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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1356 Introduced in House (IH)]

110th CONGRESS
  1st Session
                                H. R. 1356

To amend title 49, United States Code, to authorize appropriations for 
the Federal Aviation Administration for fiscal years 2008 through 2010, 
to improve aviation safety and capacity, to provide stable, cost-based 
   funding for the national aviation system, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2007

Mr. Oberstar (for himself, Mr. Mica, Mr. Costello, and Mr. Petri) (all 
 by request) introduced the following bill; which was referred to the 
Committee on Transportation and Infrastructure, and in addition to the 
Committees on Science and Technology, and Ways and Means, for a period 
    to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
To amend title 49, United States Code, to authorize appropriations for 
the Federal Aviation Administration for fiscal years 2008 through 2010, 
to improve aviation safety and capacity, to provide stable, cost-based 
   funding for the national aviation system, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Next Generation 
Air Transportation System Financing Reform Act of 2007''.
    (b) Table of Contents.--

Sec. 1. Short title; Table of contents.
Sec. 2. Amendments to title 49, United States Code.
Sec. 3. Effective date.
                        TITLE I--AUTHORIZATIONS

Sec. 101. Authorizations for General Fund, air traffic functions, 
                            safety and operations.
Sec. 102. Airport planning and development and noise compatibility 
                            planning and programs.
Sec. 103. Airline data and analysis.
Sec. 104. Office of Commercial Space Transportation.
Sec. 105. Transition.
                      TITLE II--USER FEE AUTHORITY

Sec. 201. Fees.
Sec. 202. Conforming Amendments.
                 TITLE III--AIRPORT IMPROVEMENT PROGRAM

Sec. 301. Reform of passenger facility charge authority.
Sec. 302. Amendments to AIP definitions.
Sec. 303. Amendments to grant assurances.
Sec. 304. Government share of project costs.
Sec. 305. Amendments to allowable costs.
Sec. 306. Simplification and reform of apportionment formulas.
Sec. 307. Minimum amount for discretionary fund.
Sec. 308. Funding of space transportation infrastructure grants 
                            program.
Sec. 309. Repeal of small airport fund.
Sec. 310. Creation of new small airport set-aside, and repeal of 
                            military and reliever airport set-asides.
Sec. 311. Military Airport Program.
Sec. 312. Sale of private airport to public sponsor.
Sec. 313. Sunset of airport security program.
Sec. 314. Sunset of pilot program for purchase of airport development 
                            rights.
Sec. 315. Extension of grant authority for compatible land use planning 
                            and projects by State and local 
                            governments.
Sec. 316. Midway Island Airport.
Sec. 317. Pilot program for airport takeover of air navigation 
                            facilities.
Sec. 318. ADS-B Support Pilot Program
Sec. 319. AIP eligibility for Metropolitan Washington Airports 
                            Authority.
Sec. 320. Miscellaneous Amendments.
                 TITLE IV--MANAGEMENT AND ORGANIZATION

Sec. 401. Air Transportation System Advisory Board.
Sec. 402. Facilitation of Next Generation air traffic services.
Sec. 403. Clarification of authority to enter into reimbursable 
                            agreements.
Sec. 404. Definition of air navigation facility.
Sec. 405. Improved management of property inventory.
Sec. 406. Clarification to acquisition reform authority.
Sec. 407. Assistance to foreign aviation authorities.
Sec. 408. Presidential Rank Award Program.
Sec. 409. Realignment and consolidation of aviation facilities and 
                            services.
Sec. 410. Operational and approach procedures by third parties through 
                            delegation.
Sec. 411. Judicial review of denial of airman certificates.
Sec. 412. Release of data relating to abandoned type certificates and 
                            supplemental type certificates.
Sec. 413. Design Organization Certificates.
Sec. 414. Contract tower program.
Sec. 415. Enhanced Oversight of Next Generation Air Transportation 
                            System Joint Planning and Development 
                            office.
     TITLE V--AVIATION SAFETY, SECURITY, CAPACITY AND CONNECTIVITY 
                              IMPROVEMENTS

Sec. 501. Disclosure of data to Federal agencies in interest of 
                            national security.
Sec. 502. FAA access to criminal history records or database systems.
Sec. 503. Allocation of operating authorizations at LaGuardia airport.
Sec. 504. Pilot program for market-based mechanisms at congested 
                            airports.
          TITLE VI--ENVIRONMENTAL STEWARDSHIP AND STREAMLINING

Sec. 601. Airport Cooperative Research Program.
Sec. 602. State Block Grant Program.
Sec. 603. Airport funding of special studies or reviews.
Sec. 604. Environmental Mitigation Demonstration Pilot Program.
Sec. 605. Grant eligibility for assessment of flight procedures.
Sec. 606. Research consortium for lower energy, emissions and noise 
                            technology partnership.
Sec. 607. Amendments to Air Tour Management Program.
                     TITLE VII--AVIATION INSURANCE

Sec. 701. General Authority.
Sec. 702. Extension of authority to limit third party liability of air 
                            carriers arising out of acts of terrorism.
Sec. 703. Clarification on reinsurance authority.
Sec. 704. Use of independent claims adjusters.
Sec. 705. Extension of aviation program authority.
                TITLE VIII--AVIATION SERVICE IMPROVMENTS

Sec. 801. Extension of competitive access reports.
Sec. 802. Essential air service reform.
Sec. 803. Termination of DOT authority to set international mail rates.
Sec. 804. Air carriage of international mail.
Sec. 805. Contents of competition plans.
Sec. 806. Airport privatization.
Sec. 807. Clarification of air carrier fee disputes.
Sec. 808. Amendments to chapter 415.
               TITLE IX--INTERNAL REVENUE CODE AMENDMENTS

Sec. 901. Amendment of 1986 Code.
Sec. 902. Modifications to tax on aviation fuel.
Sec. 903. Modifications to tax on transportation of persons by air.
Sec. 904. Extension of Airport and Airway Trust Fund expenditure 
                            authority.

SEC. 2. AMENDMENTS TO TITLE 49, UNITED STATES CODE.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or a 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of title 49, 
United States Code.

SEC. 3. EFFECTIVE DATE.

    Except as otherwise expressly provided, this Act and the amendments 
made by this Act shall be effective on the date of enactment.

                        TITLE I--AUTHORIZATIONS

SEC. 101. AUTHORIZATIONS FOR SAFETY AND OPERATIONS, AIR TRAFFIC 
              FUNCTIONS, RESEARCH AND DEVELOPMENT.

    (a) In General.--Part C of subtitle VII is amended by striking 
chapter 482 and inserting in lieu thereof the following:

  ``CHAPTER 482--AUTHORIZATIONS FOR AIR TRAFFIC FUNCTIONS, SAFETY AND 
                OPERATIONS, AND RESEARCH AND DEVELOPMENT

``Sec.
``48201. Air Traffic Organization.
``48202. Safety and operations.
``48203. Civil aviation research and development.
``48204. General fund authorization.
``Sec. 48201. Air Traffic Organization
    ``(a) Air Traffic Organization Account.--On October 1, 2007, the 
Secretary of the Treasury shall establish on the books of the Treasury 
a separate account to be known as the `Air Traffic Organization'.
    ``(b) Authorization of Appropriations.--In addition to amounts from 
the general fund of the Treasury as authorized in section 48204, not 
more than a total of the following amounts may be appropriated to the 
Secretary of Transportation out of the Airport and Airway Trust Fund 
established under section 9502 of the Internal Revenue Code of 1986 (26 
U.S.C. 9502) for capital, operating and overhead costs of providing air 
traffic control and related services:
            ``(1) $7,915,516,000 for fiscal year 2008;
            ``(2) $1,130,000,000 for fiscal year 2009; and
            ``(3) $1,126,000,000 for fiscal year 2010.
    ``(c) User Fees.--(1) In addition to amounts authorized under 
subsection (b), amounts credited to the account established under 
subsection (a) from fees collected under section 45305 of this title 
are authorized to be used for capital, operating and overhead costs of 
providing air traffic control and related services, as well as for the 
costs related to the assessment and collection of these fees.
    ``(2) Notwithstanding any other provision of law, amounts credited 
to the account established under subsection (a) shall be used only to 
carry out the air traffic functions of the Federal Aviation 
Administration.
    ``(d) Availability of Amounts.--Amounts appropriated under this 
section shall remain available until expended.
``Sec. 48202. Safety and operations
    ``(a) Safety and Operations Account.--On October 1, 2007, the 
Secretary of the Treasury shall establish on the books of the Treasury 
a separate account to be known as the `Safety and Operations'.
    ``(b) Authorization of Appropriations.--In addition to amounts from 
the general fund of the Treasury as authorized in section 48204, not 
more than a total of the following amounts may be appropriated to the 
Secretary of Transportation out of the Airport and Airway Trust Fund 
established under section 9502 of the Internal Revenue Code of 1986 (26 
U.S.C. 9502) for programs, activities and services relating to the 
Federal Aviation Administration's safety programs, services to the 
commercial space industry and other staff support functions:
            ``(1) $671,594,000 for fiscal year 2008;
            ``(2) $69,000,000 for fiscal year 2009; and
            ``(3) $69,000,000 for fiscal year 2010.
    ``(c) User Fees.--(1) Amounts credited to the account established 
under subsection (a) from fees collected under sections 45305 and 45306 
of this title, are authorized to be used for programs, activities and 
services relating to the Federal Aviation Administration's safety 
programs and other staff support functions, as well as for the costs 
related to the assessment and collection of these fees.
    ``(2) Notwithstanding any other provision of law, amounts credited 
to the account established under subsection (a) shall be used only to 
carry out the safety programs, services to the commercial space 
industry, and staff support functions of the Federal Aviation 
Administration.
    ``(d) Availability of Amounts.--Amounts appropriated under this 
section shall remain available until expended.
``Sec. 48203. Civil aviation research and development
    ``(a) Authorization.--In addition to amounts from the general fund 
of the Treasury as authorized in section 48204, not more than the 
following amounts may be appropriated out of the Airport and Airway 
Trust Fund established under section 9502 of the Internal Revenue Code 
of 1986 (26 U.S.C. 9502), to the Secretary of Transportation for 
conducting civil aviation research and development under sections 
44504, 44505, 44507, 44509, and 44511-44513 of this title:
            ``(1) $122,867,000 for fiscal year 2008;
            ``(2) $174,000,000 for fiscal year 2009; and
            ``(3) $174,000,000 for fiscal year 2010.
    ``(b) Availability of Amounts.--Amounts appropriated under this 
section shall remain available until expended.
``Sec. 48204. General Fund Authorization
    ``(a) Not more than the following amounts may be appropriated under 
this chapter from the general fund of the Treasury to the Secretary of 
Transportation for activities or services, the cost of which is not 
otherwise funded by fees established under chapter 453 of this title or 
by funds made available from the Airport and Airway Trust Fund, related 
to aviation safety regulation and oversight, research and development, 
air traffic services provided to military, public or air ambulance 
aircraft, operation of Flight Service Stations and Automated Flight 
Service Stations, operation of air traffic control towers at airports 
with fewer than 100,000 passenger boardings per year, services to the 
commercial space industry, or other Federal Aviation Administration 
programs in the general public interest, including the capital, 
operating, and overhead costs for such activities or services:
            ``(1) $2,618,322,000 for fiscal year 2008;
            ``(2) $2,582,000,000 for fiscal year 2009; and
            ``(3) $2,582,000,000 for fiscal year 2010.''.
    ``(b) Conforming Amendment.--The analysis of Part C of Subtitle VII 
is amended by revising the entry for chapter 482 to read as follows:

``482. Authorizations for air traffic functions, safety and    48201.''.
 operations, research and development and general fund.....

SEC. 102. AIRPORT PLANNING AND DEVELOPMENT AND NOISE COMPATIBILITY 
              PLANNING AND PROGRAMS.

    (a) Authorization.--Section 48103 is amended--
            (1) in the first sentence, by striking ``The'' and 
        inserting ``(a) Authorization.--The'';
            (2) by striking ``September 30, 2003'' and inserting 
        ``September 30, 2007'';
            (3) by striking paragraphs (1) through (4) and inserting 
        the following:
            ``(1) $2,750,000,000 for fiscal year 2008;
            ``(2) $2,900,000,000 for fiscal year 2009; and
            ``(3) $3,050,000,000 for fiscal year 2010.''; and
            (4) by inserting at the end the following:
    ``(b) Airport Cooperative Research Program.--Not more than 
$15,000,000 per year for fiscal years 2008, 2009 and 2010 may be 
appropriated to the Secretary of Transportation from the amounts made 
available each year under subsection (a) for the Airport Cooperative 
Research Program under section 44511 of this title, of which not less 
than $5,000,000 per year shall be for research activities related to 
the airport environment, including reduction of community exposure to 
civil aircraft noise, reduction of civil aviation emissions, or 
addressing water quality issues.''.
    (b) Obligational Authority.--Section 47104(c) is amended by 
striking ``September 30, 2007'' and inserting ``September 30, 2010''.

SEC. 103. AIRLINE DATA AND ANALYSIS.

    (a) Authorization.--There is authorized to be appropriated to the 
Secretary of Transportation out of the Airport and Airway Trust Fund 
established by section 9502 of the Internal Revenue Code of 1986 (26 
U.S.C. 9502), $4,000,000 per year for fiscal year 2008, and $6,000,000 
for fiscal years 2009 and 2010 to fund airline data collection and 
analysis by the Bureau of Transportation Statistics in the Research and 
Innovative Technology Administration of the Department of 
Transportation.
    (b) In fiscal year 2009, the Secretary shall reform, by the most 
efficient means available, the aviation economic data program for the 
collection and dissemination of airline traffic and financial data.

SEC. 104. OFFICE OF COMMERCIAL SPACE TRANSPORTATION.

    Section 70119 is amended--
            (1) in paragraph (4), by striking ``and'';
            (2) in paragraph (5), by striking ``2009.'' and inserting 
        ``2009; and''; and
            (3) by inserting at the end:
            ``(6) $15,224,000 for fiscal year 2010.''.

SEC. 105. TRANSITION.

    (a) Authorization for Transition Period.--For the purpose of 
supporting the transition to a user fee system of financing under 
chapter 453, not more than $1,360,000,000 is authorized to be 
appropriated to the Secretary of Transportation from the general fund 
of the Treasury to provide services for an initial period of sixty days 
for which user fees under sections 45305 (air traffic control and 
related fees) and 45306 (registration, certification and related fees) 
are assessed.
    (b) Fee Surcharge.--The Administrator of the Federal Aviation 
Administration shall, subject to appropriation in advance, impose and 
collect a surcharge on the user fees established under sections 45305 
and 45306 for fiscal year 2009 in an amount and manner so as to fully 
recover and return to the general fund in fiscal year 2009 the amount 
used for transition costs under this section.

                      TITLE II--USER FEE AUTHORITY

SEC. 201. FEES.

