Prohibits the Secretary of Transportation from issuing any final rule that would change the Department of Transportation's (DOT) interpretation of what constitutes "actual control" of an airline with respect to requirements prohibiting foreign interests from exercising actual control over all airline operations. Directs the Secretary to report to Congress on the impact of DOT's proposed change of allowing foreign interests to control economic and competitive decisions while requiring U.S. citizens to control decisions concerning commitments to the Civil Reserve Air Fleet, transportation security, safety, and organizational documents. (Under current law, only an airline that qualifies as "a citizen of the United States" may provide service between U.S. cities or on international routes obtained by the United States through international agreements. Defines "a citizen of the United States" as an individual who is a citizen of the United States, a partnership each of whose partners is an individual who is a citizen of the United States, or a corporation or association in which at least 75% of the voting interest is owned or controlled by persons that are citizens of the United States).
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4542 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 4542
To direct the Secretary of Transportation to report to Congress
concerning proposed changes to long-standing policies that prohibit
foreign interests from exercising actual control over the economic,
competitive, safety, and security decisions of United States airlines,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 14, 2005
Mr. Oberstar (for himself, Mr. Young of Alaska, Mr. Costello, Mr.
LoBiondo, Mr. DeFazio, Ms. Berkley, Mr. Boswell, Mr. Graves, Mr. Smith
of New Jersey, Ms. Norton, Ms. Millender-McDonald, Ms. Woolsey, Mr.
Pascrell, Mr. Brady of Pennsylvania, Mr. Menendez, Mr. Lynch, Mr.
Evans, Mr. McHugh, Ms. Kilpatrick of Michigan, Mr. Rothman, Mr.
Visclosky, Mr. Hinchey, Mr. Olver, Mr. Davis of Tennessee, Mr. Davis of
Alabama, Mr. Marshall, Mr. Rahall, Mrs. McCarthy, Mr. LaTourette, Mr.
Murphy, Mr. Simmons, Mr. Ferguson, Mr. McIntyre, Mr. McNulty, Mr. Udall
of New Mexico, Mr. Baca, Mr. Payne, Mr. Andrews, Mr. Meek of Florida,
Mr. Michaud, Mr. Matheson, Mr. Ryan of Ohio, Mr. Salazar, Mr. Engel,
Mr. Costa, Mr. Holden, Mr. Cummings, Mr. Ney, Mr. Dicks, Mr. Carnahan,
Mr. Bishop of New York, Mr. Gene Green of Texas, Mr. Pastor, Mr.
Langevin, Mr. Strickland, Mr. Cardin, Mr. Duncan, Mr. Baird, Mr. Berry,
Mr. Blumenauer, Mr. Abercrombie, Mr. Carter, and Mr. Filner) introduced
the following bill; which was referred to the Committee on
Transportation and Infrastructure, and in addition to the Committee on
Rules, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To direct the Secretary of Transportation to report to Congress
concerning proposed changes to long-standing policies that prohibit
foreign interests from exercising actual control over the economic,
competitive, safety, and security decisions of United States airlines,
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. FINDINGS.
Congress finds the following:
(1) Under current law (49 U.S.C. 40102(a)(15)), only an
airline that qualifies as ``a citizen of the United States''
(commonly referred to as a United States airline) may provide
service between cities in the United States or on international
routes obtained by the United States through international
agreements. The law further provides that an airline will
qualify as a citizen of the United States only if the airline
is ``a corporation or association . . . which is under the
actual control of citizens of the United States''.
(2) Throughout its 47-year history (1938-1985), the Civil
Aeronautics Board interpreted the governing law as requiring
that United States interests be in ``actual control'' of all
operations of the airline. The Department of Transportation
continued these policies when it took over the responsibilities
of the Civil Aeronautics Board in 1985.
(3) To ensure that these long-standing policies remained in
effect, Congress in 2003 passed an amendment specifically
adding to the definition of ``citizen of the United States'' a
requirement that the airline be ``under the actual control of
citizens of the United States''. When this ``actual control''
test was specifically added to the law, it clearly was intended
to codify the policy developed by the Civil Aeronautics Board
and the Department, which required that United States interests
control economic and competitive decisions of the airline, as
well as safety and security decisions.
(4) Congress has repeatedly refused the Department's
requests to pass legislation to allow foreign interests to gain
increased control of United States airlines by changing the
statutory requirements that United States citizens must own 75
percent of the voting stock of United States airlines. The
Department now seeks to accomplish increased foreign control by
other means.
