[House Report 108-526]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 108-526
======================================================================
CAPE TOWN TREATY IMPLEMENTATION ACT OF 2004
_______
June 8, 2004.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Transportation and
Infrastructure, submitted the following
R E P O R T
[To accompany H.R. 4226]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 4226) to amend title 49, United
States Code, to make certain conforming changes to provisions
governing the registration of aircraft and the recordation of
instruments in order to implement the Convention on
International Interests in Mobile Equipment and the Protocol to
the Convention on International Interests in Mobile Equipment
on Matters Specific to Aircraft Equipment, known as the ``Cape
Town Treaty'', having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as ``Cape Town Treaty Implementation Act of
2004''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds the following:
(1) The Cape Town Treaty (as defined in section 44113 of
title 49, United States Code) extends modern commercial laws
for the sale, finance, and lease of aircraft and aircraft
engines to the international arena in a manner consistent with
United States law and practice.
(2) The Cape Town Treaty provides for internationally
established and recognized financing and leasing rights that
will provide greater security and commercial predictability in
connection with the financing and leasing of highly mobile
assets, such as aircraft and aircraft engines.
(3) The legal and financing framework of the Cape Town Treaty
will provide substantial economic benefits to the aviation and
aerospace sectors, including the promotion of exports, and will
facilitate the acquisition of newer, safer aircraft around the
world.
(4) Only technical changes to United States law and
regulations are required since the asset-based financing and
leasing concepts embodied in the Cape Town Treaty are already
reflected in the United States in the Uniform Commercial Code.
(5) The new electronic registry system established under the
Cape Town Treaty will work in tandem with current aircraft
document recordation systems of the Federal Aviation
Administration, which have served United States industry well.
(6) The United States Government was a leader in the
development of the Cape Town Treaty.
(b) Purpose.--Accordingly, the purpose of this Act is to provide for
the implementation of the Cape Town Treaty in the United States by
making certain technical amendments to the provisions of chapter 441 of
title 49, United States Code, directing the Federal Aviation
Administration to complete the necessary rulemaking processes as
expeditiously as possible, and clarifying the applicability of the
Treaty during the rulemaking process.
SEC. 3. RECORDATION OF SECURITY INSTRUMENTS.
(a) Establishment of System.--Section 44107(a) of title 49, United
States Code, is amended--
(1) in paragraph (2)(A) by striking ``750'' and inserting
``550''; and
(2) in paragraph (3) by striking ``clause (1) or (2) of this
subsection'' and inserting ``paragraph (1) or (2)''.
(b) International Registry.--Section 44107 of such title is amended
by adding at the end the following:
``(e) International Registry.--
``(1) Designation of united states entry point.--As permitted
under the Cape Town Treaty, the Federal Aviation Administration
Civil Aviation Registry is designated as the United States
Entry Point to the International Registry relating to--
``(A) civil aircraft of the United States;
``(B) an aircraft for which a United States
identification number has been assigned but only with
regard to a notice filed under paragraph (2); and
``(C) aircraft engines.
``(2) System for filing notice of prospective interests.--
``(A) Establishment.--The Administrator shall
establish a system for filing notices of prospective
assignments and prospective international interests in,
and prospective sales of, aircraft or aircraft engines
described in paragraph (1) under the Cape Town Treaty.
``(B) Maintenance of validity.--A filing of a notice
of prospective assignment, interest, or sale under this
paragraph and the registration with the International
Registry relating to such assignment, interest, or sale
shall not be valid after the 60th day following the
date of the filing unless documents eligible for
recording under subsection (a) relating to such notice
are filed for recordation on or before such 60th day.
``(3) Authorization for registration of aircraft.--A
registration with the International Registry relating to an
aircraft described in paragraph (1) (other than subparagraph
(C)) is valid only if (A) the person seeking the registration
first files documents eligible for recording under subsection
(a) and relating to the registration with the United States
Entry Point, and (B) the United States Entry Point authorizes
the registration.''.
SEC. 4. REGULATIONS.
(a) In General.--The Administrator of the Federal Aviation
Administration shall issue regulations necessary to carry out this Act,
including any amendments made by this Act.
(b) Contents of Regulations.--Regulations to be issued under this Act
shall specify, at a minimum, the requirements for--
(1) the registration of aircraft previously registered in a
country in which the Cape Town Treaty is in effect; and
(2) the cancellation of registration of a civil aircraft of
the United States based on a request made in accordance with
the Cape Town Treaty.
(c) Expedited Rulemaking Process.--
(1) Final rule.--The Administrator shall issue regulations
under this section by publishing a final rule by December 31,
2004.
(2) Effective date.--The final rule shall not be effective
before the date the Cape Town Treaty enters into force with
respect to the United States.
(3) Economic analysis.--The Administrator shall not be
required to prepare an economic analysis of the cost and
benefits of the final rule.
(d) Applicability of Treaty.--Notwithstanding parts 47.37(a)(3)(ii)
and 47.47(a)(2) of title 14, of the Code of Federal Regulations,
Articles IX(5) and XIII of the Cape Town Treaty shall apply to the
matters described in subsection (b) until the earlier of the effective
date of the final rule under this section or December 31, 2004.
SEC. 5. LIMITATION ON VALIDITY OF CONVEYANCES, LEASES, AND SECURITY
INSTRUMENTS.
Section 44108(c)(2) of title 49, United States Code, is amended by
striking the period at the end and inserting ``or the Cape Town Treaty,
as applicable.''.
SEC. 6. DEFINITIONS.
(a) In General.--Chapter 441 of title 49, United States Code, is
amended by adding at the end the following:
``Sec. 44113. Definitions
``In this chapter, the following definitions apply:
``(1) Cape town treaty.--The term `Cape Town Treaty' means
the Convention on International Interests in Mobile Equipment,
as modified by the Protocol to the Convention on International
Interests in Mobile Equipment on Matters Specific to Aircraft
Equipment, signed at Rome on May 9, 2003.
``(2) United states entry point.--The term `United States
Entry Point' means the Federal Aviation Administration Civil
Aviation Registry.
``(3) International registry.--The term `International
Registry' means the registry established under the Cape Town
Treaty.''.
(b) Conforming Amendment.--The analysis for such chapter is amended
by adding at the end the following:
``44113. Definitions.''.
SEC. 7. EFFECTIVE DATE AND PRESERVATION OF PRIOR RIGHTS.
This Act, including any amendments made by this Act, shall take
effect on the date the Cape Town Treaty (as defined in section 44113 of
title 49, United States Code) enters into force with respect to the
United States and shall not apply to any registration or recordation
that was made before such effective date under chapter 441 of such
title or any legal rights relating to such registration or recordation.
Purpose of the Legislation
H.R. 4226 amends title 49, United States Code, to make
certain conforming changes to provisions governing the
registration of aircraft and the recordation of instruments to
implement the Convention on International Interests in Mobile
Equipment and the Protocol to the Convention on International
Interests in Mobile Equipment on Matters Specific to Aircraft
Equipment, known as the ``Cape Town Treaty.''
Background and Need for Legislation
The Cape Town Convention on International Interests in
Mobile Equipment, and the related Protocol on Aircraft
Equipment, known as the ``Cape Town Treaty,'' will extend
modern commercial finance laws, already in place in the United
States, to international transactions involving high value
mobile equipment. The Cape Town Convention contains the basic
terms and provisions that underlie the regime and the Aircraft
Protocol makes the Treaty operational as to aircraft, aircraft
engines and helicopters above a certain size. The Treaty
represents a significant advance in international aviation
financing and is vital to U.S. aviation and aerospace interests
given the challenges faced by the industry today. Key federal
agencies concerned with civil aviation and U.S. exports,
including the FAA, Export-Import Bank of the United States
(EXIM Bank), and the Departments of Transportation, Commerce
and State were fully involved in development of the Convention
and Aircraft Protocol.