    (a) In General.--Chapter 453 is amended by adding at the end the 
following:
``Sec. 45305. Air traffic control and related fees
    ``(a) Schedule of Fees.--(1) Not later than the date of transition, 
the Administrator of the Federal Aviation Administration shall 
establish fees for air traffic control and related activities, 
services, facilities and equipment provided by, or on behalf of, the 
Administration in accordance with this section. Except as provided in 
subsection (c), owners or operators of aircraft in the national 
airspace system shall pay the fees assessed under this section. The 
Administrator may establish separate fees for aircraft operating in 
terminal, enroute, or oceanic airspace.
    ``(2) For purposes of this section and section 45306, `date of 
transition' means October 1, 2008.
    ``(3) In establishing fees under paragraph (1), the Administrator 
may establish interim fees for a period not to exceed one year after 
the date of transition, and may impose a surcharge on such fees in 
order to recover the full costs of services during the initial period 
of transition to user fees. The establishment of such interim fees 
would not be subject to the requirements of subsection (e)(2).
    ``(4) In accordance with this section, the Administrator may 
periodically modify the fees established under this section either on 
the Administrator's own initiative, based on the requirements of the 
agency or the users of the National Airspace System, or on a 
recommendation from the Board under subsection (e)(2) of this section.
    ``(b) Basis for Fees; Computation Methods.--(1) En Route and 
Oceanic.--In establishing fees for aircraft operating in en route or 
oceanic airspace, including fees for aircraft that operate in United 
States controlled airspace but neither take off from, nor land in, the 
United States, the Administrator may base the fee on distance traveled, 
or on any other method that is consistent with the treaties and 
international agreements to which the United States is a party.
    ``(2) Terminal Airspace.--For aircraft operations in terminal 
airspace, the Administrator may establish a fee with the following 
elements:
            ``(A) for takeoffs and landings at airports with greater 
        than 100,000 passenger boardings per year;
            ``(B) that may be based on the weight of the aircraft;
            ``(C) specifically for aircraft operating in terminal 
        airspace for a large hub airport, as defined by section 
        40102(a)(29);
            ``(D) specifically for terminal airspace for a large hub 
        airport that varies with the time of day, day of the week, or 
        for a particular large hub airport if the Administrator 
        determines--
                    ``(i) that such airspace is congested;
                    ``(ii) that such congestion results in whole or in 
                part from the limitation on the capacity of the large 
                hub airport or airports; and
                    ``(iii) that establishing such a fee will help 
                reduce delays in the national airspace system; and
            ``(E) a fee that is different for nighttime operations than 
        for daytime operations.
    ``(3) Quantitative Standards.--For the purpose of the 
determinations required by paragraphs (b)(2)(D), the Administrator 
shall issue quantitative standards for the levels of airspace and 
airport congestion, operating delays, effect of airport delay on 
national system delay, and feasibility of increasing the capacity of a 
congested airport, and make such determinations in accordance with 
those standards.
    ``(4) Aircraft Altitude.--Nothing in this section shall require the 
Administrator to take into account aircraft altitude in establishing 
any fee for aircraft operations in terminal, en route or oceanic 
airspace.
    ``(5) Incentive for Equipage.--The Administrator may establish 
reduced fees for aircraft that are equipped with avionics whose use the 
Administrator determines would enhance the safety or efficiency of the 
National Airspace System if the Administrator finds that such a fee 
structure would create an incentive for the purchase and installation 
of such equipment.
    ``(6) Relation to Costs.--The fees established under this section 
shall be based on the costs to the Administration of providing the air 
traffic control and related activities, services, facilities, and 
equipment using the available data derived from the agency's cost 
accounting system and cost allocation system to users. For purposes of 
this section, the term `costs' means those costs associated with the 
operation, maintenance, debt service, and overhead expenses of the 
services provided and the facilities and equipment used in such 
services, including the projected costs for the period during which the 
services will be provided, but shall not include the cost of providing 
services to aircraft described in subsection (c).
    ``(7) Reserve.--The fees that the Administrator establishes under 
this section may also include amounts sufficient to cover the costs of 
providing air traffic control and related activities, services, 
facilities and equipment in the event that receipts are less than 
projected, whether such a shortfall is caused by a decrease in aircraft 
operations, delinquent payment of fees by any person, or for another 
comparable reason.
    ``(8) Annual Review.--The Administrator shall provide for an annual 
independent review to validate that the agency used actual costs for 
the year, which were prepared in accordance with generally accepted 
accounting principles, and compiled those costs in accordance with the 
agency's documented cost allocation methodology.
    ``(9) Fees Credited as Offsetting Collections.--Any fee authorized 
to be collected under this section shall, subject to appropriation made 
in advance--
            ``(A) be credited as offsetting collections to the account 
        established under section 48201(a) of this title; and
            ``(B) be available to the Administrator for expenditure 
        only to pay the costs of activities and services for which the 
        fee is imposed, including the costs to determine, assess, 
        review and collect the fee.
    ``(10) Effect of Law on Fee Collection.--The Administrator may 
continue to assess and collect and spend fees established under this 
section during any period in which the agency's funding is provided 
under an Act providing continuing appropriations in lieu of the 
agency's regular appropriations.
    ``(c) Exceptions.--(1) Military and Other Public Aircraft.--Fees 
may not be assessed under this section for air traffic control and 
related services provided to military aircraft, public aircraft (as 
defined in section 40102 of this subtitle), air ambulance aircraft, or 
to military or non-commercial civil aircraft of a foreign government.
    ``(2) General Aviation Operations.--Except for fees established for 
operations in terminal airspace for a large hub airport under 
subsection (b)(2), no fees may be established under this section for 
air traffic control and related services provided to aircraft 
operations using fuel for which a tax was paid under section 4081(a)(2) 
(except taxes paid at the rate specified in section 4081(a)(2)(C)(i)) 
of title 26, United States Code. The exception provided by this 
subparagraph shall cease to be effective if the rate of tax for fuel 
under section 4081(a)(2) is lower than 70.0 cents per gallon, starting 
on the date of transition, except if the lower rate is the result of 
adjustments made under section 4081(a)(2) of title 26, United States 
Code.
    ``(3) Flight Plan Information.--Any person required to file a 
flight plan with the Administration, including operators of flights 
described in paragraphs (1) and (2), must specify in the plan whether 
the person is engaged in an operation for compensation or hire, or a 
general aviation operation, or a military or public aircraft operation, 
for purposes of this section.
    ``(4) Canada to Canada Flights.--The Administrator may waive a fee 
that would otherwise be assessed under this chapter for flights that 
operate in U.S.-controlled airspace but takeoff and land at an airport 
in Canada without an intermediate stop outside Canada, if the 
Administrator determines that not assessing and collecting the fee for 
such flights would be in the public interest.
    ``(d) Administrative Provisions.--(1) Fees Payable to the 
Administrator.--Fees assessed and amounts collected under this section 
are payable to the Administrator. The Administrator may refund any fee, 
or portion thereof, paid by mistake in excess of the amount required.
    ``(2) Collection Procedures.--The Administrator shall establish 
procedures for the collection of fees. These procedures shall establish 
the frequency of payment, deadlines for payment, a maximum amount of 
fees that may be outstanding on the account of any person, and such 
other limitations and conditions as the Administrator determines are 
necessary to obtain prompt payment of fees.
    ``(3) Failure To Pay Required Fees.--If the Administrator 
determines that any person has failed to pay fees when due under this 
section, or to comply with any limitation or condition on payment under 
this section, or to provide the Administration with the correct 
information in the person's flight plan or by other means regarding the 
nature of the flight, including whether the person engaged in an 
operation for compensation or hire or general aviation operation, the 
Administrator may--
            ``(A) assess interest charges, using a rate equal to 150 
        percent of a rate determined by the Secretary of the Treasury 
        based on the average of bond equivalent yields on 13-week 
        Treasury bills auctioned during the previous calendar quarter, 
        to be redetermined quarterly, on amounts that have not been 
        paid by the deadline;
            ``(B) change the required payment schedule for such person;
            ``(C) offset any amount of fees owed by withholding any 
        payment otherwise owed or due to the person by the Secretary or 
        the Administrator;
            ``(D) upon 24 hours notice, terminate, reduce, or withhold 
        the provision of non-emergency air traffic control and related 
        services to such person, except that, in any case involving a 
        foreign air carrier, the Administrator shall take such actions 
        as are necessary to comply with applicable international 
        agreements; or
            ``(E) impose a civil penalty for each day amounts remain 
        unpaid, or take other appropriate enforcement action under this 
        subtitle.
    ``(4) Action When Future Payment in Jeopardy.--If the Administrator 
reasonably determines that an aircraft owner or operator will not pay 
its required fees when due, the Administrator may--
            ``(A) change the required payment schedule for such person; 
        or
            ``(B) upon 24 hours notice, terminate, reduce, or withhold 
        the provision of non-emergency air traffic control and related 
        services to such person, except that, in any case involving a 
        foreign air carrier, the Administrator shall take such actions 
        as are necessary to comply with applicable international 
        agreements.
    ``(5) Payment Not Stayed Pending Review.--In any case where a 
person seeks administrative review of the Administrator's action under 
this section, the collection of fees from that person may not be stayed 
pending resolution of the case.
    ``(e) Consultation Requirements; Approval of Fees.--(1) Prior to 
establishing or modifying fees under this section or section 45306 of 
this title, the Administrator shall consult with air carriers, 
including foreign air carriers, consistent with international 
agreements, and any other persons subject to such fees, and any other 
member of the public who wishes to file comments. For purposes of the 
section, `consult' means to afford the opportunity to provide comments 
to, and have such comments considered by, the Administrator.
    ``(2) Prior to establishing or modifying fees under this section or 
section 45306 of this title, the Administrator shall consult with and 
seek the recommendations of the type and level of such fees from the 
Air Transportation System Advisory Board (hereinafter `the Board') 
established under section 106(p) of this title. The Board may, from 
time to time, recommend that the Administrator modify established fees 
based on the needs of the agency or the users of the National Airspace 
System. If the Board fails to recommend approval of any fee proposed by 
the Administrator, or if the Administrator fails to adopt the 
recommendation of the Board, the Administrator may establish or 
maintain such fees only after publishing in the Federal Register a 
written determination setting forth the reasons for the Administrator's 
establishment or modification of the fees and summarizing the views of 
the Board.
    ``(3) Any person who is subject to fees established in this section 
or section 45306 of this title, and who objects to the establishment or 
amount of such fees may appeal that decision exclusively to the 
Secretary of Transportation. The Secretary may disapprove the 
establishment or modification of fees if the Secretary finds that the 
fees--
            ``(A) are not, in the case of fees under this section, 
        based on costs as described in subsection (b)(6);
            ``(B) do not fairly allocate system costs among users who 
        pay fees;
            ``(C) unreasonably discriminate against a particular 
        category of users of the system; or
            ``(D) are not in accordance with the strategic plan of the 
        Administration.
    ``(4) The decision of the Administrator to establish or modify a 
fee or schedule of fees under this section or section 45306 of this 
title shall be effective unless disapproved by the Secretary within 60 
days after submission of the Administrator's decision to the Secretary. 
The decision of the Secretary constitutes final agency action and is 
not subject to judicial review.
    ``(f) Effect on Other Fees.--Unless otherwise specified, nothing in 
this section or section 45306 shall be construed as affecting fees 
previously authorized and established under this chapter.
    ``(g) Exemption From Rulemaking.--The requirements applicable to 
developing and issuing rules under title 5, United States Code, shall 
not apply to the actions of the Secretary, Administrator, or Board 
under this section.
    ``(h) Status of Airport.--Based on fiscal year 2006 data, the 
Administrator shall publish a list of airports that meet the criteria 
for a large hub airport under subsection (b)(2). The Administrator 
shall periodically update such list. If in the fiscal year during which 
the list is first published or in any subsequent fiscal year in which 
the list of airports is updated, an airport meets the criteria for a 
large hub airport under subsection (b)(2), such airport shall be deemed 
to remain in such status for three years regardless of fluctuation in 
the passenger boardings during that time.
    ``(i) Definitions.--For the purposes of this section--
            ``(1) `Air ambulance aircraft' means--
                    ``(A) rotorcraft, which are engaged in an operation 
                to provide emergency medical services; or
                    ``(B) fixed-wing aircraft, which are equipped for 
                and exclusively dedicated to providing acute care 
                medical services.
            ``(2) `enroute airspace' means airspace encompassing Class 
        A and Class E airspace listed in part 71 of title 14 of the 
        Code of Federal Regulations and subpart B of Federal Aviation 
        Administration Order 7400.9N or a successor order;
            ``(3) `terminal airspace' means airspace encompassing Class 
        B, Class C and Class D airspace listed in part 71 of title 14 
        of the Code of Federal Regulations and subpart B of Federal 
        Aviation Administration Order 7400.9N or a successor order.
            ``(4) `oceanic airspace' means U.S. controlled airspace 
        over an ocean.
``Sec. 45306. Registration, certification and related fees
    ``(a) Imposition of Registration Fees.--On the date of transition, 
the Administrator shall establish the following fees for the following 
services or activities:
            ``(1) $130 for registering an aircraft.
            ``(2) $45 for replacing an aircraft registration.
            ``(3) $130 for issuing an original dealer's aircraft 
        certificate.
            ``(4) $105 for issuing an additional aircraft certificate.
            ``(5) $80 for issuing a special registration number.
            ``(6) $50 for issuing a renewal of a special registration 
        number.
            ``(7) $130 for recording a security interest.
            ``(8) $130 for recording a security interest in aircraft 
        parts.
            ``(9) $50 for issuing an airman certificate.
            ``(10) $25 for issuing a replacement airman certificate.
            ``(11) $42 for issuing an airman medical certificate.
            ``(12) $100 for providing legal title opinions pertaining 
        to aircraft transactions.
    ``(b) Establishment of Certification Fees.--(1) The Administrator 
shall establish fees for the following services or activities:
            ``(A) The appointment of a designee (other than designated 
        medical examiners).
            ``(B) The appointment of delegated organizations.
            ``(C) The training of a designee.
            ``(D) The issuance of a certificate to a flight school 
        under Part 141 of title 14 of the Code of Federal Regulations.
            ``(E) The issuance of a certificate to a training center 
        under Part 142 of title 14 of the Code of Federal Regulations.
            ``(F) The issuance of a certificate to a large domestic 
        repair station under part 145 of title 14 of the Code of 
        Federal Regulations.
            ``(G) The issuance of a certificate to a medium domestic 
        repair station under part 145 of title 14 of the Code of 
        Federal Regulations.
            ``(H) The issuance of a certificate to a small domestic 
        repair station under part 145 of title 14 of the Code of 
        Federal Regulations.
            ``(I) The issuance of a certificate to a large foreign 
        repair station under part 145 of title 14 of the Code of 
        Federal Regulations.
            ``(J) The issuance of a certificate to a medium foreign 
        repair station under part 145 of title 14 of the Code of 
        Federal Regulations.
            ``(K) The issuance of a certificate to a small foreign 
        repair station under part 145 of title 14 of the Code of 
        Federal Regulations.
            ``(L) The issuance of a certificate to a maintenance 
        technical school under part 147 of title 14 of the Code of 
        Federal Regulations.
            ``(M) Training provided to foreign aviation authorities.
    ``(2) Relation to Costs.--The fees that the Administrator 
establishes and assesses under this section, shall be based on the 
costs to the Administration of providing such activities and services 
using the available data derived from the agency's cost accounting 
system and cost allocation system to users. For purposes of this 
section, the term `costs' shall mean those costs associated with 
capital, operation and maintenance, and overhead, including the 
projected costs for the period during which the services are provided.
    ``(c) Fees for Other Services.--The Administrator may establish and 
collect such additional fees as may be necessary to cover the cost of 
aviation certification, regulation, and related services not enumerated 
in subsection (b), including any additional cost of providing services 
outside the United States.
    ``(d) Fees Credited as Offsetting Collections.--(1) Any fee 
authorized to be collected under this section shall, subject to 
appropriation made in advance--
            ``(A) be credited as offsetting collections to the account 
        established under section 48202(a) of this title; and
            ``(B) be available for expenditure only to pay the costs of 
        activities and services for which the fee is imposed, including 
        the costs to determine, assess, review and collect the fee.
    ``(2) The Administrator may continue to assess and collect and 
spend fees established under this section during any period in which 
the agency's funding is provided under an Act providing continuing 
appropriations in lieu of the agency's regular appropriations.
    ``(e) Adjustments.--The Administrator shall periodically adjust the 
fees established by subsections (a) or (b) in the following 
circumstances--
    ``(1) to account for changes in the Consumer Price Index of All 
Urban Consumers published by the Secretary of Labor;
    ``(2) when data reveal that the cost of providing the service is 
higher or lower than the cost data that was used to establish the fee 
then in effect; or
    ``(3) when the Board recommends an adjustment in the fees, in 
accordance with the procedures under subsection (g).
    ``(f) Administrative Provisions.--(1) Fees Payable to the 
Administrator.--All fees assessed and amounts collected under this 
section are payable to the Administrator. The Administrator may refund 
any fee, or portion thereof, paid by mistake in excess of the amount 
required.
    ``(2) Collection Procedures.--The Administrator shall establish 
procedures for the collection of fees. These procedures shall establish 
the frequency of payment, deadlines for payment, a maximum amount of 
fees that may be outstanding on the account of any person, and such 
other limitations and conditions as the Administrator determines are 
necessary to obtain prompt payment of fees.
    ``(3) Failure To Pay Required Fees.--If the Administrator 
determines that any person has failed to pay fees when due under this 
section or to comply with any limitation or condition on payment under 
this section, the Administrator may--
            ``(A) assess interest charges, using a rate equal to 150 
        percent of a rate determined by the Secretary of the Treasury 
        based on the average of bond equivalent yields on 13-week 
        Treasury bills auctioned during the previous calendar quarter, 
        to be redetermined quarterly, on amounts that have not been 
        paid by the deadline;
            ``(B) change the required payment schedule for such person;
            ``(C) upon 24 hours notice to the person, terminate, reduce 
        or withhold non-emergency services or in any case involving a 
        foreign air carrier, the Administrator shall take such actions 
        as are necessary to comply with applicable international 
        agreements; or
            ``(D) impose a civil penalty for each day amounts remain 
        unpaid, or take other appropriate enforcement action under this 
        subtitle.
    ``(4) Action When Future Payment in Jeopardy.--If the Administrator 
reasonably determines that a person will not pay its required fees when 
due, the Administrator may--
            ``(A) change the required payment schedule for such person; 
        or
            ``(B) upon 24 hours notice, terminate, reduce, or withhold 
        non-emergency services to such person, except that, in any case 
        involving a foreign air carrier, the Administrator shall take 
        such actions as are necessary to comply with applicable 
        international agreements.
    ``(5) Payment Not Stayed Pending Review.--In any case where a 
person seeks administrative review of the Administrator's action under 
this section, the collection of fees from that person may not be stayed 
pending resolution of the case.
    ``(g) Procedure for Imposition of Fees.--In establishing or 
modifying fees under this section, the procedures and requirements of 
section 45305(e) of this title shall apply.
    ``(h) Exemption From Rulemaking.--The requirements applicable to 
developing and issuing rules under title 5, United States Code, shall 
not apply to the actions of the Secretary, Administrator, or Board 
under this section.
``Sec. 45307. Rules of construction
    ``Notwithstanding any other law, the fees computed, established, 
assessed, modified or approved under this chapter shall be governed by 
the provisions of this chapter and not the provisions of section 9701 
of title 31.
``Sec. 45308. Borrowing authority
    ``(a) In General.--(1) In order to support the transition to the 
Next Generation Air Transportation System, in fiscal years 2013 through 
2017 the Secretary of Transportation is authorized to issue obligations 
to the Secretary of the Treasury to finance capital investments in the 
facilities and equipment of the air traffic control system to be owned 
and operated by the Federal Aviation Administration. The Secretary of 
the Treasury, in the Secretary's discretion, may purchase any such 
obligations, provided that the Secretary first determines that there is 
reasonable assurance of repayment of such obligations.
    ``(2) The Secretary shall not issue any obligations under paragraph 
(1) without first obtaining approval by the Director of the Office of 
Management and Budget of the issuance of such obligations and proposed 
investments to be financed.
    ``(b) Conditions and Limit on Indebtedness.--Obligations issued 
under this section shall be in such forms and denominations, bear such 
maturities, and shall be subject to such terms and conditions as may be 
prescribed by the Secretary of the Treasury. The aggregate amount of 
all such obligations shall not exceed $5,000,000,000 and all 
obligations shall be repaid by the Secretary of Transportation by the 
end of fiscal year 2017.
    ``(c) User Fee Increase.--Upon the issuance of obligations under 
paragraph (1), the Secretary of Transportation shall increase the user 
fees authorized in sections 45305 and 45306 in each of the fiscal years 
2013 to 2017 in the amounts required to repay such obligations with 
interest, and such payments shall have first priority in the use of 
fees collected during this period. This increase in user fees shall not 
be treated as discretionary offsetting collections and shall only be 
used to repay the obligations incurred under paragraph (1).
    ``(d) Interest Rate.--The interest rate on obligations issued under 
this section shall be a rate determined by the Secretary of the 
Treasury, taking into consideration the current market yields on 
outstanding marketable obligations of the United States of comparable 
maturity, plus a surcharge, determined by the Secretary of the 
Treasury, to be sufficient to cover any potential losses and the 
administrative costs associated with the obligations. Any surcharges 
for administrative costs collected by the Secretary of the Treasury 
shall be credited to the appropriation account which incurred the cost.
    ``(e) Purchase of Obligations.--For the purposes of purchasing 
obligations under subsection (a), the Secretary of the Treasury may use 
as a public debt transaction the proceeds from the sale of any 
securities issued under chapter 31 of title 31, United States Code, and 
the purposes for which securities may be issued under such chapter are 
extended to include any purchase of such obligations under this 
subsection.''.
    (b) Conforming Amendment.--
            (1) The analysis of chapter 453 is amended--
                    (A) by inserting in the title after ``FEES'', ``AND 
                FINANCING'';
                    (B) by adding at the end the following:

``45305. Air traffic control and related fees.
``45306. Certification, registration, and related fees.
``45307. Rules of construction.
``45308. Borrowing authority.''.
            (2) The analysis of Part A of subtitle VII is amended by 
        revising the entry for chapter 453 to read as follows:

``453. FEES AND FINANCING...........................45301 (reserved)''.

SEC. 202. CONFORMING AMENDMENTS.

    (a) Civil Penalties.--Section 46301 is amended--
            (1) in paragraph (a)(1)(A), by inserting ``chapter 453,'' 
        before ``section 47107(b)''; and
            (2) in paragraph (a)(5), by
                    (A) striking ``or chapter 449'' and inserting 
                ``chapter 449''; and
                    (B) striking ``44907-44909)'' and inserting 
                ``44907-44909), or chapter 453''.
    (b) Fees for Overflights, Foreign Services and Services to General 
Aviation.--Effective October 1, 2008, sections 45301 and 45302 are 
repealed.
    (c) Administrative Provisions.--Effective October 1, 2008, in 
section 45303--
            (1) subsections (a), (b) and (c) are repealed; and
            (2) subsections (d), (e) and (f) are redesignated as (a), 
        (b) and (c) respectively.

           TITLE III--AIRPORT IMPROVEMENT PROGRAM AMENDMENTS

SEC. 301. REFORM OF PASSENGER FACILITY CHARGE AUTHORITY.

