Brief ⁽¹⁾

Senate Sub. for HB 2143 would create a Discount Airline Guarantee Program similar to the Railroad Loan Guarantee Program which has been in the Kansas statutes since 1991.

The Discount Airline Guarantee Program would give the Secretary of Transportation the authority to enter into an agreement to guarantee the operation of a discount airline.

A maximum of $4,000,000 could be guaranteed under the program.

The following criteria would have to be met by the discount airline prior to qualifying for the guarantees:

• •Raise all initial start-up costs;
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• •Receive a $4,000,000 guarantee for the city of operation;
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• •Secure from the base airport of operation a release from the payment of all airport fees for six months;
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• •Make all flights available and accessible for booking in the International Airline Reservation System;
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• •Set "walk up" airfares, at the time the borrower enters the marketplace, at a minimum of 30 percent less than the average airfares in the preceding calendar year on commercial airlines;
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• •Set 21-day advance fares, at the time the borrower enters the marketplace, at a minimum of 10 percent less than the average airfares in the preceding calendar year on commercial airlines;
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• •Obtain contractual commitments for at least 50 percent of all available seats for the first year of operation;
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• •Provide baggage transfer services for all passengers; and
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• •Provide through ticketing services for all passengers.

The Secretary of Transportation would have authority to adopt rules and regulations for the implementation of the program. The Secretary would not be permitted to enter into any agreement to guarantee a discount airline unless it has been authorized by an act of the Legislature or the State Finance Council.

The bill would also create the Discount Airline Guarantee Program Fund, to be administered by the Secretary of Transportation. All expenditures from the fund would go through the appropriations process. These expenditures would be for any amount of loss incurred by the discount airline, except that the payments would be made in alternating order with guarantee payments from the city of operation, beginning with the city payment as follows: $2,000,000 of the city guarantee funds, $2,000,000 of the state guarantee funds, $2,000,000 of the city guarantee funds, and $2,000,000 of the state guarantee funds.

Background

The original version of HB 2143 would have amended KSA 2000 Supp. 8-1725 to add a new traffic code violation for failure to turn off auxiliary driving lamps or fog lamps when approaching an oncoming vehicle within 500 feet and when approaching another vehicle from the rear within 300 feet.

The Senate Commerce Committee passed a substitute bill excluding the original provisions of HB 2143 and adding the Discount Airline Guarantee Program provisions from the Senate Commerce Committee version of SB 324.

The Senate made a technical amendment to the bill.

An official fiscal note was not available on the substitute bill upon publication of this supplemental note. However, the $4,000,000 in guarantees contemplated by the bill would have to be appropriated before there would be any fiscal impact on the state.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi