"DECLARATORY ORDERS AND ARBITRATION

"SEC. 417. In order to lessen the need for administrative or judicial litigation and the expense involved therein, the Authority is authorized and directed to"DECLARATORY ORDERS

"(a) Enter declaratory orders, upon the petition of any interested person, interpreting any provision of this Act (other than title III-A) or any order, rule, regulation, term, condition, limitation, or requirement adopted pursuant thereto, whether or not there has been any actual or alleged action or omission in contravention thereof. Such orders shall have the effect of other orders entered pursuant to this Act and shall be subject to review as provided in section 1006.

"ARBITRATION

"(b) Provide and administer, subject to such rules as it may adopt or approve, machinery for voluntary arbitration of claims, controversies, and other disputes arising between or among air carriers, foreign air carriers, or air contractors, or any of them, or between or among any such person or persons and any other person or persons. The Authority may utilize private persons or its own members or employees or those of other Government agencies as arbiters, and may provide such machinery through or in cooperation with private organizations or otherwise as it may deem appropriate. Arbitration awards shall require such action, including the payment of penalties or punitive damages, as the parties may have provided for and, unless clearly unreasonable or arbitrary, shall have the effect of contracts as between the parties affected thereby and shall be enforceable as such. A contract for the submission of any existing or future claim, controversy, or dispute to the arbitration provided for herein shall be valid and enforceable by a decree for specific performance if the claim, controversy, or dispute is one to which the commerce power or the judicial power of the United States extends."

SEC. 26. The Civil Aeronautics Act of 1938, as amended, is hereby further amended by inserting at the end of title IV thereof the following:

"TITLE IV-A-AIR CONTRACTOR ECONOMIC REGULATION

"DECLARATION OF POLICY AND EXEMPTIONS

"DECLARATION

"SEC. 4100. (a) In the exercise and performance of its powers and duties under this title, the Authority shall consider the following, among other things, as being in the public interest:

"(1) The encouragement of the transportation of persons and property by air contractors in order to foster a market for aircraft manufacturers, in order to pomote skill in the operation and maintenance of aircraft, in order to develop new and additional uses for and types of aircraft, and in order to provide facilities for transportation by air supplementary to the air transportation system of air carriers.

"(2) The regulation of air contractors in such manner as to foster sound economic conditions among air contractors and to prevent destructive and wasteful competition between air contractors or between such contractors and air carriers.

"(3) Competition among air contractors to the extent necessary to achieve the maximum benefits from private initiative without undue impairment of the resources of such contractors.

"CLASSIFICATION AND EXEMPTION

"(b) The Authority may make such classifications of air contractors, according to geographical sections, types, or otherwise, as it may deem to be in the public interest, and may make any provision of this title inapplicable to any or all air contractors or classes of air contractors for such periods, or until such time, as it may deem to be in the public interest. Such action shall be taken with the objective, among others, of so adjusting the regulatory provisions hereof to the changing needs and conditions of the air contracting busi

ness as to avoid undue administrative burdens and unnecessary impediments to the development of such business. In connection with any such action the Authority may impose such requirements as it may deem to be in the public interest.

"LICENSES OF AIR CONTRACTORS

"LICENSES REQUIRED

"SEC. 4101. (a) No person shall engage in any air commerce as an air contractor unless there is in force a license issued by the Authority authorizing such person to engage in such commerce. No license shall be issued to any person who is not a citizen of the United States to engage in any interstate or overseas air commerce.

• "APPLICATION FOR LICENSE

"(b) Application for a license shall be made in writing to the Authority and shall be so verified, shall be in such form and contain such information, and shall be accompanied by such proof of service, upon such interested persons, as the Authority shall by regulation require.

"NOTICE OF APPLICATION

"(c) Upon the filing of any such application, the Authority shall give due notice thereof to the public by posting a notice of such application in the office of the secretary of the Authority and to such other persons as the Authority may by regulation determine. Any interested person may file with the Authority a protest or memorandum of opposition to or in support of the issuance of a license. Such application shall be set for public hearing, and the Authority shall dispose of such application as speedily as possible.

"ISSUANCE OF LICENSE

"(d) (1) The Authority shall issue a license authorizing the whole or any part of the commerce covered by the application, if it finds that the applicant is fit, willing, and able to perform such commerce properly, and to conform to the provisions of this Act and the rules, regulations, and requirements of the Authority hereunder, and that such commerce is required by the public interest; otherwise such application shall be denied.

"(2) The Authority may issue a license under this section authorizing the whole or any part of the air commerce applied for for such limited periods as may be required by the public interest: Provided, That where application is made for a certificate of unlimited duration and the certificate issued by the Board is effective for a temporary period only, the applicant may reject such certificate if such right of rejection is exercised within such reasonable period of time as may be fixed by the Board, and in such event no certificate shall be issued to such applicant.