    (a) Broadening Eligibility.--(1) Section 40117 is amended--
            (A) in the title, by striking ``fees'' and inserting 
        ``charges'';
            (B) in subsection (a)(3), by striking paragraphs (A) 
        through (G) and inserting:
                    ``(A) A project for capital costs of the airport or 
                local airport system under section 47107(b)(1)(A) and 
                (B).
                    ``(B) A project for capital costs of a local 
                facility that is directly and substantially related to 
                air transportation of passengers or property and that 
                is available for public use under section 
                47107(b)(1)(C).'';
            (C) by revising paragraph (a)(4) to read as follows:
            ``(4) Intermodal ground access project.--The term 
        `intermodal ground access project' means a local facility that 
        is directly and substantially related to the movement of 
        passengers or property in the form of a fixed guideway system 
        (as defined in section 5302 of this title), that is a component 
        of a fixed guideway system that provides transportation 
        services to the general public or that connects to such a fixed 
        guideway system.'';
            (D) in paragraph (a)(5), by striking ``FEE'' or ``fee'' 
        each time it appears and inserting ``CHARGE'' or ``charge'', 
        respectively;
            (E) in paragraph (a)(6), by striking ``fee.'' and inserting 
        ``charge.''.
    (2) Conforming Amendments.--(A) Section 47107(b)(1)(C) is amended 
to read as follows:
                    ``(C) any other local facility that is directly and 
                substantially related to air transportation of 
                passengers or property and that is available for public 
                use.''.
    (B) Section 47133(a)(3) is amended to read as follows:
            ``(3) any other local facility that is directly and 
        substantially related to air transportation of passengers or 
        property and that is available for public use.''.
    (b) Increase in PFC Maximum Level.--Section 40117(b) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``The Secretary of Transportation 
                may authorize under this section an eligible agency 
                to'' and inserting ``An eligible agency may'';
                    (B) by striking ``fee'' both times it appears and 
                inserting ``charge'';
                    (C) by striking ``or $3'' and inserting ``$3, $4, 
                $4.50, $5, $6''; and
                    (D) by inserting at the end, ``An eligible agency 
                that is approved by the Administrator to participate in 
                the pilot program established under section 44518 of 
                this title may impose a passenger facility charge of 
                $7.'';
            (2) in paragraph (2), by inserting ``directly or 
        indirectly'' before ``regulate'';
            (3) in paragraph (3), by striking ``fee'' and inserting 
        ``charge''; and
            (4) by striking paragraphs (4), (5) and (6).
    (c) Passenger Facility Charge Streamlining.--Section 40117(c) is 
revised to read as follows:
    ``(c) Procedural Requirements for Imposition of Passenger Facility 
Charge.--(1) An eligible agency must submit to those air carriers and 
foreign air carriers operating at the airport with a significant 
business interest, as defined in paragraph (3), and to the Secretary 
and make available to the public annually a report, in the form 
required by the Secretary, on the status of the eligible agency's 
passenger facility fee program, including the following:
            ``(A) the total amount of program revenue held by the 
        agency at the beginning of the twelve months covered by the 
        report;
            ``(B) the total amount of program revenue collected by the 
        agency during the period covered by the report;
            ``(C) the amount of expenditures with program revenue made 
        by the agency on each eligible airport-related project during 
        the period covered by the report;
            ``(D) each airport-related project for which the agency 
        plans to collect and use program revenue during the next 
        twelve-month period covered by the report, including the amount 
        of revenue projected to be used for such project;
            ``(E) the level of program revenue the agency plans to 
        collect during the next twelve-month period covered by the 
        report;
            ``(F) a description of the notice and consultation process 
        with air carriers and foreign air carriers under paragraph (3), 
        and with the public under paragraph (4), including a copies of 
        any adverse comments received and how the agency responded; and
            ``(G) any other information on the program that the 
        Secretary may require.
    ``(2) Implementation.--Subject to the requirements of paragraphs 
(3) and (4), (5) and (6), the eligible agency may implement the planned 
collection and use of passenger facility charges in accordance with its 
report upon filing the report as required in paragraph (1).
    ``(3) Consultation With Carriers for New Projects.--(A) An eligible 
agency proposing to collect or use passenger facility charge revenue 
for a project not previously approved by the Secretary or not included 
in a report required by paragraph (1) that was submitted in a prior 
year, or an eligible agency proposing to increase the level of the 
passenger facility charge to be collected at the airport, must provide 
to air carriers and foreign air carriers operating at the airport 
reasonable notice, and an opportunity to comment on the planned 
collection and use of program revenue before providing the report 
required under paragraph (1). The Secretary shall prescribe by 
regulation what constitutes reasonable notice under this paragraph, 
which shall at a minimum include--
            ``(i) that the eligible agency provide to air carriers and 
        foreign air carriers operating at the airport written notice of 
        the planned collection and use of passenger facility charge 
        revenue;
            ``(ii) that the notice include a full description and 
        justification for a proposed project;
            ``(iii) a detailed financial plan for the proposed project; 
        and
            ``(iv) the proposed level for the passenger facility 
        charge.
    ``(B) An eligible agency providing notice and an opportunity for 
comment shall be deemed to have satisfied the requirements of this 
paragraph if the eligible agency provides such notice to air carriers 
and foreign air carriers that have a significant business interest at 
the airport. For purposes of this paragraph, the term ``significant 
business interest'' means an air carrier or foreign air carrier that--
            ``(i) had not less than 1.0 percent of passenger boardings 
        at the airport in the prior calendar year;
            ``(ii) had at least 25,000 passenger boardings at the 
        airport in the prior calendar year; or
            ``(iii) provides scheduled service at the airport.
    ``(C) Not later than 45 days after written notice is provided under 
subparagraph (A), each air carrier and foreign air carrier may provide 
written comments to the eligible agency indicating its agreement or 
disagreement with the project or, if applicable, the proposed level for 
a passenger facility charge.
    ``(D) The eligible agency may include, as part of the notice and 
comment process, a consultation meeting to discuss the proposed project 
or, if applicable, the proposed level for a passenger facility charge. 
If the agency provides a consultation meeting, the written comments 
specified in subparagraph (C) shall be due not later than 30 days after 
the meeting.
    ``(4) Public Notice and Comment.--(A) An eligible agency proposing 
to collect or use passenger facility charge revenue for a project not 
previously approved by the Secretary or not included in a report 
required by paragraph (1) that was filed in a prior year, or an 
eligible agency proposing to increase the level of the passenger 
facility charge to be collected, must provide reasonable notice and an 
opportunity for public comment on the planned collection and use of 
program revenue before providing the report required in paragraph (1).
    ``(B) The Secretary shall prescribe by regulation what constitutes 
reasonable notice under this paragraph, which shall at a minimum 
require--
            ``(i) that the eligible agency provide public notice of 
        intent to collect a passenger facility charge so as to inform 
        those interested persons and agencies that may be affected;
            ``(ii) appropriate methods of publication, which may 
        include notice in local newspapers of general circulation or 
        other local media, or posting of the notice on the agency's 
        internet website; and
            ``(iii) submission of public comments no later than 45 days 
        after the date of the publication of the notice.
    ``(5) Objections.--(A) Any interested person may file with the 
Secretary a written objection to a proposed project or to a proposed 
increase in the level of a passenger facility charge included in a 
notice under this paragraph provided that the filing is made within 30 
days after submission of the report specified in paragraph (1).
    ``(B) The Secretary shall provide not less than 30 days for the 
eligible agency to respond to any filed objection.
    ``(C) Not later than 90 days after receiving the eligible agency's 
response to a filed objection, the Secretary shall make a determination 
whether or not to terminate authority to collect the passenger facility 
charge for the project or at the increased level, based on the filed 
objection. The Secretary shall state the reasons for any determination. 
The Secretary may only terminate authority if--
            ``(i) the project is not an eligible airport related 
        project;
            ``(ii) the eligible agency has not complied with the 
        requirements of this section or the Secretary's implementing 
        regulations in proposing the project;
            ``(iii) the eligible agency has been found to be in 
        violation of section 47107(b) of this title and has failed to 
        take corrective action, prior to the filing of the objection; 
        or
            ``(iv) in the case of a proposed increase in the passenger 
        facility charge level, the level is not authorized by this 
        section.
    ``(D) Upon issuance of a decision terminating authority, the public 
agency shall prepare an accounting of passenger facility revenue 
collected under the terminated authority and restore the funds for use 
on other authorized projects.
    ``(E) Except as provided in paragraph (C), the eligible agency may 
implement the planned collection and use of a passenger facility charge 
in accordance with its report upon filing the report as specified in 
paragraph (1)(A).
    ``(6) Approval Requirement for Intermodal Ground Access Project.--
(A) An eligible agency may not collect or use a passenger facility 
charge to finance an intermodal ground access project, unless the 
project is first approved by the Secretary in accordance with this 
paragraph.
    ``(B) The eligible agency may submit to the Secretary an 
application for authority to impose a passenger facility charge for an 
intermodal ground access project. The application shall contain 
information and be in the form that the Secretary may require by 
regulation but, at a minimum, must include copies of any comments 
received by the agency during the comment period described by 
subparagraph (C).
    ``(C) Before submitting an application under this paragraph, an 
eligible agency must provide air carriers and foreign air carriers 
operating at the airport, and the public, reasonable notice of and an 
opportunity to comment on a proposed intermodal ground access project. 
Such notice and opportunity to comment shall conform to the 
requirements of paragraphs (3) and (4).
    ``(D) After receiving an application, the Secretary may provide air 
carriers, foreign air carriers and other interested persons notice and 
an opportunity to comment on the application. The Secretary shall make 
a final decision on the application not later than 120 days after 
receiving it.''.
    (d) Conforming Changes.--(1) Correction.--In subsections (d) 
through (m) of section 40117, by--
            (A) striking ``fee'' or ``fees'' wherever the terms appear 
        and inserting ``charge'' or ``charges'', respectively; and
            (B) striking ``FEE'' or ``FEES'' wherever the terms appear 
        and inserting ``CHARGE'' or ``CHARGES'', respectively.
    (2) Limitations on Approving Applications.--Section 40117(d) is 
amended--
            (A) in the first sentence, by striking ``subsection (c) of 
        this section to finance a specific'' and inserting ``subsection 
        (c)(6) of this section to finance an intermodal ground 
        access'';
            (B) in paragraph (1), by--
                    (i) striking ``fee'' and inserting ``charge''; and
                    (ii) striking ``specific'';
            (C) by revising paragraph (2) to read as follows:
            ``(2) the project is an eligible airport-related project; 
        and'';
            (D) in paragraph (3), by striking ``each of the specific 
        projects; and'' and inserting ``the project.''; and
            (E) by striking paragraph (4).
    (3) Limitations on Imposing Fees.--Section 40117(e)(1) is amended 
to read as follows:
            ``An eligible agency may impose a passenger facility charge 
        only subject to terms the Secretary may prescribe to carry out 
        the objectives of this section.''.
    (4) Limitations on Contracts, Leases, and Use Agreements.--Section 
40117(f)(2) is amended--
            (A) by striking ``long-term''; and
            (B) by striking ``Secretary.'' and inserting ``Secretary, 
        except a project for replacement of baggage conveyor systems 
        and reconfiguration of terminal baggage areas that the 
        Secretary determines are necessary to install bulk explosive 
        detection devices.''.
    (5) Compliance.--Section 40117(h) is amended--
            (A) by inserting a new paragraph (3) as follows:
            ``(3) The Secretary may, on complaint of an interested 
        person or on the Secretary's own initiative, conduct an 
        investigation into an eligible agency's collection and use of 
        passenger facility charge revenue to determine whether a 
        passenger facility charge is excessive or that passenger 
        facility revenue is not being used as provided in this section. 
        The Secretary shall prescribe regulations establishing 
        procedures for complaints and investigations. The regulations 
        may provide for the issuance of a final agency decision without 
        resort to an oral evidentiary hearing. The Secretary shall not 
        accept complaints filed under this paragraph until after the 
        issuance of regulations establishing complaint procedures.''; 
        and
            (B) by redesignating paragraph (3) as paragraph (4).
    (6) Pilot Program for PFC at Nonhub Airports.--Section 40117(l) is 
amended--
            (A) in paragraph (2), by striking ``(c)(2)'' and inserting 
        ``(c)(3)''; and
            (B) in paragraph (7), by striking ``date that is 3 years 
        after the date of issuance of regulations to carry out this 
        subsection.'' and inserting ``date of issuance of regulations 
        to carry out subsection (c) of this section, as amended by the 
        Next Generation Air Transportation System Financing Reform Act 
        of 2007.''.
    (7) Prohibition on Approving PFC Applications for Airport Revenue 
Diversion.--Section 47111(e) is amended in the first sentence by 
striking from ``sponsor, and withhold approval of any new application 
to impose a fee under section 40117.'' through the end of the 
subsection, and inserting ``sponsor. A sponsor shall not propose 
collection or use of passenger facility charges for any new projects 
under section 40117(c)(3)-(6) unless the Secretary determines that the 
sponsor has taken corrective action to address the violation and the 
violation no longer exists.''.

SEC. 302. AMENDMENTS TO AIP DEFINITIONS.

    Section 47102 is amended--
            (1) in subsection (3),
                    (A) in clause (B)(iv), by striking ``20'' and 
                inserting ``9''; and
                    (B) by adding at the end, the following:
                    ``(M) construction of mobile refueler parking 
                within a fuel farm at a nonprimary airport meeting the 
                requirements of section 112.8 of title 40 of the Code 
                of Federal Regulations.
                    ``(N) terminal development subject to the 
                provisions of section 47119.''.
            (2) by inserting the following new paragraph (8) and 
        redesignating paragraphs (8) through (22) as paragraphs (9) 
        through (23), respectively:
            ``(8) a `general aviation airport' means a public airport 
        in a State that the Secretary determines--
                    ``(A) does not have scheduled service; or
                    ``(B) has scheduled service with less than 2,500 
                passenger boardings each year.'';
            (3) by inserting the following new paragraph (24) and 
        redesignating paragraphs (23) through (25) as (25) through 
        (27), respectively:
            ``(24) `revenue producing aeronautical support facilities' 
        means new fuel farms, new hangar buildings, self-service credit 
        card aeronautical fueling systems, airplane wash racks, major 
        rehabilitation of a hangar owned by a sponsor, or other 
        aeronautical support facilities that the Secretary determines 
        will increase the revenue producing ability of the airport.''; 
        and
            (4) by inserting at the end the following new paragraph 
        (28):
            ``(28) `terminal development' means--
                    ``(A) development of an airport passenger terminal 
                building, including terminal gates, access roads 
                servicing exclusively airport traffic that leads 
                directly to or from a terminal building, and walkways 
                that lead directly to or from a terminal building; and
                    ``(B) the cost of a vehicle under section 47119(a) 
                of this title.''.

SEC. 303. AMENDMENTS TO GRANT ASSURANCES.

    Section 47107 is amended--
            (1) in clause (a)(16)(D)(ii), by striking ``made;'' and 
        inserting ``made, except that, if there is a change in airport 
        design standards that the Secretary determines is beyond the 
        owner or operator's control that requires the relocation or 
        replacement of an existing airport facility, the Secretary, 
        upon the request of the owner or operator, may grant funds 
        available under section 47114 to pay the cost of relocating or 
        replacing such facility.''; and
            (2) in clause (c)(2)(A)(iii), by striking from ``paid to 
        the Secretary'' through the end of the clause, and inserting 
        ``reinvested in another project at the airport or transferred 
        to another airport as the Secretary prescribes. In approving 
        the reinvestment or transfer of such proceeds, the Secretary 
        shall give preference, in descending order, to the following 
        actions:
                                    ``(I) reinvestment in an approved 
                                noise compatibility project;
                                    ``(II) reinvestment in an approved 
                                project that is eligible for funding 
                                under section 47117(e);
                                    ``(III) reinvestment in an airport 
                                development project that is eligible 
                                for funding under sections 47114, 47115 
                                or 47117 and meets the requirements of 
                                this chapter;
                                    ``(IV) transfer to another sponsor 
                                of another public airport to be 
                                reinvested in an approved noise 
                                compatibility project at such airport; 
                                and
                                    ``(V) payment to the Secretary for 
                                deposit in the Airport and Airway Trust 
                                Fund established under section 9502 of 
                                the Internal Revenue Code of 1986 (26 
                                U.S.C. 9502);''.

SEC. 304. GOVERNMENT SHARE OF PROJECT COSTS.

    Section 47109 is amended--
            (1) in subsection (a) by--
                    (A) by striking ``subsection (b) or subsection 
                (c)'' and inserting ``subsections (b), (c) or (e)'';
                    (B) by striking ``is--'' and inserting ``may not 
                exceed--'';
                    (C) by striking paragraphs (1) and (2) and adding 
                the following new paragraphs:
            ``(1) 50 percent for an airfield pavement rehabilitation 
        project for runways, taxiways or aircraft aprons at a large hub 
        or medium hub primary airport, as defined in section 47102;
            ``(2) 75 percent for other approved airport development 
        projects at a large hub or medium hub primary airport, as 
        defined in section 47102;
            ``(3) 95 percent for a project funded by a grant issued to 
        a nonprimary airport that is not apportioned funds under 
        section 47114 of this title;'';
                    (D) by redesignating paragraphs (3), (4), and (5) 
                as paragraphs (4), (5), and (6); and
            (2) in subsection (f), by striking ``47118(f)'' and 
        inserting ``47118(e)''; and
            (3) by adding at the end the following:
    ``(e) Special Rule for Transition From Small Hub to Medium Hub 
Status.--If the status of a small hub primary airport changes to a 
medium hub primary airport, the United States Government's share of 
allowable project costs for the airport may not exceed 90 percent for 
two fiscal years following such change in hub status.''.

SEC. 305. AMENDMENTS TO ALLOWABLE COSTS.

    Section 47110 is amended--
            (1) by revising subsection (d) to read as follows:
    ``(d) Relocation of Airport-Owned Facilities.--The Secretary may 
determine that the costs of relocating or replacing an airport-owned 
facility are allowable for an airport development project at an airport 
only if--
            ``(1) the Government's share of such costs is paid with 
        funds apportioned to the airport sponsor under sections 
        47114(c)(1) or 47114(d)(2);
            ``(2) the Secretary determines that the relocation or 
        replacement is required due to a change in the Secretary's 
        design standards; and
            ``(3) the Secretary determines that the change is beyond 
        the control of the airport sponsor.''; and
            (2) in subsection (h) by striking ``facilities, including 
        fuel farms and hangars,'' and inserting ``facilities, as 
        defined by section 47102,''.

SEC. 306. SIMPLIFICATION AND REFORM OF APPORTIONMENT FORMULAS.