The financing provisions on secured interests and leasing
under the Treaty do not require any implementing legislation in
the U.S. because they are fully consistent with U.S. law under
the Uniform Commercial Code. However, certain technical
amendments to the Federal Aviation Administration's (FAA) Civil
Aviation Registry functions are required to fully integrate the
FAA's Registry system with the new, computerized International
Registry that will be established under the Treaty. Those
technical amendments are set forth in H.R. 4226, the ``Cape
Town Treaty Implementation Act of 2004.''
Treaty status
The Cape Town Convention and Aircraft Protocol were
negotiated under the auspices of the International Institute
for the Unification of Private Law (UNIDROIT), an
intergovernmental organization focused on harmonizing the
commercial law of nations, and the International Civil Aviation
Organization (ICAO), the United Nations body responsible for
international aviation. It was concluded in November 2001 at a
Diplomatic Conference at Cape Town, South Africa, and has been
signed by 29 states, including the United States. The President
transmitted the Cape Town Convention and Aircraft Protocol to
the Senate on November 5, 2003. Later that month, Secretary of
Transportation Norman Y. Mineta transmitted proposed technical
amendments to the FAA's authority to fully implement the
Treaty. The Senate Foreign Relations Committee held a hearing
on the Treaty on April 1, 2004.
Benefits of the FAA Civil Aviation Registry, the designated U.S. Entry
Point, and the International Registry
The Cape Town Treaty will establish a new international
legal framework, modeled on the modern finance law as practiced
in the U.S., to give greater security to those who finance the
purchase of highly mobile aircraft, aircraft engines and
helicopters of a certain size. To implement this world-wide
system for countries ratifying the Treaty, an International
Registry will be established where notices of rights in
aircraft, helicopters and engines will be recorded. That will
be done for the limited purpose of establishing the priority of
competing financial interests, and has no oversight, safety or
other regulatory implications. Under the amendments made by
H.R. 4226, the FAA's Civil Aviation Registry (``FAA Registry'')
system will be preserved and fully integrated with the new
International Registry.
Once in force, the Cape Town Treaty will provide
significant economic benefits both in the U.S and abroad. For
countries that manufacture aircraft, such as the U.S., there
will likely be increased exports as the number of orders for
aircraft and aircraft equipment increase. U.S. companies that
make aircraft parts and provide related services also will
benefit and positive employment implications all around are
expected. In addition, the creditor protections provided for by
the Treaty will benefit U.S. financing companies. There will be
a significant reduction in the risk financing companies incur
when financing aircraft in countries whose laws do not
meaningfully protect creditors in the event of a default or
insolvency. This risk reduction will, in turn, bring benefits
to many countries, particularly developing countries, whose
carriers have had to pay high interest rates or who have not
been able to access the commercial credit markets at all
because of their credit risk. For example, the EXIM Bank has
already offered financing advantages to airlines located in
countries that ratify the Treaty. Currently, four countries
have ratified the Convention and Protocol: Ethiopia, Pakistan,
Nigeria and Panama. Increased credit, assisting in the
acquisition of modern aircraft, will also contribute to
international aviation safety.
An important difference between the FAA's Registry and the
new International Registry is that parties having recordable
interests in U.S. aircraft and related equipment file their
complete documents relating to the interest with the FAA
Registry, while they will only file short, summary notices of
such interests with the new International Registry. To ensure
overall effectiveness of aircraft finance and to maintain the
benefits of the FAA's ``full documentary'' Registry, H.R. 4226
designates the FAA Registry, to be the U.S. ``Entry Point'' to
the International Registry. It also provides that parties must
continue to file all recordable documents with the FAA to
receive the authorization to file with the International
Registry and for that registration to be valid.
