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EQUIPMENT TRUST PROVISIONS

[Act of September 4, 1957,71 Stat.617]

To amend section 116 of chapter X of the Federal Bankruptcy Act, to make certain equipment trust provisions applicable to aircraft and aircraft equipment of air carriers

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 116 of the Act of July 1, 1898, chapter 541, as amended (11 U. S. C. 516; 52 Stat. 885), be amended by adding at the end thereof the following new subsection:

"(5) Notwithstanding any other provisions of chapter X, the title of any owner, whether as trustee or otherwise, to aircraft, aircraft engines, propellers, appliances, and spare parts (as any of such are defined in the Civil Aeronautics Act of 1938, as now in effect or hereafter amended) leased, subleased, or conditionally sold to any air carrier which is operating pursuant to a certificate of convenience and necessity issued by the Civil Aeronautics Board, and any right of such owner or of any other lessor to such air carrier to take possession of such property in compliance with the provisions of any such lease or conditional sale contract shall not be affected by the provisions of chapter X if the terms of such lease or conditional sale so provide."

184

GOVERNMENT GUARANTY OF EQUIPMENT LOANS

[Act of September 7, 1957, 71 Stat. 629, as amended by Act of March 18, 1959, 73 Stat. 4; Act of June 25, 1959, 73 Stat. 141; Act of July 12, 1960, 74 Stat. 411; and Act of September 14, 1962, 76 Stat. 936]

To provide for Government guaranty of private loans to certain air carriers for purchase of modern aircraft and equipment, to foster the development and use of modern transport aircraft by such carriers, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That it is hereby declared to be the policy of Congress, in the interests of the commerce of the United States, the postal service, and the national defense to promote the development of local, feeder, and short-haul air transportation. In furtherance of this policy it is deemed necessary and desirable that provision be made to assist certain air carriers engaged in such air transportation by providing governmental guaranties of loans to enable them to purchase aircraft suitable for such transportation on reasonable terms.

SEC. 2. [71 Stat. 629, as amended by 76 Stat. 936; 49 U.S.C. 1324 note] As used in this Act

(a) "Secretary" means the Secretary of Commerce.

(b) "Aircraft purchase loan" means any loan, or commitment in connection therewith, made for the purchase of a commercial transport aircraft, including spare parts normally associated therewith.

SEC. 3. [71 Stat. 629, as amended by 73 Stat. 4,73 Stat. 150, 74 Stat. 421, 76 Stat. 936; 49 U.S.C. 1324 note] The Secretary is hereby authorized to guarantee any lender against loss of principal or interest on any aircraft purchase loan made by such lender to any air carrier holding a certificate of public convenience and necessity issued by the Board (a) designated therein to be for local or feeder air service, or (b) providing for operations wholly within the State of Hawaii, or (c) providing for operations (the major portion of which are conducted either within Alaska or between Alaska and the fortyeight contiguous States) within the State of Alaska (including service between Alaska and the forty-eight contiguous States, and between Alaska and adjacent Canadian territory), or (d) providing for operations within the Commonwealth of Puerto Rico (including service to the Virgin Islands and the Dominican Republic), or (e) providing for operations between Florida and the British West Indies (including service to Cuba), or (f) for the purpose of authorizing metropolitan helicopter service. Such guaranty shall be made in such form, on such terms and conditions, and pursuant to such regulations, as the Secretary deems necessary and which are not inconsistent with the provisions of this Act.

SEC. 4. [71 Stat. 629, as amended by 76 Stat. 936; 49 U.S.C. 1324 note] No guaranty shall be made:

(a) Extending to more than the unpaid interest and 90 percent of the unpaid principal of any loan.

(b) 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 therewith.

(c) On any loan whose terms permit full repayment more than 10 years after the date thereof.

(d) Wherein the total face amount of such loan, and of any other loans to the same carrier, or corporate predecessor carrier or carriers, guaranteed and outstanding under the terms of this Act exceed $10,000,000.

(e) Unless the Secretary finds that, without such guaranty, in the amount thereof, the air carrier would be unable to obtain necessary funds for the purchase of needed aircraft on reasonable terms.

(f) Unless the Secretary finds that the aircraft to be purchased with the guaranteed loan is needed to improve the service and efficiency of operation of the air carrier.

SEC. 5. 71 Stat. 629, as amended by 76 Stat. 936; 49 U.S.C. 1324 note] The Secretary shall prescribe and collect from the lending institution a reasonable guaranty fee in connection with each loan guaranteed under this Act.