    Section 47114 is amended--
            (1) in subsection (c)(1)--
                    (A) in subparagraph (A), by striking ``primary 
                airport'' and inserting ``small hub and nonhub primary 
                airport'';
                    (B) in clause (A)(i), by striking ``$7.80'' and 
                inserting ``$15.60'';
                    (C) in clause (A)(ii), by striking ``$5.20'' and 
                inserting ``$10.40'';
                    (D) in clause (A)(iii), by striking ``$2.60'' and 
                inserting ``$5.20'';
                    (E) in clause (A)(iv), by striking ``$.65'' and 
                inserting ``$1.30'';
                    (F) in clause (A)(v), by striking ``$.50'' and 
                inserting ``$1.00'';
                    (G) in subparagraph (B), by striking ``$650,000'' 
                and all that follows through the end of the sentence 
                and inserting ``$1,000,000 nor more than $26,000,000 
                may be apportioned under subparagraph (A) of this 
                paragraph to an airport sponsor of each large hub and 
                medium hub primary airport for fiscal years 2008 and 
                2009, and to each airport sponsor for a small hub and 
                nonhub primary airport for each fiscal year.''
                    (H) by amending subparagraph (C) to read as 
                follows:
                    ``(C) Transitional rule for large and medium hub 
                airports.--In fiscal years 2008 and 2009, the Secretary 
                shall apportion to each large and medium hub airport an 
                amount equal to 50 percent of the amount that is 
                calculated using the formulas set forth in subparagraph 
                (A).'';
                    (I) in subparagraph (D), by striking ``(B) or (C), 
                as appropriate,'' and inserting ``(B)''; and
                    (J) by striking subparagraph (F) and redesignating 
                subparagraph (G) as subparagraph (F);
            (2) in subsection (c)(2)--
                    (A) in subparagraph (A), by striking ``(D),'' and 
                inserting ``(C),''; and
                    (B) by striking subparagraph (C) and redesignating 
                subparagraphs (D) and (E) as (C) and (D), respectively;
            (3) in subsection (d)--
                    (A) in subparagraph (2), by--
                            (i) striking ``18.5 percent'' and inserting 
                        ``10 percent''; and
                            (ii) adding a new subparagraph at the end 
                        as follows:
                    ``(D) Minimum apportionment.--In any fiscal year in 
                which the total amount made available for apportionment 
                under this subsection is less than $300,000,000, the 
                Secretary shall reduce, on a prorated basis, the amount 
                to be apportioned under subparagraph (d)(3)(A) of this 
                section, and make such reduction available to be 
                apportioned under this subsection, so as to meet a 
                minimum apportionment of $300,000,000.''; and
                    (B) by revising paragraph (3) to read as follows:
            ``(3) Nonprimary airports.--Except as provided in 
        subsection (2)(D), the Secretary shall each fiscal year 
        apportion--
                    ``(A) to each airport, excluding primary airports 
                but including reliever and nonprimary commercial 
                service airports-
                            ``(i) $400,000 to each airport that is 
                        either a nonprimary commercial service airport 
                        or a reliever or that is a nonprimary airport 
                        having 100 or more operational registered based 
                        aircraft;
                            ``(ii) $200,000 to each airport that is a 
                        nonprimary airport (other than a nonprimary 
                        commercial service or reliever airport), having 
                        50 and 99 operational registered based 
                        aircraft, or three or more operational 
                        registered based jet aircraft; and
                            ``(iii) $100,000 to each airport that is a 
                        nonprimary airport (other than a nonprimary 
                        commercial service airport or a reliever 
                        airport), and has 10 to 49 operational, 
                        registered based aircraft.
                    ``(B) For purposes of subparagraph (A), the terms 
                `operational registered based aircraft' or `operational 
                registered based jet aircraft' shall be as defined in 
                the Federal Aviation Administration's National Flight 
                Data Center Airport Data Base or in a comparable, 
                updated agency database.'';
            (4) subsection (e) is amended--
                    (A) in subparagraph (1)(B), by inserting ``twice'' 
                before ``the minimum''; and
                    (B) by striking paragraph (4);
            (5) in subsection (f)(1)--
                    (A) by striking ``in a fiscal year to the sponsor 
                of an airport having at least .25 percent of the total 
                number of boardings each year in the United States'' 
                and inserting ``in fiscal years 2008 and 2009 to a 
                sponsor of a large hub or medium hub airport'';
                    (B) in subparagraph (B), by striking ``$3.00,'' and 
                inserting ``$3.00, but not more than $4.50,'';
                    (C) by adding a new subparagraph at the end as 
                follows:
            ``(C) in the case of a passenger facility charge of more 
        than $4.50, 100 percent of the projected revenues from the 
        charge in the fiscal year but not by more than 100 percent of 
        the amount that otherwise would be apportioned under this 
        section.''; and
                    (D) by striking ``fee'' each place it appears and 
                inserting ``charge'';
            (6) in subsection (f)(2), by striking ``fee'' each time it 
        appears and inserting ``charge''; and
            (7) by adding at the end the following:
    ``(g) Environmental Set-Aside.--(1) The Secretary may apportion at 
least 8 percent of the amount subject to apportionment for each fiscal 
year for grants for--
            ``(A) airport noise compatibility planning under section 
        47505(a)(2);
            ``(B) carrying out noise compatibility programs under 
        section 47504(c);
            ``(C) noise mitigation projects approved in an 
        environmental record of decision for an airport development 
        project under this title;
            ``(D) for compatible land use planning projects carried out 
        by State and local governments under section 47141;
            ``(E) for airport development described in section 
        47102(3)(F), 47102(3)(K) or 47102(3)(L) to comply with the 
        Clean Air Act (42 U.S.C. 7401 et seq.);
            ``(F) for water quality mitigation projects to comply with 
        the Clean Water Act (33 U.S.C. 1251 et seq.) approved in an 
        environmental record of decision for an airport development 
        project under this title; and
            ``(G) for carrying out an environmental mitigation 
        demonstration project under section 47143 of this title.
    ``(2) The Secretary may count the amount of grants made for such 
planning and programs with funds apportioned under section 47114 in 
that fiscal year in determining whether or not such 8 percent 
requirement is being met in that fiscal year.''.

SEC. 307. MINIMUM AMOUNT FOR THE DISCRETIONARY FUND.

    Section 47115(g)(1) is amended by striking from ``sum of--'' 
through the end of clause (B) and inserting ``sum of $520,000,000.''.

SEC. 308. FUNDING OF SPACE TRANSPORTATION INFRASTRUCTURE GRANTS 
              PROGRAM.

    Section 47115 is amended by adding at the end the following new 
subsection:
    ``(k) Funding of Space Transportation Infrastructure Matching 
Grants.--Notwithstanding any other provision of this chapter, from 
amounts made available under this section, the Secretary may issue a 
grant for a project under section 70301 of this title, provided that, 
in issuing such a grant, the Secretary shall follow the provisions of 
chapter 703 of this title. Not more than $10,000,000 per fiscal year 
shall be available for grants under this subsection.''.

SEC. 309. REPEAL OF SMALL AIRPORT FUND.

    Section 47116 is repealed.

SEC. 310. CREATION OF NEW SMALL AIRPORT SET-ASIDE, AND REPEAL OF THE 
              MILITARY AND RELIEVER AIRPORT SET-ASIDES.

    Section 47117(e) is amended to read as follows:
    ``(e) Small Airport Set-Aside.--Each fiscal year, the Secretary 
shall provide at least 20 percent of the amount available to the 
discretionary fund under section 47115 of this title to sponsors of 
small hub airports, nonhub airports, nonprimary commercial service 
airports, reliever airports or general aviation airports, for any 
purpose for which amounts are made available under section 48103. An 
airport in a State participating in the State block grant program under 
section 47128 may receive a grant under this section to the same extent 
the airport may receive a grant if the State were not participating in 
such program.''.

SEC. 311. MILITARY AIRPORT PROGRAM.

    Section 47118 is amended--
            (1) in subsection (a), by striking ``section 
        47117(e)(1)(B)'' and inserting ``sections 47114(c)(1), (c)(2) 
        and (d), 47115, or 47117(e)'';
            (2) by striking subsection (c) and redesignating 
        subsections (d) through (g) as (c) through (f) respectively?];
            (3) in subsection (c), as redesignated, by striking 
        ``section 47117(d)(1)(B) of this title'' and inserting 
        ``sections 47114, 47115 or 47117 of this title for projects at 
        airports designated under this section'';
            (4) in subsection (d), as redesignated, by striking 
        ``section 47115, $10,000,000 for each of fiscal years 2004 and 
        2005, and $7,000,000 for each fiscal year thereafter,'' and 
        inserting ``sections 47114, 47115 or 47117, $7,000,000 for each 
        fiscal year,'';
            (5) in subsection (e), as redesignated--
                    (A) by striking ``(1) Construction.--From'' and 
                inserting ``From'';
                    (B) by striking ``section 47115, $10,000,000 for 
                each of fiscal years 2004 and 2005, and $7,000,000 for 
                each fiscal year thereafter,'' and inserting ``sections 
                47114, 47115 or 47117, $7,000,000 for each fiscal 
                year,''; and
                    (C) by striking paragraph (2); and
            (6) in subparagraph (f), as redesignated, by striking 
        ``one'' and inserting ``up to three''.

SEC. 312. SALE OF PRIVATE AIRPORT TO PUBLIC SPONSOR.

    Section 47133(b) is amended--
            (1) by striking ``apply if'' and inserting: ``apply--(1) 
        if'';
            (2) by striking ``operator.'' and inserting ``operator; 
        and''; and
            (3) by adding at the end the following:
            ``(2) in the case of a privately owned airport, to the 
        proceeds from the sale of the airport to a public sponsor if--
                    ``(A) the sale is approved by the Secretary;
                    ``(B) funding is provided under this title for the 
                public sponsor's acquisition; and
                    ``(C) an amount equal to the remaining unamortized 
                portion of the original grant, amortized over a 20-year 
                period, is repaid to the Secretary by the private owner 
                for deposit in the Trust Fund for airport acquisitions.
            ``(3) This subsection shall apply to grants issued on or 
        after October 1, 1996.''.

SEC. 313. SUNSET OF AIRPORT SECURITY PROGRAM.

    Section 47137 is amended by adding at the end the following:
    ``(h) Sunset.--This section shall not be in effect after September 
30, 2008.''.

SEC. 314. SUNSET OF PILOT PROGRAM FOR PURCHASE OF AIRPORT DEVELOPMENT 
              RIGHTS.

    Section 47138 is amended by adding at the end the following:
    ``(f) Sunset.--This section shall not be in effect after September 
30, 2007.''.

SEC. 315. EXTENSION OF GRANT AUTHORITY FOR COMPATIBLE LAND USE PLANNING 
              AND PROJECTS BY STATE AND LOCAL GOVERNMENTS.

    Section 47141(f) is amended by striking ``September 30, 2007.'' and 
inserting ``September 30, 2010.''.

SEC. 316. MIDWAY ISLAND AIRPORT.

    Section 186(d) of the Vision 100--Century of Aviation 
Reauthorization Act (Public Law No. 108-176, 117 Stat. 2490, 2518) is 
amended by striking ``October 1, 2007'' and inserting ``October 1, 
2010''.

SEC. 317. PILOT PROGRAM FOR AIRPORT TAKEOVER OF AIR NAVIGATION 
              FACILITIES.

    (a) In General.--Chapter 445 is amended by adding at the end the 
following new section:
``Sec. 44518. Pilot program for airport takeover of terminal area air 
              navigation equipment
    ``(a) In General.--Subject to the requirements of this section, the 
Administrator of the Federal Aviation Administrator may carry out a 
pilot program under which the Administrator may transfer ownership, 
operating and maintenance responsibilities for airport terminal area 
air navigation equipment to sponsors of not more than 10 medium or 
large hub airports.
    ``(b) Terms and Conditions of Transfer for Airport Sponsors.--As a 
condition of participating in this pilot program the sponsor shall 
agree that the sponsor will--
            ``(1) operate and maintain all of the air navigation 
        equipment that is subject to this section at the airport in 
        accordance with standards established by the Administrator;
            ``(2) permit the Administrator or a person designated by 
        the Administrator to conduct inspections of the air navigation 
        equipment under a schedule established by the Administrator; 
        and
            ``(3) acquire and maintain new air navigation equipment as 
        needed to replace facilities that have to be replaced at the 
        end of their useful life or to meet new standards established 
        by the Administrator.
    ``(c) Terms and Conditions of Transfer for the Administrator.--When 
the Administrator approves a sponsor's participation in this pilot 
program, the Administrator shall--
            ``(1) transfer, at no cost to the sponsor, the title and 
        ownership of the air navigation equipment facilities approved 
        for transfer under this program; and
            ``(2) transfer, at no cost to the sponsor, the government's 
        property interest in the land on which the air navigation 
        facilities transferred under subsection (1) are located.
    ``(d) Treatment of Airport Costs Under Pilot Program.--Upon 
transfer by the Administrator, any costs incurred by the airport for 
ownership and maintenance of the equipment transferred under this 
section shall be considered a cost of providing airfield facilities and 
services under standards and guidelines issued by the Secretary under 
section 47129(b)(2) and may be recovered in rates and charges assessed 
for use of the airfield.
    ``(e) Special Passenger Facility Charge Authority.--Notwithstanding 
the maximum amount for a passenger facility charge provided under 
section 40117(b)(1), a participating sponsor in the pilot program under 
this section is authorized to impose a passenger facility charge of $7 
provided that the sponsor meets the otherwise applicable requirements 
of section 40117.
    ``(f) Definitions.--In this section--
            ``(1) `large hub airport' and `medium hub airport' shall 
        have the meaning set forth in section 40102;
            ``(2) `sponsor' shall have the same meaning as in section 
        47102;
            ``(3) `terminal area air navigation equipment' means an air 
        navigation facility under section 40102, other than buildings 
        used for air traffic control functions, that exists to provide 
        approach and landing guidance to aircraft.
    ``(g) Guidelines.--The Administrator shall issue advisory 
guidelines on the implementation of the program. The guidelines shall 
not be subject to administrative rulemaking requirements under 
subchapter II of chapter 5 of title 5.''.
    (b) Conforming Amendment.--The analysis of chapter 445 is amended 
by inserting at the end:

``44518. Pilot program for airport takeover of terminal area air 
                            navigation equipment.''.

SEC. 318. ADS-B SUPPORT PILOT PROGRAM.

    (a) In General.--Chapter 445 is amended by adding at the end the 
following new section:
``Sec. 44519. ADS-B support pilot program
    ``(a) In General.--The Secretary may carry out a pilot program to 
support non-Federal acquisition of National Airspace System (NAS) 
compliant Automatic Dependant Surveillance--Broadcast (ADS-B) ground 
stations if--
            ``(1) the Secretary determines that acquisition of the 
        ground stations benefits the improvement of safety or capacity 
        in the National Airspace System;
            ``(2) the ground stations provide the required transmit and 
        receive data formats consistent with the National Airspace 
        System architecture at the appropriate service delivery point; 
        and
            ``(3) the ground stations acquired under this program are 
        supplemental to ground stations established under programs 
        administered by the Administrator of the Federal Aviation 
        Administration.
    ``(b) Project Grants.--(1) For purposes of carrying out this pilot 
program and notwithstanding the requirements of section 47114(d), the 
Secretary may make a project grant out of funds apportioned under 
section 47114(d)(2) to not more than ten eligible sponsors to acquire 
and install ADS-B ground stations in order to serve any public-use 
airport.
    ``(2) The Secretary shall establish procurement procedures 
applicable to grants issued under this section. The procedures shall 
permit the sponsor to carry out the project using Federal Aviation 
Administration contracts. The procedures established by the Secretary 
may provide for the direct reimbursement (including administrative 
costs) of the Administrator by the sponsor using grant funds under this 
section, for the ordering of such equipment and its installation, or 
for the direct ordering of such equipment and its installation by the 
sponsor, using such grant funds, from the suppliers with which the 
Administrator has contracted.
    ``(c) Matching Requirement.--The amount of a grant to an eligible 
sponsor under subsection (b) may not exceed 90 percent of the costs of 
the acquisition and installation of the ground support equipment.
    ``(d) Definitions.--In this section--
            ``(1) `ADS-B ground station' means electronic equipment 
        that provides for ADS-B reception and broadcast services.
            ``(2) `eligible sponsor' means a state, a metropolitan 
        planning organization in the area where the project is located, 
        or any consortium of two or more state or local governments 
        meeting the definition of a sponsor under section 47102 of this 
        title.''.
    (b) Conforming Amendment.--The analysis of chapter 445 is amended 
by inserting at the end:

``44519. ADS-B support pilot program.''.

SEC. 319. AIP ELIGIBILITY FOR METROPOLITAN WASHINGTON AIRPORTS 
              AUTHORITY.

    Section 49108 is amended by striking ``October 1, 2008,'' and 
inserting ``October 1, 2010''.

SEC. 320. MISCELLANEOUS AMENDMENTS.