Amendments to U.S. law to implement the Cape Town Treaty
H.R. 4226 makes minor conforming changes to chapter 441 of
title 49, United States Code, which governs the recordation of
security interests with the FAA Registry, currently operated
out of the FAA's Mike Monroney Aeronautical Center in Oklahoma
City. It designates the FAA Registry as the U.S. Entry Point to
the International Registry and implements other key features of
the Cape Town Treaty.
First, it provides for the filing of prospective interests
in aircraft, helicopters or engines. This is a modern financing
approach where the priority of the secured interest dates from
the date of the filing of the notice of prospective interest.
The FAA is directed to establish a system for filing such
notices and authorizing the parties to file with the
International Registry. The filing of the prospective notice
and its registration with the International Registry is not
valid unless the parties subsequently file with the FAA, within
60 days, their recordable documents relating to the interest.
This is essential to maintaining the current FAA system and
providing for legal certainty and clarity.
Second, the bill makes conforming amendments to current law
to recognize the application of the Cape Town Treaty. One
amendment allows the recordation of slightly less powerful
engines with the FAA registry and the new International
Registry. Another change directs the FAA to immediately
prescribe regulations for the registration and deregistration
of aircraft in accordance with the terms of the Treaty relating
to the consent of affected parties. This only relates to
financing interests, and has no effect on FAA safety and
security rules and practices.
FAA rulemaking
The Committee also requires an expedited rulemaking
procedure and directs the agency to complete the rulemaking by
December 31, 2004. The rulemaking requires the updating of only
two sections of FAA's current regulations (sections 47.37 and
47.47 of 14 C.F.R.). To expedite the rulemaking process, the
Committee believes that the FAA should be able to proceed to a
final rule without first seeking public comment on these
straightforward changes to the FAA regulations. The bill also
waives the requirement to prepare an economic analysis of the
cost and benefits of the rule. To provide legal certainty and
clarity during the time period of the rulemaking process, the
bill expressly provides that the provisions of the Cape Town
Treaty apply to those matters covered by the rulemaking until
the final rule is effective or December 31, 2004, whichever is
earlier.
H.R. 4226 provides that the Act and the amendments made by
this Act are effective upon the Cape Town Treaty's coming into
force in the U.S. and do not apply to any prior registration or
recordation. The Committee wants to make certain and clear that
all existing rights are subject to prior rules and are
unaffected by the Act. The Committee expects that the FAA will
manage its rulemaking process so as to make its updated
regulations effective when the Cape Town Treaty comes into
force in the U.S. and the International Registry has been
established. The FAA should facilitate the U.S. ratification of
the Treaty at the earliest possible date. U.S. ratification is
critical to ratification by a number of other countries,
including those with large markets for U.S. exports.
Summary of the Legislation
SECTION 1.--SHORT TITLE
This Act may be cited as the ``Cape Town Implementation Act
of 2004''.
SECTION 2.--FINDINGS AND PURPOSE
This section sets forth congressional findings describing
the significance and benefits of the Cape Town Treaty and
noting that the Treaty's commercial financing and leasing
concepts are fully consistent with existing U.S. law. It also
notes that only technical changes to U.S. law and regulations
are needed and recognizes the United States' leadership role in
the development of the Treaty. This section also sets forth
that the purpose of the Act is to provide for implementation of
the Treaty by making certain technical amendments to title 49,
United States Code. It directs the FAA to complete rulemaking
as fast as possible.
SECTION 3.--RECORDATION OF SECURITY INSTRUMENTS
This section makes conforming changes to 49 U.S.C. 44107,
the provision that governs the recordation of security
interests with the FAA Registry. The first amendment would
lower the power rating of aircraft engines eligible for
recordation from 750 rated takeoff horsepower to 550. This
allows for interests in slightly less powerful engines to be
recorded with the FAA registry, a change called for by the Cape
Town Treaty. That change was included in the Treaty so that
security interests in engines that power all medium size
business aircraft to large commercial aircraft would be
eligible for the benefits of the Treaty including the new
International Registry.