SEC. 6. [71 Stat. 629, as amended by 76 Stat. 936; 49 U.S.C. 1324 note] (a) To permit him to make use of such expert advice and services as he may require in carrying out the provisions of this Act, the Secretary may use available services and facilities of other agencies and instrumentalities of the Federal Government with their consent and on a reimbursable basis.

(b) Departments and agencies of the Federal Government shall exercise their powers, duties, and functions in such manner as will assist in carrying out the objectives of this Act.

(c) The Secretary shall make available to the Comptroller General of the United States such information with respect to the loan guaranty program under this Act as the Comptroller General may require to carry out his duties under the Budget and Accounting Act, 1921.

SEC. 7. [71 Stat. 629, as amended by 76 Stat. 936; 49 U.S.C. 1324 note] (a) Receipts under this Act shall be credited to miscellaneous receipts of the Treasury.

(b) Payments to lenders required as a consequence of any guaranty under this Act may be made from funds which are hereby authorized to be appropriated to the Department of Commerce for that purpose. (c) Administrative expenses under this Act shall be paid from appropriations to the Department of Commerce for administrative

expenses.

SEC. 8. [71 Stat. 629, as amended by 76 Stat. 936; 49 U.S.C. 1324 note] This Act shall become effective upon enactment and the authority contained in section 3 hereof shall expire ten years thereafter.

TRANSITIONAL PROVISIONS IN THE ACT OF OCTOBER 15, 1962, RELATING TO AIRCRAFT LOAN GUARANTEES1

[76 Stat. 936]

To amend the Act of September 7, 1957, relating to aircraft loan guarantees Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.

SEC. 9. (a) All orders, determinations, rules, regulations, permissions, approvals, agreements, rulings, directives, and privileges which have been issued, made, or granted, or allowed to become effective, by the Civil Aeronautics Board, or any court of competent jurisdiction, under any provision of law amended by this Act, or in the exercise of duties, powers, or functions which, under this Act, are vested in the Secretary of Commerce, and which are in effect on the date of enactment of this Act shall continue in effect according to their terms until modified, terminated, superseded, set aside, or repealed by the Secretary of Commerce or by any court of competent jurisdiction, or by operation of law.

(b) The provisions of this Act shall not affect any proceedings pending before the Civil Aeronautics Board on the date of enactment of this Act; but any such proceedings shall be continued before the Secretary of Commerce, orders issued therein, and payments made pursuant to such orders, as if this Act had not been enacted; and orders issued in any such proceedings shall continue in effect until modified, terminated, superseded, or repealed by the Secretary of Commerce, or by operation of law.

(c) The provisions of this Act shall not affect suits commenced prior to the date of its enactment; and all such suits shall be continued by the Secretary of Commerce, proceedings therein had, appeals therein taken, and judgments therein rendered, in the same manner and with the same effect as if this Act had not been enacted. No suit, action, or other proceeding lawfully commenced by or against the Civil Aeronautics Board or officer of the United States, in relation to the discharge of official duties, shall abate by reason of any transfer of authority, power, or duties from the Board or officer to the Secretary of Commerce under the provisions of this Act, but the court upon a motion or a supplemental petition filed at any time within twelve months after such transfer, showing the necessity for a survival of such suit, action, or other proceeding to obtain a settlement of the questions involved, may allow the same to be maintained by or against the Secretary of Commerce.

1 The sections of this Act not shown here have been incorporated as amendments to the Government Guaranty of Equipment Loans Act, ante p. 185, and to section 410 of the Federal Aviation Act, ante p. 45.

SEC. 10. (a) The officers, employees, and property (including office equipment and official records) of the Civil Aeronautics Board which the Bureau of the Budget, after consultation with the Board, shall determine to have been employed by the Board in the exercise and performance of those powers and duties vested in and imposed upon it by the Act of September 7, 1957 (71 Stat. 629), as in effect on the day before the date of enactment of this Act, and which are vested by this Act in the Secretary of Commerce, shall be transferred to the Department of Commerce upon such date or dates as the Bureau of the Budget shall specify. The transfer of personnel under this section shall be without reduction in classification or compensation, except that this requirement shall not operate after the end of the fiscal year during which such transfer is made to prevent the adjustment of classification or compensation to conform to the duties to which such transferred personnel may be assigned.

(b) All records transferred to the Secretary of Commerce under this Act shall be available for use by him to the same extent as if such records were originally records of the Secretary.

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