    (a) Technical Changes to National Plan of Integrated Airport 
Systems.--Section 47103 is amended--
            (1) in subsection (a), by striking ``each airport to--'' 
        and inserting ``the airport system to--'';
            (2) in subsection (a)(1), by striking ``system in the 
        particular area;'' and inserting ``system, including connection 
        to the surface transportation network; and'';
            (3) in subsection (a)(2), by striking ``aeronautics; and'' 
        and inserting ``aeronautics.'';
            (4) by striking subsection (a)(3);
            (5) by striking subsection (b)(2) and redesignating (b)(3) 
        as (b)(2);
            (6) in subsection (b)(2), as redesignated, by striking 
        ``operations, Short Takeoff and Landing/Very Short Takeoff and 
        Landing aircraft operations,'' and inserting ``operations''; 
        and
            (7) in subsection (d), by striking ``status of the''.
    (b) Conforming Change to Project Grant Agreements.--Section 
47108(e)(3) is amended by striking ``and the small airport fund''.
    (c) Update Veterans Preference Definition.--Section 47112(c) is 
amended--
            (1) in paragraph (1) by--
                    (A) in subparagraph (B), by striking ``separated 
                from'' and inserting ``discharged or released from 
                active duty in''; and
                    (B) inserting at the end the following:
                    ``(C) `Afghanistan-Iraq war veteran' means an 
                individual who served on active duty, as defined by 
                section 101(21) of title 38, at any time in the armed 
                forces for a period of more than 180 consecutive days, 
                any part of which occurred during the period beginning 
                on September 11, 2001, and ending on the date 
                prescribed by Presidential proclamation or by law as 
                the last date of Operation Iraqi Freedom.''; and
            (2) in paragraph (2), by striking ``veterans and'' and 
        inserting ``veterans, Afghanistan-Iraq war veterans, and''.
    (d) Consolidation of Terminal Development Provisions.--Section 
47119 is amended--
            (1) redesignating subsections (a), (b), (c) and (d) as 
        subsections (b), (c), (d) and (e) respectively, and by 
        inserting a new subsection (a) as follows:
    ``(a) In General.--(1) The Secretary may approve a project for 
terminal development (including multimodal terminal development) in a 
nonrevenue-producing public-use area of a commercial service airport--
            ``(A) if the sponsor certifies that the airport, on the 
        date the grant application is submitted to the Secretary, has--
                    ``(i) all the safety equipment required for 
                certification of the airport under section 44706 of 
                this title;
                    ``(ii) all the security equipment required by 
                regulation; and
                    ``(iii) provided for access, to the area of the 
                airport for passengers for boarding or exiting 
                aircraft, to those passengers boarding or exiting 
                aircraft, except air carrier aircraft;
            ``(B) if the cost is directly related to moving passengers 
        and baggage in air commerce within the airport, including 
        vehicles for moving passengers between terminal facilities and 
        between terminal facilities and aircraft; and
            ``(C) under terms necessary to protect the interests of the 
        Government.
    ``(2) In making a decision under paragraph (1) of this subsection, 
the Secretary may approve as allowable costs the expenses of terminal 
development in a revenue-producing area and construction, 
reconstruction, repair, and improvement in a nonrevenue-producing 
parking lot if--
            ``(A) except as provided in section 47108(e)(3), the 
        airport does not have more than .05 percent of the total annual 
        passenger boardings in the United States; and
            ``(B) the sponsor certifies that any needed airport 
        development project affecting safety, security, or capacity 
        will not be deferred because of the Secretary's approval.'';
            (2) in subsection (b), as redesignated--
                    (A) in paragraph (4)(A), by striking ``section 
                47110(d)'' and inserting ``subsection (a)''; and
                    (B) in paragraph (5), by striking ``subsection 
                (b)(1) and (2)'' and inserting ``subsection (c)(1) and 
                (2)''; and
            (3) by inserting at the end the following new subsections:
    ``(f) Limitation on Discretionary Funds.--The Secretary may 
distribute not more than $20,000,000 from the discretionary fund 
established under section 47115 of this title for terminal development 
projects at a nonhub airport or a small hub primary airport that is 
eligible to receive discretionary funds under section 47108(e)(3) of 
this title.''.
    (e) Annual Report.--Section 47131(a) is amended--
            (1) by striking ``April 1'' and inserting ``June 1''; and
            (2) by revising paragraphs (1), (2), (3) and (4) to read as 
        follows:
            ``(1) a summary of airport development and planning 
        completed;
            ``(2) a summary of individual grants issued;
            ``(3) an accounting of discretionary and apportioned funds 
        allocated;
            ``(4) the allocation of appropriations; and''.
    (f) Correction to Emission Credits Provision.--Section 47139 is 
amended--
            (1) in subsection (a), by striking ``47102(3)(F),''; and
            (2) in subsection (b)--
                    (A) by striking ``47102(3)(F),'';
                    (B) by striking ``47102(3)(L), or 47140'' and 
                inserting ``or 47102(3)(L),'';
                    (C) by striking ``47103(3)(F),'';
                    (D) by striking ``47102(3)(L), or 47140,'' and 
                inserting ``or ``47102(3)(L),''.
    (g) Repeal of Airport Ground Support Equipment Emissions Retrofit 
Pilot Program.--Section 47140 is repealed.
    (h) Correction to Surplus Property Authority.--Section 47151(e) is 
amended by striking ``(other than real property that is subject to 
section 2687 of title 10, section 201 of the Defense Authorization 
Amendments and Base Closure and Realignment Act (10 U.S.C. 2687 note), 
or section 2905 of the Defense Base Closure and Realignment Act of 1990 
(10 U.S.C. 2687 note)''.
    (i) Airport Capacity Benchmark Reports; Definition of Joint Use 
Airport.--Section 47175 is amended--
            (1) in paragraph (2), by striking ``Airport Capacity 
        Benchmark Report 2001.'' and inserting ``2001 and 2004 Airport 
        Capacity Benchmark Reports or of the most recent Benchmark 
        report.''; and
            (2) by adding at the end:
            ``(7) Joint use airport.--The term `joint use airport' 
        means an airport owned by the United States Department of 
        Defense, at which both military and civilian aircraft make 
        shared use of the airfield.''.
    (j) Conforming Amendment to Civil Penalty Assessment Authority.--
Section 46301(d)(2) is amended by striking ``46318,'' and inserting 
``46318, 46319''.
    (k) Funding for Administrative Expenses for Airport Programs.--(1) 
Section 48105 is amended to read as follows:
``Sec. 48105. Airport programs administrative expenses
    ``Of the amount newly made available, the following shall be 
available for administrative expenses relating to the Airport 
Improvement Program, passenger facility fee approval and oversight, 
national airport system planning, airport standards development and 
enforcement, airport certification, airport-related environmental 
activities (including legal services), and other airport-related 
activities (including airport technology research), to remain available 
until expended--
            ``(1) for fiscal year 2008, $80,676,000;
            ``(2) for fiscal year 2009, $85,000,000; and
            ``(3) for fiscal year 2010, $89,000,000.''.
            (2) Conforming amendments.--The analysis of chapter 481 is 
        amended by revising the title for section 48105 to read as 
        follows:

``48105. Airport programs administrative expenses.''.

             TITLE IV--MANAGEMENT AND ORGANIZATION REFORMS

SEC. 401. AIR TRANSPORTATION SYSTEM ADVISORY BOARD.

    Section 106 is amended by striking subsection (p) and inserting in 
lieu thereof the following:
    ``(p) Air Transportation System Advisory Board.--
            ``(1) Establishment.--The Secretary shall establish an 
        Advisory Board which shall be known as the Air Transportation 
        System Advisory Board (in this subsection referred to as the 
        `Board').
            ``(2) Membership.--The Board shall be comprised of 13 
        members, who shall consist of--
                    ``(A) the Administrator of the Federal Aviation 
                Administration and a representative from the Department 
                of Defense;
                    ``(B) three members who shall have a fiduciary 
                responsibility to represent the public interest; and
                    ``(C) eight members representing aviation 
                interests:
                            ``(i) one representative of the airport 
                        community;
                            ``(ii) one representative each of major air 
                        carriers (Carrier Group I), national air 
                        carriers (Carrier Group II), and the regional 
                        air carriers (Carrier Group III), as previously 
                        defined by the Secretary of Transportation 
                        under section 4, part 241 of title 49 of the 
                        Code of Federal Regulations;
                            ``(iii) one representative of the cargo 
                        airlines;
                            ``(iv) one representative of the general 
                        aviation community;
                            ``(v) one representative of the business 
                        aviation community; and
                            ``(vi) one representative of the aviation 
                        manufacturing community.
            ``(3) Appointment and qualifications.--
                    ``(A) Members of the Board appointed under 
                paragraphs (2)(B) and (2)(C) shall be appointed by the 
                Secretary and shall not be considered to be employees 
                of the Federal Government.
                    ``(B) Members of the Board appointed under 
                paragraph (2)(B) shall be citizens of the United 
                States, and it is recommended that they shall be 
                appointed without regard to political affiliation and 
                solely on the basis of their professional experience 
                and expertise in one or more of the following areas 
                and, in the aggregate, should collectively bring to 
                bear expertise in the following areas:
                            ``(i) management of large service 
                        organizations;
                            ``(ii) customer service;
                            ``(iii) management of large procurements;
                            ``(iv) information and communications 
                        technology;
                            ``(v) organizational development; and
                            ``(vi) labor relations.
            ``(4) Functions.--
                    ``(A) In general.--The Board shall--
                            ``(i) review and provide advice on the 
                        Administration's safety programs, budget, and 
                        cost accounting system;
                            ``(ii) review the Administration's 
                        strategic plan and make recommendations on the 
                        non-safety program portions of the plan, and 
                        provide advice on the safety programs of the 
                        plan;
                            ``(iii) review the operational efficiency 
                        of the air traffic control system and make 
                        recommendations on the operational and 
                        performance metrics for that system;
                            ``(iv) review and make recommendations on 
                        the Administration's plan for modernizing that 
                        system and capital expenditures for a project 
                        of $100,000,000 or more related to the system;
                            ``(v) make recommendations of the type and 
                        level of fees to be established by the 
                        Administration under sections 45305 and 45306 
                        and for any adjustments to those fees in 
                        accordance with the procedures established 
                        under those sections; and
                            ``(vi) provide advice on the 
                        Administrator's selection of a Chief Operating 
                        Officer for the Air Traffic Organization and on 
                        the appointment and compensation of its 
                        managers.
                    ``(B) Meetings.--The Board shall meet on a regular 
                and periodic basis or at the call of the Chairman or of 
                the Administrator.
                    ``(C) Access to documents and staff.--The 
                Administration may give the Board appropriate access to 
                relevant documents and personnel of the Administration, 
                and the Administrator shall make available, consistent 
                with the authority to withhold commercial and other 
                proprietary information under section 552 of title 5 
                (commonly known as the `Freedom of Information Act'), 
                cost data associated with the acquisition and operation 
                of air traffic control systems. Any member of the Board 
                who receives commercial or other proprietary data from 
                the Administrator shall be subject to the provisions of 
                section 1905 of title 18, pertaining to unauthorized 
                disclosure of such information.
            ``(5) Federal advisory committee act not to apply.--The 
        Federal Advisory Committee Act (5 U.S.C. App.) shall not apply 
        to the Board or such rulemaking committees as the Administrator 
        shall designate.
            ``(6) Administrative matters.--
                    ``(A) Terms of members.--Members of the Board 
                appointed under paragraphs (2)(B) and (2)(C) shall be 
                appointed for a term of 3 years. Of the members first 
                appointed by the Secretary--
                            ``(i) 3 shall be appointed for terms of 1 
                        year;
                            ``(ii) 4 shall be appointed for terms of 2 
                        years;
                            ``(iii) 4 shall be appointed for terms of 3 
                        years.
                    ``(B) Reappointment.--No individual may be 
                appointed to the Board for more than six years total.
                    ``(C) Vacancy.--Any vacancy on the Board shall be 
                filled in the same manner as the original position. Any 
                member appointed to fill a vacancy occurring before the 
                expiration of the term for which the member's 
                predecessor was appointed shall be appointed for the 
                remainder of that term.
                    ``(D) Continuation in office.--A member of the 
                Board whose term expires shall continue to serve until 
                the date on which the member's successor takes office.
                    ``(E) Removal.--Any member of the Board appointed 
                under paragraph (2)(B) or (2)(C) may be removed by the 
                Secretary.
                    ``(F) Claims against members of the board.--
                            ``(i) In general.--A member appointed to 
                        the Board shall have no personal liability 
                        under State or Federal law with respect to any 
                        claim arising out of or resulting from an act 
                        or omission by such member within the scope of 
                        service as a member of the Board.
                            ``(ii) Effect on other law.--This 
                        subparagraph shall not be construed--
                                    (I) to affect any other immunity or 
                                protection that may be available to a 
                                member of the Board under applicable 
                                law with respect to such transactions;
                                    (II) to affect any other right or 
                                remedy against the United States under 
                                applicable law; or
                                    (III) to limit or alter in any way 
                                the immunities that are available under 
                                applicable law for Federal officers and 
                                employees.
                    ``(G) Ethical considerations.--Each member of the 
                Board appointed under paragraph (2)(B) must self-
                certify that he or she--
                            ``(i) does not have a pecuniary interest 
                        in, or own stock in or bonds of, an aviation or 
                        aeronautical enterprise, except an interest in 
                        a diversified mutual fund or an interest that 
                        is exempt from the application of section 208 
                        of title 18;
                            ``(ii) does not engage in another business 
                        related to aviation or aeronautics; or
                            ``(iii) is not a member of any organization 
                        that engages, as a substantial part of its 
                        activities, in activities to influence 
                        aviation-related legislation.
                    ``(H) Chairman; vice chairman.--The Board shall 
                elect a chair and a vice chair from among its members, 
                each of whom shall serve for a term of 2 years. The 
                vice chair shall perform the duties of the chairman in 
                the absence of the chairman.
                    ``(I) Compensation.--No member shall receive any 
                compensation or other benefits from the Federal 
                Government for serving on the Board, except for 
                compensation benefits for injuries under subchapter I 
                of chapter 81 of title 5, United States Code (Federal 
                Employees' Compensation Act) and except as provided 
                under subparagraph (J).
                    ``(J) Expenses.--Each member of the Board shall be 
                paid actual travel expenses and per diem in lieu of 
                subsistence expenses when away from his or her usual 
                place of residence, in accordance with section 5703 of 
                title 5.
                    ``(K) Detail of personnel from the 
                administration.--The Administrator shall make available 
                to the Board such staff, information, and 
                administrative services and assistance as may 
                reasonably be required to enable the Board to carry out 
                its responsibilities under this subsection.
                    ``(L) Quorum and voting.--A simple majority of 
                members of the Board shall constitute a quorum. A 
                majority vote of members present and voting shall be 
                required for the Committee to take action.
            ``(7) Role of the administrator and the secretary.--All 
        actions and functions of the Board are subject to the approval 
        or disapproval of the Administrator and the Secretary.
            ``(8) Air traffic control system defined.--In this section, 
        the term `air traffic control system' has the meaning such term 
        has under section 40102(a).''.

SEC. 402. FACILITATION OF NEXT GENERATION AIR TRAFFIC SERVICES.

    Section 106(l) is amended by adding at the end the following:
            ``(7) Services by private sector.--In determining what 
        actions to take, by rule or through an agreement or transaction 
        under paragraph (6) or under section 44502, to permit non-
        government providers of communications, navigation, 
        surveillance or other services to provide such services in the 
        National Airspace System, or to require the usage of such 
        services, the Administrator shall consider whether such actions 
        would:
                    (A) promote the safety of life and property;
                    (B) improve the efficiency of the National Airspace 
                System and reduce the regulatory burden upon National 
                Airspace System users, based upon sound engineering 
                principles, user operational requirements, and 
                marketplace demands;
                    (C) encourage competition and provide services to 
                the largest feasible number of users; and
                    (D) take into account the unique role served by 
                general aviation.''.

SEC. 403. CLARIFICATION OF AUTHORITY TO ENTER INTO REIMBURSABLE 
              AGREEEMENTS.

    Section 106(m) is amended in the last sentence by inserting ``with 
or'' before ``without''.

SEC. 404. DEFINITION OF AIR NAVIGATION FACILITY.

    Section 40102(4) is amended--
            (1) by revising paragraph (B) to read ``runway lighting and 
        airport surface visual and other navigation aids;'';
            (2) in paragraph(C), by striking ``weather information, 
        signaling, radio-directional finding, or radio or other 
        electromagnetic communication; and'' and inserting 
        ``aeronautical and meteorological information to air traffic 
        control facilities or aircraft, supplying communication, 
        navigation or surveillance equipment for air-to-ground or air-
        to-air applications;'';
            (3) in paragraph (D)--
                    (A) by striking ``another structure'' and inserting 
                ``any structure or equipment''; and
                    (B) by striking ``aircraft.'' and inserting 
                ``aircraft; and''; and
            (4) by adding at the end the following:
                    ``(E) buildings, equipment and systems dedicated to 
                the National Airspace System.''.

SEC. 405. IMPROVED MANAGEMENT OF PROPERTY INVENTORY.

    Section 40110(a)(2) is amended by striking ``compensation; and'' 
and inserting ``compensation, and the amount received may be credited 
to the appropriation current when the amount is received; and''.

SEC. 406. CLARIFICATION TO ACQUISITION REFORM AUTHORITY.

    Section 40110(c) is amended by--
            (1) by striking paragraph (4); and
            (2) by redesignating paragraph (5) as paragraph (4).

SEC. 407. ASSISTANCE TO FOREIGN AVIATION AUTHORITIES.

    Section 40113(e) is amended--
            (1) in paragraph (1), by--
                    (A) inserting ``(public or private)'' after the 
                word ``authorities''; and
                    (B) striking the period at the end of the first 
                sentence and inserting: ``or efficiency. The 
                Administrator is authorized to participate in, and 
                submit offers in response to, competitions to provide 
                these services, and to contract with foreign aviation 
                authorities to provide these services consistent with 
                the provisions under section 106(l)(6) of this title. 
                The Administrator is also authorized, notwithstanding 
                any other provision of law or policy, to accept 
                payments in arrears.''; and
            (2) in paragraph (3) by striking from ``appropriation'' 
        through the end of the sentence and inserting ``appropriation 
        current when the expenditures are or were paid, or the 
        appropriation current when the amount is received''.

SEC. 408. PRESIDENTIAL RANK AWARD PROGRAM.

    Section 40122(g)(2) is amended--
            (1) in paragraph (H) by striking ``Board.'' and inserting 
        ``Board;''; and
            (2) by inserting at the end the following new subparagraph:
                    ``(G) section 4507(b), (c), and (d), relating to 
                Meritorious Executive or Distinguished Executive rank 
                awards, and section 4507a(b) and (c), relating to 
                Meritorious Senior Professional or Distinguished Senior 
                Professional rank- awards: Provided, That for purposes 
                of applying such provisions to the personnel management 
                system, ``agency'' means the Department of 
                Transportation, ``senior executive'' means an Federal 
                Aviation Administration executive, ``career appointee'' 
                means an Federal Aviation Administration career 
                executive, and ``senior career employee'' means an 
                Federal Aviation Administration career senior 
                professional: Provided further, That receipt by a 
                career appointee of the rank of Meritorious Executive 
                or Meritorious Senior Professional entitles such 
                individual to a lump-sum payment of an amount equal to 
                20 percent of annual basic pay, which shall be in 
                addition to the basic pay paid under the Federal 
                Aviation Administration Executive Compensation Plan: 
                Provided further, That receipt by a career appointee of 
                the rank of Distinguished Executive or Distinguished 
                Senior Professional entitles the individual to a lump-
                sum payment of an amount equal to 35 percent of annual 
                basic pay, which shall be in addition to the basic pay 
                paid under the Federal Aviation Administration 
                Executive Compensation plan.''.

SEC. 409. REALIGNMENT AND CONSOLIDATION OF AVIATION FACILITIES AND 
              SERVICES.