This section designates the FAA's Civil Aviation Registry
as the U.S. ``Entry Point'' for authorizing filings related to
U.S. registered civil aircraft, helicopters or aircraft engines
with the new International Registry. This reflects an expressly
authorized declaration under the Treaty by the U.S., which was
done to ensure the seamless interaction of the new
International Registry and the FAA Registry, as well as to
maintain full documentation of all transactions at the FAA
Registry. Use of that FAA authorization procedure is also
available for aircraft engines, so as to permit efficient
transaction closings.
This section also directs the FAA to establish a system for
filing notices of prospective interests in aircraft,
helicopters or aircraft engines with the FAA and, in turn,
authorizing such filings with the new International Registry.
This concept of prospective interests reflects the modern
financing practice in the U.S. under the Uniform Commercial
Code. It gives notice of an intended secured interest, where
both parties to the transaction agree. The date the notice is
registered establishes the interest's priority. This
advancement is one of the key improvements brought about under
the Cape Town Treaty. To provide for this type of filing, while
at the same time ensuring that the full documentary system of
the FAA Registry is maintained, this section provides that the
filing of a notice of prospective interest and its registration
on the International Registry will only be valid if the secured
parties subsequently file the recordable documents related to
the notice within 60 days. However, this 60-day rule does not
apply in the limited cases where a document-type or category is
not eligible for recordation at the FAA Registry, as for
example, with regard to a sale of an aircraft engine. In such a
case, this section does not invalidate a registration at the
International Registry based on such notice of prospective
interest.
Finally, this section provides that, with regard to U.S.
civil aircraft, or aircraft that have received a U.S.
identification number (but have not yet become U.S. aircraft),
that authorization from the FAA Entry Point must be obtained
for a filing with the International Registry, and all related,
eligible documents must first be recorded with the FAA
Registry, for any registration with the International Registry
to be valid relating to such aircraft. However, for aircraft
engines the FAA authorization is optional (since engines do not
have any country's nationality). This is consistent with the
Treaty and is intended to provide clarity and certainty to the
registration process.
SECTION 4.--REGULATIONS
This section directs the FAA to prescribe regulations
necessary to implement the Cape Town Treaty with regard to two
specific processes. First, FAA must proscribe regulations for
the registration of aircraft in the U.S. that were previously
registered in a foreign country where the Cape Town Treaty is
in force. Secondly, the FAA must proscribe regulations for the
de-registration of U.S. civil aircraft based on a request made
in accordance with the terms of the Treaty. These terms deal
only with financial interests and have no effect on safety,
security or other legal requirements. This rulemaking serves
the limited function of implementing key remedies available
under the Treaty to those holding financial interests in
aircraft.
This section also requires an expedited rulemaking process.
Given the noncontroversial nature of the matters to be dealt
with in rulemaking, the expected, clear content of the
regulations based on express provisions in the Treaty, and the
fact that the development of the Cape Town Treaty had broad
participation of private parties as well as government
agencies, this section directs the FAA to publish a final rule
by no later than December 31, 2004. It also notes that the
final rule shall not be effective before the Treaty comes into
force in the U.S. In the further interest of avoiding
unnecessary delay and given the widespread acknowledgement of
and support for the Treaty's potential economic benefits, the
preparation of any economic analysis for the rulemaking is not
required.
Finally, this section states that the Cape Town Treaty
shall apply to the registration and deregistration of aircraft
until the FAA final rule is effective, or until the deadline
for a final rule, December 31, 2004, whichever is earlier.
Sections 47.37 and 47.47 of 14 C.F.R., cited in this section,
are inconsistent with the mandates of the Cape Town Treaty in
that they provide that before an aircraft can be registered as
a U.S. civil aircraft (or deregistered as a U.S. civil
aircraft), all holders of recorded security interests must be
satisfied or give their consent before the registration (or
deregistration) can be approved. The current regulations carry
out the terms of the old Geneva Convention. The Cape Town
Convention updates and changes these requirements.
