AND CAPITAL GAINS A BILL TO AMEND SECTION 406 (b) OF THE CIVIL AERO- NAUTICS ACT OF 1938 WITH RESPECT TO THE REINVEST- MENT BY AIR CARRIERS OF THE PROCEEDS FROM THE A BILL TO AMEND SECTION 406 (b) OF THE CIVIL AERO- NAUTICS ACT OF 1938 WITH RESPECT TO THE REINVEST- MENT BY AIR CARRIERS OF THE PROCEEDS FROM THE Additional information submitted for the record by-Continued Central Airlines, Inc., statement of Keith Kahle, president- Chicago Helicopter Airways, Inc., statements of-- Statement of Hon. James R. Durfee, chairman__ Statistics on local service and territorial carriers, tables.. Douglas, Donald W., telegram from___ Frontier Airlines, Inc., statement of C. A. Myhre, president- Lake Central Airlines, Inc., statement of Gwin Hicks, president_ Pan American World Airways, Inc., statement of Robert G. Ferguson, Reeve Aleutian Airways, Inc., statement of Robert C. Reeve, presi- Southern Airways, Inc., statement of Frank W. Hulse, president- Trans-Pacific Airlines, Ltd., statement of David A. Benz, executive Transport Workers Union of America, letter from James F. Horst, international vice president, and director, air transport division.. Trans-Texas Airways, statement of R. E. McKaughan, president--- AIRCRAFT EQUIPMENT LOANS AND CAPITAL GAINS WEDNESDAY, JULY 17, 1957 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TRANSPORTATION AND COMMUNICATIONS OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The committee met, pursuant to call, in room 1435, House Office Building, Hon. Oren Harris (chairman) presiding. The CHAIRMAN. Let the committee come to order. The subcommittee on transportation and communications is meeting today to begin hearings on two important bills, which are, of course, of much interest to the airlines. Although these bills deal with different subject matters, they endeavor to approach the same problem, and that is, buying new equipment, which the airlines must have, if they are to provide air transportation which the public needs, demands, and must have. One of these bills, H. R. 5822 is an old familiar proposal. We recall wrestling with it in the past. It deals with the problems of reinvestment by air carriers of the proceeds from the sale or other disposition of certain operating property and equipment, referred to, I believe, chiefly as capital gains. The other bill, H. R. 7993, would provide for Government guaranty of private loans to certain air carriers for the purchase of aircraft and equipment. This is a new proposal which has been presented by the Civil Aeronautics Board. At this point the two bills referred to will be included in the record, and the reports from the agencies will likewise be included in the record at their appropriate place. (H. R. 5822 and H. R. 7993 are as follows:) [H. R. 5822, 85th Cong., 1st sess.] A BILL To amend section 406 (b) of the Civil Aeronautics Act of 1938 with respect to the reinvestment by air carriers of the proceeds from the sale or other disposition of certain operating property and equipment Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 406 (b) of the Civil Aeronautics Act of 1938, as amended, is hereby amended by adding at the end thereof the following new paragraph: "In determining the need of an air carrier for compensation for the transportation of mail, and such carrier's 'other revenue' for the purpose of this section, the Board shall not take into account gains derived from the sale or other disposition of flight equipment if (1) the carrier notifies the Board in writing that it has invested or intends to reinvest the gains (less applicable expenses and taxes) derived from such sale or other disposition in flight equipment and (2) submits evidence in the manner prescribed by the Board that an amount equal to such gains (less applicable expenses and taxes) has been expended for purchase of flight equipment or has been deposited in a special reequipment |