    (a) Chapter 445 is amended by adding at the end the following new 
section:
``Sec. 44518. Realignment and consolidation of aviation facilities and 
              services
    ``(a) Purpose.--The purpose of this section is to provide a fair 
process that will result in the realignment or consolidation of 
services and facilities of the Federal Aviation Administration to help 
reduce capital, operating, maintenance, and administrative costs with 
no adverse effect on safety.
    ``(b) Definitions.--(1) The term `congressional committees of 
interest' means the Committee on Commerce, Science and Transportation 
of the Senate, the Committee on Transportation and Infrastructure of 
the House of Representatives and the Committees on Appropriations of 
the Senate and House of Representatives.
    ``(2) The term `Commission' means the Commission established by 
subsection (c) of this section.
    ``(3) The term `realignment' includes any action which relocates 
functions and personnel positions but does not include a reduction in 
personnel resulting from workload adjustments.
    ``(c) Establishment of Commission.--(1) The Secretary may establish 
an independent commission to be known as the `Realignment and 
Consolidation of Aviation Facilities and Services Commission'.
    ``(2) The Commission shall carry out the duties specified for it in 
this part.
    ``(3) The Commission shall be composed of five members appointed by 
the Secretary. Such members shall not be considered employees of the 
Federal Government.
    ``(4) Members of the Commission shall be appointed for a term of 3 
years.
    ``(5) The Commission shall elect a chair from among its members.
    ``(6) A vacancy in the Commission shall be filled in the same 
manner as the original appointment but the individual appointed to fill 
the vacancy shall serve only for the unexpired portion of the term for 
which the individual's predecessor was appointed.
    ``(7) No member shall receive any compensation or other benefits 
from the Federal Government for serving on the Commission, except for 
compensation benefits for injuries under subchapter I of chapter 81 of 
title 5, United States Code (Federal Employees' Compensation Act, and 
except that each member of the Commission shall be paid actual travel 
expenses and per diem in lieu of subsistence expenses when away from 
his or her usual place of residence in accordance with section 5703 of 
title 5, United States Code.
    ``(8) The Administrator of the Federal Aviation Administration 
shall make available to the Commission such staff, information, and 
administrative services and assistance as may reasonably be required to 
enable the Commission to carry out its responsibilities under this 
paragraph. The Commission may employ experts or consultants on a 
temporary or intermittent basis with the approval of the Secretary.
    ``(9) The Federal Advisory Committee Act (5 U.S.C. App.) shall not 
apply to the Commission.
    ``(d) FAA Recommendations for Facilities Realignment and 
Consolidation.--Within six months after the establishment of the 
Commission by the Secretary, the Administrator, after providing an 
opportunity for public comment, shall publish the final criteria to be 
used in making the Administrator's recommendations for the realignment 
and consolidation of services and facilities under this section. On the 
basis of such final criteria, the Administrator shall publish in the 
Federal Register and transmit to the Commission a list of the services 
and facilities that the Administrator recommends for realignment and 
consolidation including a justification for each recommendation.
    ``(e) Review and Recommendations by the Commission.--(1) After 
receiving the recommendations from the Administrator pursuant to 
subsection (d), the Commission shall opportunity for public comment on 
such recommendations.
    ``(2) Based on its review and analysis of the Administrator's 
recommendations and any public comment it may receive, the Commission 
shall make its independent recommendations to the President for 
realignment and consolidation of aviation services or facilities.
    ``(3) The Commission shall explain and justify in its report 
submitted to the President any recommendation made by the Commission 
that is different from the recommendations made by the Administrator 
pursuant to subsection (d). The Commission shall transmit a copy of 
such report to the congressional committees of interest on the same 
date on which it transmits its recommendations to the President under 
paragraph (2).
    ``(f) Review by the President.--(1) The President shall transmit to 
the Commission and to the Congress a report containing the President's 
approval or disapproval of the Commission's recommendations.
    ``(2) If the President approves all the recommendations of the 
Commission, the President shall transmit a copy of such recommendations 
to the Congress, together with a certification of such approval.
    ``(3) If the President disapproves the recommendations of the 
Commission, in whole or in part, the President shall transmit to the 
Commission and the Congress the reasons for that disapproval. The 
Commission shall consider the President's report and may then transmit 
to the President a revised list of recommendations for the realignment 
and consolidation of services and facilities.
    ``(4) If the President approves all of the revised recommendations 
of the Commission transmitted to the President under paragraph (3), the 
President shall transmit a copy of such revised recommendations to the 
Congress, together with a certification of such approval.
    ``(5) If the President does not transmit to the Congress an 
approval and certification, the process by which agency services and 
facilities may be selected for realignment or consolidation under this 
section shall be terminated.
    ``(g) Realignment and Consolidation of Services Facilities.--
Subject to paragraph (h), the Administrator shall--
            ``(1) realign or consolidate all FAA services and 
        facilities recommended for realignment or consolidation by the 
        Commission in the report transmitted to the Congress by the 
        President pursuant to subsection (f)(2) or (4);
            ``(2) initiate all such realignments and consolidations no 
        later than two years after the date on which the President 
        transmits a report to the Congress containing the 
        recommendations for such realignments or consolidations; and
            ``(3) complete all such realignments and consolidations no 
        later than the end of the six-year period beginning on the date 
        on which the President transmits the report containing the 
        recommendations for such realignments or consolidations.
    ``(h) Congressional Disapproval.--(1) The Administrator may not 
carry out any closure or realignment recommended by the Commission in a 
report transmitted from the President pursuant to subsection (f)(2) or 
(4) if a joint resolution is enacted, disapproving such recommendations 
of the Commission before the earlier of--
            ``(A) the end of the 60 day period beginning on the date on 
        which the President transmits such report; or
            ``(B) the adjournment of Congress sine die for the session 
        during which such report is transmitted.
    ``(2) For purposes of paragraph (1)(A), the days on which either 
House of Congress is not in session because of an adjournment of more 
than three days to a day certain shall be excluded in the computation 
of the 60 day period.
    ``(i) Authorization.--(1) There is authorized to be appropriated to 
the Administrator such sums as may be necessary for the Commission to 
carry out its duties and for the Administrator to implement the 
realignment and consolidation of services and facilities as described 
in subsection (g).
    ``(2) Such sums shall remain available until expended.
    ``(j) Effect on Other Authorities.--Nothing in this section shall 
affect the authorities provided in section 44503 or the existing 
authorities or responsibilities of the Administrator under this title 
to manage the operations of the Federal Aviation Administration, 
including realigning or consolidating facilities or services.''.
    (b) Conforming Amendment.--The analysis of chapter 455 is amended 
by adding at the end the following:

``44518. Realignment and consolidation of aviation facilities and 
                            services.''.

SEC. 410. OPERATIONAL AND APPROACH PROCEDURES BY THIRD PARTIES THROUGH 
              DELEGATION.

    Section 44701 is amended by adding at the end the following:
    ``(g) Delegation.--Subject to any regulations, supervision, and 
review that the Administrator may prescribe, the Administrator may 
delegate to a qualified private person, or to an employee under the 
supervision of that person, the development, testing and maintenance of 
flight procedures.''.

SEC. 411. JUDICIAL REVIEW OF DENIAL OF AIRMAN CERTIFICATES.

    (a) Judicial Review of NTSB Decisions.--Section 44703(d) is amended 
by adding at the end the following:
            ``(3) Judicial review.--A person substantially affected by 
        an order of the Board under subsection (d) of this section, or 
        the Administrator when the Administrator decides that an order 
        of the Board will have a significant adverse impact on carrying 
        out this part, may obtain judicial review of the order under 
        section 46110 of this title. The Administrator shall be made a 
        party to the judicial review proceedings. The findings of fact 
        of the Board in any such case are conclusive if supported by 
        substantial evidence.''
    (b) Conforming Amendment.--Section 1153(c) is amended by striking 
``section 44709 or'' and inserting ``section 44703(d), 44709 or''.

SEC. 412. RELEASE OF DATA RELATING TO ABANDONED TYPE CERTIFICATES AND 
              SUPPLEMENTAL TYPE CERTIFICATES.

    Section 44704(a) is amended by adding at the end the following:
            ``(5) Release of data.--(A) Notwithstanding any other 
        provision of law, the Administrator may designate, without the 
        consent of the owner of record, engineering data in the 
        agency's possession related to a type certificate or a 
        supplemental type certificate for an aircraft, engine, 
        propeller or appliance, along with any associated supplier 
        approved data for that product as public data, and therefore 
        releasable, upon request, to a person seeking to maintain the 
        airworthiness of such product, if the Administrator determines 
        that:
                    (i) the certificate containing the requested data 
                has been inactive for three years;
                    (ii) the owner of record, or the owner of record's 
                heir, of the type certificate or supplemental 
                certificate has not been located despite a search of 
                due diligence by the agency; and
                    (iii) the designation of such data as public data 
                will enhance aviation safety.
            (B) For purposes of this section, ``engineering data'' 
        means type design drawings and specifications for the entire 
        product, including the original design data, any approved data 
        for any supplemental type certificates, and any approved data 
        for individual parts or components for the particular 
        aeronautical product.''.

SEC. 413. DESIGN ORGANIZATION CERTIFICATES.

    Section 44704(e) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``Beginning 7 years after the date 
                of enactment of this subsection,'' and inserting 
                ``Effective January 1, 2013,''; and
                    (B) by striking ``44701(a) for the type 
                certification of aircraft, aircraft engines, 
                propellers, or appliances.'' and inserting ``44701.'';
            (2) in paragraph (2), by striking ``testing'' and inserting 
        ``production''; and
            (3) by revising paragraph (3) to read as follows:
            ``(3) Issuance of certificate based on design organization 
        certification.--The Administrator may rely on the Design 
        Organization for certification of compliance under this 
        section.''.

SEC. 414. CONTRACT TOWER PROGRAM.

    Section 47124(b) is amended--
            (1) in paragraph (1), by striking ``(Visual Flight Rules) 
        level I'' and inserting ``nonapproach control''; and
            (2) in paragraph (2), by striking ``an airport traffic 
        control tower classified as a level I (Visual Flight Rules)'' 
        and inserting ``a low activity nonapproach control air traffic 
        control''.

SEC. 415. ENHANCED OVERSIGHT OF NEXT GENERATION AIR TRANSPORTATION 
              SYSTEM JOINT PLANNING AND DEVELOPMENT OFFICE.

    Section 709 of Vision 100--Century of Aviation Reauthorization Act 
(Public Law 108-176, Dec. 12, 2003, 117 Stat. 2490, 2582) (49 U.S.C. 
40101 note) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by adding at the end, ``The 
                Director of the Office shall be supervised for various 
                purposes by such officer or officers of the Department 
                as the Secretary may specify.
                    (B) adding at the end the following:
            ``(5) The Director of the Office shall be a voting member 
        of the Federal Aviation Administration's Joint Resources 
        Council and the Air Traffic Organization's Executive 
        Council.'';
            (2) by redesignating subsections (d) and (e) as (e) and (f) 
        and inserting the following:
    ``(d) Consolidated Operational Evolution Partnership.--The 
Administrator of the Federal Aviation Administration shall develop and 
publish annually a consolidated operational evolution partnership that 
provides a detailed description of how the agency is implementing the 
Next Generation Air Transportation System.''; and
            (3) in subsection (e)(2), as redesignated, by striking 
        ``plan.'' and inserting ``plan, and how the respective budgets, 
        and assignment of expert personnel, of the Federal Aviation 
        Administration, the National Aeronautics and Space 
        Administration, the Departments of Defense, the Department of 
        Homeland Security, the Department of Commerce and any other 
        Federal agency that has an important interest in, or 
        responsibility for, the Next Generation Air Transportation 
        System support specific operational improvements for such 
        System.''.

     TITLE V--AVIATION SAFETY, SECURITY, CAPACITY AND CONNECTIVITY 
                              IMPROVEMENTS

SEC. 501. DISCLOSURE OF DATA TO FEDERAL AGENCIES IN INTEREST OF 
              NATIONAL SECURITY.

    Section 40119(b) is amended by adding at the end the following:
            ``(3) Section 552 of title 5, United States Code, does not 
        apply to disclosures the Administrator of the Federal Aviation 
        Administration may make from the agency's systems of records to 
        any Federal law enforcement, intelligence, protective, 
        immigration, or national security official in order to assist 
        the official receiving that information in the performance of 
        official duties.''.

SEC. 502. FAA ACCESS TO CRIMINAL HISTORY RECORDS OR DATABASE SYSTEMS.

    (a) In General.--Chapter 401 is revised by adding new section 40130 
to read as follows:
``Sec. 40130. FAA access to criminal history records or databases 
              systems
    ``(a) Access to Records or Databases Systems.--(1) Notwithstanding 
section 534 of title 28, United States Code, and the implementing 
regulations for such section (28 C.F.R. part 20), the Administrator of 
the Federal Aviation Administration is authorized to access a system of 
documented criminal justice information maintained by the Department of 
Justice or by a State but may do so only for the purpose of carrying 
out its civil and administrative responsibilities to protect the safety 
and security of the National Airspace System or to support the missions 
of the Department of Justice, the Department of Homeland Security and 
other law enforcement agencies. The Administrator shall be subject to 
the same conditions or procedures established by the Department of 
Justice or State for access to such an information system by other 
governmental agencies with access to the system.
    ``(2) The Administrator may not use the access authorized under 
paragraph (1) to conduct criminal investigations.
    ``(b) Designated Employees.--The Administrator shall, by order, 
designate those employees of the Administration who shall carry out the 
authority described in subsection (a). Such designated employees may--
            ``(1) have access to and receive criminal history, driver, 
        vehicle, and other law enforcement information contained in the 
        law enforcement databases of the Department of Justice, or of 
        any jurisdiction in a State in the same manner as a police 
        officer employed by a State or local authority of that State 
        who is certified or commissioned under the laws of that State;
            ``(2) use any radio, data link, or warning system of the 
        Federal Government and of any jurisdiction in a State that 
        provides information about wanted persons, be-on-the-lookout 
        notices, or warrant status or other officer safety information 
        to which a police officer employed by a State or local 
        authority in that State who is certified or commissioned under 
        the laws of that State has access and in the same manner as 
        such police officer; or
            ``(3) receive Federal, State, or local government 
        communications with a police officer employed by a State or 
        local authority in that State in the same manner as a police 
        officer employed by a State or local authority in that State 
        who is commissioned under the laws of that State.
    ``(c) Definition.--For purposes of this section, `system of 
documented criminal justice information' means any law enforcement 
databases, systems or communications containing information concerning 
identification, criminal history, arrests, convictions, arrest 
warrants, wanted or missing persons, including the National Crime 
Information Center (NCIC) and its incorporated criminal history 
databases and the National Law Enforcement Telecommunications System 
(NLETS).''.
    (b) Conforming Amendment.--The analysis for chapter 401 is amended 
by adding at the end the following:

``40130. FAA access to criminal history records or databases 
                            systems.''.

SEC. 503. ALLOCATION OF OPERATING AUTHORIZATIONS AT LAGUARDIA AIRPORT.

    (a) In General.--Subchapter I of Chapter 417 of title 49, United 
States Code, is amended by adding at the end the following:

``Sec. 41724. Allocation of operating authorizations at LaGuardia 
                            Airport.
    ``(a) General Authority.--(1) Notwithstanding any other provision 
of law, the Secretary of Transportation and the Administrator of the 
Federal Aviation Administration may determine that the use of a market 
based mechanism, such as an auction or congestion pricing, is 
appropriate to promote the efficient movement of air traffic at 
LaGuardia Airport. To accomplish this objective, the Administrator 
shall determine the operational capacity of LaGuardia airport, in 
accordance with section 40103 of this title.
    ``(2) If the Secretary makes a the determination under subsection 
(a) that use of a market-based mechanism is appropriate, the Secretary 
and the Administrator shall permit the Port Authority of New York and 
New Jersey (Port Authority) to implement a market-based measure for the 
allocation of operating authorizations at the airport in accordance 
with subsection (b). If the Port Authority fails to implement such a 
mechanism within one year of the Secretary's determination, the 
Secretary may implement a market-based mechanism at LaGuardia Airport 
in accordance with section 41725 of this title.
    ``(b) Rulemaking.--(1) The Secretary shall issue a rule to 
establish the terms and conditions under which interested persons may 
obtain operating authorizations through a market-based mechanism 
authorized by subsection (a). The rule shall also, at a minimum, 
establish the procedures, timing, terms and conditions for the 
implementation of this mechanism. Such regulation shall include 
provisions to protect the public interest as set forth in section 40101 
of this title including:
            ``(A) placing maximum reliance on competitive market 
        forces;
            ``(B) avoiding unreasonable industry concentration;
            ``(C) encouraging entry into air transportation markets by 
        new and existing air carriers;
            ``(D) ensuring that passengers in small communities and 
        rural and remote areas have access to affordable, scheduled air 
        service; and
            ``(E) providing air carriers and the traveling public a 
        stable and predictable schedule for planning future travel.
    ``(2) In developing the terms and conditions for an allocation 
mechanism, the Secretary may distinguish among classes of aircraft 
operators and among types of air service.
    ``(c) Escrow Account.--If the Port Authority implements a market-
based mechanism under this section and such mechanism produces annual 
revenue in excess of the annual administrative costs associated with 
the establishment and administration of the mechanism, the Port 
Authority shall deposit the excess revenue in an escrow account. 
Expenditures may be made from the escrow account on eligible airport-
related projects, in accordance with section 40117 of this title, or on 
any other project that the Secretary finds is in the public interest.
    ``(d) Rules of Construction.--Nothing in this section or in the use 
of a market-based mechanism authorized by this section shall:
            ``(1) diminish the authority of the Administrator under 
        other provisions of this title to regulate the safe and 
        efficient use of the national airspace, including the 
        withdrawal of operating authorizations obtained under this 
        section when required in the public interest; or
            ``(2) be considered for purpose of any Federal law a major 
        Federal action significantly affecting the human environment.
    ``(e) Treatment as Additional Revenue.--Expenditures or other 
financial assistance provided under paragraph (c) shall be in addition 
to funds that would otherwise be provided under the Airport Improvement 
Program or any other Federal assistance program.''.
    (b) Conforming Amendment.--The analysis of subchapter I of chapter 
417 is amended by adding at the end the following:

``41724. Allocation of operating authorizations at LaGuardia 
                            Airport.''.

SEC. 504. PILOT PROGRAM FOR MARKET-BASED MECHANISMS AT CONGESTED 
              AIRPORTS.

    (a) Pilot Program.--Subchapter I of chapter 417 of title 49, United 
States Code, is amended by adding at the end the following:
``Sec. 41725. Pilot Program to evaluate market-based mechanisms at 
              congested airports
    ``(a) In General.--In order to promote the efficient use of airport 
capacity or the efficient movement of air traffic, the Secretary of 
Transportation shall establish a pilot program for market-based pricing 
mechanisms for domestic flights at not more than fifteen airports under 
which an airport owner or operator may adopt, or the Administrator of 
the Federal Aviation Administration may impose, a market-based 
mechanism for the airport in accordance with the procedures established 
by this section.
    ``(b) Regional Delay.--(1) The Secretary may approve the 
application of an airport owner or operator to participate in the 
program if the Secretary finds that:
            ``(A) the airport experiences demand exceeding existing 
        capacity in the aggregate or during specific times or dates;
            ``(B) delays at the airport have a significant adverse 
        effect on the regional airspace; and
            ``(C) the market-based mechanism proposed by the airport 
        owner or operator will not result in a disincentive for the 
        airport operator to add capacity where possible.
    ``(2) Once the airport's participation in the program is approved, 
the airport owner or operator may implement a market-based mechanism, 
and, in the case of a congestion fee or auction, establish the method 
of collecting such revenue. Such fees shall be reasonable and not 
unjustly discriminatory.
    ``(3) An airport owner or operator may establish or adjust a 
market-based mechanism under this program only after consultation with 
the Administrator, air carriers serving the airport, and operators of 
aircraft based at the airport.
    ``(4) If an auction or congestion fee implemented under this 
section produces annual revenue in excess of the annual administrative 
costs associated with the establishment and administration of the fee, 
the airport owner or operator shall deposit the excess revenue in an 
escrow account. Expenditures may be made from the escrow account on 
eligible airport-related projects, in accordance with section 40117 of 
this title, or on any other project that the Secretary finds is in the 
public interest.
    ``(c) Delays Affecting the National System.--(1) If the Secretary 
finds that the capacity constraints at an airport cause significant 
delays beyond the region in which the airport is located and have 
negative effects on the National Airspace System, and the owner or 
operator of such airport has not already adopted a market-based 
mechanism under paragraph (b), then the Secretary may implement, 
through rulemaking, a market-based mechanism at the airport under the 
program to address these effects on the system. If market-based 
mechanisms are implemented, the Administrator of the Federal Aviation 
Administration shall establish the method of collecting such fees. Such 
fees shall be reasonable and not unjustly discriminatory.
    ``(2) The Administrator may establish or adjust a market-based 
mechanism under this program only after consultation with the airport 
owner or operator, air carriers serving the airport, and operators of 
aircraft based at the airport.
    ``(3) If market-based mechanisms implemented by the Administrator 
under this section produce annual revenue in excess of the annual 
administrative costs associated with the establishment and 
administration of the fee, the Administrator shall deposit the surplus 
funds in an account established in the Treasury, and designated as the 
Airspace Congestion Mitigation Account. Such surplus revenue shall be 
available to the Secretary, as specified in appropriations Acts, until 
expended, for the following uses:
            ``(A) airport capacity expansion or airport congestion and 
        delay reduction at the airport at which a market based 
        mechanism is implemented;
            ``(B) airport capacity expansion or airport congestion and 
        delay reduction at other congested airports, with priority 
        given to capacity projects in the same region as the airport at 
        which a market based mechanism is implemented;
            ``(C) improvement of ground access to the airports in the 
        vicinity, as defined by the Secretary, if the Secretary finds 
        that it would help relieve congestion at the airport where a 
        market-based mechanism is implemented;
            ``(D) construction, reconstruction or reconfiguration of 
        gates and related areas at the airport where a market-based 
        mechanism is implemented;
            ``(E) facilities, equipment, or other air traffic control 
        improvement projects that would enhance airport or airspace 
        capacity in the National Airspace System, with priority given 
        to projects in the region of an airport where a market-based 
        mechanism is implemented; and
            ``(F) assistance to air carriers in the purchase of 
        equipment for their aircraft to enable them to utilize air 
        traffic control facilities and equipment, including the 
        facilities and equipment purchased under subparagraph (E), in 
        order to enhance airport and airspace capacity.
    ``(d) Conformance With Requirements.--A market-based mechanism 
implemented under this pilot program shall be deemed to meet the 
requirements of section 40116 and chapter 471 of this title.
    ``(e) Definition.--For purposes of this section, the term `market-
based mechanism' includes the use of auctions, or congestion or peak 
period pricing under which fees may vary by time of day or day of the 
week in order to reduce aviation congestion and delays.
    ``(f) Exclusion.--An airport subject to the requirements of section 
41724 shall not be eligible to participate in this pilot program.''.
    (b) Conforming Amendment.--The analysis of subchapter I of chapter 
417 is amended by adding at the end the following:

``41725. Pilot Program for market-based mechanisms at congested 
                            airports.''.

          TITLE VI--ENVIRONMENTAL STEWARDSHIP AND STREAMLINING

SEC. 601. AIRPORT COOPERATIVE RESEARCH PROGRAM.

    Section 44511(f) is amended--
            (1) in paragraph (1), by striking ``establish a 4-year 
        pilot'' and inserting ``maintain an''; and
            (2) in paragraph (4), by--
                    (A) inserting ``pilot'' before ``program'' the 
                first time it appears; and
                    (B) striking ``program, including recommendations 
                as to the need for establishing a permanent airport 
                cooperative research program.'' and inserting 
                ``program.''.

SEC. 602. STATE BLOCK GRANT PROGRAM.

    Section 47128 is amended--
            (1) in subsection (a), by striking ``regulations'' both 
        times it appears and inserting ``guidance'';
            (2) in subsection (b)(4), by striking ``grant;'' and 
        inserting ``grant, including Federal environmental requirements 
        or an agreed upon equivalent;''; and
            (3) by redesignating subsection (c) as (d) and inserting 
        the following new subsection (c):
    ``(c) Environmental Analysis and Coordination Requirements.--Any 
Federal agency that must approve, license or permit a proposed action 
by a participating State shall coordinate and consult with the State. 
Such agency shall utilize the environmental analysis prepared by the 
State, provided it is adequate, or supplement that analysis as 
necessary to meet applicable Federal requirements.''.

SEC. 603. AIRPORT FUNDING OF SPECIAL STUDIES OR REVIEWS.

    Section 47173(a) is amended by striking ``project.'' and inserting 
``project, or to conduct special environmental studies related to a 
federally funded airport project or for special studies or reviews to 
support approved noise compatibility measures in a Part 150 program or 
environmental mitigation in a Federal Aviation Administration Record of 
Decision or Finding of No Significant Impact.''.

SEC. 604. ENVIRONMENTAL MITIGATION DEMONSTRATION PILOT PROGRAM.

    (a) Pilot Program.--Chapter 471 is amended at the end by adding the 
following new section:
``Sec. 47143. Environmental Mitigation Demonstration Pilot Program
    ``(a) In General.--The Secretary of Transportation shall carry out 
a pilot program involving not more than six projects at public-use 
airports under which the Secretary may make grants to sponsors of such 
airports from funds apportioned under paragraph 47117(e)(1)(A) for use 
at such airports for environmental mitigation demonstration projects 
that will measurably reduce or mitigate aviation impacts on noise, air 
quality or water quality in the vicinity of the airport. 
Notwithstanding any other provision of this subchapter, an 
environmental mitigation demonstration project approved under this 
section shall be treated as eligible for assistance under this 
subchapter.
    ``(b) Participation in Pilot Program.--A public-use airport shall 
be eligible for participation in the pilot program.
    ``(c) Selection Criteria.--In selecting from among applicants for 
participation in the pilot program, the Secretary may give priority 
consideration to environmental mitigation demonstration projects that--
            ``(1) will achieve the greatest reductions in aircraft 
        noise, airport emissions, or airport water quality impacts 
        either on an absolute basis, or on a per dollar of funds 
        expended basis; and
            ``(2) will be implemented by an eligible consortium.
    ``(d) United States Government's Share.--Notwithstanding any other 
provision of this subchapter, the United States Government's share of 
the costs of a project carried out under this section shall be 50 
percent.
    ``(e) Maximum Amount.--Not more than $2,500,000 may be made 
available by the Secretary in grants under this section for any single 
project.
    ``(f) Identifying Best Practices.--The Administrator may develop 
and publish information identifying best practices for reducing or 
mitigating aviation impacts on noise, air quality, or water quality in 
the vicinity of airports, based on the projects carried out under the 
pilot program.
    ``(g) Definitions.--In this section--
            ``(1) the term `eligible consortium' means a consortium 
        that comprises two or more of the following entities:
                    ``(A) businesses incorporated in the United States;
                    ``(B) public or private educational or research 
                organizations located in the United States;
                    ``(C) entities of State or local governments in the 
                United States; or
                    ``(D) Federal laboratories.
            ``(2) the term `environmental mitigation demonstration 
        project' means a project that:
                    ``(A) introduces new conceptual environmental 
                mitigation techniques or technology with associated 
                benefits, which have already been proven in laboratory 
                demonstrations;
                    ``(B) proposes methods for efficient adaptation or 
                integration of new concepts to airport operations; and
                    ``(C) will demonstrate whether new techniques or 
                technology for environmental mitigation identified in 
                research are--
                            ``(i) practical to implement at or near 
                        multiple public use airports; and
                            ``(ii) capable of reducing noise, airport 
                        emissions, or water quality impacts in 
                        measurably significant amounts.''.
    (b) Conforming Amendment.--The analysis for subchapter I of chapter 
471 is amended by adding at the end the following:

``47143. Environmental mitigation demonstration pilot program.''.

SEC. 605. GRANT ELIGIBILITY FOR ASSESSMENT OF FLIGHT PROCEDURES.

    Section 47504 is amended by adding at the end the following new 
subsection:
    ``(e) Grants for Assessment of Flight Procedures.--(1) The 
Secretary is authorized in accordance with paragraph (c)(1) to make a 
grant to an airport operator to assist in completing environmental 
review and assessment activities for proposals to implement flight 
procedures that have been approved for airport noise compatibility 
planning purposes under subsection (b).
    ``(2) The Administrator of the Federal Aviation Administration may 
accept funds from an airport sponsor, including funds provided to the 
sponsor under paragraph (1), to hire additional staff or obtain the 
services of consultants in order to facilitate the timely processing, 
review and completion of environmental activities associated with 
proposals to implement flight procedures submitted and approved for 
airport noise compatibility planning purposes in accordance with this 
section. Funds received under this authority shall not be subject to 
the procedures applicable to the receipt of gifts by the 
Administrator.''.

SEC. 606. RESEARCH CONSORTIUM FOR LOWER ENERGY, EMISSIONS AND NOISE 
              TECHNOLOGY PARTNERSHIP.

    (a) Establishment of Consortium.--Subchapter I of chapter 475 is 
amended by adding at the end the following:
``Sec. 47512. Research consortium for lower energy, emissions and noise 
              technology partnership
    ``(a) CLEEN Engine Technology Partnership.--The Administrator of 
the Federal Aviation Administration shall enter into a cooperative 
agreement with the Partnership for AiR Transportation Noise and 
Emissions Reduction (PARTNER) Center of Excellence for the development, 
maturing, and certification for Continuous Lower Energy, Emissions and 
Noise (CLEEN) engine and airframe technology for aircraft over the next 
ten years.
    ``(b) Performance Objective.--The Administrator shall establish the 
following performance objectives for the program to be completed by 
2015:
            ``(1) certifiable aircraft technology that increases 
        aircraft fuel efficiency by 25 percent relative to 1997 
        subsonic aircraft technology;
            ``(2) certifiable engine technology that reduces landing 
        and takeoff cycle (LTO) nitrogen oxide emissions by 50 percent, 
        without increasing other gaseous or particle emissions, over 
        the International Civil Aviation Organization (ICAO) standard 
        adopted in 2004;
            ``(3) certifiable aircraft technology that reduces noise 
        levels by 10 dB relative to 1997 subsonic jet aircraft 
        technology;
            ``(4) determination of the feasibility of use of 
        alternative fuels in aircraft systems, including successful 
        demonstration and quantification of benefits; and
            ``(5) determination of the extent to which new engine and 
        aircraft technologies may be used to retrofit or re-engine 
        aircraft so as to increase the level of penetration into the 
        commercial fleet.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated from the funding provided for the Next Generation Air 
Transportation System program such sums as necessary to carry out this 
section.
    ``(d) The Administrator shall publish a progress report on the 
CLEEN program each year beginning in 2009.''.
    (b) Conforming Amendment.--The analysis of subchapter I of chapter 
475 is amended by adding at the end:

``47512. Research consortium for lower energy, emissions and noise 
                            technology partnership.''.

SEC. 607. AMENDMENTS TO AIR TOUR MANAGEMENT PROGRAM.

    Section 40128 is amended--
            (1) in subsection (a)--
                    (A) in clause (1)(C), by striking ``lands.'' and 
                inserting ``lands, or a voluntary agreement.''; and
                    (B) by adding at the end the following:
            ``(5) Exemption.--Notwithstanding paragraph (1), units of 
        the national park system that have 50 or fewer commercial air 
        tour flights a year shall be exempt from the requirements of 
        this section, except that the Director may determine at any 
        time that this exemption shall not apply to any park for which 
        the Director determines an air tour management plan or 
        voluntary agreement is necessary to protect park resources and 
        values or park visitor use and enjoyment. The Director shall 
        inform the Administrator in writing of such determinations. The 
        Director and Administrator shall publish an annual list of 
        national parks that fall within the exemption provided by this 
        paragraph. A commercial air tour operator conducting commercial 
        air tours in a national park that is exempt from the 
        requirements of this section shall submit to the Administrator 
        and the Director an annual report of the number of air tour 
        flights it conducts each year in such exempted park.'';
            (2) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(7) Voluntary agreements.--(A) As an alternative to an 
        air tour management plan, for any unit of the national park 
        system, the Director and the Administrator may enter into a 
        voluntary agreement to manage commercial air tour operations 
        over a park unit with any commercial air tour operators that 
        have applied for authority to conduct air tour operations over 
        the park unit, including existing operators that have interim 
        operating authority, and new entrant applicants.
            ``(B) Such voluntary agreement shall address the management 
        issues necessary to protect park resources and visitor use 
        without compromising aviation safety, and may--
                    ``(i) include provisions described in paragraph 
                (3)(B) through (E);
                    ``(ii) include provisions to insure the stability 
                of and compliance with the voluntary agreement; and
                    ``(iii) provide for fees for operating over the 
                park.
            ``(C) The Director and the Administrator shall offer the 
        opportunity for public review of a proposed voluntary 
        agreement, and shall consult with any Indian tribe whose tribal 
        lands are, or may be, overflown by commercial air tour 
        operators under a voluntary agreement.
            ``(D) Following such public review and consultation, a 
        voluntary agreement may be implemented without further 
        administrative or environmental process.
            ``(E) A voluntary agreement may be rescinded at the 
        discretion of the Director or the Administrator if the Director 
        determines that the agreement is not adequately protecting park 
        resources or visitor experiences, or the Administrator 
        determines that the agreement is adversely affecting aviation 
        safety or the national aviation system. If a voluntary 
        agreement for a park is rescinded, the operators must conform 
        to the requirements for interim operating authority under 
        subsection (c) until an air tour management plan for the park 
        is in effect.'';
            (3) in subsection (c)--
                    (A) by revising clause (2)(I) to read as follows:
                    ``(I) may allow for modifications of the interim 
                operating authority without further environmental 
                process provided that--
                            ``(i) adequate information on the 
                        operator's existing and proposed operations is 
                        provided to the Administrator and the Director 
                        by the operator making the request;
                            ``(ii) the Administrator agrees that there 
                        would be no adverse impact on aviation safety; 
                        and
                            ``(iii) the Director agrees, based on 
                        professional expertise regarding the protection 
                        of the park resources and values and visitor 
                        use and enjoyment.'';
                    (B) in paragraph (3)--
                            (i) in clause (A), by striking from ``if 
                        the Administrator determines'' through the end 
                        and inserting ``without further environmental 
                        process provided that--
                            ``(i) adequate information on the 
                        operator's proposed operations is provided to 
                        the Administrator and the Director by the 
                        operator making the request;
                            ``(ii) the Administrator agrees that there 
                        would be no adverse impact on aviation safety; 
                        and
                            ``(iii) the Director agrees, based on 
                        professional expertise regarding the protection 
                        of park resources and values and visitor use 
                        and enjoyment.''; and
                            (ii) by striking clause (B) and 
                        redesignating clause (C) as (B);
            (4) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (5) inserting new subsection (d) as follows:
    ``(d) Commercial Air Tour Operator Reports.--Each commercial air 
tour operator providing a commercial air tour over a national park unit 
under interim operating authority or in accordance with an air tour 
management plan shall report the number of commercial air tour 
operations over each park unit and other data requested by the 
Administrator and Director in order to facilitate administering the 
provisions of this section. The reports shall be on a frequency and in 
a format requested by the Administrator and Director, and shall be 
submitted to both the Administrator and Director or their designees. 
The Administrator and Director shall jointly issue an initial request 
for the reports authorized in this subsection no later than three 
months after the date of enactment of this provision.''.

                       TITLE VII--AVIATION INSURANCE

SEC. 701. GENERAL AUTHORITY.

    (a) In General.--Section 44302 is amended--
            (1) by repealing subsection (b); and
            (2) in subsection (f)(2)--
                    (A) by striking ``paragraph (1)--(A) in'' and 
                inserting ``paragraph (1), in''; and
                    (B) by striking ``2002; and'' and inserting 
                ``2002.''; and
                    (C) by striking paragraph (B).
    (b) Conforming Amendment.--Section 44303(a) is amended by striking 
``, or reimburse insurance costs,''.

SEC. 702. EXTENSION OF AUTHORITY TO LIMIT THIRD PARTY LIABILITY OF AIR 
              CARRIERS ARISING OUT OF ACTS OF TERRORISM.

    Section 44303(b) is amended by striking ``December 31, 2006'' and 
inserting ``December 31, 2011''.

SEC. 703. CLARIFICATION OF REINSURANCE AUTHORITY.

    Section 44304 is amended in the second sentence by striking ``the 
carrier'' and inserting ``any insurance carrier''.

SEC. 704. USE OF INDEPENDENT CLAIMS ADJUSTERS.

    Section 44308 is amended in subsection (c)(1) in the second 
sentence by striking ``agent'' and inserting ``agent, or a claims 
adjuster who is independent of the underwriting agent,''.

SEC. 705. EXTENSION OF PROGRAM AUTHORITY.

    Section 44310 is amended by striking ``March 30, 2008.'' and 
inserting ``March 30, 2013.''.

                TITLE VIII--AVIATION SERVICE IMPROVMENTS

SEC. 801. EXTENSION OF COMPETITIVE ACCESS REPORTS.

    Section 47107(s)(3) is amended by striking ``2008'' and inserting 
``2012''.

SEC. 802. ESSENTIAL AIR SERVICE REFORM.