Specifically, once the Treaty is in effect, and where, under
the Treaty, a specific authorization has been granted, only the
senior interest will have to be satisfied or consent to the
registration or deregistration of an aircraft. This change
reflects more modern methods of financing and is acceptable
because any other financial interests will still be protected
through filings with the new International Registry.
SECTION 5.--LIMITATION ON THE VALIDITY OF CONVEYANCES, LEASES, AND
SECURITY INSTRUMENTS
This section makes a conforming change to 49 U.S.C. 44108
to recognize that the application of the Cape Town Treaty.
Specifically, it clarifies that the terms of section
44108(c)(1), which provides that the validity of a transaction
is governed by the law of the place of delivery, does not take
precedence over the Cape Town Treaty. The change is required
since the Treaty lays down substantive requirements with regard
to the validity of a transaction. A similar approach was
previously followed for the Geneva Convention.
SECTION 6.--DEFINITIONS
This section provides definitions of terms used in the Act.
SECTION 7.--EFFECTIVE DATE AND PRESERVATION OF PRIOR RIGHTS
This section provides that the Act and the amendments made
by this Act are effective upon the Cape Town Treaty coming into
force in the U.S. and do not apply to any prior registration or
recordation under chapter 441 or any legal rights relating
thereto. All existing rights are subject to prior rules and
thus unaffected by the Act.
Legislative History and Committee Consideration
H.R. 4226 was introduced by Chairman Young, Ranking Member
James Oberstar, Aviation Subcommittee Chairman John Mica and
Aviation Subcommittee Ranking Member Peter DeFazio on April 28,
2004. It was referred to the Committee on Transportation and
Infrastructure. The Aviation Subcommittee held a hearing on the
Treaty and H.R. 4226 on April 29, 2004 and then, on the same
date, in a mark up session, the Subcommittee ordered that H.R.
4226 be favorably reported, without amendment, to the full
committee. A full committee mark-up was held on May 12, 2004,
where, after adopting a manager's amendment offered by Aviation
Subcommittee Chairman Mica, (which made clarifying changes to
the bill), H.R. 4226 was ordered reported, as amended, to the
House by voice vote.
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 roll call votes during consideration of the bill.
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 Legislation
Clause 3(c)(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
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
performance goals and objective of this legislation are to
improve transportation safety.
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.
4226 from the Director of the Congressional Budget Office.
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 26, 2004.
Hon. Don Young,
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. 4226, the Cape
Town Treaty Implementation Act of 2004.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Megan
Carroll.
Sincerely,
Elizabeth Robinson
(For Douglas Holtz-Eakin, Director).
Enclosure.
H.R. 4226--Cape Town Treaty Implementation Act of 2004
The Cape Town Treaty, which CBO expects to come into force
during fiscal year 2005, will extend asset-based financing
laws, already applied in the United States, to international
transactions involving the sale, financing, or leasing of
aircraft and aircraft engines. Under that treaty, an
international organization will establish a registry to record
security interests in aircraft and aircraft engines.
The Federal Aviation Administration (FAA) currently
operates a similar registry for domestic aircraft and aircraft
engines. To implement the Cape Town Treaty in the United
States, H.R. 4226 would expand the FAA's authority to operate
that registry and authorize the agency to provide access to the
new international registry. The bill also would direct the FAA
to issue regulations to implement these changes.
According to the FAA, H.R. 4226 would require no major
changes to the agency's existing registry or recording
processes, and any increases in administrative costs would be
less than $500,000 a year. Hence, CBO estimates that
implementing H.R. 4226 would not significantly affect the
federal budget. The bill would not affect direct spending or
revenues.
Section 4 of the Unfunded Mandates Reform Act excludes from
the application of that act any legislative provisions that are
necessary for the ratification or implementation of
international treaty obligations. CBO has determined that
because H.R. 4226 would implement the Cape Town Treaty, it
falls within that exclusion. CBO has thus not reviewed the bill
for the presence of mandates.