(5) On November 7, 2005, the Department issued a Notice of
Proposed Rulemaking (70 Fed. Reg. 67389) that proposes to
change the Department's long-standing interpretation of
``actual control''. Under the proposed rules, United States
citizens would be required to control decisions of a United
States airline concerning commitments to the Civil Reserve Air
Fleet, transportation security, safety, and organizational
documents. However, United States citizens would not be
required to control the airline's basic economic and
competitive decisions, such as the cities to be served, the
fares to be charged, the aircraft to be purchased, and the
nature and size of the aircraft fleet.
(6) The proposed new interpretation that ``actual control''
does not require control of significant portions of an
airline's operation is contrary to the plain language of the
statute.
(7) The proposed new interpretation would change long-
standing policies and legal interpretations that ``actual
control'' means control over all operations of the airline, not
only decisions concerning security, safety, the Civil Reserve
Air Fleet program, and organizational documents.
(8) The proposed new interpretation could lead to
fundamental changes in the Nation's aviation system.
(9) The Department's rulemaking is a major impairment of
the policies and legal interpretation that Congress
specifically required by statute in 2003, and that have been
followed for over 60 years. Any major change in the definition
of ``actual control'' should only be accomplished through the
legislative process and should not be unilaterally imposed by
the executive branch.
SEC. 2. LIMITATION ON CERTAIN ACTIONS.
(a) In General.--For a period of one year after the date of
enactment of this Act, the Secretary of Transportation shall not issue
a decision on the notice of proposed rulemaking referred to in section
1(a)(5), issue any final rule, or make any fitness determination under
section 41102 of title 49, United States Code, that would change the
Department of Transportation's long-standing interpretation concerning
what constitutes ``actual control'' of an airline for purposes of
section 40102(a)(15) of such title.
(b) Congressional Review.--Any final rule described in subsection
(a) issued by the Secretary shall be treated as a major rule for
purposes of chapter 8 of title 5, United States Code.
(c) Report.--Not later than 90 days after the date of enactment of
this Act, the Secretary shall submit to Congress a report that assesses
the impact of the proposed rules referred to in section 1(a)(5). At a
minimum, the report shall include the following:
(1) An assessment of the consequences of permitting greater
participation of foreign interests in the direct operations of
United States airlines, including the impact on national
defense, competition between foreign and United States
airlines, the growth of international air services performed by
United States airlines, and access of United States citizens,
especially those living in rural communities, to aviation
service.
(2) If the Department interprets the proposed rules as
allowing foreign owners of 25 percent or less of a United
States airline's stock to gain control of the airline through
supermajority voting requirements, or as allowing agreements
under which United States shareholders will vote their shares
the same way as minority foreign shareholders, a discussion of
the potential effects of such supermajority voting requirements
or agreements on--
(A) national defense;
(B) competition between foreign and United States
airlines;
(C) access to domestic aviation services; and
(D) whether such agreements would be consistent
with the statutory requirement that permits an airline
to qualify as a citizen of the United States only if at
least 75 percent of the voting interest in the airline
is owned or controlled by persons that are citizens of
the United States.
(3) A discussion of how the Department will ensure that
United States citizens maintain control over matters having an
impact on issues concerning Civil Reserve Air Fleet
participation, safety, and security if foreign interests are
allowed to exercise control over issues concerning a United
States airline's day-to-day operations, market strategy, and
fleet management.
(4) A discussion of the portion of the proposed rules that
provides that the new interpretation of ``actual control''
would apply only in cases in which a foreign country grants
United States interests ``reciprocal access to investments in
their carriers'', and a discussion of--
(A) how the Department can adopt an interpretation
that will permit a definition of ``actual control'' to
vary depending on policies followed by a foreign
country;
(B) how the Department would define ``reciprocal
access'';
(C) how the Department would determine that the
home country of a foreign airline does not deny United
States citizens reciprocal access to investments in its
own airlines; and
(D) whether, as part of ``reciprocal access'', the
Department would require control by United States
interests over economic decisions by a foreign airline.
(5) A discussion of the effects the proposed rules would
have on the wages, working conditions, and opportunities of
United States airline employees, including job opportunities in
international air transportation.
(6) A discussion of whether under the proposed rules
interested parties would be notified of and have an opportunity
to comment on an application submitted to the Department under
which a foreign interest could gain control of a United States
airline.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Aviation.
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