FINANCIAL MANAGEMENT OF PASSENGER FACILITY FEES.

SEC. 124. FINANCIAL MANAGEMENT OF PASSENGER FACILITY FEES. Section 40117 is further amended by adding at the end the following:“(m) Financial Management of Fees.—“(1) Handling of fees.—A covered air carrier shall segregate in a separate account passenger facility revenue equal to the average monthly liability for fees collected under this section by such carrier or any of its agents for the benefit of the eligible agencies entitled to such revenue.“(2) Trust fund status.—If a covered air carrier or its agent fails to segregate passenger facility revenue in violation of the subsection, the trust fund status of such revenue shall 117 STAT. 2503 not be defeated by an inability of any party to identify and trace the precise funds in the accounts of the air carrier.“(3) Prohibition.—A covered air carrier and its agents may not grant to any third party any security or other interest in passenger facility revenue.“(4) Compensation to eligible entities.—A covered air carrier that fails to comply with any requirement of this subsection, or otherwise unnecessarily causes an eligible entity to expend funds, through litigation or otherwise, to recover or retain payment of passenger facility revenue to which the eligible entity is otherwise entitled shall be required to compensate the eligible agency for the costs so incurred.“(5) Interest on amounts.—A covered air carrier that collects passenger facility fees is entitled to receive the interest on passenger facility fee accounts if the accounts are established and maintained in compliance with this subsection.“(6) Existing regulations.—The provisions of section 158.49 of title 14, Code of Federal Regulations, that permit the commingling of passenger facility fees with other air carrier revenue shall not apply to a covered air carrier.“(7) Covered air carrier defined.—In this section, the term ‘covered air carrier’ means an air carrier that files for chapter 7 or chapter 11 of title 11 bankruptcy protection, or has an involuntary chapter 7 of title 11 bankruptcy proceeding commenced against it, after the date of enactment of this subsection.”.