SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Free to Fly Act''.

SEC. 2. DEFINITIONS.

    Section 40102(a) of title 49, United States Code, is amended--
            (1) in paragraph (2) by striking ``citizen of the United 
        States'' and inserting ``citizen of the United States, or other 
        person organized under the laws of the United States or a 
        State, the District of Columbia, or a territory or possession 
        of the United States,'';
            (2) in paragraph (15)(C)--
                    (A) by striking ``of which the president and at 
                least two-thirds of the board of directors'' and 
                inserting ``of which the president and at least 51 
                percent of the board of directors''; and
                    (B) by striking ``at least 75 percent of the voting 
                interest'' and inserting ``at least 51 percent of the 
                voting interest'';
            (3) in paragraph (21) by striking ``not a citizen of the 
        United States'' and inserting ``who is not organized under the 
        laws of the United States or a State, the District of Columbia, 
        or a territory or possession of the United States''; and
            (4) in paragraph (26) by striking ``citizen of the United 
        States'' and inserting ``citizen of the United States or other 
        person organized under the laws of the United States or a 
        State, the District of Columbia, or a territory or possession 
        of the United States''.

SEC. 3. REQUIREMENT FOR CERTIFICATE.

    Section 41101(b) of title 49, United States Code, is amended--
            (1) by striking ``citizen of the United States'' and 
        inserting ``citizen of the United States or other person 
        organized under the laws of the United States or a State, the 
        District of Columbia, or a territory or possession of the 
        United States'';
            (2) in paragraph (1) by striking ``citizen'' and inserting 
        ``citizen or other person'';
            (3) by redesignating subsection (c) as subsection (d); and
            (4) by inserting after subsection (b) the following:
    ``(c) Additional Requirements for Non-Citizens Operating Certain 
Routes.--In order for a person who is not a citizen of the United 
States and who is not a foreign air carrier to be issued and maintain a 
certificate for air transportation or intrastate air transportation, 
all employees and managing officers, other than the board of directors, 
must be citizens, nationals, or lawful permanent residents of the 
United States, and the person's headquarters and base of operations 
must be located in the United States.''.

SEC. 4. ISSUANCE OF CERTIFICATES OF PUBLIC CONVENIENCE.

    Section 41102 of title 49, United States Code, is amended--
            (1) by striking the subsection heading in subsection (a) 
        and inserting ``Issuance to a Citizen'';
            (2) by redesignating subsections (b), (c), and (d) as 
        subsections (c), (d), and (e), respectively;
            (3) by inserting after subsection (a) the following:
    ``(b) Issuance to Other Persons.--The Secretary of Transportation 
may issue a certificate of public convenience and necessity to a person 
organized under the laws of the United States or a State, the District 
of Columbia, or a territory or possession of the United States, of 
which more than 49 percent of the board of directors are not citizens 
of the United States, which is not under the actual control of citizens 
of the United States, or in which more than 49 percent of the voting 
interest is owned or controlled by persons that are not citizens of the 
United States, to provide any part of the following air transportation 
the person has applied for under section 41108 of this title:
            ``(1) Air transportation as an air carrier.
            ``(2) Temporary air transportation as an air carrier for a 
        limited period.
            ``(3) Charter air transportation as a charter air 
        carrier.'';
            (4) in subsection (c), as redesignated--
                    (A) by striking ``under subsection (a)'' each place 
                it appears and inserting ``under subsection (a) or 
                subsection (b)'' in each such place; and
                    (B) by striking ``citizen'' and inserting ``citizen 
                or other person''; and
            (5) by striking subsection (e), as redesignated, and 
        inserting the following:
    ``(e) Presidential Review of Certain Certificates.--The Secretary 
shall submit each decision to the President under section 41307 of this 
title authorizing--
            ``(1) the provision of foreign air transportation; or
            ``(2) the provision of interstate air transportation or 
        intrastate air transportation by a person who is not a citizen 
        of the United States.''.

SEC. 5. CIVIL RESERVE AIR FLEET ELIGIBILITY.

    Section 41106 of title 49, United States Code, is amended by 
striking subsection (d) and inserting the following:
    ``(d) Exception.--The Secretary of Defense may contract with an air 
carrier that does not meet all requirements if--
            ``(1) the Secretary decides that no air carrier holding a 
        certificate under section 41102 is capable of providing, and 
        willing to provide, the airlift services; or
            ``(2) the Secretary decides to grant a waiver under section 
        9518 of title 10, United States Code, for a person who is not a 
        citizen of the United States and who is organized under the 
        laws of the United States that has a certificate of public 
        convenience and necessity, from the Civil Reserve Air Fleet 
        citizenship requirements for the purposes of eligibility and 
        participation.''.