"EXISTING AIR CONTRACTORS

"(e) The operation of any person regularly operating as an air contractor for a period of at least six months, or, if its operation was seasonal, regularly operating as such for seasonal periods during a period of at least one year, prior to the time when section 4101 (a) hereof becomes applicable to such person, shall be taken prima facie to be in the public interest for the purpose of section 4101 (d) hereof. Any air contractor operating as such at the time section 4101 (a) hereof becomes applicable to it may continue such operation until the Authority has passed upon its application for a license if it makes such application within one hundred and twenty days after the date when such section becomes applicable.

"TERMS AND CONDITIONS OF LICENSES

"(f) Each license issued under this section shall specify the points between which, or areas within which, operation as an air contractor is to be permitted, and the nature of the traffic and the scope of the business to be authorized thereby. There shall be attached to the exercise of the privileges granted by such license, or amendment thereto, such reasonable terms, conditions, and limitations as the public interest may require, except that no term, condition, or limitation shall

restrict the right of the contractor to change or add contracts wihin the scope of the license or to change or add to its equipment or facilities for performing the authorized commerce as the development of the business and the demands of the public shall require.

"EFFECTIVE DATE AND DURATION OF LICENSE

"(g) Each license shall be effective from the date specified therein, and shall continue in effect until suspended or revoked as hereinafter provided, or until the Authority shall certify that operation thereunder has ceased, or, if issued for a limited period of time under subsection (d) (2) of this section, shall continue in effect until the expiration thereof, unless, prior to the date of expiration, such license shall be suspended or revoked as provided herein, or the Authority shall certify that operations thereunder have ceased: Provided, That if any service authorized by a license is not inaugurated within such period, not less than ninety days, after the date of the authorization as shall be fixed by the Authority, or if, for a period of ninety days or such other period as may be designated by the Authority, any such service is not operated, the Authority may by order, entered after notice and hearing, direct that such license shall thereupon cease to be effective to the extent of such service.

"AUTHORITY TO MODIFY, SUSPEND, OR REVOKE

"(h) The Authority, upon petition or complaint or upon its own initiative, after notice and hearing, may alter, amend, modify, or suspend any such license, in whole or in part, if the public interest so requires, or may revoke any such license, in whole or in part, for intentional failure to comply with any provision of this title or any order, rule, or regulation issued hereunder or any term, condition, or limitation of such license: Provided, That no such license shall be revoked unless the holder thereof fails to comply, within a reasonable time to be fixed by the authority, with an order of the Authority commanding obedience to the provision, or to the order (other than an order issued in accordance with this proviso), rule, regulation, term, condition, or limitation found by the Authority to have been violated. Any interested person may file with the Authority a protest or memorandum in support of or in opposition to the alteration amendment, modification, suspension, or revocation of a license.

"TRANSFER OF LICENSE

"(i) No license may be transferred unless such transfer is approved by the Authority as being consistent with the public interest.

"CERTAIN RIGHTS NOT CONFERRED BY LICENSE

"(J) No license shall confer any proprietary, property, or exclusive right in the use of any air space, civil airway, landing area, or air-navigation facility.

"SCHEDULES OF AIR CONTRACTORS

"FILING OF SCHEDULES REQUIRED

"SEC. 4102. (a) Every air contractor shall file with the Authority, and print, and keep open to public inspection, schedules showing, to the extent required by the Authority, by regulation or otherwise, its minimum rates, fares, and charges for air commerce, and showing, to the extent required by regulations of the Authority, all classifications, rules, regulations, practices, and services in connection with such air commerce. Schedules shall be filed, posted, and published in such form and manner, and shall contain such information, as the Authority shall by regulation prescribe; and the Authority is empowered to reject any schedule so filed which is not consistent with this section and such regulations. Any schedule so rejected shall be void. The rates, fares, and charges shown in any schedule shall be stated in terms of lawful money of the United States, but such schedules may also state rates, fares, and charges in terms of currencies other than lawful money of the United States, and may, in the case of foreign air commerce, contain such information as may be required under the laws of any country in or to which an air contractor is authorized to operate.

"OBSERVANCE OF SCHEDULES; REBATING PROHIBITED

"(b) When required by the Authority to include a rate, fare, or charge in a schedule, no air contractor shall charge or demand or collect or receive a less compensation for air commerce covered by such rate, fare, or charge, or for any service in connection therewith, than the rate, fare, or charge specified in its currently effective schedule; and no air contractor shall, in any manner or by any device, directly or indirectly, or through any agent or broker, or otherwise, refund or remit any portion of the compensation for such commerce so as to reduce such compensation below the rate, fare, or charge so specified, or extend to any person any privileges or facilities, with respect to matters required by the Authority to be specified in such schedules, except those specified therein. Nothing in this Act shall prohibit such air contractors, under such terms and conditions as the Authority may prescribe, from issuing or interchanging tickets or passes for free or reduced-rate transportation, to their directors, officers, and employees and their immediate families; witnesses and attorneys attending any legal investigation in which any such air contractor is interested; persons injured in aircraft accidents and physicians and nurses attending such persons; and any person or property with the object of providing relief in cases of general epidemic, pestilence, or other calamitous visitation; and to such other persons and under such other circumstances as the Authority may by regulations prescribe. No air contractor shall provide free or reduced-rate transportation to any other persons or under any other circumstances.

