. Termination
`The authority of the Secretary under section 49203 shall
terminate on the date that is 5 years after the date of enactment
of the Regional Jet Air Service Improvement Act.'.
SEC. 3. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as may be
necessary to carry out part E of subtile VII of title 49, United
States Code.
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