SEC. 6. APPLICATION FOR CERTIFICATE OF PUBLIC CONVENIENCE.

    Section 41108 of title 49, United States Code, is amended--
            (1) in subsection (a) by striking ``citizen of the United 
        States'' and inserting ``citizen of the United States or other 
        person organized under the laws of the United States or a 
        State, the District of Columbia, or a territory or possession 
        of the United States'';
            (2) in subsections (b) and (c) by striking ``citizen'' each 
        place it appears and inserting ``citizen or other person'';
            (3) in subsection (b)(3)(A) by striking ``interstate air 
        transportation'' and inserting ``interstate air transportation 
        provided by a citizen''; and
            (4) in subsection (b)(3)(B) by striking ``foreign air 
        transportation'' and inserting ``interstate air transportation 
        or intrastate air transportation by a person who is not a 
        citizen of the United States, or foreign air transportation,''.

SEC. 7. POTENTIAL REVOCATION OF CERTIFICATE.

    Section 41110(a)(2)(B) of title 49, United States Code, is amended 
by striking ``sections 41308-41310(a)'' and inserting ``sections 
41101(c), 41308-41310(a)''.

SEC. 8. LIABILITY INSURANCE AND FINANCIAL RESPONSIBILITY.

    Section 41112(a) of title 49, United States Code, is amended--
            (1) by striking ``citizen of the United States'' and 
        inserting ``citizen of the United States, or other person 
        organized under the laws of the United States or a State, the 
        District of Columbia, or a territory or possession of the 
        United States''; and
            (2) by striking ``citizen'' the second place it appears and 
        inserting ``citizen or other person''.

SEC. 9. PRESIDENTIAL REVIEW OF FOREIGN AIR CARRIERS AND OTHER NON-
              CITIZENS.

    Section 41307 of title 49, United States Code, is amended--
            (1) by striking the section heading and inserting 
        ``Presidential review of actions about foreign air 
        transportation and air transportation provided by non-
        citizens''; and
            (2) by striking ``to provide foreign air transportation'' 
        and inserting ``to provide foreign air transportation, or for a 
        person who is not a citizen of the United States to provide air 
        transportation or intrastate air transportation''.

SEC. 10. JOINT PRICING.

    Section 41503 of title 49, United States Code, is amended by 
striking ``citizen of the United States'' and inserting ``a citizen of 
the United States or other person organized under the laws of the 
United States or a State, the District of Columbia, or a territory or 
possession of the United States''.

SEC. 11. NAVIGATION OF FOREIGN CIVIL AIRCRAFT.

    Section 41703(a) of title 49, United States Code, is amended--
            (1) in paragraph (4) by striking the period and inserting 
        ``; or''; and
            (2) by adding at the end the following:
            ``(5) if specifically authorized under sections 41102 and 
        41108, and if the airman holds a certificate issued or made 
        valid by the Government.''.

SEC. 12. WAIVERS FOR NON-CITIZEN AIR CARRIER PARTICIPATION IN THE CIVIL 
              RESERVE AIR FLEET.

    (a) In General.--Chapter 931 of title 10, United States Code, is 
amended by adding at the end the following:
``Sec. 9518. Non-citizen air carriers: waiver authority
    ``(a) Waiver Authority.--In the case of any air carrier described 
in subsection (b) or any aircraft owned by an air carrier described in 
subsection (b), the Secretary of Defense may waive any citizenship 
requirement under this chapter. Any such waiver--
            ``(1) shall be for a period not to exceed two years;
            ``(2) may be revoked at any time by the Secretary; and
            ``(3) may be renewed for an additional two-year period for 
        an unlimited number of times.
    ``(b) Air Carrier Described.--An air carrier described in this 
section is an air carrier--
            ``(1) owned by a person who is not a citizen of the United 
        States and who is organized under the laws of the United States 
        or a State, territory, or the District of Columbia; and
            ``(2) that holds a certificate of public convenience and 
        necessity under section 41102 of title 49.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``9518. Non-citizen air carriers: waiver authority.''.
Free to Fly Act The bill modifies definitions relating to aviation to permit a foreign air carrier to own U.S. domestic air routes. The foreign carrier may establish U.S.-based subsidiaries for such purpose.  All foreign-owed air carriers that obtain a certificate to fly domestic routes may only hire U.S. citizens or nationals, or permanent legal residents. The Department of Transportation (DOT) may issue a certificate of public convenience and necessity to a foreign air carrier with a board of directors that is comprised of more than 49% non-U.S. citizens. The bill expands the scope of the President's review of DOT actions involving foreign air carriers. The Department of Defense may waive citizenship requirements for certain foreign air carriers participating in the civil reserve air fleet.
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