"NOTICE OF SCHEDULE CHANGE

"(c) No reduction shall be made in any rate, fare, or charge, specified in any effective schedule of any air contractor, and no change shall be made in any classification, rule, regulation, or practice affecting any such rate, fare, or charge, or the value of the service thereunder, except after thirty days' notice of the proposed reduction or change filed, posted, and published in accordance with subsection (a) of this section. Such notice shall plainly state the reduction or change proposed to be made and the time such reduction or change will take effect. The Authority may, in the public interest, by regulation or otherwise, allow such reduction or change by notice less than that specified herein, or modify the requirements of this section with respect to filing and posting of schedules, either in particular instances or by general order.

"RATES AND SERVICE OF AIR CONTRACTORS

"REASONABLE RATES AND SERVICE

"SEC. 4103. (a) It shall be the duty of every air contractor to establish and observe reasonable minimum rates, fares, and charges for any service rendered by it as an air contractor, and to establish and observe reasonable classifications, rules, regulations, and practices relating to such commerce.

"DISCRIMINATION

"(b) No air contractor shall make, give, or cause any undue or unreasonable preference or advantage to any particular person, port, locality, or description of traffic in air commerce in any respect whatsoever, or subject any particular person, port, locality, or description of traffic in air commerce to any unjust discrimination, or any undue or unreasonable prejudice or disadvantage in any respect whatsoever.

"MISCELLANEOUS

"SEC. 4104. The provisions of section 407, 408, 409, 411, 412, 413, 414, and 415 of this Act or any of such provisions, shall, effective upon such date or dates as the Authority may deem in the public interest, be applicable to air contractors and to the air contracting business; the term 'air carrier' as used in such section shall include 'air contractor', and references in such sections to 'traffic' or to 'air transportation' shall be deemed to include air contracting traffic and commerce."

83838-43-2

SEC. 27. Section 601 (a) (5) of the Civil Aeronautics Act of 1938, as amended, is hereby amended by inserting after the words "air carriers" the words "and air contractors".

SEC. 28. Subsection (a) of section 602 of the Civil Aeronautics Act of 1938, as amended, is amended by striking out the last sentence thereof and by adding at the end of the preceding sentence the following proviso: "Provided, That the Authority may, in its discretion, prohibit or restrict the issuance of airman certificates to aliens, or may make such issuance dependent on the terms of reciprocal agreements entered into with foreign governments."

SEC. 29. Section 604 of the Civil Aeronautics Act of 1938, as amended, is amended to read as follows:

"OPERATING CERTIFICATES

"POWER TO ISSUE

"(a) The Authority is empowered to issue air carrier or air contractor operating certificates and to establish minimum safety standards for the operation of the air carrier or air contractor to whom any such certificate is issued,

"ISSUANCE

"(b) Any person deciding to operate as an air carrier or air contractor may file with the Authority an application for an air carrier or air contractor operating certificate. If the Authority finds after investigation that such person is properly and adequately equipped and able to conduct a safe operation in accordance with the requirements of this Act and the rules, regulations, and standards prescribed thereunder, it shall issue an air carrier or air contractor operating certificate to such person. Each air carrier or air contractor operating certificate shall prescribe such terms, conditions, and limitations as are reasonably necessary to assure safety in air commerce.'

SEC. 30. Section 609 of the Civil Aeronautics Act of 1938, as amended, is amended by inserting after the words "air carrier" in such section, the words "or air contractor", by striking out the phrase "upon notice and hearing" and inserting in lieu thereof the phrase "upon notice and opportunity for hearing", and by striking out the next to the last sentence and inserting in lieu thereof the following: "The Authority shall immediately give notice of such suspension to the holder of such certificate and shall provide such holder with an opportunity for hearing."

SEC. 31. Title VI of the Civil Aeronautics Act of 1938, as amended, is amended by inserting at the end thereof the following new section:

"DENIAL OF CERTIFICATE

"SEC. 611. Any person, whose application for the issuance or renewal of a .certificate issuable under this title is denied by the Administrator, may file with the Authority a petition for review' under such regulations as the Authority may prescribe. The Authority shall review such denial and after providing the petitioner with an opportunity for hearing, may affirm the Administrator's action or may direct the issuance of such certificate upon such conditions as it deems necessary in the interest of safety."

SEC. 32. Section 610 (a) (4) of the Civil Aeronautics Act of 1938, as amended, is hereby amended by inserting after the words "air carrier" in each place where such words appear the words "or air contractor".

SEC. 33. Section 801 of the Civil Aeronautics Act, as amended, is hereby amended by inserting after the words "section 402," the words "or any license authorizing an air contractor to engage in overseas or foreign air commerce, or air commerce between places in the same Territory or possession,"; and by inserting after the word "permits" the words "and licenses".

SEC. 34. Title VIII of the Civil Aeronautics Act of 1938, as amended is hereby amended by striking out the word "administrative" from the title thereof; and by adding a new section immediately following section 801 thereof, to be designated section 802, and by renumbering the subsequent sections accordingly. The new section shall read as follows: