[House Report 106-35]
[From the U.S. Government Publishing Office]
106th Congress Report
1st Session HOUSE OF REPRESENTATIVES 106-35
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COMMERCIAL OPERATION OF SUPERSONIC TRANSPORT CATEGORY AIRCRAFT
_______
March 2, 1999.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Shuster, from the Committee on Transportation and Infrastructure,
submitted the following
R E P O R T
[To accompany H.R. 661]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 661) to direct the Secretary of
Transportation to prohibit the commercial operation of
supersonic transport category aircraft that do not comply with
stage 3 noise levels if the European Union adopts certain
aircraft noise regulations, having considered the same, report
favorably thereon without amendment and recommend that the bill
do pass.
BACKGROUND
Aircraft noise has been a significant issue in the aviation
industry for many years. Aircraft noise affects communities and
people located near airports. To combat aviation noise,
Congress passed Public Law No. 101-508, 104 Stat. 1388-378,
codified at 49 U.S.C. 47524. This law imposes significant noise
restrictions on the aviation industry. The most stringent of
these restrictions, known as Stage 3 noise restrictions, have
been phased in and require certain categories of aircraft to be
fully Stage 3 compliant by December 31, 1999.
The International Civil Aviation Organization (``ICAO''),
created by the Chicago Convention, sets and administers
international certification standards for aircraft. Once an
aircraft is certified as having met ICAO standards, it may be
used in any ICAO member country. ICAO certification gives
operators and investors assurances of worldwide marketability
for the normal life cycle of an aircraft. ICAO has promulgated
international noise restrictions, similar to U.S. Stage 3
restrictions, that are known as Chapter 3 noise restrictions;
these restrictions become fully effective in 2002. Chapter 3
and Stage 3 noise restrictions are the most stringent noise
restrictions currently in effect and significantly reduce the
amount of noise experienced by people near airports.
An aircraft may meet these noise restrictions by various
means. The most common means are: purchasing new aircraft that
are manufactured to meet the restrictions; modifying an
existing Stage 2 engine by essentially placing a device on it
that makes the engine quieter and brings it up to Stage 3
levels, a process known as ``hushkitting;'' or putting new,
quieter Stage 3 engines on an existing Stage 2 aircraft, known
as ``re-engining.'' In addition, aircraft weight and flap
restrictions may be imposed to ensure that noise levels are at
Stage 3 levels.
The European Union (``EU'') is in the process of adopting a
regulation that will severely restrict the use of hushkitted
and re-engined aircraft in Europe despite the fact that these
aircraft meet all Stage 3 and Chapter 3 requirements. The draft
regulation targets ``recertificated'' aircraft, defined by the
EU as aircraft modified through technical measures--hushkits,
engine modifications, or other technical measures--or
indirectly through operational restrictions, such as weight or
flap restrictions.
The proposed regulation targets several generally accepted
methods for bringing older aircraft in compliance with current
noise restrictions. Hushkits have been used for close to 15
years as an appropriate measure to meet existing aircraft noise
restrictions. Companies also often elect to re-engine their
older aircraft to meet current noise restrictions.
The draft regulation provides that an EU member state
cannot place ``recertificated civil subsonic jet aeroplanes''
on its register after April 1, 1999. However, a recertificated
aircraft that was on the register of an EU member state before
April 1, 1999 can be freely transferred to the registry of
another EU Member State.
Recertificated aircraft registered in non-EU States can not
be operated in the EU after April 1, 2002, unless the operator
can prove that these aircraft were both operated in the EU
between April 1, 1995 and April 1, 1999, and have remained on
the same register. In addition, recertificated aircraft already
on the register of an EU Member State cannot operate in the EU
after April 1, 2002, unless they were already operating in the
EU before April 1, 1999.
The EU's proposal does allow the use of some re-engined
aircraft. The proposed regulation uses the bypass ratio of an
engine as an artificial cut off in determining whether an
aircraft is a ``recertificated'' aircraft. The EU's proposal
restricts the use of aircraft that are re-engined with a new
engine having a bypass ratio of less than 3.0:1. This
artificial cut off would, for example, allow the continued
operation of aircraft having Rolls Royce engines, which have a
bypass ratio of 3.1:1, but would disallow the use of aircraft
re-engined with Pratt & Whitney JT8D engines, which have a
bypass ratio of less than 3.0:1. Put another way, only aircraft
equipped with U.S. manufactured engines are being disallowed
under the proposed regulation.
The proposal would affect U.S. cargo, express package
service, and passenger airlines. Specifically, the regulation
would affect over 1600 aircraft including DC-9s and 727s.
The proposed ban violates universally recognized
international obligations. Article 33 of the Chicago Convention
mandates universal recognition of an airline's airworthiness
certificate, where aircraft of the airlines' flag meet all
current ICAO standards.
The proposed regulation also treats domestic and foreign
operators differently in violation of the Convention's
nondiscrimination principle, and potentially violates EU Member
States' bilateral air service agreements with the U.S. This
proposal is a major departure from international standards in
the aircraft certification arena. It unlawfully discriminates
against U.S. operators by denying U.S. designated airlines the
right to choose Chapter 3 compliant equipment best suited for
its fleet.
The Committee finds that the EU's proposed regulation will
adversely affect the fleet value of aircraft that have been
modified either by adding hushkits or re-engining to meet ICAO
Chapter 3 noise rules. The rule would artificially and
dramatically limit the pool of possible buyers of U.S.-owned
hushkitted aircraft because EU operators can no longer buy
these aircraft from non-Europeans-only from other Europeans.
Since these aircraft will no longer be allowed to operate in
Europe, the market value of the aircraft will substantially
decline.
The EU's proposal would also significantly increase the
cost of U.S. operations to, from, and within Europe--any new
operations would have to use aircraft originally manufactured
to meet Chapter 3 standards.
Ostensibly, the EU has proposed this regulation for
environmental purposes. However, there has been no credible
evidence that the proposal has any environmental basis. The
aircraft targeted by the proposed regulation would be banned
from some airports where noise has not been an issue.
Furthermore, some non-hushkitted Chapter 3 aircraft, which
would be allowed to fly under this proposal, are noisier than
the hushkitted aircraft affected by the proposed regulation
The proposed regulation promotes European commercial
interests rather than environmental interests by favoring EU
airlines over U.S. airlines, prohibiting airlines from
developing countries, and favoring EU manufacturers over U.S.
and other non-European manufacturers. The proposed regulation
will cost U.S. operators between $1 and $2 billion by
disrupting investor expectations and making certificated
aircraft significantly less valuable in the EU market. The
regulation is expected to cost U.S. manufacturers over $1
billion in spare parts and engines sales. It will shrink the
number of potential buyers for those aircraft and drastically
reduce the value of affected aircraft. In addition, it may
increase the cost of aircraft financing significantly, as
financial institutions realize that the certification process
can not be relied on to establish aircraft life expectancy.
The Committee further believes that the EU proposal
unfairly discriminates against hushkit and U.S. aircraft
manufacturers. Development of hushkit technology is U.S.-based;
essentially all hushkits are U.S. manufactured and the
overwhelming majority of the business is conducted by U.S.
companies. There are no European manufactured hushkitted
aircraft. The proposed regulation does not affect any European
aircraft or aircraft engine manufacturer.
The Committee believes that the EU proposal seriously
undermines ICAO's broad applicability and purpose to set
international aviation standards to which all member countries
abide, and will result in a patchwork of regional regulations
that could dramatically disadvantage the U.S. aviation
industry. Specifically, by imposing a regional noise standard,
the EU severely undercuts ICAO's efforts to address
environmental issues on a uniform international basis and
current ICAO efforts to draft Chapter 4 noise restrictions
could potentially falter. ICAO explicitly rejected this EU
proposal at its September 1998 assembly meeting. Airbus
Industries, a European based aircraft manufacturer that could
potentially benefit from this regulation, also is on record
opposing its implementation for the above reasons.
REPORTED BILL
The Concorde is a civil supersonic transport category
aircraft operated by both British Airways and Air France. It
does not meet, and has been exempted from, Stage 3
environmental noise requirements for its U.S. operations. In
fact, the Concorde does not even meet less stringent Stage 2
noise standards.
The reported bill would ban U.S. commercial operations of
the Concorde if the European Union adopts its proposed
regulations by restricting the U.S. commercial operations of
civil supersonic transport category aircraft that do not meet
current U.S. noise restrictions. In contrast, the EU proposal
would restrict U.S. aircraft that meet current international
noise restrictions. Other EU-based aircraft that meet Chapter 3
noise restrictions in the same way are not restricted by the
EU's proposed regulation. The Committee believes that this bill
is a fair and measured response to the EU's proposed action.
HEARINGS AND LEGISLATIVE HISTORY
H.R. 661 was introduced on February 9, 1999. The Committee
has not held hearings on the reported legislation.
COMMITTEE CONSIDERATION
On February 11, 1999 the Committee on Transportation and
Infrastructure met in open session and ordered the bill
reported, without an amendment, by voice vote with a quorum
present. There were no recorded votes taken during Committee
consideration of H.R. 661.
ROLLCALL VOTES
Clause 3(b) of rule XIII of the House of Representatives
requires each committee report to include the total number of
votes cast for and against on each roll call vote on a motion
to report and on any amendment offered to the measure or
matter, and the names of those members voting for and against.
There were no recorded votes taken in connection with ordering
H.R. 661 reported. A motion by Mr. Duncan to order H.R. 661
favorably reported to the House, without amendment, was agreed
to by voice vote, a quorum being present.
COMMITTEE OVERSIGHT FINDINGS
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
COST OF THE LEGISLATION
Clause 3(d)2 of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
COMPLIANCE WITH HOUSE RULE XIII
1. With respect to the requirement of clause 3(c)(2) of
rule XIII of the Rules of the House of Representatives, and
section 308(a) of the Congressional Budget Act of 1974, the
Committee references the report of the Congressional Budget
Office included below.
2. With respect to the requirement of clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, the
Committee has received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 661.
3. With respect to the requirement of clause 3(c)(3) of
rule XIII of the Rules of the House of Representatives and
section 402 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R. 661
from the Director of the Congressional Budget Office.
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 25, 1999.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure, House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 661, a bill to
direct the Secretary of Transportation to prohibit the
commercial operation of supersonic transport category aircraft
that do not comply with stage 3 noise levels if the European
Union adopts certain aircraft noise regulations.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Deborah
Reis (for federal costs), and Lesley Frymier (for the private-
sector impact).
Sincerely,
Dan L. Crippen, Director.
Enclosure.
congressional budget office cost estimate
H.R. 661--A bill to direct the Secretary of Transportation to prohibit
the commercial operation of supersonic transport category
aircraft that do not comply with stage 3 noise levels if the
European Union adopts certain aircraft noise regulations
H.R. 661 would require the Secretary of Transportation to
prohibit the operation of civil supersonic aircraft to or from
U.S. airports if the European Union adopts a final regulation
affecting the use and sale of certain airline equipment
retrofitted for noise control by American companies.
CBO estimates that enacting H.R. 661 would have no
immediate impact on the federal budget, but the government
could incur costs as the result of arbitration, litigation, or
other efforts at dispute resolution in an international forum.
It is possible that the federal government could be liable for
damages, but CBO has no basis for predicting the likelihood or
outcome of such proceedings. Pay-as-you-go procedures would
apply because the bill could affect direct spending--if the
United States has to pay damages and if it uses the permanent
judgment fund appropriation for that purpose.
H.R. 661 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments. By
effectively banning the operation of Concorde aircraft at U.S.
airports, H.R. 661 would impose a new private-sector mandate on
British Airways and Air France, the operators of the Concorde.
Based on information provided by the Department of
Transportation, the Congressional Research Service, and
industry sources, CBO estimates that the direct cost of the new
private-sector mandate would not exceed the statutory threshold
established in UMRA ($100 million in 1996, adjusted annually
for inflation).
The CBO staff contacts are Deborah Reis (for federal
costs), and Lesley Frymier (for the private-sector impact).
This estimate was approved by Robert A. Sunshine, Deputy
Assistant Director for Budget Analysis.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Public Law
104-1).
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of the Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act (Public Law 104-4).
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, committee reports on a bill or joint
resolution of a public character shall include a statement
citing the specific powers granted to the Congress in the
Constitution to enact the measure. The Committee on
Transportation and Infrastructure finds that Congress has the
authority to enact this measure pursuant to its powers granted
under Article I, Section 8 of the Constitution.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.