    (a) Definition.--Section 41731 is amended to read as follows:
``Sec. 41731. Definition
    ``In this subchapter `eligible place' means a place in the United 
States--
            ``(1) that as of the date of enactment of the Next 
        Generation Air Transportation System Financing Reform Act of 
        2007, was receiving subsidized Essential Air Service;
            ``(2) that is more than 70 highway miles from the nearest 
        medium or large hub airport; and
            ``(3) at which the subsidy per passenger does not exceed 
        $200 for a community that is less than 210 miles from the 
        nearest medium or large hub airport.''.
    (b) Essential Air Service.--Section 41732 is amended to read as 
follows:
``Sec. 41732. Essential air service
    ``Essential air service provided under section 41733 of this title 
is transportation of passengers and cargo to a destination airport and 
at a level of service comparable to what the community received on the 
date of enactment of the Next Generation Air Transportation System 
Financing Reform Act of 2007.''.
    (c) Availability of Compensation.--Section 41733 is amended to read 
as follows:
``Sec. 41733. Selection criteria and availability of compensation
    ``(a) Availability of Compensation.--
            ``(1) If the Secretary decides that essential air service 
        under section 41732 will not be provided to an eligible place 
        without compensation, the Secretary shall provide notice that 
        any air carrier may apply to provide essential air service to 
        the place for compensation under this section. In selecting an 
        applicant, the Secretary may consider, among other factors--
                    ``(A) the demonstrated reliability of the applicant 
                in providing air service;
                    ``(B) the contractual and marketing arrangements 
                the applicant has made with an air carrier(s) to ensure 
                service beyond the destination airport;
                    ``(C) the interline arrangements that the applicant 
                has made with a larger carrier to allow passengers and 
                cargo of the applicant at the destination airport to be 
                transported by the carrier(s) through one reservation, 
                ticket, and baggage check-in;
                    ``(D) the preferences of the actual and potential 
                users of air service at the eligible place, giving 
                substantial weight to the views of the elected 
                officials representing the users; and
                    ``(E) the relative subsidy costs to the United 
                States Government based on the applicants' proposals.
            ``(2) Under guidelines prescribed under section 41737 of 
        this subchapter, the Secretary shall pay the rate of 
        compensation for providing essential air service under this 
        section and section 41734 of this subchapter.
    ``(b) Compensation Payments.--The Secretary shall pay compensation 
under this section at times and in the way the Secretary decides is 
appropriate. The Secretary shall end payment of compensation to an air 
carrier for providing essential air service to an eligible place when 
the Secretary decides the compensation is no longer necessary to 
maintain essential air service to the place.
    ``(c) Review.--The Secretary shall review periodically the level of 
essential air service for each eligible place. Based on the review and 
consultations with the interested community and the appropriate State 
authority of the State in which the community is located, the Secretary 
may make appropriate adjustments in the level of service. However, the 
level of service that is subsidized will not be more than that which a 
community is receiving as of the date of enactment of the Next 
Generation Air Transportation System Financing Reform Act of 2007.''.
    (d) Ending, Suspending or Reducing Essential Air Service.--Section 
41734 is amended to read as follows:
``Sec. 41734. Ending, suspending, and reducing essential air service
    ``(a) Notice Required.--An air carrier may end, suspend, or reduce 
air transportation to an eligible place below the level of essential 
air service established for that place under this subchapter only after 
giving the Secretary of Transportation, the appropriate State 
authority, and the affected communities at least 90 days' notice before 
ending, suspending, or reducing that air service.
    ``(b) Continuation of Service for 30 Days After Notice Period.--If 
at the end of the notice period under subsection (a) of this section 
the Secretary has not found another air carrier to provide essential 
air service to the eligible place, the Secretary shall require the 
carrier providing notice to continue to provide essential air service 
to the place for an additional 30-day period or until another air 
carrier begins to provide essential air service to the place, whichever 
occurs first.
    ``(c) Continuation of Service for Additional 30-Day Periods.--If at 
the end of the 30-day period under subsection (b) of this section the 
Secretary decides another air carrier will not provide essential air 
service to the place on a continuing basis, the Secretary shall require 
the air carrier providing service to continue to provide service for 
additional 30-day periods until another air carrier begins providing 
service on a continuing basis. At the end of each 30-day period, the 
Secretary shall decide if another air carrier will provide service on a 
continuing basis.
    ``(d) Continuation of Compensation After Notice Period.--If an air 
carrier receiving compensation under this subchapter for providing 
essential air service to an eligible place is required to continue to 
provide service to the place under this section after the 90-day notice 
period under subsection (a) of this section, the Secretary shall 
continue to pay that compensation after the last day of that period. 
The Secretary shall pay the compensation until the Secretary finds 
another air carrier to provide the service to the place or the 180th 
day after the carrier filed notice to suspend service, whichever is 
earlier. If, after the 180th day, the Secretary has not found another 
air carrier to provide the service, the carrier required to continue to 
provide that service shall receive compensation sufficient to pay for 
the fully allocated actual cost to the air carrier of performing the 
essential air service that was being provided when the 90-day notice 
was given under subsection (a) of this section plus a reasonable return 
on investment that is equal to 5 percent of operating costs.
    ``(e) Finding Replacement Service Providers.--When the Secretary 
requires an air carrier to continue to provide essential air service to 
an eligible place, the Secretary shall promptly issue a request for 
proposals to find another air carrier to provide at least the essential 
air service set forth in section 41732 to the place on a continuing 
basis.''.
    (e) Compensation Guidelines.--Section 41737 is amended to read as 
follows:
``Sec. 41737. Compensation guidelines, limitations, and claims
    ``(a) Compensation Guidelines.--
            ``(1) The Secretary of Transportation shall prescribe 
        guidelines governing the rate of compensation payable under 
        this subchapter. The guidelines shall be used to determine the 
        reasonable amount of compensation required to ensure the 
        continuation of air service or air transportation under this 
        subchapter. The guidelines shall--
                    ``(A) provide for a reduction in compensation when 
                an air carrier does not provide service or 
                transportation agreed to be provided;
                    ``(B) consider amounts needed by an air carrier to 
                promote public use of the service or transportation for 
                which compensation is being paid; and
                    ``(C) include expense elements based on 
                representative costs of air carriers providing 
                scheduled air transportation of passengers, property, 
                and mail on equipment of the type the Secretary decides 
                is appropriate for providing the service or 
                transportation for which compensation is being 
                provided.
            ``(2) Promotional amounts described in paragraph (1)(B) of 
        this subsection shall be a special, segregated element of the 
        compensation provided to a carrier under this subchapter.
    ``(b) Claims.--Not later than 15 days after receiving a written 
claim from an air carrier for compensation under this subchapter, the 
Secretary shall--
            ``(1) pay or deny the United States Government's share of a 
        claim; and
            ``(2) if denying the claim, notify the person of the denial 
        and the reasons for the denial.
    ``(c) Authority To Make Agreements and Incur Obligations.--The 
Secretary may make agreements and incur obligations from the Airport 
and Airway Trust Fund established under section 9502 of the Internal 
Revenue Code of 1986 (26 U.S.C. 9502) to pay compensation under this 
subchapter. An agreement by the Secretary under this subsection is a 
contractual obligation of the Government to pay the Government's share 
of the compensation.
    ``(d) Eligibility Determinations.--
            ``(1) In making all determinations on eligibility for 
        compensation under this subchapter, the Secretary shall rank 
        all compensated points in their order of relative decreasing 
        driving distance from the nearest large or medium hub airport. 
        The term ``driving distance'' means the shortest driving 
        distance as determined by the Federal Highway Administration.
            ``(2) If the funds appropriated under Section 41742 are not 
        sufficient to pay for service to all of the eligible places, 
        the Secretary shall provide subsidy first to the eligible 
        communities that do not have highway access to a medium or 
        large hub airport, then to the most isolated community, as 
        determined under paragraph (1), that requires compensation and 
        then the next most isolated community requiring compensation, 
        and so on, in order, until the Secretary has obligated not more 
        than the amount authorized to be appropriated from the Airport 
        and Airway Trust Fund under 49 U.S.C. 48203(b), which shall 
        remain available until expended.''.
    (e) Authorization.--Section 41742 is amended to read as follows:
``Sec. 41742. Essential Air Service authorization
    ``Beginning in fiscal year 2009, $50,000,000 is authorized and 
shall be made available immediately for obligation and expenditure to 
the Secretary of Transportation out of the Airport and Airway Trust 
Fund established under section 9502 of the Internal Revenue Code of 
1986 (26 U.S.C. 9502), to carry out the essential air service program 
under this subchapter for each fiscal year. Such amount shall remain 
available until expended.''.
    (f) Repealed Provisions.--
            (1) Sections 41735, 41736, 41745, 41747, and 41748 are 
        repealed.
            (2) Subchapter III of chapter 417 is repealed.
    (g) Conforming Amendments.--
            (1) The analysis to chapter 417 is amended by striking the 
        items relating to sections 41735, 41736, 41745, 41747, and 
        41748.
            (2) The analysis to chapter 417 is amended by striking all 
        of the items relating to subchapter III.
            (3) Section 41738 is amended by deleting ``or air 
        transportation to a place designated under 41736''.

SEC. 803. TERMINATION OF DOT AUTHORITY TO SET INTERNATIONAL MAIL RATES.

    (a) Elimination of International Mail Rate Setting Authority.--
Section 41901(b)(1) is amended by striking ``in foreign air 
transportation or''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective 16 months after the date of enactment of this Act.

SEC. 804. AIR CARRIAGE OF INTERNATIONAL MAIL.

    (a) Elimination of Requirement To File Contract.--Section 5402(b) 
of title 39, United States Code, is amended by striking the last three 
sentences.
    (b) Elimination of Schedules for Mail Transportation.--Section 
41902 is amended--
            (1) in subsection (a) by striking ``in foreign air 
        transportation or'';
            (2) by revising subsection (b) to read as follows:
    ``(b) Statements on Places and Schedules.--Every air carrier shall 
file with the United States Postal Service a statement showing--
            ``(1) the places between which the carrier is authorized to 
        transport mail in Alaska;
            ``(2) every schedule of aircraft regularly operated by the 
        carrier between places described in clause (1) of this 
        subsection and every change in each schedule; and
            ``(3) for each schedule, the placed served by the carrier 
        and the time of arrival at, and departure from, each place.'';
            (3) by deleting subsections (e) and (f).
    (c) Effective Date.--The amendment made by subsection (a) shall 
become effective 16 months after the date of enactment of this Act.

SEC. 805. CONTENTS OF COMPETITION PLANS.

    Section 47106(f)(2) is amended--
            (1) by striking ``patterns of air service,'';
            (2) by inserting ``and'' before ``whether''; and
            (3) by striking ``, and airfare levels (as compiled by the 
        Department of Transportation) compared to other large 
        airports''.

SEC. 806. AIRPORT PRIVATIZATION.

    Section 47134 is amended--
            (1) in the first sentence of subsection (b), by striking 
        ``5 airports'' and inserting ``15 airports'';
            (2) by revising paragraph (b)(1)(A) to read as follows:
            ``(1) Use of revenues.--
                    ``(A) In general.--The Secretary may grant an 
                exemption to a sponsor from the provisions of section 
                47107(b) and 47133 of this title (and any other law, 
                regulation, or grant assurance) to the extent necessary 
                to permit the sponsor to recover from the sale or lease 
                of the airport such amount as may be approved by the 
                Secretary after the sponsor has consulted--
                            ``(i) in the case of a primary airport, 
                        with each air carrier and foreign air carrier 
                        serving the airport as determined by the 
                        Secretary; or
                            ``(ii) in the case of a non-primary 
                        airport, with at least 65 percent of the owners 
                        of aircraft based at that airport, as 
                        determined by the Secretary.'';
            (3) by striking subparagraph (b)(1)(C);
            (4) in subsection (c), by--
                    (A) striking paragraphs (4), (5), and (9) and 
                redesignating paragraphs (6) through (8) as paragraphs 
                (4) through (6) respectively; and
                    (B) adding a new paragraph (7) at the end to read 
                as follows:
            ``(7) No part of a fee charged to an air carrier or a 
        foreign air carrier may include a return on investment or 
        recovery of principal with respect to consideration paid to the 
        public agency for the lease or sale of the airport unless such 
        part of the fee is approved by the air carrier or foreign air 
        carrier.''; and
            (5) by striking paragraph (d) and redesignating paragraphs 
        (e) through (m) as (d) through (l) respectively.

SEC. 807. CLARIFICATION OF AIR CARRIER FEE DISPUTES.

    Section 47129 is amended--
            (1) by inserting ``and foreign air carrier'' after ``air 
        carrier'' in the section heading, in the heading for subsection 
        (d), and in the paragraph heading for paragraph (d)(2);
            (2) by striking ``air carrier'' each place it appears in 
        text, and inserting ``air carrier or foreign air carrier'';
            (3) by striking ``air carrier's'' each place it appears and 
        inserting ``air carrier's or foreign air carrier's'';
            (4) by striking ``air carriers'' each place it appears and 
        inserting ``air carriers or foreign air carriers''; and
            (5) by striking ``(as defined in section 40102 of this 
        title)'' in subsection (a) and inserting ``(as those terms are 
        defined in section 40102 of this title)''.

SEC. 808. AMENDMENTS TO CHAPTER 415.

    (a) In General.--Chapter 415 is amended--
            (1) by revising section 41501 to read as follows:
``Sec. 41501. Establishing reasonable prices, classifications, rules 
              and practices for foreign air transportation
    ``Every air carrier and foreign air carrier shall establish, comply 
with, and enforce reasonable prices, classifications, rules and 
practices related to foreign air transportation.''.
            (2) by revising section 41502 to read as follows:
``Sec. 41502. Establishing joint prices for through routes with other 
              carriers
    ``An air carrier, including an indirect air carrier, may establish 
reasonable joint prices and through service with another carrier.''.
            (3) by repealing sections 41503, 41505, 41506, 41508, and 
        41510.
            (4) by revising section 41504(a) to read as follows:
    ``(a) Filing and Contents.--In the way prescribed by regulation by 
the Secretary of Transportation, any air carrier or foreign air carrier 
providing foreign air transportation between places designated by the 
Secretary, and any air carrier or foreign air carrier granted immunity 
from the antitrust laws for the coordination of prices pursuant to 
section 41308 of this title, shall file with the Secretary, publish, 
and keep open to public inspection, tariffs showing the prices for the 
foreign air transportation provided by the carrier or provided by the 
carrier and another air carrier or foreign air carrier in which through 
service and joint prices have been established. A tariff--
            ``(1) shall contain--
                    ``(A) to the extent the Secretary requires by 
                regulation, a description of the classifications, 
                rules, and practices related to the foreign air 
                transportation;
                    ``(B) a statement of the prices in money of the 
                United States; and
                    ``(C) other information the Secretary requires by 
                regulation; and
            ``(2) may contain--
                    ``(A) a statement of the prices in money that is 
                not money of the United States; and
                    ``(B) information that is required under the laws 
                of a foreign country in or to which the air carrier or 
                foreign air carrier is authorized to operate.''; and
            (5) by striking subsection 41509(e) and redesignating 
        subsections 41509(f) and (g) as 41509(e) and (f) respectively.
    (b) Conforming Amendments.--
            (1) The analysis for chapter 415 is amended by striking the 
        items relating to sections 41503, 41505, 41506, 41508, and 
        41510;
            (2) Section 40109(c) is amended by striking ``41505,'';
            (3) Section 41110(a)(2)(B) is amended--
                    (A) by striking ``41503,'';
                    (B) by striking ``41506,''; and
                    (C) by striking ``41510,''
            (4) Section 46301 is amended by striking ``41505,''.

               TITLE IX--INTERNAL REVENUE CODE AMENDMENTS

SEC. 901. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this Title an 
amendment or repeal is expressed in terms of an amendment to, or a 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Internal 
Revenue Code of 1986.

SEC. 902. MODIFICATIONS TO TAX ON AVIATION FUEL.

    (a) In General.--Effective October 1, 2008, section 4081(a)(2) 
(relating to rates of tax) is amended--
            (1) in paragraph (A) by inserting before the comma at the 
        end of subparagraph (A)(ii) ``, except that the rate of tax 
        imposed on and after October 1, 2008, shall be 70.0 cents per 
        gallon'';
            (2) by revising paragraph (C) to read as follows:
                    ``(C) Taxes imposed on fuel used in aviation.--In 
                the case of kerosene for use in aviation, the rate of 
                tax under subparagraph (A)(iii) shall be--
                            ``(i) in the case of use for commercial 
                        aviation by a person registered for such use 
                        under section 4101 and in which the fuel is 
                        removed from any refinery or terminal directly 
                        into the fuel tank of an aircraft, 4.3 cents 
                        per gallon, except that the rate of tax imposed 
                        on and after October 1, 2008, shall be 13.6 
                        cents per gallon; and
                            ``(ii) in the case of use for aviation not 
                        described in clause (i), 21.8 cents per gallon, 
                        except that the rate of tax imposed on and 
                        after October 1, 2008, shall be 70.0 cents per 
                        gallon in a case in which the fuel is removed 
                        from any refinery or terminal directly into the 
                        fuel tank of an aircraft.''; and
            (3) by inserting at the end the following:
                    ``(E) Inflation adjustment of tax rates.--In the 
                case of taxable events in a calendar year after 2009, 
                the amount per gallon specified in subparagraph (C)(i) 
                shall be increased by an amount equal to such amount, 
                multiplied by the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year by 
                substituting ``2008'' for ``1992'' in subparagraph (B) 
                thereof. Any increase determined under the preceding 
                sentence shall be rounded to the nearest tenth of a 
                cent.
                    ``(F) Adjustment of tax rates to reflect cost 
                imposed on the system.--In the case of taxable events 
                in a calendar year after 2009, the amount per gallon 
                specified in subparagraphs (A)(ii) and (C)(ii) in 
                excess of the rate specified in (C)(i) shall be an 
                amount based on the costs, as defined in section 
                45305(b)(6), imposed by operators who use fuel on which 
                such taxes are paid as determined by the Federal 
                Aviation Administration's cost allocation system, and 
                shall be increased or decreased once every two years as 
                necessary to cover such costs by an amount determined 
                by the Federal Aviation Administration. Any increase or 
                decrease determined under the preceding sentence shall 
                be rounded to the nearest tenth of a cent.''.
    (b) Conforming Changes to Fuel Tax Rate Provisions.--
            (1) Tax rates under section 4081(d)(2).--Effective October 
        1, 2007, section 4081(d)(2) (relating to aviation fuel tax 
        termination) is amended to read as follows:
            ``(2) Aviation fuels.--The rates of tax specified in 
        subsection (a)(2)(A)(ii), (a)(2)(C)(i), and (a)(2)(C)(ii) shall 
        be 0.00 cents per gallon after September 30, 2017.''.
            (2) Tax rates under section 4041.--Effective October 1, 
        2008, section 4041(c)(3) (relating to certain liquids used as a 
        fuel in aviation) is amended by inserting before the period at 
        the end of paragraph (3) ``, except that the rate of tax 
        imposed on and after October 1, 2008, shall be the rate, after 
        adjustment for inflation under 4081(a)(2)(E), applicable under 
        section 4081(a)(2)(C)(i) with respect to any fuel sold for use 
        or used for commercial aviation, and under section 
        4081(a)(2)(A)(ii) or 4081(a)(2)(C)(ii) with respect to any 
        other fuel sold for use or used in aircraft.''.
    (c) Fuel Tax Refund Limitations.--Effective October 1, 2008, 
section 6427(l) is amended--
            (1) in subsection (l)(4), by inserting before the period at 
        the end of subsection (l)(4)(A)(ii) ``and, on and after October 
        1, 2008, so much of the rate of tax specified in section 
        4081(a)(2)(A)(iii) as does not exceed the tax specified in 
        section 4081(a)(2)(C)(i), after adjustment for inflation under 
        4081(a)(2)(E)''; and
            (2) in subsection (l)(5), by inserting before the period at 
        the end of subsection (l)(5)(A)(ii) ``and, on and after October 
        1, 2008, so much of the rate of tax specified in section 
        4081(a)(2)(A)(iii) as does not exceed the tax specified in 
        section 4081(a)(2)(C)(ii), after adjustment for inflation under 
        4081(a)(2)(E).''.

SEC. 903. MODIFICATIONS TO TAX ON TRANSPORTATION OF PERSONS BY AIR.

    (a) One-Year Extension of Current Taxes.--(1) Section 
4261(j)(1)(ii) (relating to imposition of tax on persons) is amended by 
striking ``September 30, 2007,'' and inserting ``September 30, 2008''.
    (2) Section 4271(d)(1)(A)(ii) (relating to imposition of tax on 
property) is amended by striking ``September 30, 2007,'' and inserting 
``September 30, 2008''.
    (b) Modifications to Taxes.--Effective October 1, 2008, section 
4261 (relating to imposition of tax) is amended--
            (1) in subsection (c),
                    (A) by inserting before the period at the end of 
                subsection (c)(1) ``, except that the rate of tax 
                imposed for transportation beginning on and after 
                October 1, 2008, shall be $6.39'';
                    (B) by amending subsection (c)(2) to read as 
                follows:
            ``(2) Exception for certain transportation.--This 
        subsection shall not apply to any transportation that consumes 
        fuel taxed under section 4081(a)(2)(C)(i).'';
                    (C) by inserting after ``In any case'' in 
                subsection (c)(3) ``involving transportation beginning 
                before October 1, 2008, and''; and
                    (D) by inserting before the period at the end of 
                subsection (e)(4)(B)(ii) ``, except that the last 
                nonindexed year is 2009 in the case of the dollar 
                amounts contained in subsection (c) that apply to 
                taxable events in a calendar year after 2009.''; and
            (2) by amending subsection (j) to insert the following at 
        the end:
            ``(3) Extension of taxable period in the case of 
        international travel facilities.--Notwithstanding paragraph 
        (1), the taxes imposed by subsection (c) of this section shall 
        apply to--
                    ``(A) transportation beginning during the period 
                beginning on March 7, 1997, and ending on September 30, 
                2017; and
                    ``(B) amounts paid during such period for 
                transportation beginning after such period.''.

SEC. 904. EXTENSION OF AIRPORT AND AIRWAY TRUST FUND EXPENDITURE 
              AUTHORITY.

    (a) In General.--Paragraph (1) of section 9502(d) of the Internal 
Revenue Code of 1986 (relating to expenditures from Airport and Airway 
Trust Fund) is amended--
            (1) by striking ``October 1, 2007'' and inserting ``October 
        1, 2017''; and
            (2) by inserting before the semicolon at the end of 
        subparagraph (A) the following: ``, or the Next Generation Air 
        Transportation System Financing Reform Act of 2007''.
    (b) Conforming Amendment.--Paragraph (2) of section 9502(f) of the 
Internal Revenue Code of 1986 is amended by striking ``October 1, 
2007'' and inserting ``October 1, 2017''.
                                 <all>
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