The CBO staff contact for this estimate is Megan Carroll.
This estimate was approved by Peter H. Fontaine, Deputy
Assistant Director for Budget Analysis.
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.
Federal Mandates Statement
The Committee adopts as its own the estimate of 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).
Preemption Clarification
Section 423 of the Congressional Budget Act of 1974
requires the report of any Committee on a bill or joint
resolution to include a statement on the extent to which the
bill or joint resolution is intended to preempt state, local or
tribal law. The Committee states that H.R. 4226 does not
preempt any state, local, or tribal law.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act are created by this
legislation.
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).
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 49, UNITED STATES CODE
* * * * * * *
SUBTITLE VII--AVIATION PROGRAMS
* * * * * * *
PART A--AIR COMMERCE AND SAFETY
* * * * * * *
SUBPART III--SAFETY
CHAPTER 441--REGISTRATION AND RECORDATION OF AIRCRAFT
Sec.
44101. Operation of aircraft.
* * * * * * *
44113. Definitions.
* * * * * * *
Sec. 44107. Recordation of conveyances, leases, and security
instruments
(a) Establishment of System.--The Administrator of the
Federal Aviation Administration shall establish a system for
recording--
(1) * * *
(2) leases and instruments executed for security
purposes, including conditional sales contracts,
assignments, and amendments, that affect an interest
in--
(A) a specifically identified aircraft engine
having at least [750] 550 rated takeoff
horsepower or its equivalent;
* * * * * * *
(3) releases, cancellations, discharges, and
satisfactions related to a conveyance, lease, or
instrument recorded under [clause (1) or (2) of this
subsection] paragraph (1) or (2).
* * * * * * *
(e) International Registry.--
(1) Designation of united states entry point.--As
permitted under the Cape Town Treaty, the Federal
Aviation Administration Civil Aviation Registry is
designated as the United States Entry Point to the
International Registry relating to--
(A) civil aircraft of the United States;
(B) an aircraft for which a United States
identification number has been assigned but
only with regard to a notice filed under
paragraph (2); and
(C) aircraft engines.
(2) System for filing notice of prospective
interests.--
(A) Establishment.--The Administrator shall
establish a system for filing notices of
prospective assignments and prospective
international interests in, and prospective
sales of, aircraft or aircraft engines
described in paragraph (1) under the Cape Town
Treaty.
(B) Maintenance of validity.--A filing of a
notice of prospective assignment, interest, or
sale under this paragraph and the registration
with the International Registry relating to
such assignment, interest, or sale shall not be
valid after the 60th day following the date of
the filing unless documents eligible for
recording under subsection (a) relating to such
notice are filed for recordation on or before
such 60th day.
(3) Authorization for registration of aircraft.--A
registration with the International Registry relating
to an aircraft described in paragraph (1) (other than
subparagraph (C)) is valid only if (A) the person
seeking the registration first files documents eligible
for recording under subsection (a) and relating to the
registration with the United States Entry Point, and
(B) the United States Entry Point authorizes the
registration.
Sec. 44108. Validity of conveyances, leases, and security instruments
(a) * * *
* * * * * * *
(c) Applicable Laws.--(1) * * *
(2) This subsection does not take precedence over the
Convention on the International Recognition of Rights in
Aircraft (4 U.S.T. 1830)[.] or the Cape Town Treaty, as
applicable.
* * * * * * *
Sec. 44113. Definitions
In this chapter, the following definitions apply:
(1) Cape town treaty.--The term ``Cape Town Treaty''
means the Convention on International Interests in
Mobile Equipment, as modified by the Protocol to the
Convention on International Interests in Mobile
Equipment on Matters Specific to Aircraft Equipment,
signed at Rome on May 9, 2003.
(2) United states entry point.--The term ``United
States Entry Point'' means the Federal Aviation
Administration Civil Aviation Registry.
(3) International registry.--The term ``International
Registry'' means the registry established under the
Cape Town Treaty.
* * * * * * *